Official Report 356KB pdf
Dormant Bank and Building Society Accounts (Scotland) Order 2010 (Draft)
I welcome colleagues to the 21st meeting of the Economy, Energy and Tourism Committee in 2010. I remind members that we have previously agreed that agenda item 4 will be taken in private. I welcome Johann Lamont to the meeting as a special guest; I hope that you enjoy your visit to the committee.
I have with me Jackie Killeen, who is head of policy and development at the Big Lottery Fund, and Geoff Pearson and Laura Sexton from the third sector division of the Scottish Government.
Thank you for your opening remarks, minister. You indicated the four broad policy areas that you intend to include in your guidance to BIG. Why did you not include them in the policy notes for the order?
That is because they are in the order and are relatively self-explanatory.
They are not in the order. It mentions only strong, resilient and supportive communities. The four policy objectives to which you referred are not mentioned specifically.
I am told that they are in the policy directions.
If somebody points out to me which paragraph in the explanatory notes refers to them, I will be happy.
The next stage will be policy directions from the minister to BIG. Normally, we would expose such policy directions to the committee at this stage. However, the act with which we are working requires us to consult BIG before we issue the directions. We therefore have the slight conundrum of whether to consult BIG first and then come to Parliament or consult Parliament first and then go to BIG.
That leaves the committee in the slightly difficult position of being asked to recommend approval of an order whose scope is wide. The minister has a series of policy objectives on the back of the order on which we are not allowed to comment. That strikes me as being not entirely satisfactory.
I am sure that members’ comments would help with framing the directions that we will give to BIG.
I will query that point. It helps that we had a preliminary discussion some weeks ago, minister. Although the policy directions could not be issued before consulting BIG formally, I had hoped that you might bring draft policy directions with you today. How much does what you have put on the record constitute what will be in the policy directions? Do you want to add more to make clear what you expect the policy directions to contain, subject to your consultation of BIG?
As you know, we consulted widely by doing early work with the Scottish Council for Voluntary Organisations, by taking the process round the country, by opening up the consultation website and by having one-on-one conversations with members. We are keen to ensure that, as we formalise the system within the constraints of the formula with which we must work, it will pass audit by the committee, and that members will see the audit trail of the inputs being reflected in what is finally put in place. I acknowledge your concerns. I ask Geoff Pearson to say more that might give you comfort about how we can keep the process as tight as you and I would like.
When the policy directions have been sent to and agreed with BIG, we intend to show them to Parliament, so that members have a clearer picture. In his introduction, the minister set out the four themes, which are intended to be kept wide, in particular because the money will not become available at least until next June—we expect to wait another 12 months for the money from the UK Government.
It might help if BIG explained how it will fulfil its remit.
For us the process is pretty much as Geoff Pearson has outlined it. Once we receive policy directions from Government, we will be able to begin to put together a strategic plan that takes accounts of needs and each of the policy areas. We will then consult on that plan to ensure that we come up with the best funding mechanism to support those aims and, before we finalise it, will come back to ministers with it and convert it into whatever funding process will ultimately be designed.
Will the broad indications that we have heard today be adequate to define the strategic plan? In that respect, I certainly understand the minister’s point with regard to the scope of the areas. It might also be interesting to hear Jackie Killeen’s thoughts on the type of grant or award that might be appropriate. For example, nothing in the minister’s opening comments indicated whether there would be a few large awards or a lot of small awards, which clearly makes a difference to the sustainability of projects. On the basis of what we have heard today, do you expect the policy directions to be enough, or will you need more information or detail to clarify the minister’s intentions?
Those are important questions. We need to know various priorities, such as the kind of impact the funding should have and whether we are looking for a longer-term legacy. We must also strike a balance between all that and making money quickly and easily accessible.
Will all that be addressed in the policy directions that the minister intends to bring forward? When do you expect to make those directions available to us in draft—or final—form?
Geoff Pearson will clarify the timings.
We would want to give you the policy directions before recess. We still have to go through a small legal process, depending on the advice that you give us and the progress that we make today, but we would certainly hope to give them to you soon.
How is that exchange influenced by the endowed trust proposal?
It has been decided in the English part of the act the priorities should be set out. There is also reference to a social investment bank which, when we first saw the provision, we thought would account for only a minor part of the money. However, it is beginning to look as if it will account for a major part of the money in England. If BIG advises us that an endowed trust mechanism would be beneficial, that will strongly tip the balance. On the other hand, if the advice is that such a mechanism is awkward, we might well suggest to ministers that we probably should not take that approach. In either case, we will depend on advice.
