Good morning. I welcome people to the 22nd meeting in 2005 of the Finance Committee. I remind everyone to switch off all pagers and mobile phones. All members are present, which is a good start.
My introductory remarks will be brief. Thank you for inviting us to attend. We very much welcome the cross-cutting inquiry into deprivation, which we have followed with close interest. The Executive agency Communities Scotland was formed to bring together physical housing development and investment with broader regeneration of communities. Our current corporate plan is about places and people and the interaction between the two. I know that the committee has been considering that.
Thank you. For the sake of clarification, can you tell us about the structure of Communities Scotland? You are the director of community regeneration. You said that you are in charge of one budget, but Communities Scotland is obviously also in charge of a mainstream housing budget and, as you mentioned, there are other budgets such as futurebuilders. How does Communities Scotland work as an organisation to deal with regeneration and housing issues?
Under the chief executive, Angiolina Foster, there is a director of community regeneration—me. Our main function, which we took on from the Scottish Executive about four years ago, is the area regeneration function—the management of what was at the time social inclusion partnership programmes. That function within community regeneration has been supplemented by similar programmes that work towards community regeneration. I have mentioned futurebuilders and our wider role programme, which operates through housing associations. We also have a fund for post offices in urban deprived areas. The intention was to bring those programmes together in a more coherent format within the community regeneration division. We also have a Scottish centre for regeneration, which is about learning, spreading best practice and looking at skills within the regeneration sector. That is all contained within the community regeneration function.
It is interesting to learn something about the structure, as I know that it has been evolving since Communities Scotland was set up. What is the rationale behind the introduction of the regeneration outcome agreements? Where do they come from and how do they do work?
In the most basic terms, we are trying to ensure that, through the regeneration outcome agreements, rather than just looking at the inputs, spend and number of projects that have been funded over the years through community regeneration, we start by looking collectively at the outcomes that we want. The ROA works, in effect, from back to front. It gets all the key players together to decide how to achieve the desired outcomes in, for example, health and employability. It then works back to see how, collectively, the key players intend to meet those outcomes. Those key players decide which projects will best achieve the outcomes that they want. That, in essence, is what the ROAs are about.
You have seen the outcome agreements evolving. Have you noticed particular patterns in their contents? What sort of difficulties have partners experienced in arriving at the regeneration outcome agreements?
It would be absolutely foolish of me to say that the challenge has not been massive. We now have 32 regeneration outcome agreements across Scotland, but that has been a very challenging process for us and for the partnerships concerned. We were working with more than 1,400 individual projects. People are attached to those projects, as some of them are delivering good local outputs, so switching overnight to a wholly outcome-based approach has been a challenge.
Wendy, do you wish to come in on this?
Yes, although my question takes us on to the next theme, so perhaps I should let you finish.
One of the complaints has been that the regeneration outcome agreements are unduly bureaucratic for the amounts of money involved. Perhaps that is not the case in Glasgow, but it may be so in areas that get less money through the community regeneration fund. Can the bureaucracy be simplified and stripped down? To some extent, the outcome agreements are paralleled by other exercises, particularly those that councils must get into in order to justify their funding. The danger is that we end up with people having to make multiple justifications for what is, in effect, the same kind of activity. What is your perspective?
First, I completely understand the point; it was made in several of the submissions. I suppose that the answer to the question is that sometimes one person's bureaucracy is another person's way of challenging what is being achieved with the funds.
That is helpful.
I want to pursue the point that the convener made about bureaucracy. The criticism that has been made is more about duplication of effort than about excessive bureaucracy in a straightforward assessment of how public expenditure is controlled. Obviously, the committee takes an active interest in how public money is spent, but there is widespread concern that Communities Scotland may be duplicating the efforts of other agencies and organisations, particularly local authorities. Will you clarify for the committee exactly what Communities Scotland brings to the party that differs from what local authorities bring to it? From where I am sitting, what Communities Scotland brings and what local authorities bring look terribly similar.
First, we provide on behalf of Scottish ministers a national overview and function to ensure quality and to ensure that outcomes are set and achieved. I am not sure that anyone else does that—it is not a crowded field at the national level.
