Finance Committee, 22 Nov 2005

Meeting date: Tuesday, November 22, 2005

Official Report 313KB pdf

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Cross-Cutting Inquiry into Deprivation

Having cleared that ground, we move to our second agenda item, which is another evidence-taking session in our cross-cutting inquiry into deprivation. I welcome to the committee the Minister for Communities, Malcolm Chisholm. He has offered to give evidence on behalf of the Minister for Finance and Public Service Reform and the Minister for Health and Community Care, whom we had originally invited to the meeting. Given that we are likely to ask questions that will concern different departments, the minister has brought with him a number of officials. They are: Alisdair McIntosh, head of the regeneration, fuel poverty and supporting people division; David Henderson, head of local government finance division; Angela Campbell, economics adviser at the health economics unit; Frances Wood, head of health improvement policy; and Julie Wilson, senior statistician at the Scottish Executive's analytical services group. I welcome you all to today's meeting.

As is customary, I ask the minister to make a brief opening statement, after which we will proceed to questions.

I will try to keep my comments brief, although I should point out that I have to cover a very large area. As you said, convener, you invited other ministers to the meeting; however, in their wisdom, they have decided to send me into the fray alone but—I think—well armed.

Ministers thought that I should come and give evidence partly because I have some overarching responsibilities in this area, especially as chair of the closing the opportunity gap delivery group. Perhaps, by way of introduction, I should say something about that role. At the end of last year, I announced 10 specific targets for closing the opportunity gap, which have served to focus the attention of the Executive and its partners on what we believe to be the most pressing and important poverty and deprivation issues including worklessness, health inequalities, low educational attainment, access to rural services and community regeneration of our most deprived neighbourhoods.

I make it clear that those targets and the resources and work behind them focus on individual and area deprivation. I know that the committee has discussed those two areas, which I believe are complementary. It is a question not of addressing one or the other issue, but of working across the Executive and with our public sector, private sector and voluntary sector partners to tackle both.

As much of the committee's discussion has focused on promoting the community regeneration of the most deprived neighbourhoods, I should say something about that. Members who have read the Executive's recent publication "Social Focus on Deprived Areas 2005" will know that the most deprived neighbourhoods fare significantly worse than the rest of Scotland on nearly all socioeconomic indicators. The committee has also heard from a range of people evidence that concentrations of deprivation compound and reinforce each other. The Executive agrees with that view.

We also know that it will be difficult to achieve our closing the opportunity gap targets if we do not make significant progress in the most deprived areas. For example, about one third of the lowest attaining 20 per cent of secondary 4 pupils live in the 15 per cent most deprived areas. Clearly, we must have an impact on those areas if we are to have any impact on Scotland. The "Social Focus on Deprived Areas" report consolidates and updates the evidence base for inequalities, which confirms that we were correct in our thinking on closing the opportunity gap.

As a result, targeting the most deprived areas is the right—but not the only—approach. The community regeneration fund aims to be a catalyst for that not only by funding important services and projects in its own right but, more important, by using the regeneration outcome agreement to focus the efforts and resources of community planning partners on the most deprived neighbourhoods. Although the CRF amounts to £318 million, I am under no illusion that it will tackle all the problems of deprived neighbourhoods. It will make a difference, but the big budgets for local government, the health service and others must also play their part. That is what we are trying to deal with through the new regeneration outcome agreements.

The committee has reflected on the important subject of the big amounts of money that go into local government budgets. The distribution of that money is another issue that has arisen; David Henderson is here as the expert on that. Eight years ago, I was the minister with responsibility for local government in Scotland, so I have experience of, an interest in and knowledge of the matter.

Adjustments for deprivation in the grant-aided expenditure methodology are now made to 18 GAE sub-services that are linked to just over £2 billion from a GAE total of £8.7 billion. Those sub-services relate mainly to education and social work; they include the lines for school meals, the child care strategy, services for the home-based elderly, homelessness and enhanced debt-advice services. The committee may wish to ask more about that.

I have more recent experience of working in the health portfolio. Members will know that account is taken of deprivation through the Arbuthnott formula, which was the first subject that the Health and Community Care Committee, of which I was a member, discussed in 1999. That formula was acknowledged as being a step forward. However, another review is being conducted by the national resource allocation committee. Members may be interested to know that it is exploring the potential of data zones, which the committee has discussed, in its review of the Arbuthnott formula.

An interesting issue that crossed my desk when I was Minister for Health and Community Care was the extent to which a formula that is based on the use of health services is adequate. The concept of unmet need came very much into play. We set up pilot projects on unmet need. Members probably noticed in the papers this morning a development in relation to anticipatory care, which was a key recommendation of Professor David Kerr's report. The ideas of unmet need and anticipatory care, which are closely related but conceptually different, are progressive notions in health spending. They will further ratchet up our attempts to focus health expenditure on the sickest and most deprived communities.

Apart from those in health and local government, many other funding streams relate to the committee's inquiry. We sent the committee a table that lists the various funding streams that impact in one way or another on the most deprived areas. Members will probably remember that we divided the deprivation criteria into four categories. I will not go through all the funds, but the table touches not only on the community regeneration fund, but on the affordable housing investment programme, pilot studies for unmet need in health—to which I have just referred—the working for families fund and the supporting people programme, which includes an allowance for deprived areas in its distribution.

Over and above that list of funds that relate to deprived areas, many funding streams deal with multiple deprivation, but not on an area basis. For example, sure start Scotland is targeted not at areas of multiple deprivation, but at vulnerable families with children who are aged from nought to three. That involves a not inconsiderable budget of £170 million over three years.

A complex situation of mainstream funding and specific funding streams applies. We are always looking to ensure that such funds work together better. We look forward to the committee's report as a contribution to our continuing attempts to meet deprivation needs more effectively.

It might be useful if I make two or three comments before we start the questioning. First, we have heard interesting evidence from the witnesses whom we have seen. Also, we are to have a report on a day that committee members spent in Glasgow last week. In a sense, those activities have generated the questions that members are likely to ask.

Secondly, we are interested in solutions rather than in the process of mapping out deprivation and the policy focus. We want to know what is working in tackling deprivation, which is an issue because there is much more evidence and information about the problems than there is about how the solutions work.

The third issue in which we are particularly interested is the complexity of the funding that is linked to deprivation and the problems that people have both at the Executive end and at the local authority and other organisations end—the receiving end—of making sense of the funding streams. We are also interested in whether there are opportunities for refinement, streamlining and consolidation and in how those areas might be developed. Those are the issues on which we are trying particularly to focus.