The development of a new fund such as this one is refreshing in respect of social and environmental development for communities in Scotland, because there have been constraints in the way in which BIG has operated in that respect in the recent past. First, while a needs assessment is being undertaken, will there be a wider definition of the kinds of social and environmental projects that can be supported than has been the case within the current constraints under which BIG operates?
That issue has been registered: I hope that we covered it in my opening notes. We also got input on it from Lewis Macdonald, which we have reflected on and have referred through to BIG. I will pass the parcel to Jackie Killeen, given that she has now had that steer direct from Rob Gibson, from Lewis Macdonald historically and from the Government in our exchanges.
It is very important for us to treat the two as separate sources of funding. Dormant bank accounts funding will be delivered and reported on separately from lottery funding, as it comes from a different legislative source and has its own legislative framework here. Although there are many advantages for us in being able to draw on our experience and our infrastructure in developing funding programmes, we are clear that this is a separate source of funding with discrete purposes. We will set up the right kind of funding programmes so that it achieves those purposes. It is different from lottery funding in that respect.
I welcome that remark. I will give an example of a project that hit the buffers recently but which is quite an exciting project that would boost self-esteem and self-reliance in communities and be an example to others. It came in the form of an approach by the football team from the village of Embo to set up forest crofts in its area. It ran into problems in BIG, including issues about buying Government land. Such projects in many parts of Scotland might get a new lease of life from the thinking that you have outlined.
We are all quite keen to see the dormant bank accounts funding, alongside the likes of the post office diversification fund, having a direct impact in its own right. We want to identify novel ideas and approaches that can be emulated elsewhere and perhaps supported along more traditional lines. Rob Gibson was talking about a solid asset-based project that might be able, having been proven through something such as the dormant bank accounts activity, to be mainstreamed through other support—even through the private sector. We want the funding to be as catalytic as possible. I invite Jackie Killeen to comment on the practicalities that she has to deal with.
That is the sort of issue that we expect will emerge in consultation. What should the balance be? Should small amounts of money be given to lots of communities or is it also important to fund larger and more expensive projects? For us, it is important to ensure that we deliver an efficient fund that does not tie up too much of the money in operating costs. It is about understanding what it is important to achieve with the funding.
I hope that the instructions that are given about the objectives include a rethink of how BIG has been operating, in order to open up the possibilities. I can see that the needs base has to be carefully defined to be more adventurous.
One of the interesting dynamics of a consultation process is that one’s own mindset is confronted by other people’s opinions and views. The hallmark of our handling of the dormant bank accounts process to date, and how we will continue with BIG, is our being very open. For what are relatively small sums of money in governmental terms, it is gathering a huge amount of attention, which guarantees the integrity of the process. We are determined to ensure that the integrity of the process stands up to audit.
Two consultations were carried out previously side by side. To what extent do the four thematic priorities reflect the results of those consultations?
The priorities very much reflect the consultations, albeit that at some of the consultation events there was a slight skewing of attendees towards young people and organisations that represent younger people. That was a natural phenomenon, but there was the self-correcting feedback loop of getting people from other interest groups making their views known. The process has gone through an interesting iteration, in that in arriving at the four themes we have seen movement from others in the process. For example, those who focused heavily on young people began to change their position to back more intergenerational activity and more activity that enables young people to deliver services for older people, or in a way that ensures that young people have the benefit of interacting with older people. Out of the consultation process came the balance that is reflected in the four thematic points.
You mentioned the four thematic priorities. The first two seem to be straightforward, as does the last one. However, can you expand on the priority of intergenerational activity, explain in simple terms what that means, and give us some examples of what you envisage by that?
It is essentially about young people, through organisations such as Fairbridge, doing more for older people and gaining in the process. I can see young people and older people represented throughout the four priorities. That is a given with the opportunities for children and young people priority. Addressing health inequalities through increased activity has a fairly material skew towards younger people, and the intergenerational connection priority is what it says on the tin. In the priority on community-based employment opportunities, the word “employment” suggests how we can get more young people into the world of work. Some of that work will be community based or social-enterprise oriented, perhaps skewed towards delivering services for older people. Again, it will give younger people the chance to interact with older people and perhaps learn from them in the process.
I call Johann Lamont.
I appreciate being allowed to ask questions, convener, given that I am not a committee member.
