Local Government and Communities Committee, 24 Sep 2008

Meeting date: Wednesday, September 24, 2008

Official Report 288KB pdf

---

Subordinate Legislation

---

Public Appointments and Public Bodies etc (Scotland) Act 2003 (Amendment of Specified Authorities) Order 2008 (Draft)

The first agenda item is subordinate legislation. The committee will take evidence on the draft order. I welcome John Swinney MSP, the Cabinet Secretary for Finance and Sustainable Growth. Accompanying Mr Swinney are Paul Gray, the director of change and corporate services; Colin Spivey, the head of resourcing; and Carol Snow, a solicitor to the Scottish Government.

The Subordinate Legislation Committee has not drawn the committee's attention to the draft order. Members have received electronic copies of the publicly available material on the Standards, Procedures and Public Appointments Committee's web pages regarding its consideration of the issue. The draft order is laid under the affirmative procedure, which means that the Parliament must approve it before its provisions can come into force.

It is normal practice to give members the opportunity to ask questions of the minister and his officials before the start of the formal debate. First, I invite the minister to make some introductory remarks.

I welcome the opportunity to discuss with the committee the amendments that are being made to the Public Appointments and Public Bodies etc (Scotland) Act 2003.

As members will know, the approach to public appointments is structured around the work of the Office of the Commissioner for Public Appointments in Scotland, which provides important scrutiny of the public appointments process in Scotland. The purpose of the work of OCPAS, under the 2003 act, is to ensure that the public has confidence in the public appointments process and that the process is open, fair and transparent. No significant structural changes to that approach are envisaged in the draft order. In order to ensure that schedule 2 to the 2003 act is kept up to date, the draft order reinstates four bodies, removes two others, changes the category of three bodies and amends the entry for one. Such periodic changes are proposed by ministers as required. Essentially, the draft order tidies up schedule 2.

I look forward to addressing any points that the committee wants to raise in the first part of our discussion this morning.

Good morning, cabinet secretary. Can you explain why there is an intermediary role for the minister in the process of appointments to the national park boards? I suppose that you will answer that that is what the law says. In terms of the construction of the legislation, why is it deemed appropriate that a local authority nominee can join a board only through the intercession of an appointment by a minister? Could the drafting not say, "The board will comprise A, B and C people nominated by a minister and 1, 2, 3 and 4 people nominated by the relevant local authorities"? Why is the minister in the middle of the appointment of elected representatives to those public bodies?

My answer is probably the same as the one that you offered, which is that Parliament set out why that was to be the case, for which I do not think that there is a particularly compelling reason. The law could be amended, if it was considered appropriate that ministers should not be involved in the process and that there should be a sort of passporting approach so that a local authority that was entitled to nominate an individual to the board of a national park would be able to do so.

I suppose that ministers interceding in the process gives a certain extra imprimatur of order and administrative assurance. That is my explanation, other than giving my view about what is in the National Parks (Scotland) Act 2000.

After the draft order comes into force, such nominations must still go through an intermediary, who is the minister. Theoretically, at least, could the minister still refuse to appoint a councillor whom a local authority had nominated?

In theory, yes. I have read the correspondence that was exchanged between officials, ministers, the Standards, Procedures and Public Appointments Committee and the Commissioner for Public Appointments in Scotland about the particular circumstance that influenced the appointment of members to the national park boards. It is clear from all that that there has not been the greatest of clarity, or, rather, the greatest of consistency between two pieces of legislation: the Public Appointments and Public Bodies etc (Scotland) Act 2003 and the National Parks (Scotland) Act 2000. That has left us in a situation that has had to be resolved by ministers deciding to confirm the appointment of local authority members to the boards without putting them through the OCPAS choice process, as I would characterise it. That issue has obviously had a significant effect on how the matter has been handled.

Thank you for that.

I want to move on from the specific issue that concerned the Standards, Procedures and Public Appointments Committee to other aspects of the draft order. I am interested in the reclassification that is going on and the categorisation of various entities. Can you hazard an explanation as to what the difference is between "Nationalised bodies" and "Public corporations"?