If there are already well-established measures that command confidence in community planning partnerships, it seems to be straightforward and eminent common sense not to create a new set of measures and mechanisms to monitor the delivery of a programme. If all those efforts are being made to tell Scottish Executive departments about what is being done and about the level of confidence in the measures, that reinforces the point about duplication. Perhaps if departments listened more closely to what community planning partnerships—for which the Parliament and the Executive legislated—said, the system would be a great deal more efficient.
I was giving an illustration of where we add value, but I return to my first point. We are investing considerable sums of money. The community regeneration fund alone is £106 million for the year. It is not the case that, in Thomas Glen's community regeneration unit, tens and tens of people are running about checking on community planning partnerships. Work has been fairly excessive and, as I said, challenging over the past six months or so while the first ROAs have been developed, but there is a job of work to do to ensure that funds are being spent effectively, that we are feeding best practice into community planning partnerships on what does and does not work and that we are checking and following through how, for example, mainstream expenditure works alongside the annual figure of £106 million to achieve outcomes. The task is important and needs to be done by us at a national level. Communities Scotland is doing that task to the best of its ability, although I suppose that I would say that. That is the main reason for our role in community regeneration.
It has been suggested in the evidence that we have received that a longer-term framework for investment and a quicker or more responsive monitoring process are needed so that we can see that the trajectory of changes is upwards as a result of the funding. How are the mechanisms that you have put in place driving in that direction? In particular, how far is what Communities Scotland is doing in progressing regeneration outcome agreements influencing your partners' spending and policy decisions in the direction that you want to drive them?
There are several issues. I will try to be brief on long-term funding. I cannot deny what has been said in an overwhelming number of responses that the committee has received from all sources about the need to get away from short-termism. We have done so to a degree, as the CRF involves a three-year process, but I appreciate that that time might not be sufficient—it is not sufficient to turn around an ailing community. However, we are constrained by spending review periods and political terms. I recognise what has been said and we will take the issue back to ministers and do as much as we can to address it. I will ask my colleague Thomas Glen to say something about the proportionality of monitoring arrangements.
It is important for us to recognise that our efforts in relation to mainstreaming are operating on two levels. Through the performance management framework that we have put in place, we are building in an expectation that community planning partnerships will look to evidence the contribution of mainstream resources to supporting targeted regeneration spending. We are asking local partners increasingly to focus their mainstream budgets on supporting the communities that we are interested in addressing. At the same time, we have structured the community regeneration unit so that, across the team, we have developed thematic leads to allow us to engage with key Executive departments.
You have not said anything about the responsiveness of the monitoring process in which you are engaged or about the trajectory. How quickly can you know whether you are moving in the right direction and whether a particular approach is making progress in an area?
One of the biggest criticisms that we have received from partnerships is that, if we ask people to adopt an outcome agreement approach, the achievement of many outcomes will be longer term. We have put in place a monitoring framework that requires community planning partnerships to report annually and involves mid-year stocktakes. Partnerships have asked us why we are asking them to report annually if the point is to achieve outcomes. We think that there are milestones that we can reasonably expect people to report on and which can demonstrate progress towards outcomes. Effectively, we are trying to turn a supertanker. If we are asking people to achieve outcomes and do not have them report until the end of the three-year period, the chances are that we will miss the boat. We support vigorous monitoring that allows people to consider the management of outcomes through a system of mid-year and annual reporting.
The issues that you raise take us back to the question of bureaucracy, which was mentioned earlier. The more structured you make the monitoring process, the more bureaucratic the system will be. People can be diverted away from doing things to reporting on them. At the same time, there needs to be a mechanism for identifying whether we are moving in the right direction. There is a tension that needs to be worked on.
Absolutely. The tension between delivery and process was highlighted by a recent report for local strategic partnerships in England. There is a tension between being able to check milestones and progress and allowing people time to develop outcomes. We think that a mid-year review and an annual report are not excessive, but we are prepared to listen further.
Scottish Enterprise recently commented that it regards some inclusion activity as non-core to its activities. That could be seen as leaving a space for Communities Scotland or other partners to fill. Do you have views on what the proper role of local enterprise companies and Scottish Enterprise in regeneration outcome agreements should be?