I will kick off the questioning on a general issue that has arisen. In your judgment, have we got the balance right between people-focused interventions and place-focused ones? Obviously, a range of interventions are going on, some of which are area-based and others of which focus on issues such as worklessness and which are not narrowly place based. Have we got the balance right between the two strands and are they articulating properly?

I would not claim that the situation is perfect, but I think that we have a reasonable balance between the two. We are also trying to get beyond a hard separation between the two because we want, in the regeneration outcome agreements, to target the most deprived areas of Scotland. You referred to worklessness—we are trying to connect what is happening in the most deprived areas with wider economic issues. Perhaps one of the failings of area-based funding in the past was that it focused exclusively on what was happening in particular areas. However, through the regeneration outcome agreements, we are trying to connect what is happening in the deprived areas with the wider context of our work.

I do not think that there is a hard separation between area-based and issue-based interventions. We believe that there is a place for targeting areas of multiple deprivation because they have particular problems, but we must connect that work with the wider issues, particularly in relation to worklessness. I am very impressed with how Glasgow, for example, is focussing strongly on worklessness—it is also focusing on addiction—which is a strong focus for the community planning partnerships. We are trying to join up the regeneration outcome agreements and opportunities in specific areas of need with the wider economic opportunities that are now available more widely in Glasgow.

As I said, I think that we have the balance about right between the two strands, but we are trying to get beyond a hard separation between the two.

I can see that you might argue in principle that those things can be blended. However, I have an example that arose in our discussions in Pollok last week. The Pollok area did not qualify for urban regeneration funding from the early 1990s onwards. It was brought into the loop probably when you were the Minister for Local Government and Transport in the late 1990s. Pollok lacked a local infrastructure of organisations, which had been stripped away because of earlier underfunding. It then used different organisations such as One Plus, Barnardo's and the Wise Group, which are still active in the area, to develop initiatives on health, child care and so on.

Pollok is now looking to generate local organisations to develop the initiatives. There is an implicit logic in that because in a place-based system people will try to create place-based organisations to develop initiatives that will give them ownership, where national or regional organisations might intervene. The Wise Group raised that point in its evidence. It regards the focus on community ownership of community regeneration as being antithetical to its involvement.

What you are saying might work in theory, but it clearly does not work in practice.

You have highlighted some potential problems. I am a great admirer of the Wise Group and I read its evidence with interest.

The fact of the matter is that when it comes to our meeting targets on closing the opportunity gap, we are considering reductions in worklessness across the whole of Glasgow and in six other local authority areas. That illustrates that we are not focusing all our efforts just on the 15 per cent most deprived areas.

There is no definitive answer along the lines of saying that all projects must be based locally or no projects should be based locally; projects can be managed well or not well. That is why we tried to introduce more performance management. I know that some members of the committee have found that controversial; however, we are trying to make sure that the local area plans are better and that they focus on outcomes.

If the Wise Group is the best way of delivering the outcome of reducing worklessness and of promoting work and training opportunities, it should be used. Equally, we all know of very good projects in our constituencies in which that sort of work is done well at local level. I do not see the issue as being about having to choose one or the other. I accept that David Nicoll has identified a potential problem in people thinking only locally but, as I said in my last answer, we are trying to ensure that the 15 per cent most deprived communities connect with the wider economic opportunities around them. If that has not happened sufficiently in the past, then we would like to correct that. That is another reason why there should be some kind of national oversight of this controversial step. It would be ludicrous if on principle the Wise Group were not used because local groups were being used.

I do not want to focus on the Wise Group particularly, but on the general issue. You will be aware of some of the problems associated with the urban aid funding programme and the fact that projects were not strategic in that they did not interact with one another. Every area had its own group of projects that evolved for historical reasons to do with that particular community and the people who were involved in the projects. That is not necessarily a bad thing; it was characteristic of the urban aid approach.

Another approach came through the new life for urban Scotland initiative which, as we heard from Alan McGregor and others, did not work in Castlemilk or in the other three areas in which it was implemented. What have we learnt from the mistakes of urban aid and new life for urban Scotland? How will the new regeneration approach be better?

The fundamental difference is that now we focus on outcomes rather than on projects. The other thing that I should have said in response to the pervious question was that not all the money—even from the community regeneration fund—needs to be spent in the 15 per cent most deprived areas. Twenty per cent of the money, although it could be more in some places, can be spent thematically on projects that operate across a local authority area.

However, the main point that I would like to make in response to your question is that we have recognised that some spending in the past did not focus on outcomes but on supporting particular projects. No doubt many of those projects were worthy, but the whole exercise of regeneration outcome agreements has helped to concentrate people's minds on achieving specific objectives. Whatever method is best in reaching the objectives is the one that should be adopted.

My question is: which objectives are most crucial? Are they place-based objectives or people-based objectives? What weighting do you give to each of them?

It depends. If we are talking about an objective for regeneration, then it is what is happening in an area that is important. However, that is only one of 10 closing the opportunity gap objectives and it is not a question of choosing one or another. It is important that we make progress in areas where there are concentrations of deprivation. That is not the Executive's only—or even its overarching—objective.

The first closing the opportunity gap objective concentrates on the local authority areas that have the highest levels of worklessness. The objective is targeted, but it is targeted in a different way. We are examining worklessness across the whole of Glasgow so that we can reduce it. That is not incompatible with saying that we want a particular focus on the most deprived areas.

First, to reach the overarching targets we have to make progress in the most deprived areas. That is equally true of health inequalities and educational attainment objectives. Over and above that, our particular problem is where deprivation and poverty are concentrated; therefore, it is absolutely legitimate to target them with specific initiatives. However, I do not see it as an either/or situation. It is an important part of the attack on poverty and deprivation, but it does not take away from the wider objectives.

I have two more follow-up questions, after which I will let other members in. One thing that was impressive about Steven Purcell was that he said that priorities must be chosen, and Glasgow chose drug addiction and worklessness. I am not convinced that the Executive has chosen what it wishes to do. Maybe it is not possible to have a clear choice, because you must attend to a range of matters, but I am not clear how the Executive is prioritising, targeting and handing over resources in a clear way to address a well-defined set of outcome objectives.

You say that you are keen to move forward on outcomes, but given the complexity of regeneration outcome agreement forms and the lack of a clear view from the Executive on which matters are most important, there is a question about whether clear choices are being made. That impression is reinforced by the vast number of different channels of money and initiatives that come from the Executive, of which Steven Purcell was critical.