As I reflected on my papers last night, Mr McLetchie, I wondered whether you and I might discuss the merits of "Nationalised bodies" and "Public corporations". I am glad that my predictions have proven to be correct—I must put a bet on a horse every so often.

To give a representative feel of the organisations that we are talking about, it is probably best to use a couple of the examples in the draft order: Caledonian Maritime Assets Ltd and David MacBrayne Ltd. Essentially, they are organisations that operate in the public interest and deliver a form of public service. However, we recognise that the focus and outlook of those companies and their relationship to other players in the transportation system might change, depending on decisions that are taken at a contractual level. Nationalised bodies would be defined as key, directed components of the infrastructure of the state, whereas public corporations act in the public interest, but their perspective and outlook may change on the basis of contractual decisions that may be arrived at through the competitive tendering process that is undertaken in relation to ferry contracts.

That was a good effort, cabinet secretary. Can you perhaps tell us then where Scottish Water fits into all this? Is that now a public corporation for the purposes of the schedule 2 list?

It is.

That is fine. Can you volunteer some information as to where the Scottish Futures Trust will fit in? Will that be a public corporation?

The Scottish Futures Trust is not yet a regulated body, but it will become one. I imagine that it will fit into the public corporation category, but I want to give the committee a definitive view on that in due course.

Good morning. In your opening statement, you said that various bodies are being added to or removed from the list. Obviously, the Standards, Procedures and Public Appointments Committee expressed concern about the rationale behind the decision on which bodies are to be added or removed. Can you outline which bodies are to be added or removed and the rationale for the changes?

Yes. Quality Meat Scotland is being added as a new body. Essentially, that relates to the transformation of a private organisation into a non-departmental public body, which took effect on 1 April 2008.

Skills Development Scotland is a new body that was created out of the shell of the Scottish University for Industry Ltd. As I am sure you are aware, Skills Development Scotland was created to draw together into one organisation a number of public bodies: the skills elements of Scottish Enterprise and Highlands and Islands Enterprise; and Careers Scotland. That work was completed in April 2008. The draft order makes the appropriate designation for Skills Development Scotland.

The other body that is being added to the list is the Scottish Local Authorities Remuneration Committee. The Office of the Commissioner for Public Appointments in Scotland regulates the committee as if it were included in schedule 2 to the 2003 act, so the draft order includes the committee for the purposes of good order in the process.

As I discussed with Mr McLetchie, the draft order makes changes to terminology. On that basis, under the draft order, Caledonian Maritime Assets Ltd, David MacBrayne Ltd and Highlands and Islands Airports Ltd, which were called nationalised bodies, will now be called public corporations.

The draft order amends the designations of the Cairngorms National Park Authority and the Loch Lomond and the Trossachs National Park Authority to take into account the exclusion of local authority nominees from OCPAS regulation. The draft order also reinstates the Common Services Agency for the Scottish Health Service as a body listed in schedule 2. We have done that because of the return to use of the body's statutory name.

Two bodies are being deleted from the list. The first is the Scottish Hospital Endowments Research Trust, which has had its status as an NDPB removed, given that it is now an independent charity. Secondly, the Scottish Advisory Committee on the Medical Workforce is being deleted, as the body no longer exists; it met last in the spring of 2002.

The report that we are considering this morning states:

"The Commissioner confirmed that

the approach in the draft order would resolve the current situation and that it

"would avoid a recurrence … but stated that it would not address her concerns about the fairness and transparency"

with regard to appointments by local authorities.

Has any discussion been held with the Convention of Scottish Local Authorities or local authorities on how they propose to proceed, given such an exemption? I note from our papers that at least two authorities—Argyll and Bute Council and Moray Council, I think—offered more than one nomination in order to give some sort of choice and to comply with the process. However, the majority—six out of eight—did not. Have such discussions been held? Should the issue be looked at?