I played a bit-part role in your inquiry into economic development. I appeared before the committee about a year ago, when that issue was very topical. Regeneration outcome agreements are about linking need to future employment opportunities. It is imperative that the enterprise network should play a role in that process. There are various powerful and positive examples of that happening, such as in Glasgow. In the debate on inclusion, I get wound up by the notion that we are about tackling poverty purely by keeping the wolf from the door and local services. The debate on poverty and inclusion has moved on. It is about local services but, crucially, the fortunes of the communities that we are discussing are linked very much to access to learning, training and jobs. That is where the crossover between agencies such as Communities Scotland and Scottish Enterprise is vital. It winds me up slightly when we are pigeon-holed as just looking after the poor.
You mentioned the futurebuilders programme. How effective is funding to develop the social economy in supporting the regeneration of deprived areas?
It is pretty vital. I am very pleased that the group that is seeking to promote the social economy is part of the division that manages the community regeneration fund. Some of the most inspiring examples of communities taking control and ownership through managing community assets or businesses have happened in the social economy sector. Although the futurebuilders programme is at an early stage, we like to think that we will continue to enhance support for that sort of sustainable approach. At the end of the day, this is public money, and we should be looking to wean ourselves off giving grants to communities for ever and a day through the likes of the community regeneration fund. That is a long way off, but an approach through the social economy and futurebuilders is exactly right.
Is Communities Scotland involved in partnership working on a national level to promote the social economy?
During a debate on the social economy, ministers announced that there will be a social economy advisory board at national level, which will consider support for the social economy sector. The futurebuilders programme and giving out grants and loans are one thing, but issues such as the attitude and culture of the public authorities are equally vital. We need to wrestle with issues such as procurement. The social economy advisory board will play a key role in that process. We are also preparing a social enterprise strategy. As I am sure members know, social enterprise is a particular strand of the social economy. We are keen to provide more support to the social enterprise sector and are in the early stages of bringing together a national group and local groups to help us to develop that.
Having been involved in a lot of neighbourhood regeneration strategies, I think that one of the problems is the ceaseless meetings that people have to have. All of us share the broad objective of trying to change things, but if we were to look back at what we have done, would we see that our work has shifted the dynamics of the local economic and social structure? Let us take the debate about the role of agencies, for example. Is it only Communities Scotland's role to deal with skills and training or are other agencies central to the development of that work?
Are you asking about skills and training in capacity building or skills training generally?
I mean the individual's readiness and preparedness for access to the job market—the whole range, including basic literacy and numeracy and so on.
No, I do not see that as being just Communities Scotland‘s role. We discussed the enterprise networks earlier. They run a number of programmes, of which training for work is perhaps the most obvious example, and the voluntary sector is one of the biggest providers of adult community learning.
We will move back on track with a question from Wendy Alexander.
My first question relates to what we have said so far about accountability and transparency, which are the central focus of the Finance Committee—more so, perhaps, than they are the focus of the Communities Committee. Obviously, it is a great thing to have brought together £100 million—or £300 million over three years. However, I want to probe a little about where the accountability lies. My question looks at the same issue that John Swinney raised, but from a different angle.
First, I will address the question of accountability. As members know, community planning is enshrined in legislation. However, it is enshrined as a process; the legislation has not altered fundamentally the vertical lines of accountability. We are very aware of the issues in respect of the community regeneration fund. Ultimate accountability for individual projects that gain a community regeneration fund award—let us say as part of a cocktail of funding from three agencies—is still up through the appropriate minister to the Parliament. For example, if the funding comes from the enterprise network, accountability lies with the Minister for Enterprise and Lifelong Learning and back to the Parliament.
My question relates to your money, not everybody else's. In relation to the £300 million, did Communities Scotland recommend rejection of any of the 32 ROAs? Will the public ever know about those decisions? I am interested in accountability and transparency. As all 32 ROAs were approved, it appears that every single one of them made the grade—none of them was not up to scratch.
The first three-year process started in April this year. We are in the midst of an Audit Scotland inquiry into initiatives. Audit Scotland is giving us a hard time for not sticking rigidly to the timetable for the consideration of the ROAs, which was that all of them should have been completed by April. The fact of the matter is that we realised fairly early on that some of them needed further work; we were not satisfied with certain elements, such as community engagement, the analysis of need or whatever. Over the past year, we have worked hard on the agreements, but we let the timetable slip.
That sends out a very clear signal, however.