I will be interested to read the report of the committee's inquiry but, from the evidence, I see two contradictory strands. On the one hand, people say that there is too much national supervision and that we should leave it to local arrangements. On the other hand, you suggest that there is not a clear enough national steer on the number 1 priority. There has to be a balance.

We have clear national priorities. Sticking with regeneration outcome agreements, we have clear national priorities on work, education, health and strong, safe communities. However, we are leaving a bit of local discretion in how to prioritise within those priorities. Glasgow has made its choice, as you said. Such judgments are difficult. One might say that at national level we should set two main priorities and everything else would be subordinate, but that would not necessarily be the best solution, given local variations.

That said, there is a strong steer on worklessness at national level, not just through all the initiatives that the committee has examined, but through the forthcoming employability framework, which will give further impetus. I suppose that if there is one overarching priority, worklessness comes through strongly. It is dangerous to be over-prescriptive from the centre because we would be told that there was no local flexibility whatsoever.

The convener's point, which comes out of the evidence consistently, is that the issue is not the degree of national direction, but the degree of national focus on activities. By the time the message gets down from the Scottish Executive through Communities Scotland and into the multiplicity of different agencies, the focus has dissipated. Does not the Government need to address that challenge more directly?

As I say, I am keen to examine the evidence for that. When the committee questioned Communities Scotland you seemed to suggest the opposite—which was that in some way people should be left to make decisions locally about community planning. You seemed to question whether a national agency representing the Government should have a role.

My question to Communities Scotland was to ask what value was added by it. I cannot get an answer.

That is precisely the point that I am making. Communities Scotland is an agency of the Scottish Executive, and it is ensuring that the national priorities are reflected to a satisfactory extent in regeneration outcome agreements. The convener suggests that we should go further and have an even clearer hierarchy of national priorities. We are making it clear that regeneration must address work, health, education and strong, safe communities, but the details of how local partnerships do that ought to be subject to some local discretion.

Glasgow has chosen to focus on worklessness and addiction. Those issues might need to be addressed in Glasgow but it may be that in other parts of the world the focus needs to be slightly different.

In the context of health, education, strong, safe communities and all the rest of it, I am still left wondering what added value Communities Scotland offers. I can understand what a local authority brings to the party and the resources that the Scottish Executive brings to the party, but I am at a loss to understand the added value that Communities Scotland provides.

Communities Scotland has a range of roles. It sets national standards; it has an assessment role; it is a link between national policy and local services; it is there to develop and share best practice; and it is there to ensure that communities are engaged in the process. Part of the confusion might be about what Communities Scotland is as distinct from the Executive. Communities Scotland is no longer a non-departmental public body; it is an executive agency. In that sense, it is not separate from the Scottish Executive.

What is the role of the Scottish Executive/Communities Scotland? Should it be just to produce funding and let local bodies do what they like with it, or should it have a role over and above giving funding that includes performance management elements and ensuring that, while allowing for local discretion, national priorities are adequately reflected in local outcome agreements? It seems to me that there is an important role there and that the Parliament will feel that it has an important role in overseeing what happens locally. Communities Scotland is just an agency that performs that function.

I can understand the accountability trail that a local authority must follow and the accountability role that the Executive must perform, but Communities Scotland appears to me to be in the middle, in that, in effect, it encourages local organisations to face both ways—local accountability and national accountability. In that mix, much of the focus of the policy is lost.

I do not know what you are suggesting. Are you suggesting that there should be no national accountability? In so far as there is a need for national accountability, Communities Scotland is the body that ensures that it takes place. You could ask, "Why do you need Communities Scotland? Why not just come straight to the Scottish Executive?" You can make that argument if you want to. I presume that that would mean bringing Communities Scotland within the Scottish Executive, which I do not necessarily think would change the world fundamentally.

A lot of money is tied up in the interface between the Executive, Communities Scotland, other agencies and local authorities. My question is: where is the added value in all that? It looks like there is a tremendous amount of complexity in a central part of the Government's programme, which is to improve people's opportunities locally in a wide variety of communities. I question the added value that the creation of Communities Scotland and the bureaucracy that goes with it can bring in trying to get more out of local authority community planning partnerships or health board activity.

I listed some of Communities Scotland's roles. We could get into a discussion about its status. Communities Scotland used to be an NDPB, but Wendy Alexander changed that. No doubt someone else could argue that it should be part of the Executive, but that does not change the fundamental fact that there must be a national role in the agenda and the matter should not be left to local bodies. Contrary to what others argue, we accept that there is an important role for local decision making, utilising local knowledge and all those dimensions. We can argue about who should perform the important role nationally, in so far as it exists, but we need someone who carries out all the functions that I described to ensure that national priorities are reflected in the local agreements and to manage performance and ensure that work happens more successfully than it has done in the past.

To some extent the approach recognises that previous programmes such as urban aid were not good enough. We are trying to focus on outputs and to ensure that the programmes that people come up with deliver outcomes. We will monitor that work and performance manage it. We also want to ensure that the outcomes are based on national priorities. That seems to be a reasonable proposition.

What incentives are there for the people who are involved in delivering a regeneration outcome agreement to achieve its objectives? What happens if they do not achieve them?

The outcome agreement will be performance managed, and I will get regular reports about progress on the agreed outcomes. The same question could be asked about other outcome agreements, which are becoming common in different portfolios. They will be performance managed and if there is a problem, ultimately, funding can be sanctioned, but the objective is to avoid that.

That is scrutiny after the event, once the—

No; it will be on-going. We will not scrutinise it in 2008; we will watch progress over the three years.

Does that mean that, after the first year, if performance against the expectations of the agreement is failing, the Executive will question the project's funding, or perhaps withdraw it?

That is another answer to your question about the point of Communities Scotland. Obviously, it would draw such a failure to ministers' attention. In the first instance, the Executive would intervene to ensure that something is done to correct the situation. Ultimately, funding could be withdrawn, but we would neither want nor expect matters to get to that stage. However, performance management is an important part of the process, which is why Communities Scotland, among other organisations, has an important role.

We are focusing on particular funding, and you made the point that a number of other funding streams already exist to tackle deprivation. The community regeneration fund is targeted at the 15 per cent of communities that are considered to be the most deprived under the Scottish index of multiple deprivation. We heard evidence from either Glasgow City Council or West Dunbartonshire Council that that figure should be narrowed to 5 per cent, to allow a focus on the most deprived communities. However, we also heard evidence from Fife Council that the figure should be broadened to 25 per cent, which would catch more of the people who live in deprivation and would possibly reflect the situation in rural communities, where deprivation is more diverse. What was the logic behind the figure of 15 per cent? And what was the reasoning behind the decision that 20 per cent of funding could be more widely spread within a local authority area?