Obviously, the issue does not affect all local authorities. Only a proportion of local authorities are involved, so a discussion with COSLA may not be appropriate. However, there has been a great deal of discussion about the issue, because it has been difficult to resolve. As I said to Mr McLetchie, there is not a very consistent fit between the public appointments legislation and the national parks legislation. We have not legislated with absolute consistency.

The issue can be handled in one of two ways. One way is to look to local authorities to select experienced individuals who are suitable to take part in the work of the national park authorities. The papers that I have—I presume that members of the committee also have those papers—contain copies of letters from the convener of Highland Council and the chief executive of Angus Council, who have commented on the appropriateness and experience of the individuals whom they have nominated to take part in the work of the boards of the national park authorities.

The other way of handling the issue is to go down the route that the convener suggested. Authorities could be invited to provide more than one nominee whom ministers could consider—I do not think that there is any statutory basis for requiring them to do so. My concern about that approach is that it would limit a local authority's ability to choose an individual to be a member of a national park authority board, as it is legally entitled to do. I understand that we would be constraining without statutory cover a local authority's ability to decide its nominee. We would be encroaching without statutory authority on a local authority's right to choose a person whom it considered fit.

I was exploring a general procedural point rather than a point about the Cairngorms national park. You have outlined several considerations in relation to whether best practice should be pursued. Is it best practice to have more than one nomination? Is the procedure in Highland best practice? There, nominations come with a full curriculum vitae—a person who has been nominated has some experience, so there is justification for that nomination. Alternatively, are we content, on balance, with the current nomination procedures? Therefore, does no action need to be taken?

We should always be prepared to consider such questions, but we must avoid second-guessing local authorities when they are perfectly entitled to exercise their statutory functions in appointing individuals to boards. However, local authorities do not have an unfettered right. They must ensure that their selection process is open, fair and transparent, and they will be quite familiar with undertaking such processes in appointing members to various external organisations within their locus. I am certainly happy to discuss the matter with them, but we must be careful to avoid intruding on their statutory right to appoint, through an open, fair and transparent process, an individual whom they consider fit to be a representative on a board.

Most of the questions that I was going to ask have been covered. My understanding is that ministers make appointments to a number of public bodies, and local authorities can make nominations. The convener has hinted at where there may be a dispute about the manner in which a local authority has made an appointment. Who would oversee such a dispute or intervene to ensure that the transparency that the cabinet secretary is talking about is adhered to?

The answer to Mr Wilson's question essentially rests within individual local authorities' procedures and operating approaches. Local authorities have an obligation to operate in an open, fair and transparent fashion in their decision making. As members of the committee know, if there is any doubt or uncertainty about how local authorities have gone about making their decisions, there are plenty of avenues for scrutiny of how they came about.

Some of that scrutiny is at a more generic level. For example, external organisations and investigatory bodies such as Audit Scotland, Her Majesty's Inspectorate of Education and the Social Work Inspection Agency can consider such matters. At the level of individual conduct, the Standards Commission for Scotland can consider whether individuals have acted appropriately. There is no lack of opportunities for scrutiny of local authorities' decisions.

That concludes the question session. We move on to agenda item 2, which is the debate on the draft order.

Motion moved,

That the Local Government and Communities Committee recommends that the draft Public Appointments and Public Bodies etc. (Scotland) Act 2003 (Amendment of Specified Authorities) Order 2008 be approved.—[John Swinney.]

Cabinet secretary, do you wish to speak to the motion?

I planned a three-hour address, but I will spare the committee that. I am happy to leave things as they are.

Thank you for that. I invite members to debate the motion. Does anyone want to speak to it?

No.

I do not suppose that the minister wants to wind up, as he did not have any opening comments.

Motion agreed to.

I thank the minister and his team for their time.

Meeting suspended.

On resuming—

---

Housing Grants (Assessment of Contributions) (Scotland) Amendment Regulations 2008 (Draft)

Under agenda item 3, we will take evidence on the draft Housing Grants (Assessment of Contributions) (Scotland) Amendment Regulations 2008 from the Minister for Communities and Sport, Stewart Maxwell. I welcome the minister and his officials. He is accompanied by David Fotheringham, who is a team leader in the Scottish Government's housing markets and supply division, and Derek Willis, who is a policy executive in the division.