The formal position that I would take is to refer the matter to ministers, who would have to decide whether to take action against a CPP.
But there is no process by which we can take sanctions against a partnership that is not doing what it said it would do, or not doing it well enough. There is no formal process beyond Communities Scotland writing to ministers on a one-off basis. Clearly, 32 partnerships are out there spending £300 million.
A number of elements are involved. First, I return to what Ian Mitchell said. We have reached the point at which all 32 ROAs have been approved, but we accept that, in some cases, elements of detail remain to be finalised or developed. We are not suggesting for a second that all 32 ROAs are the finished article. Any ministerial letter would outline clearly what the partnership had to do to improve things and bring the situation up to scratch.
I will leave that with you, but you might want to write to us about the matter. If 32 outcome agreements and £300 million over three years are at stake, it is inconceivable that your monitoring agreement will not identify a portion of that money that could be spent better or that is not being spent on what you were told it would be spent. Clarification of how that process is invoked would help. Otherwise, the impression is left that you are a kindly observer and that no stick exists. You suggest that the matter would go to ministers and that a monitoring framework will be used. We would like to know how that will be invoked because, given that £300 million is at stake, we would be sceptical if we felt that it would never be invoked at any point in three years. I accept that we are at the very early stages, but a little guidance would give us some clarity about where accountability for the money lies, whether centrally or locally. We want to bottom that out, but by all means write to us.
As I said, the regeneration outcome agreement approach has great potential, we have a strategic framework in place. We already have the key bodies around the table—they should be in place anyway under community planning statute, and the vast majority of other bodies participate voluntarily. Enterprise companies and health boards are involved. We have the potential of the ROA to build on for more than just the community regeneration fund, if that is the road that we decide to go down.
I am keen to return to basic principles of accountability. Are the objectives and outcomes that ROAs set consistent, uniform and measurable? Are they expressed in a way that allows you to consolidate the outcomes and have that under statistical control, so that we know what we are achieving and what is liable to improve? I think especially of increasing economic activity locally and nationally to bring more people to live and work in Scotland's constituent parts. Does the widest possible range of stakeholders buy into working with you on those outcomes?
The first point to note is that we expect all outcomes to be measurable and to come back down the chain to have outputs and an idea of who puts in resources attached to them. We have a framework whereby we expect outcomes to be clear and jointly agreed by the community planning partnership. In guidance that we provided on the regeneration outcome agreement process, we set out the five national priorities, as I said. We also suggested a menu of national indicators that are being pursued through "Our National Health: A plan for action, a plan for change" or "A Smart, Successful Scotland: Ambitions for the Enterprise Networks", for example, to which people have signed up and on which they collect information.
I will ask you to focus your mind on one outcome. I read the labour force survey month in, month out. It consistently shows about 630,000 economically inactive people and another 150,000 who are unemployed. Do you not want to focus on and drive down those figures over time?
Absolutely. Issues have arisen over using unemployment for outcomes, but we are certainly interested in bringing more people into employment and in the sub-categories, such as whether people are registered as unemployed or receive other benefits. One outcome that we suggest is employment.
In reporting to the minister, does one A4 sheet cross his desk monthly that shows the outcomes and the movement that you have achieved that month?
It certainly does. However, the information does not all tabulate in a pure linear form to national priorities and how we are faring against fixed outcomes on the five national priorities, simply because we have given community planning partnerships the scope and—rightly—some latitude to choose related targets. It is not a purely linear relationship; we do not take a national target and consider how everybody is contributing towards it. However, for each community planning partnership we can certainly give the minister a range of outcomes and explain how progress is being made towards those outcomes and how they, in turn, affect the national targets.
Nevertheless, it strikes me that you are in a privileged position. There are outcomes downstream of you, but where are the outcomes for what you are stepping up to and for your objectives? Where do you say, "We will handle this £300 million and this is what we will deliver"?
Ultimately, the outcomes are related to the closing the opportunity gap targets. The target that the community regeneration fund particularly seeks to influence is target J, which is a spatial target that says that, in the most deprived areas of Scotland, there shall be improvements in employability, health and the local environment. That is the ultimate arbiter by which we can gauge whether progress is being made. Is that what you meant by the—
I was trying to get something that would pass the Donald Trump test, the Alan Sugar test or the Tom Farmer test, but nothing in what you said came close.