Obviously, different local authorities would benefit from different cut-off points. However, the objective reason for the 15 per cent figure is based on the graphs, which show that that is the level at which many of the socioeconomic indicators begin to get substantially worse—there is a gradual rise that increases significantly from the 15 per cent point on. That was the basic objective justification, but other cut-off points have been used. Indeed, when I was Minister for Health and Community Care, 10 per cent was used. That meant that most of the money for unmet need went to Glasgow. I accept that the case for different cut-off points for different indicators can always be made; but the graph got steep at the 15 per cent point for these particular indicators, which is why that is the cut-off point.

The decision about the 80:20 split was made before I became minister, so I cannot speak with any final authority about why that decision was made, but the balance seems reasonable. The thinking behind the community regeneration fund is that it will focus on the most deprived areas. However, bearing in mind the convener's point about connecting with wider issues and not necessarily focusing only on local projects, which I accept, we wanted a thematic basis for the fund as well. Again, we can argue about the precise proportions, but the thinking was that although we wanted to support areas in particular, we accepted the need for wider, thematic projects.

Rural areas probably do not show up in some of the statistics. I am interested in the work that Glasgow is doing on worklessness and on addiction, because addiction is a significant problem in Dumfries and Galloway; it has the fourth-highest level of heroin abuse through injection. The issues seem to be the same, although the regional background is very different. How do you balance such people issues, which are perhaps linked not specifically to geography but to history and location?

Obviously, many examples could be given and different portfolios will pick up different issues. We are mindful of the different issues that exist in rural areas. One of the closing the opportunity gap targets is specifically about improving access to services in disadvantaged rural areas and a programme of work is being developed around that. Perhaps the witnesses from the Scottish Executive Health Department will comment on the specific example you gave of substance misuse in rural areas, but I imagine that individual portfolios would pick up such issues.

In Glasgow, the problem has been identified as one that must be tackled through the community regeneration fund. How does that then link in with what is happening in health and other portfolios? There has been criticism of the different funding streams and targets because of the hoops that people have to jump through to get funding from different sources. How is all that brought together?

Glasgow made the decision about drugs through its community planning partnership, but it is not specifically related to the CRF. In general, there are encouraging signs of the different agencies working well together in Glasgow. The drugs issue is a particular example and the same community planning arrangements should apply in your area. If the partnership wants to focus on drugs as a particular priority, there is no reason why it should not do so.

I do not need to remind the Finance Committee that over and above all the funding streams that we are being questioned about, community planning partnerships can use the big allocations to health and local government in accordance with their priorities. There are specific funds for dealing with drugs, but the issue could be picked up by community planning partnerships anywhere in Scotland. That is what happened in Glasgow, where the community planning partnership decided that addiction, along with worklessness, would be the priority. Partnerships throughout Scotland could utilise mainstream resources and other specific funds alongside them.

However, people complain that they have to hit different targets for different funding streams, which adds to the bureaucracy and ties up time that could be used to deliver the outcomes that everyone wants to see.

We are mindful of that. The regeneration outcome agreements offer the potential to bring more funding streams together. We are looking to see whether some of the new funding streams can be dealt with and monitored through regeneration outcome agreements to ensure that there is a strategic fit and less bureaucracy.

We are at the first stage of regeneration outcome agreements, which have the potential to build in more funding streams and more mainstream funding. The main reason why we moved to community planning from social inclusion partnerships was to ensure that mainstream funding complemented specific funding far more effectively than it had done in the past. In some ways, the key to making progress on regeneration is to tap into mainstream budgets for health and local government. I am not saying that we have got there yet, but the regeneration outcome agreements and the focus on community planning are the important building blocks for doing that and that is where I see progress being made.

You spoke earlier about the role of assessment and accountability. I am pleased to see a senior statistician on your right-hand side today. What stage are you at in the process of understanding what the baselines for the 10 targets were and what progress has been made? That is what I would call statistical control.

There are probably 10 different answers to that, and Julie Wilson is the person to answer in more detail, which she will do in a minute. Historically, there was a lack of data in some areas but, where that was the case, we are ensuring that we get the necessary data and we have established baselines for our targets.

The targets are underpinned by the latest available evidence base. We will be tracking that through the Scottish neighbourhood statistics, which are the small-area data that fed into the SIMD.

Earlier, there was a debate about the fact hat one cannot use relative measures to track progress over time. It might be helpful to explain that, obviously, if one has a fixed pot of money, one needs to use a relative measure to divvy it up between the local authorities, the CPPs and the health boards. However, the raw data that we have established in the neighbourhood statistics will be used to track outcomes over time, so the process is transparent, accountable and measurable.

I hear the words that you are saying. However, if you were making that speech to Tom Farmer, Jim McColl or Brian Souter, they would be glazing over, as I almost was.

Sorry.

We are talking about deprivation. It would be interesting to know how you are tracking the absolute number of people of working age who are in work in deprived areas. Are you doing that?

We look at unemployment at data zone levels. We look at the number of people—

I was talking about employment. Do you look at the number of working-age people who are in work in deprived areas?

We look at the number of working-age people who are not in work. From that, one can deduce the difference.

I put it to you that it might be a better indicator of success if we were watching increases in the number of working-age people who are in work in those areas. Would not that be a nice, crisp, simple measure with which to manage performance?

Yes.

The recent "Social Focus on Deprived Areas 2005" report shows that we have detailed knowledge about all of the various elements that go into the formula for deprived areas. We can track each of those elements over time and I was surprised to hear that Arthur Midwinter suggested that we could not. We can track all of the different elements of the SIMD over time and much of that information is included in the report. We did not have that before. We can track detailed information on employment, health, education and other key indicators.

From a Finance Committee standpoint, I would say that the simple measure that I spoke of would create a feedback loop that would enable us to say that, as a result of the money that is being spent on Communities Scotland projects, there are more people in work, fewer people on social security, more taxes being collected, more people with money in their pocket and, therefore, less likelihood that people will be in ill health, because they will be able to make better choices. Would it not be useful to have that crisp measure and to publicise it frequently?

That is one of the outcomes that I will be most interested in when I get reports about the progress that is being made.