The Subordinate Legislation Committee did not draw the attention of the Local Government and Communities Committee to the draft regulations. They were laid under the affirmative procedure, which means that the Parliament must approve them before they may come into force. As is normal practice, members will have an opportunity to ask the minister and his officials questions before the formal debate on the draft regulations. I offer the minister an opportunity to make any introductory remarks that he wishes to make.

The Housing Grants (Assessment of Contributions) (Scotland) Regulations 2003 set out the rules under which local authorities determine the applicant's contribution towards the cost of works for which the authority proposes to give a housing improvement or repairs grant. The rules include an arrangement to "passport" applicants who receive certain benefits to a 100 per cent grant. The purpose of the draft Housing Grants (Assessment of Contributions) (Scotland) Amendment Regulations 2008 is to amend the 2003 regulations to take account of a new benefit—employment and support allowance—that was introduced by the Welfare Reform Act 2007.

From 27 October 2008, ESA will replace incapacity benefit and income support paid on incapacity grounds to become the main income-replacement benefit for people with a disability or health condition. People who are already in receipt of incapacity benefit or income support will continue to receive the benefits, but new applicants will receive ESA.

The draft regulations add the two forms of ESA—income-related ESA and contributory ESA—to the list of allowances and benefits that passport an applicant to 100 per cent grant. They also insert definitions of those allowances into the 2003 regulations. The amendments ensure that people in receipt of ESA as a result of the implementation of the Welfare Reform Act 2007 will be able to be passported to 100 per cent grant.

ESA does not have precisely the same effect as the benefits it replaces. Information from the Department for Work and Pensions suggests that, over seven years, a total of around 1,900 people in Scotland who would not get incapacity benefit or income support paid on incapacity grounds should receive ESA, but that around 7,700 people who could expect one of those benefits under current rules will not get ESA.

It is not possible to say how many of those 7,700 people would need an adaptation to their home to suit their disability, do not receive other benefits that passport them automatically and would rely on the passporting to 100 per cent to be able to afford the adaptation, nor is it possible to take account of the transition to ESA in any more precise way to reduce the number who might be so affected. However, the switch to ESA will not have any impact on numbers until the financial year 2009-10, by which time we expect to have changed the grant rules as a result of implementing the Housing (Scotland) Act 2006. Although separate regulations for that purpose have still to be laid, I expect grants for adapting houses to suit disabled people to be a minimum of 80 per cent rather than the current minimum of 50 per cent. In addition, local authorities will have discretion to top up the amount of grant.

The amendments made by the draft regulations will ensure that people in receipt of ESA will have access to passporting for grant for adaptations to their houses. Because of the change in definition of benefits, a small number of people who might currently expect to receive passported grant will not in future receive ESA and as a result will not be passported. However, their grant for adaptations will, we expect, be a minimum of 80 per cent and local authorities will have the discretion to top up if necessary.

I ask the committee to recommend that the draft regulations be approved.

You outlined the fact that some people who would receive income support under the present system will not be entitled to income-related ESA and touched on some of the consequences of that. Will you elaborate on how you will address that situation and provide for those people?

At the moment, it is difficult to be precise about the exact numbers. The estimates are that, over the seven-year timeframe that I mentioned, up to 7,700 people in Scotland might fall into that category. However, that is the total number and we do not know how many of them would require adaptations or will have other benefits that would passport them. Therefore, the number of people who will actually be affected could be relatively low. It could be zero, but we expect that a small number will be affected. However, we intend that the regulations on the scheme of assistance, which have yet to be laid, will raise the minimum grant level from 50 per cent to 80 per cent and allow local authorities to bring that up to 100 per cent if they so desire. Through that route, conditions for many of those people will be improved.

Different rules apply to people with and without spouses. Are you able to say any more about that and why it is so?