I want to ask you about the best way of allocating funding. A tension has been flagged up between an area-based approach—in your view, the Scottish index of multiple deprivation is a helpful focus in determining where funding should go—and a people-based approach. I will give a brief illustration. As you said, the better neighbourhood fund has been abolished and assimilated into the community regeneration fund. Dumfries and Galloway was one of the pilot areas for the better neighbourhood fund. Because of its geography and the fact that it is a rural area, the local authority chose to use a people-based approach and, in particular, to support elderly people and young people, although it found it difficult to meet the targets that were set. Now that that fund has been abolished, it is finding it difficult to get funding for such a people-based approach. Dumfries and Galloway lost out because it does not score well under the Scottish index of multiple deprivation. I am not arguing that everything should be funded from the same pot, but funding does not seem to be available for people-based programmes such as those that support older people in remote and rural communities that do not show up under the SIMD.
I understand the point. We think that, as a measure of multiple deprivation, the Scottish index of multiple deprivation is a great advance on the former indicators. The community regeneration fund is about tackling concentrated forms of disadvantage, so it will be no surprise to you to hear that we think that the index hits the mark, albeit that there are one or two foibles.
Because Dumfries and Galloway was a pilot area, it has less money to work with, even if it concentrates on ROAs. I suppose that the broader point that I want to probe is whether we should have a single funding stream that is based on the Scottish index of multiple deprivation. I am not trying to deny the problems of multiple deprivation, but in a sense we have two different forms of deprivation. There are areas in which a lot of deprivation significantly disadvantages people and their life chances, but there are also communities of deprivation that are not area based but comprise, say, older people with low incomes or young people who do not have access to training and employment. This might be a difficult area for you because it is subject to ministerial decision, but perhaps those two types of deprivation should not be tackled from the same pot. Perhaps there should be different sources of funding.
I am comfortable enough in saying that I appreciate the point. One of the five measures of deprivation is accessibility, but that was not particularly correlated with the others in the index, which suggests that, in some rural areas, access to services, isolation and the age profile are particular problems. The fact that those areas are not in areas of multiple deprivation does not mean that there are not issues that need to be tackled. I do not want to pre-empt any policy decisions, but those problems are probably best tackled outwith the framework of the community regeneration fund, which is about multiple forms of geographical deprivation.
Tagging on something about the distance from the nearest supermarket is supposed to reflect the problems of rural areas, but that is probably not the best way to tackle the difference between multiple deprivation and deprivation in groups.
Elaine Murray raises an important point. If, in rural areas, funding has to go to people-based issues, is the community regeneration fund, with its associated outcome agreements, the best way to achieve that? If there is an issue about rurality and the associated cost of delivering services, would it not be better to reflect that in the local government spending formula rather than to try to apply the community regeneration fund, which is geared towards dealing with urban concentrations of deprivation? In that way, presumably, you could reduce your overhead to perhaps 10 regeneration outcome agreements rather than 32 and simplify and clarify what you are trying to achieve.
I had better not get led too far down that route, but I can see that that might be a more cost-effective approach. I take your point, although I say to Elaine Murray that the Scottish index of multiple deprivation introduced more than just drive times. It uses areas of about 750 people, which is the smallest area we have ever used. In time, we might be able to go further, right down to individual measures, but the index represents a pretty good go at small areas. In some smaller towns in rural areas—for example, Alness in the Highlands—the index has illustrated pockets of more concentrated forms of deprivation. I do not dismiss the framework for rural areas but I take the broader point that there are wider issues for rural areas, isolation being an obvious example.
We have reached the end of the time available for this part of our evidence taking; however, as we have been unable to ask a number of questions, I hope that you will find it reasonable if we seek a written response to them.
I will keep my comments very brief.
I suspect that I should first ask about your mechanisms for selecting your board members, but I will leave that for a more private occasion.
They are probably as noble as the parliamentary processes for selecting committee conveners.
I am sure that they are.
The current set-up for funding programmes has a number of limitations. First, such programmes can reinforce a sense that people do not have to travel for a job. Members will forgive me if I use Glasgow again as an example—we work constantly in that particular area—but we often find that people will not travel from one part of the city to another for programmes or for jobs. By sending signals—
What sort of distances are you talking about?