You mentioned the allocation of budgets in relation to health and local government. The CRF will be £380 million over three years, compared with the big, dominant spends in health and local government. Have you ever put a paper to the Minister for Finance and Public Service Reform about changing the deprivation formula in either of those two areas?

I do not think that the Minister for Finance and Public Service Reform deals with the health issue but, obviously, your question could apply to two ministers rather than one. I am certainly interested in the issue that you raise but I have not done what you suggest I might do. There is on-going work in this area. David Henderson might want to talk about that and I know that you will know a lot about it already, because of your background.

The issue is complex. Julie Wilson is involved in the area and can give you objective reasons for decisions relating to the distribution of local government money. Obviously, there are contentious issues around the question of how much weight should be given to deprivation.

When I was the Parliamentary Under-Secretary of State for Scotland with responsibility for local government, I was interested in that area but I have not been directly involved it in my present position.

The local government formula is complicated. It has grown up over time and has been in place for many years. It breaks down a block of funding into 98 funding lines, of which around a quarter are allocated using the deprivation indicator. Around a third of the block budget is allocated using the deprivation indicator, sometimes directly and sometimes as a secondary indicator. The total for deprivation is substantial. Ninety per cent of just over £8 billion is unhypothecated; it is up to local government how to spend it. That goes back to the issues that were raised at the start of the meeting about local decision making and accountability.

In health, the national resource allocation committee is considering building on and, if possible, improving the Arbuthnott formula and is considering the use of the deprivation data zones in its review to see whether we can do even better at distributing money on the basis of deprivation.

I am glad that you raised the point, because I was keen to follow up Wendy Alexander's conceptual point about the extent to which it is right for the Executive to consider deprivation in different ways. I was involved in loan charges support for GAE from 1994 to 1997, which was the reorganisation period, I introduced the first level-playing-field support for private finance initiatives, I project managed the Arbuthnott review and produced the technical report and now I have inherited the SIMD, so I have been around these issues.

We are doing the right thing. We must start from the philosophical basis of what the funding formulae were set up to do. The aim with SIMD is to consider area-based concentrations of deprivation, which is why the formula is constructed in the way that it is and is targeted using the data and the work that we do on them. The defining principle of Arbuthnott was equality of access for those in equal need, which was the defining principle of the national health service when it was established back in 1948. With GAE, we are considering what each of the local authorities would spend if they were providing a similar level of service at a similar level of efficiency. In each big block, we are seeking to provide for a different philosophical basis.

Over time, the best available data and methodologies have grown up in support of those bases. When I conducted the Arbuthnott review, there was limited small-area data, although there was a lot more than there was in the original Scottish health authorities revenue equalisation formula, which was set up in the 1970s. There was only health-board level information and a lot of judgment was required. We used the best available data in postcode sectors, because we did not have data zones. On that basis, we examined the strength of the link between deprivation and ill health.

Now that the data zones have been developed, the national resource allocation committee review can consider the potential for that type of geography, with far more small-area information than we had at the time of the Arbuthnott review back in 1999.

The data in the analysis should follow the policy objective. We should not use the data to drive things or say, "Now that we have SIMD, let's use it for everything." We should consider our objective in delivering funds. We can seek to modernise the formula as periodic reviews come up.

On the point about complexity that John Swinney raised at the start of the meeting and partly to answer to Mr Chisholm's satisfaction Wendy Alexander's point about the methodology, I have set out everything you wanted to know about the three funding formulae in 20 slides. These things are as complicated as people require them to be. If members of the committee and Professor Midwinter wanted a follow-up session on the techie stuff, Angela Campbell for health, David Hurst for the GAE and I would be quite happy to work through techie issues with you. I know that the time today is intended for quizzing Mr Chisholm.

Wendy Alexander wants to follow up on techie issues. I will bring in Frank McAveety.

I am a real enthusiast for techie issues—haud me back.

I agree that it was the right issue to ask about, Frank. I will follow it up for you.

I want to ask about two things. First, we have only to look at local government funding in the past 40 or 50 years in whatever part of the United Kingdom to know that everybody throws up their arms and says, "It's really complex and difficult. I don't know how to shift it." It is a consistent problem. One of the advantages of the Parliament is that we might be able to shift some of that ground a bit; the committee could consider that. Before I move on to my second point, am I right to say that, in essence, 90 to 95 per cent of funding is distributed in the historic way, rather than according to deprivation?

That leads on to the techie stuff; I do not know whether you want to get on to that now.

No; I am trying to get at how we shift funding towards the areas that need it.

I must be careful not to tread into the area of local government, which is not in my portfolio, but I see an interesting distinction between the areas, for which there are lots of good technical reasons. In health, the Parliament and the Executive made the decision and restructured the funding, whereas in local government, beyond the technical formula, everything is done in partnership with the Convention of Scottish Local Authorities. I imagine that COSLA would say that that is a good thing and it is part of our relationship with local government; nevertheless, it is different from what happens in health. An interesting distinction arises from that complication in local government funding, although I do not want to go too far in that direction.

The facts are as I stated at the beginning. In a number of local government lines, deprivation is a factor, and people might want to make it a bigger factor. There are technical issues and political judgments to be made.

I thank Julie Wilson for admirably anticipating our possible interest in this area. The best thing would be to let us have an electronic copy of the slides. If we want to return to the matter, we can then do that.

I also ask for some further information in writing. You helpfully defined the policy objective in local government as a similar level of service at a similar level of efficiency. That is the policy objective that underlies the formula at the moment. In correspondence, can you please clarify whether that objective has changed in the past decade or whether it is a long-standing one? Does the provenance of that definition, like the Scottish health authorities revenue equalisation—or SHARE—formula, go back to the mid-1970s? I do not know. Can you please clarify whether the policy objective for GAE allocations has changed in the past 10 years? Also, is that policy objective shared by local government throughout the UK? Does the definition of a similar level of service at a similar level of efficiency apply in England and Wales?

One also needs to get hold of a certain amount of the techie side of things in order to plunge into this minefield. Can you clarify for us the changes that have been made in the GAE allocation mechanism in the past 10 years and the rationale for those changes? I am not asking whether the data have become more sophisticated; I am asking whether there has been any policy change in GAE allocation in the past 10 years and, if so, what the rationale for that was. I choose the 10-year time horizon because, as you say, things settled down after reorganisation in 1996-97. That reflected one political outlook, but then there was a change of Government. For those reasons, a 10-year time horizon is appropriate. If you could tell us whether there has been significant change in the mechanism in the past 10 years and what the rationale for that has been, that would make for more informed observations by the committee about what represents the art of the possible—or the not possible—in this area.