Things have changed dramatically in the past year. There is less money, we have a different political landscape, time has passed and we have taken the consultation responses on board. The wider third sector voiced its desire to be in on this together. I can foresee a situation in which young people get the benefit that would have accrued through skewing the money 100 per cent to them, but with some extra advantages—the hearts and minds of other organisations and the chance to interact better. We keep the cohesion so that the whole system works to get the best results for itself and for all the communities that we are talking about. That is a better dynamic to our proposal than one that might create division. I have thought long and hard about how to optimise things, and I have come to the conclusion that optimisation means collaboration, trust and respect. If you want sub-optimisation, division and blame are a good way to go about getting it. It is sensible to hold the totality together, while acknowledging that a generation is coming through in tough times and that we need to do everything that we can for those young people.
The normal process for policy directions is that we prepare a draft on the basis of what ministers want. We show that informally to BIG and there is an iterative process while we hone how BIG wishes to be directed and how we wish to direct it. Then we come to the point of saying, “This is the direction that we will give you,” and the minister sends it.
To be honest, those answers have not clarified matters. I am not sure how far you have gone in producing the draft directions and I do not see why sharing them with people would be difficult, if that would help to inform our decision on the order, as the convener said.
I understand the concerns and the logic that is behind them. We have followed the consultative process, in which many people have suggested bright ideas and shown much energy. Many ideas from the sector have filtered through to us, from MSPs and indirectly. Much thought has gone into the matter. I am concerned that your proposal might constrain the innovative processes that are out there. If we are too constricting, we might kill radical ideas that could have a dramatic effect.
That argument would have force if the money were all that was available to the third sector for the next three years, but it is not—it is a small amount of unexpected money. As we said, it is a windfall. The other side of the argument is that we could end up with all these fantastic ideas and a small amount of money, so the impact would be dissipated. We have discussed whether the effect will be short term, long term or whatever.
I respect your view, but the third sector knows by and large where the money from its revenue sources will be spent. The funds that we are discussing are additional money, which could trigger many innovative ideas. Constraining the themes might inhibit such ideas, which we might regret in the long term.
I simply want to make an observation. As Johann Lamont said, the money is unexpected, but we have a crisis that, two years ago, was also unexpected. One of my concerns was that there might be a sudden halt to funding by what looked like rock solid individuals and corporations. The availability of the windfall may make it possible to intervene in inexpensive but effective ways to maintain continuity in organisations. I do not mean failing organisations; I am talking about the consequences of Lloyds TSB and the Hunter Foundation, for example, having to contract drastically. The cash could possibly be deployed in ways that would bring other funds into play. It seems to me that an adventitious windfall has coincided with a real collapse elsewhere, and it could be of great use.
That is a perfectly valid scenario. Essentially, the consultation and MSPs’ views have skewed us less towards organisations and more towards communities and the idea that a new generation of much more resilient and proactive communities is coming forward. When we came into office, I was impressed by civil servants who talked to me about work that they had done, and by the likes of Professor Mark Moore, who is the guy who has done all the work on public value outcomes. The other side of the coin is his great desire to see active citizens. Essentially, the strong, resilient community is a function of more active and self-sufficient individuals—active citizens. That is where the consultation is nudging us.
I have listened to the exchanges around the table with interest, and it seems to me that things partly depend on how the themes are related. This week, I had a meeting with Aberdeen Children’s University, which supports children in primary 6 and 7 in disadvantaged areas to proceed with extra learning at the point of transition to secondary school. It struck me that that project could perhaps benefit from wider support and wider application in Scotland.
The obvious point that you make is that it is important for projects to tick several boxes. It is equally important to come up with imaginative, genuinely purposeful solutions and end up with outcomes that we all want—with overall resilience at the individual and community levels and the cohesion that comes with that. We will leave that to BIG to a large extent and to the draft policy directions process. I understand that the timing of that is critical. I look to Mr Pearson to give an indication of what we can do and what is possible.
I will say two things, if I may. One is that the balance between the priorities will depend largely on the advice that we get from BIG—from the consultation and its knowledge on how best to deploy funds. The minister spoke about an endowed trust. If the BIG advice is that an endowed trust is the best place to put the money, the amount that we spend on the individual themes could be less. We could put all the money into the long-term plan, but that would depend on the advice from BIG.
Although it is only 48 hours in chronological terms, there is a significant difference between seeing the draft directions before the recess and seeing them before the order is considered in the chamber. I am sure that the minister understands that. Is it possible for the directions to be made public in draft form before the Parliament considers the order next week?
I understand the critical path. The answer is yes.
I have a follow-up question on Lewis Macdonald’s other point, which Johann Lamont also raised. As well as the four themes, is it also possible to give an overarching direction that the emphasis should be on projects that are youth development related? For example, a health related project might have a youth development aspect. I am thinking also of intergenerational projects. The idea would be to have youth development as the key link between the four policy themes.