In some cases, the distance is 5 or 6 miles. There are several reasons for that situation—I will perhaps touch on some of them later—but one is that we are sending a signal that problems in Castlemilk, for example, can be addressed in Castlemilk. By and large, the jobs cannot be found there. We have to persuade people in Castlemilk that they must acquire skills to make them competitive with people not only from Castlemilk or Easterhouse but from the dormitory towns that surround Glasgow for jobs that are often in the city centre. Often, we do people a disservice by telling them that every solution can be found locally. That is clearly not the case.
To continue with the Glasgow example, do you feel that the alternative is to design programmes that focus on renewal not in Easterhouse or Castlemilk but in greater Glasgow?
Yes, but with the caveat that we are talking about employment-based programmes. I appreciate that other programmes are better focused locally.
Beyond employment-based programmes, do you have any experience to suggest that, as far as this matter is concerned, we should consider other geographical areas instead of regions or districts such as Glasgow?
No, not beyond employment-based programmes. We have introduced some physical regeneration programmes that are often quite properly focused on small areas. For example, if we are improving people's back courts, we need to focus very narrowly and locally on what they need. However, we feel that such programmes are a way of getting people work experience to make them more competitive for jobs.
In your submission, you are critical of area-based approaches to funding and suggest that we need to focus on a much wider area to ensure the success of your employability programmes. How does that approach fit with the current funding infrastructure and the schemes that you are bidding under?
Because the bulk of our funds come from United Kingdom or European sources, our approach fits reasonably well with current funding schemes. However, things started to fall apart when we had the old SIPs. Our organisation received hardly any SIP funding because we found the SIP boundaries too small to be workable. For example, we would have needed to apply for funding in perhaps eight to 10 different SIP areas to run a city-wide programme. That was just not viable, as it would have taken only two or three SIPs to say no for a city-wide programme to fall apart.
So the current design of some funding streams militates against organisations such as the Wise Group putting together a programme to tackle employability in the wider sphere.
Absolutely. The current focus prevents the development of a labour market-based approach for a travel-to-work area.
Let me move on to ask about the regeneration outcome approach, which has been much discussed this morning. I take it from your submission that you are more comfortable with that approach. What are the strengths of such an approach and what does it tackle? You said that the SIP-based approach did not deliver the type of infrastructure that allowed you to make an impact. In what way has the regeneration outcome approach been more beneficial?
First, I point out that the regeneration outcome approach is better rather than ideal.
I will take that as a ringing endorsement.
The regeneration outcome approach is better than what we had before because the community planning partnerships will—we are told—take a more strategic view of programmes than the SIPs did. Like all such things, we will need to wait and see what happens. The important thing is not what people say but how they act.
What has been your experience to date?
Our experience to date is that engagement with the community planning partnerships has not been terrifically good.
Is that through lack of effort on your part or lack of invitation on theirs?
I suppose that it might be a combination of both those things.
It is obvious that an organisation such as the Wise Group has a lot to bring to the party. If SIPs were too small, it seems a bit odd that you have not been more immersed in community planning discussions. I am keen to get to the bottom of why that is the case.
By and large, I think that the reason is that partnerships tend to be partnerships of funders, and delivery organisations tend to be absent from their discussions. About a year and a half ago, we wrote to perhaps 10 or 12 of the embryonic community planning partnerships to offer to get involved, but I am still waiting for our first reply.
Let us accept that there is a difference between the funders of programmes and those such as yourselves who deliver them. Does the emerging evidence suggest that the new structures have addressed your concerns about the previous approach? Are programmes now more broadly designed and, therefore, more capable of fitting in with your aim of improving the employability and prospects of individuals?
We have not seen such evidence yet, but the caveat is that it is early days.
Finally, I want to ask about the Scottish index of multiple deprivation. You said that you were concerned about it drilling down to population groups of less than 750. Has the SIMD attracted a status that may be counterproductive to achieving the policy objectives of the Government and its various agencies?
That is a possibility. The document is comprehensive. Some of the interesting messages that have come out of it are not often stressed, such as the fact that the majority of income-deprived people in Scotland do not live in the most deprived 15 per cent of data zones, even in Glasgow. There is so much information that it can be interpreted in almost any way one chooses.