In addition, is Julie Wilson able to tell us what the evidence base was for any shifts—or non-shifts—or whether evidence has contributed to the change of direction?

I asked for rationale, which is always easier to come up with than evidence.

Evidence would be helpful.

Julie Wilson also talked about the SIMD and the best formula for the best arrangement. I have a question on the inclusion of rural indicators in the SIMD. Much of the evidence that we have received has been that the indicators point in the opposite direction from urban areas and that the political bolting-on of rural deprivation issues distorts what we are trying to measure, which is multiple deprivation in urban areas. Therefore, if we want to give money to rural areas for access issues, we should do so by a different mechanism. Do you or your colleagues have any comments on that?

I would be happy to comment. I will also pick up on the point about the historic spend, if there is time.

The access domain in the SIMD points in the opposite direction—the techie term is that it is negatively correlated. Our philosophical base is that deprivation has many facets, all of which we want to cover. Access difficulties and barriers are a social exclusion concept that we seek to measure in the SIMD. That is the rationale for their inclusion.

Can I just pause you there? To consider the issue from an analytical background, does that not mean that your concept of deprivation is too wide? Historically, the SIMD was produced to measure multiple deprivation. The analysis of urban deprivation led to indicators that allowed us to measure it. It seems to me that the concept was then politically widened to take account of rural issues. Is that correct?

No. The concept that we try to pursue is that of deprivation. It just so happens that many of the indicators allegedly pick up the more urban angle. Many people with a rural interest are concerned that there is a bias against rural areas. One controversial issue was the question of car ownership in the census, which fed into the Carstairs index. Specific indicators of rural deprivation are the analytical holy grail, but we are trying to find them. The methodology for the SIMD, which was developed for us by the University of Oxford, is a UK-wide concept.

We recently sent the index to a group of academics in Glasgow for an independent health check. The results of that, which were published earlier this month, restate that the index is fit for purpose. The access domain is valid for some of the more deprived areas at the margins, where we consider the peripheries of settlements and catchment areas. However, the SIMD differs from the health system, which makes a separate adjustment for remoteness. That ties back to the fact that, under the Arbuthnott formula, if we seek to fund equality of access for those who are in equal need, we must estimate the potential workload and make a further adjustment for the diseconomy of scale that means that it is more expensive to provide for a smaller workload in a rural area.

In short, no, it was not a political decision to include rural issues.

I just think that there is a mixture of different issues in the SIMD. We seek greater transparency and clarity. As you said, we have three different approaches—the GAE approach, the Arbuthnott approach and the SIMD. The Arbuthnott formula allocates on the basis of deprivation, but distributes on the basis of health need, which is not necessarily aligned with deprivation. When Greater Glasgow NHS Board allocates its resources, it does not put them into deprived areas; it just provides hospitals.

That is a different question, which I always used to be asked when I was the Minister for Health and Community Care. The distribution formula and what happens are two different matters. The same question exists in local government. The extent to which local authorities skew money is another interesting issue—that obviously happens in education, for example, in relation to pupil to teacher ratios in deprived areas.

I suppose that that question is secondary to the issue of the overall distribution of money. The committee needs to consider to what extent it wants to have national oversight. I notice that some of the expert witnesses from whom the committee took evidence called for more national oversight of how local bodies spend money within their boundaries. It would be interesting for us to consider whether that is desirable. I do not know whether we have the detailed information that we would need in order for there to be such oversight. Earlier I spoke about making regeneration work effectively by bending the spend. The amount of information that we have is an issue. We have tended to adopt the approach of evaluating spending purely on the basis of whether it delivers particular outcomes.

I hesitate to tread into the area of local government funding, but in health I was struck by the fact that unmet need was not being captured by formulas. An attempt has been made to deal with that issue. I wonder to what extent the same phenomenon exists in local government. Conceptually, the issue is interesting. Equal access on the basis of equal need is fine, but does that deal with unmet need? With anticipatory care, the Health Department is going even further. The notion of unmet need is based on the principle of equity of access, but one could argue that the ultimate principle should be equity of outcome. In that case, it is necessary to go further than dealing with unmet need and to make specific efforts, as is being done in particular areas with anticipatory care. One could argue that the same principle would apply to education in deprived areas and so on. That could change things a great deal. It is an interesting area, if we are serious about dealing with deprivation and poverty.

I suppose that the issue with which we are particularly concerned is consistency—the appropriateness of the mechanism that is being used for the use to which it is being put. As Julie Wilson put it, is every funding mechanism perfectly adapted to the requirements that have been placed on it, or does the diversity of funding mechanisms in health, local government and regeneration suggest that there is not appropriateness or fitness for purpose in each case? Do we need to look at having common funding mechanisms?

Nothing is ever perfect. The analysis that was carried out when SHARE was set up was the best that could be done based on the available information. If the Arbuthnott team had been meeting back in the 1970s, it would probably have done the same. I have with me a graph that I hope answers the convener's question. The majority of GAE for education is allocated on the basis of the number of pupils in an authority. The deprivation adjustment seeks to redistribute some of the funding. That is where the criticism regarding past levels of spending comes in, because the calculation is based just on the data that are available in local government. There is not the same information on supply that was available to the Arbuthnott committee, so that adjustments could be made for that. The majority of the education block is awarded on the basis of pupil numbers. Health, by contrast, is a universal service for all age groups; its population base is not restricted to people of school age. Because the population bases are different to start with, we could never have the same funding formula for health and education. I do not know whether that addresses the question that was asked about past spending.

Your comments are welcome. However, I asked about how we can shift our energies and emphasis. Anyone who has been a minister will recognise that it is possible to become caught up in the minutiae of process, rather than consider the big issues of principle and the questions about how we want to shift things. It strikes me that a great deal of energy will be expended on getting 32 local authorities to be reasonably consistent in their regeneration outcome agreements. That alone is a big challenge. A further issue is the size of regeneration budgets compared with overall annual spending on education, on local government more generally and on health. It is about pulling together the energies of the Executive—both ministers and the civil service—to shift things. Although this resource allocation is welcome, I am not sure that it is the sort of critical work that we should be doing.

The critical work should be about shifting some of that statistical analysis so that we can change the way in which we arrive at conclusions and perhaps face up to the difficult political choices that need to be made. We must at least engage in that in a rigorous way to try to make the kind of shift on some of the problems that we know exist primarily in very poor parts of Scotland.