There are differences between contributory ESA and income-related ESA. Contributory ESA is, I think, an exact match for incapacity benefit; there is more of a difference with income-related ESA. It is quite complicated, so it is probably better if I read this out rather than do it from memory:

"Contributory ESA will be an individual benefit, and there will therefore be no increases for partners. However, partners will be able to make separate claims for contributory benefit. In income-related ESA couples will have additions made for partners, but only one of the partners can claim income related ESA. Couples can only claim one income-related benefit for day to day living expenses at a time. This means income-related ESA is not payable at the same time as income-based JSA, IS or Pension Credit, since otherwise there would be double provision from public funds."

I hope that that covers the question.

We certainly heard what you said. Whether we understood it is another matter.

That is why I read straight from my brief—it is a rather complicated benefit.

These changes have been brought about because the United Kingdom Government has effectively introduced a new benefit. Is it the interpretation of that new benefit that the minister is trying to adhere to and adopt in relation to how we conduct things in the Scottish context?

Yes. The Welfare Reform Act 2007 is a piece of UK legislation that introduces this new benefit. We have two choices. If we pass this Scottish statutory instrumentI, we will ensure that, from 27 October, people who are in receipt of ESA are covered in terms of grants. That may have a negative effect on a small number of people who will no longer be entitled to ESA although they were entitled to it under the previous set-up. If we do not pass the SSI, the number of people who are affected will be much greater because, from 27 October, all those who receive ESA will not be entitled to those grants because they will not be included in the passport benefits.

Effectively, our hands are tied in terms of trying to support people: the UK Parliament passed the Welfare Reform Act 2007 and we must update our regulations to ensure that the maximum number of people are entitled to receive support. That is what the SSI aims to achieve.

That clarifies the point. I was just trying to get to the fact that ESA is not something that the Scottish Government can manipulate.

No.

It came through the Welfare Reform Act 2007.

Yes.

Therefore, any impact that it may have on individuals who received benefit under the previous regime is down to the introduction of ESA, not the Scottish Government denying people that benefit.

Let me make it absolutely clear: the people who are currently on those benefits will remain on those benefits; it is new claimants after 27 October who will be affected by the change in the rules.

Let us put this into perspective. I appreciate the fact that the regulations introduce a technical change to reflect changes in the UK benefits system, as you have described to Mr Wilson. How many people currently receive the improvement and repairs grants that are covered by the regulations? Can you give us an idea of how many such grants are being paid by local authorities on an annual basis and what that expenditure is?

Unfortunately, I will have to get back to the committee on that. I do not have that information to hand. The effect of the regulations is to minimise the impact of the change to the ESA. I am sorry, but I do not have the numbers in front of me.

I appreciate that. I recall periods in which councils paid generous repairs grants, which led to substantial runs on their repair grant expenditure funds. Those have been substantially scaled back in the past, in periods preceding the present Government. I am trying to get a perspective on what we are talking about in practical terms—how many grants are being paid and what that is costing the budget. It would be useful to know whether that expenditure and the number of people who are being assisted are broadly static, falling or rising. If that information could be supplied, that would be useful. I appreciate that it is not directly material to consideration of the SSI, but it would provide a useful perspective. Sometimes, in the past, regulations have given people only theoretical entitlements. Unless the money is available, they are not worth the paper on which they are written.

You are right to say that it is a connected issue but not one that directly affects the regulations. We intend to implement the 2006 act, and I mentioned in my opening remarks some of the changes it will make. Our expectation is that the overall number of grants will reduce after those changes come into effect, because of the establishment of the scheme of assistance. We believe that the changes that we hope to make—raising the minimum grant and making entitlement to it automatic—will be beneficial to people with disabilities.

You said that your proposal, which involves housing grants, is necessary because of the Welfare Reform Act 2007 and the establishment of the employment and support allowance. At what point in the process did the Department for Work and Pensions contact the Scottish Government to make the Scottish ministers aware of any knock-on effects of its legislation? Has there been a period of positive consultation between the UK Administration and the Scottish Government?