I return to a point that my colleague Elaine Murray raised with the Communities Scotland representative a moment ago. Does the index of multiple deprivation encourage policy makers to consider area and geographical solutions rather than people-based solutions?
I think so, but we will have to wait to see what evidence emerges.
Given all the mid-year reports, annual reports, policy evaluations and other concepts that we learned about this morning, what would be a fair point at which to say that the index is working or is not working?
I am not sure.
Thank you.
In one of the case studies you mention the working for health in greater Glasgow project. Will you compare and contrast the interest in that project from the Executive and from the Department for Work and Pensions? It might be useful for you to describe it briefly first.
The WHIGG project is a programme that we are running with the health board in Glasgow. In essence, it provides people with a six-week preparation for applying for jobs in the health service. The jobs are not guaranteed; the project aims to make people more competitive. We work with people on their interview skills and core skills and on presenting their CVs. As part of the programme they get tasters in hospitals.
What is your estimation of the need that remains to be tackled through that project?
The need is huge, because some groups, such as the homeless and people with substance abuse problems, are particularly disadvantaged when it comes to competing in the labour market. That need will not go away; it will still be there on 1 July 2006.
But the project will not.
Not at this rate.
In your submission you said that the short-term nature of funding is a major drag on wider regeneration strategies. Will you expand on what you mean by that?
There are two points to make. Funding is often very time limited. Someone will give us funding for 12 months to get a pilot up and running, which is great. The difficulty is where to get funding for the next year or two if the programme is successful. There is money for pilots, but to keep programmes running we have to get into councils' core budgets, which are horribly overstretched and to which we cannot get access.
If we were to try to shift the dynamic towards longer-term funding, what two or three approaches would benefit the kind of clients with whom you deal, who operate more on a regional basis than on a local community basis?
The critical thing is that funders should fund organisations that deliver the outcomes that they want. Funders should work with those organisations to deliver continuous improvement rather than innovation, for example. The aim should be reasonable performance rather than the crazy things that we sometimes see.
Are you saying that dismissal is a good accountability mechanism?
Absolutely. We work well for two reasons. First, people genuinely believe in what they are doing; secondly, people know that if they do not work properly, they will lose their jobs. I am sure that the board would have no compunction in sacking me if I were not doing my job, and that applies throughout our organisation.
The weekend papers included some coverage about the DWP work and partnership stuff. In parts of my constituency, seven out of 10 folk claim incapacity benefit. Somewhere on the continuum, there are individuals in the ILM network with whom you deal. The field is crowded, and a range of partners is involved. How would you streamline the field to get better efficiency as well as more effective outcomes? How would you prevent people from being moved around so many different providers? I have a hunch that some folk nick about between different providers over a two or three-year period.
I will borrow Ian Mitchell's phrase about things that wind us up. One of the things that tends to wind me up is hearing people from the public sector say that there are too many delivery organisations involved and that there is too much clutter. Too much clutter for what? Too many delivery organisations for what? That is a strange way to look at the situation. People should be looking at performance—that is how to declutter. Decluttering is achieved not by agreeing around a table what the way forward should be and what delivery agents will be used, but by getting rid of poor performance. We have been exceptionally bad at doing that.
How should we reach conclusions? What mechanisms would you use that are not used at the moment to decide what is and is not a good performer? Our earlier discussion, which you observed, revealed concern about the lack of an end point.
We have a contract with the Department for Work and Pensions to deliver part of the employment zone in Glasgow. As part of that contract, we commit to getting Y per cent of positive outcomes—getting a certain number of the people who start into jobs. We have two big incentives to do that properly. First, we are paid on outcomes rather than on starts, which shapes our behaviour. Secondly, the DWP made absolutely clear to us at the start that it will take the contract away from us if we do not hit the targets. Contract management is a simple way of reaching conclusions.
I seek your views on a point that I was trying to develop with Communities Scotland. Instead of having 32 areas with ROAs and lumping in the people-based community of interest deprivation programmes with the multiple deprivation index, would it be beneficial to separate those out, so that you could tackle the problems of multiple deprivation in particular localities separately from funding the people-based community of interest programmes?