The distribution of money is obviously an issue, but regeneration outcome agreements would still be the right approach, however how much money was shifted. As they develop, regeneration outcome agreements will be able to pull in more and more mainstream funding. Presumably, the more mainstream funding that is pulled in, the more ambitious the potential outcomes can be. For me, that is the way forward. Regeneration outcome agreements are already beginning to capture different funding streams, but the more that they capture mainstream funding, the more ambitious they will be able to be.

How rigorously does the Executive check the efficiency and effectiveness of its expenditure in areas of multiple deprivation?

Sorry. Will you repeat the question?

We are putting a lot of money into those areas. How rigorously do you check the efficiency of that expenditure?

That is related to what I have been saying about regeneration outcome agreements and performance assessment more generally. As I said earlier, such checks are obviously a key part of what Communities Scotland does through its performance management of the community regeneration fund and the regeneration outcome agreements that are part of that. In a way, you have simply given another reason why performance assessment is important.

The regeneration outcome agreements apply only to a particular fund. Are other funding streams checked with the same rigour?

As was apparent from his evidence to the committee, Professor Sutton has an interest in where the outturn spend is allocated in different areas and the extent to which different boards target funding appropriately once they receive it. That issue feeds into the work of the national resource allocation committee—or NRAC—on unmet need. We are aware of that issue and we are considering it.

Having been involved in setting up the performance assessment framework for health, I know that we have adopted a methodology for the big public health targets that charges each board with making its contribution to tackling inequalities in its area. For example, on the target to achieve a 50 per cent reduction in coronary heart disease, rather than just rank boards on rates for premature mortality from coronary heart disease—that would be pointless as we would just have one board at the bottom and one at the top—we adopted a methodology whereby each board is asked to deliver a 50 per cent reduction from its own baseline. The target will be met only if boards tackle the inequalities in their areas and put in the spend where it matters.

Given that the Executive is aware of the problem and is doing something about it, when can we expect to see outcomes on issues such as those that you have described?

You will be able to trace the outcomes through the small-area data and neighbourhood stats that we are providing.

Is that information available now?

You will be able to see the baseline. The "Social Focus on Deprived Areas" report should give a baseline for the information so that we can then track developments over time.

On health targets, I should flag up the fact that the recent report from Professor David Kerr placed a lot of emphasis on tackling health inequalities. The Executive has set specific targets to increase the rate of improvement for the most deprived areas in six indicators, including coronary heart disease—as Julie Wilson mentioned—and cancer mortality. Again, those issues will be tracked carefully. The targets are required to be met within a specific time period.

How frequently will the Executive report on that?

I am not sure. Perhaps Frances Wood will be able to clarify that.

Annually.

That example is interesting because I set those targets when I was Minister for Health and Community Care. At the time, we did not have a baseline but we have a baseline now. The first reports on those targets are coming through—I do not know whether they have been published yet—and they provide some interesting figures on where improvements are taking place. We set targets for improvements in the most deprived areas, but the difficulty in measuring improvements in health inequalities is that improvements in deprived areas may be matched by greater improvements in more affluent areas. However, that is an example of a target for which we had no baseline when we set it and, having set the target, we now have a baseline against which we can report at regular intervals.

The beauty of that mechanism, especially if the information is reported as time-series data, is that all the silos of Government will take a sense of ownership in the outcome and the entire population of Scotland can start to be conscious of the measures that we should all be working towards.

It is a good example. The two indicators that we picked—premature mortality due to cancer and coronary heart disease—are the simplest and starkest indicators of health inequality so we are tracking those in relation to the target on closing the opportunity gap. We now have the baseline and we will be able to track progress during the next three years and beyond, so it will be absolutely clear whether the target for improvement is met, exceeded or whatever.

What is your response to the Audit Scotland report "Scottish Executive: supporting new initiatives"? It suggests that there is scope for greater clarity in the setting of objectives and measures of success for the community regeneration fund.

I read that report and I suppose that I was pleased that none of the projects that were benchmarked against the good-practice principles was found to have a significant degree of unmanaged risk overall. Obviously, the report focuses on the processes that the Executive uses to establish and operate projects. We will certainly consider the scope for improving the guidance and encouraging consistency and compliance. We want to learn lessons from the report, which will also be considered by the Parliament's Audit Committee.

There have been criticisms of the community regeneration fund but there is also an aspiration to move into mainstreaming and consider regeneration outcome agreements as a mechanism through which we can drive a greater thrust of mainstream funds. How robust are the mechanisms and how realistic is that objective?

One of the criticisms of the CRF relates to your point about the need for a clear national picture due to the local variations in priorities. Given our general approach of combining national and local priorities, it is perhaps difficult to achieve what Audit Scotland asks for, but we are certainly happy to take on board what it said. The other thing about the regeneration outcome agreements is that they took longer to develop than Audit Scotland would have wished, but it was important that there was some to-ing and fro-ing between Communities Scotland and the local community planning partnerships so that they got the agreements right. That is why they took a bit longer to develop and did not meet the April 2005 deadline.

We have heard slightly contradictory views on ring fencing. On the one hand, Steven Purcell said that ring fencing represents a constraint on local authorities' freedom of action and he mentioned the complexity of the audit and bidding requirements of different kinds of funding. On the other hand, Glasgow clearly benefits from ring-fenced initiatives. Again, have we got the balance correct?

We are seeking to achieve a balance. There is a perennial tension. In general, local government lobbies for less ring fencing. David Henderson might want to comment on the thinking on that, but in general there is a move towards outcome agreements. The intention is, no doubt, that some funds that are ring fenced can be un-ring fenced—or whatever the word is—when we have more effective outcome agreements.

From our point of view, ring fencing serves an important purpose in driving national priorities. Sometimes, it is short-term ring fencing. When we can use outcome agreements, that is fine, but ring-fenced funding is useful for certain initiatives, not least those that are targeted at deprived individuals or communities. The community regeneration fund is an example of that. It is intended to draw in mainstream budgets but it is targeted at the local level. Some people say that that means that we do not trust local authorities, but we have national responsibilities. What Andy Kerr said yesterday about anticipatory care and the funding for that is really over and above all the decisions that health boards make. He was saying from the centre that money will go to particular community health partnerships to pilot the new work on anticipatory care that was recommended in Professor David Kerr's report. In the short term, there is certainly a role for ring-fenced funding for our new directions and policies. In the longer term, that might turn into outcome agreements.

One thing that probably has changed over the past 10 years is the amount of money going from the Executive into local government in ring-fenced funding streams. The amount is now £1.8 billion out of a total of just over £9 billion.