We have been aware of the situation for many months. Officials have been in conversation with their counterparts in the UK Government on this issue for some months. The fact remains that the powers over welfare benefits are reserved to the UK Government and the UK Parliament has taken the decision to make the alteration that we have been talking about. Since becoming aware of the developments, we have been working on regulations that would minimise the effect of the change on people who currently receive the benefits that will be replaced.

That is positive, but my point is that when the Welfare Reform Bill went through the UK Parliament, issues would have been raised about the knock-on effects of the proposals. Does the Scottish Government have to monitor what happens at a UK level, or does the UK Government inform the Scottish Government of possible knock-on effects during its scrutiny process?

The piece of legislation that we are discussing was dealt with prior to the election in May 2007. As I was not a minister at the time, I am not aware of the discussions that took place during the passage of the act. I cannot really help you.

Can the officials help Mr Doris?

On the administrative side, through colleagues in other departments we have had links with DWP and we have been informed of the administrative processes. I am not aware that there has been a great deal of engagement on a policy level; I think that that is left to Westminster.

I am not sure that that exactly answers my question, but it raises a general point—

It might be that your questions might be better asked of the Minister for Parliamentary Business, who I believe has regular contact with Westminster about the impact of proposed UK legislation.

The employment and support allowance is a new benefit in the sense that it will replace the payments that were previously paid out to new claimants. The Scottish Government has to work through the changes and ensure that its partners in local authorities are aware of the changes and take on board the impact on future claimants. It is important to state that the issue concerns future claimants, not existing claimants.

We are in regular contact with local authorities, through the Convention of Scottish Local Authorities in particular. I am not aware that the regulations will have any financial impact on local authorities—in fact, I do not think that they will—but local authorities are aware of the change.

As I said earlier, we think that these regulations are necessary to minimise the impact on people who are affected by the change and to ensure that everyone who is in the new scheme benefits from the passporting effect.

For clarity, I should say that we are dealing with a technical change, not the changes in the benefits system.

Yes, this is a technical change.

The powers for grants and payments flow from the Scottish Government to local authorities, which deliver and manage them. We heard you say that the minimum grant levels are to be examined. We may be getting ahead here, but I think that we would all, as constituency MSPs if not as a committee, agree that that aspect needs to be examined.

You mentioned a review. I have come across a small number of people who, despite being given substantial amounts of money, do not have the wherewithal to access the £15,000 or £20,000 that would complete their project—I am talking about the level of grant for modernisation work. Will the examination of minimum grant levels and the review of grants include consideration of how such people could be helped?

The scheme of assistance regulations are still to come. As I understand it, the discussion in the 2006 act is that people will be allowed to use the equity in their property as part of the process, so they can access increased funds through borrowing on their asset. That will help many people who have an asset that has value but do not, as the convener said, have cash in the bank to improve their property. Obviously, local authorities will have discretion to provide grants.

When can we expect news on that?

The regulations are just about finalised and we expect to lay them before the end of September.

Thank you. That concludes our question session.

We now move to agenda item 4 and the debate on the draft Housing Grants (Assessment of Contributions) (Scotland) Amendment Regulations 2008. I invite the minister to move motion S3M-2569.

Motion moved,

That the Local Government and Communities Committee recommends that the draft Housing Grants (Assessment of Contributions) (Scotland) Amendment Regulations 2008 be approved.—[Stewart Maxwell.]

Motion agreed to.

I thank the minister and his team for their attendance and their evidence.

---

Housing Grants (Application Forms) (Scotland) Amendment Regulations 2008 (SSI 2008/283)

Agenda item 5 is consideration of a negative instrument: the Housing Grants (Application Forms) (Scotland) Amendment Regulations 2008 (SSI 2008/283). Members will have received copies of the regulations, but they have raised no concerns about them and no motion to annul has been lodged. Do members therefore agree that we have nothing to report to the Parliament on the regulations?

Members indicated agreement.