The idea of strong, resilient communities carries that connotation. In our on-going conversation, we found that those who were particularly vigorous on the youth issue in the first iteration softened their position to one where youth play a more proactive part in the wider community—in effect, wrapping the community around them. The issue is one of trying to get this optimisation through collaboration across the generations and across the various organisations so that we do not create division.
The point that I was trying to make is that this is not about providing services to young people but about young people working in the wider community to meet the policy objectives. Can that be included in the directions as an aim?
We will certainly give that further consideration. I am hearing clearly your voice on that. I heard that from Johann Lamont, too.
I support what Lewis Macdonald said on the matter. I understand the technical nature of the legislation but, at the end of the day, it will be difficult for us as parliamentarians to make a decision if we have not seen the draft directions. That is the position in which we find ourselves. We need to see the draft directions before the Parliament makes a decision.
We have accepted the point. You heard the caveats that Geoff Pearson gave the committee on that.
Someone said that we cannot unpack all the issues, but we need as much information as possible. It would be helpful to have that.
Outcomes have been a hallmark of the current Administration. I mentioned Professor Mark Moore and the idea of public value. We are looking for tangible results at every outcome, whether that is more young people in community-based employment or whatever.
We are very much an outcome-focused funder, which means that, when we are considering where to invest lottery funding, we are concerned about the outcome and the result rather than the activity primarily. When we decide which projects to fund, we consider the need and what the outcome will be—that is the basis. Our primary concern is the outcome and the longer-term impact.
Okay. I am asking because, particularly with young people, it is often about the journey travelled. Previously, there has been criticism that the outcomes have been stark and in black and white. For some young people—particularly those with learning difficulties—it is about the journey travelled, rather than black-and-white outcomes. I would like you to take that point on board.
We very much accept that.
How will you ensure that there is a fairly equitable spread of moneys throughout the country—especially throughout the parliamentary regions—rather than the money being focused on half a dozen main locations?
That goes back to my earlier comments about the need to tease out what is most important. We must ensure that the funding is accessible throughout Scotland and must find the best mechanism for doing that. For example, the Big Lottery Fund currently runs something called awards for all—you are probably familiar with it—which is one of the most popular grant programmes. That is a very effective way of getting funding to all parts of the country and every community. It makes small grants of up to £10,000, which, although of a low value, have a very high impact.
Members have no further questions, so I will ask one. Can you elaborate on your thinking on the options that you have talked about for possibly establishing an endowed trust with some of the funding? It is a slightly odd pot of money in that there are two reasonably sizeable lump sums followed by a relatively small continuing revenue stream. I can see the arguments in favour of having an endowed trust to ensure a better longer-term revenue stream, but the lump sums would have an immediate impact. Do you have any thoughts on the directions that you will give to the Big Lottery Fund in considering those issues?
We are watching what is happening down south with the big society bank. We are also going through the consultation process, in which many other people will be consulted who have been watching what has been happening elsewhere. It would be wrong of us to load the dice on that; I would prefer to hear the voices of the communities and other organisations through the consultation process, helping us and the Big Lottery Fund to come to a proper conclusion.
We have experience of setting up a number of trusts in different parts of the UK for different purposes—it is a matter of what is most important. We must also take account of return on investment and value for money.
That concludes item 1, and we move on to agenda item 2, which is formal consideration of the order. I ask the minister to move motion S3M-6478.
We had a useful engagement on the draft order under item 1. Judging from how the minister and his officials have described the situation, it seems that the order of events that must be followed is not optimal when it comes to the process and to getting a proper outcome. However, in order to proceed when the money becomes available—which, it has been indicated, will be June 2011—we should seek to make progress.
I support what Lewis Macdonald said. I recommend that the committee recommends approval of the order, subject to the proviso that the minister returns to the Parliament with the preliminary draft directions—whatever he wishes to call them—prior to the Parliament’s consideration of the order next week. That is my recommendation, although it is obviously up to the committee to consider the matter.
I welcome Lewis Macdonald’s contribution and your own comments, convener, and we will accede to that request to the letter. Returning to the committee to progress the matter would be absolutely consistent with the approach that we have taken to date, in which we have sought to be as open as possible, from the wider public consultation to the one-to-one consultations with yourselves. The issue for us is to proceed in that spirit to get the best possible result, covering the length and breadth of Scotland, as Stuart McMillan suggested, and involving everyone of good will at the community level in Scotland.
I seek the committee’s agreement to the motion that the order be approved, subject to the proviso that the draft directions are published before the Parliament considers the order next week.
Does the committee agree that the clerks and I will prepare a short factual report setting out our discussion and our decision?
I thank the officials and the minister for their attendance.
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