There are two ways in which we want to make progress in the coming year or two. First, we want to merge the number of funding streams to reduce complexity. Secondly, we want to move towards outcome agreements and to focus on what is achieved locally rather than on the process.

The GAE funding formula gets a lot of attention but it is just a means to an end. It is not 98 different funding streams; it is one funding stream and a distribution methodology. It is still important to get the amount right, so that local authorities get the right amounts, but we have to focus on what they do with that money. We are moving into that territory and are streamlining the bureaucracy. Merging the funding streams will cut the amount that is spent on the process.

Does national performance accountability conflict with local priority setting? When ministers allocate ring-fenced money, they are held accountable for the extent to which that money delivers their priorities; but you are arguing for local flexibility to decide priorities. Is that position consistent or inconsistent? How can it be made more consistent?

A second question also arises. We can talk about two types of ring fencing: tight ring fencing and slightly looser ring fencing. The latter would apply to programmes such as the supporting people programme, in which an overall allocation is distributed among different local priorities. How on earth can ministers' policy priorities be identical to local policy priorities when there is a tension at policy level and at management level?

The Executive would set the overarching targets and it would then be up to local authorities to decide how to achieve those targets. That is the only way to do it; you cannot have both sides setting different, conflicting targets.

Many of the Executive's funding streams are specifically targeted. Is that consistent with what you are saying?

Depending on how we move ahead, the focus will move away from process and towards outcomes. However, we will need to be able to monitor what happens.

At one level, Alisdair McIntosh might be more open to the question than David Henderson. David is talking about local government but there may be more of an issue in the areas that are not covered by GAE.

We are as one on this, as you would expect. The way to manage the tension or to bridge the gap—if there is a gap—is by establishing a framework of outcomes. At the high level, we have to identify what the Executive wants, but that has to link to a series of more specific outcomes that make sense locally. That would allow us to move away from the need to measure activity or to count outputs; instead, we would be able to focus on the big picture in terms of outcomes.

In relation to the community regeneration fund, we are trying to ensure that the outcomes that were identified in the fairly broad framework that informed the negotiations on regeneration outcome agreements link up with and make sense in the context of the health improvement framework for national outcomes, the work that is being done on antisocial behaviour and related outcome agreements and the work that will follow on from the employability framework, for example. We are trying to ensure that the foundation of the ROAs can be built on by colleagues who work on different portfolios, so that, down the track, we can consider much broader outcome agreements.

The convener mentioned the supporting people programme, under which we are working with health portfolio colleagues to identify joint outcomes, particularly for older people, because that portfolio supports some interventions and the supporting people programme supports others. If we can achieve clarity on joint outcomes, perhaps we can develop the mechanisms to deliver them.

Through the ROAs, we have a good starting point, but the answer to the question of how far we can go will depend on building meaningful outcomes that are measurable, make sense at national level and feed into more specific outcomes that local authorities and their partners can deliver on.

That could be one way to get round the problem of separate funding streams not coming together. A good example is the supporting people programme joining up with work on health, whereby we can put together funding streams that have traditionally been separate. A whole agenda of joint budgeting and so on relates to that. That could deal with some of the problems that the committee has highlighted in its deliberations.

I will give a little more information about what we are doing in health, where we are moving towards local delivery plans and are trying to focus on several targets that are more about outcomes than outputs. In health improvement, we have tried to tie together joint health improvement plans with regeneration outcome agreements. We are developing a joint outcomes framework that we hope community planning partnerships will be able to use to direct their local investment in tackling deprivation and health inequalities and in community regeneration. We are tying together all those matters around outcomes, which will become jointly owned by local government, the NHS and wider partners in the community planning structure.

It might be useful if you provided us with examples of action that the Executive is taking to ensure a more consistent approach to the co-ordination of funding streams and the measurement of outcomes and outputs. Perhaps we could have that in writing.

Malcolm Chisholm indicated agreement.

In any sphere, the movement towards achieving consistent improved performance involves what we have discussed: worthy aims that lots of people well understand and which are under statistical control, so that the measurement can be seen to be progressing. The other component links to the key word "variation", which the minister used. What steps are being taken to understand the causes of variation in different areas, to model them, to document them and to address those reasons?

Variation in what regard?

Variation in the intensity and nature of deprivation.

Is that not partly what the SIMD seeks to do by having 31 indicators that feed into consideration of the multifaceted nature of deprivation?

Are you talking about tracking variation over time?

No. I am talking about understanding why area A is different from area B and what factor impinges on deprivation in area A but not in area B and about comparison even with areas that have little deprivation. I am talking about what is different—transport difficulties, housing difficulties, education difficulties or a lack of jobs. Can we identify that and be seen to be addressing it?

Yes, we can do that. We have all that information and we are working with our regeneration policy colleagues to develop that understanding. The information can be used to see the extent to which outcome agreements tie up with the issues that the data say are underlying problems.

In the Highlands, where can I look at a social inclusion partnership area and understand how it deviates from the ideal or other areas, for example?

All that information is on the Scottish neighbourhood statistics website but, if you wanted, we could run you special analysis of any SIPs or any other geography. The database that has been set up allows people to draw their own maps, choose their own indicators and do all the comparison, but if you wanted to give us a list of questions, we would be happy to provide all the information for you.

I am more keen to see a process in which you have identified that information and are taking steps to ensure less variation and a more median normality.

That is what closing the opportunity gap is all about. To answer your question, we now have the information and can track it to find out where the gap is being closed. The underpinning philosophy of closing the opportunity gap is to close gaps between groups of individuals and between places.

So is it possible that, at some point, we will get a crisp statement on one sheet of A4 that sets out for a SIP area the aims, the statistical data on outputs that you have received and the key measures that you are putting in place in order to lift all the boats in the area?

We can do that. We have given some examples of health and work indicators and I am sure that we could simplify those. Part of the problem in that regard is that we have very detailed data from the social focus on deprived areas. I am sure that that could be simplified; I believe that Julie Wilson could do that, among her many other talents.

One of the difficulties is that there is probably more information about the problem than there is about the solution, but that takes us back to where we were at the beginning.

I thank the minister and his officials for coming along today. We will reflect on what we have heard. I suspect that we might want to take further evidence in the new year. Your ordeal is over, Malcolm.

It was not an ordeal; it was a pleasure.

As we are a wee bit behind time, I wonder whether I could crave Jim Mather's indulgence and take agenda item 3, the report to the committee on the case study visit, at next week's meeting.

Certainly.

He is such a reasonable man.

Absolutely.