Absolutely. Deprivation exists where it exists. I give the example of some rural communities. We work in Dumfries. I should not perhaps regard that as a rural area, because we work in the town. Dumfries does not look like a particularly deprived area, but there are unemployed people in Dumfries. Should we deny them the opportunity to improve their lot because there are not sufficient concentrations of deprived people in that locality?
I am well aware of the work that you did in Dumfries with Irvine Housing Association. What targets do you have to reach and how is your performance evaluated? Is that done purely on the basis of whether you have got people who have been long-term unemployed into work? Is there any evaluation of what you have done for community regeneration and so on?
It depends almost entirely on who is paying us to do what. One complexity of our funding is that I can hardly think of an instance in which there is a single funding stream to a programme. Sometimes there are as many as six or seven streams, for each of which we must deliver outcomes. In the case of the project in Dumfries, one of the outcomes was simply that Irvine Housing Association wanted its housing stock to be improved. In a way, it did not care that formerly unemployed people were doing that. The work had to be done, and it had to be done to commercial standards.
You have commented on the problems of bureaucracy and having several sources of funding. Is it a problem meeting targets when the targets that are set by different agencies are very different? Do difficulties arise from what you are expected to do by the different people who fund you?
It is not straightforward—a fair amount of juggling is needed to get things right. However, we have the advantage of having quite a long experience in doing that. Ultimately, I would rather have several funding streams than a single fund. The danger with having a single fund is that all your eggs are in one basket. If the fund is badly run or badly organised, there will be more problems.
There is an implied contrast between the picture that you have created of the Wise Group as a delivery organisation that is strongly focused on outcomes or outputs and Communities Scotland, from which we heard earlier, which has a perhaps more theoretical approach that involves people simply talking to each other about their objectives. Communities Scotland has a safety net, whereas the Wise Group is only as good as its last set of performance outcomes. Is it always a good thing to be in that position? Could your position be improved by allowing for some vestiges of a safety net or some elements to ensure your continuity?
For the first two years after I took over as chief executive, I thought that the holy grail was to achieve core funding as that would provide greater certainty, but I now think that that would have been disastrous. It can happen that, for a relatively small amount of money, the organisation that provides the core funding obtains a disproportionate influence over the delivery organisation. In some ways, the absence of a safety net is actually quite a good thing.
Further to the questions that Elaine Murray and Des McNulty asked, have you any comments about the overall funding and support that you receive for tackling deprivation and poverty and the funding and support that you receive as a social enterprise? Will you expand on that a bit?
By and large, the funding that we receive for tackling deprivation is sufficient. I will not say that we should have more money, but I would like greater flexibility in how we use that money. I believe that our funders' sole concern, apart from honesty, should be whether we deliver what we said we would deliver. The bureaucratic overhead in developing and running projects is utterly enormous. Over 2003 and 2004, we had a grand total of 52 audit and verification visits—that works out at about one visit a fortnight. When I visited the Deputy Prime Minister, he was so appalled about that that he said that something must be done, but we are still waiting for that to happen. We believe that we are overregulated in some ways but we think that the level of support is broadly fair.
Is that not a rather dangerous approach for the futurebuilders programme? Quite clearly, there is an enormous level of need that futurebuilders should have been trying to tackle. However, my knowledge of the futurebuilders programme, and my experience of isolated projects in rural areas such as Glen Esk in my constituency, show that an enormous number of applications were rejected because of oversubscription to a programme that simply could not deliver on a reasonable expectation of the difference that investment could have made to the social economy.
The level of investment that would be needed would far exceed any programme that the Scottish Executive could reasonably be expected to fund. We are talking about very large sums of money and I understand that ministers have lots of priorities.
In that case, are we not creating an enormous bureaucracy to pussyfoot around telling people that their programmes are awful? If an organisation's programmes are awful, it will be told that and it will not get any funding. What is wrong with applying that test across the board? We might reduce the volume of bureaucracy that is involved and thereby make more money available for the investment funds that make a difference to people's lives.
Part of the problem comes from trying to be inclusive with funds. It is about saying, "Here is a fund that can be used to do something and we want everyone to bid in to it." I will not say anything that I did not say when the futurebuilders programme was being developed, but that programme is aimed at hundreds of organisations. When money such as the seedcorn funds of £6 million is divided into small chunks and spread across hundreds of organisations, they might be able to afford a better quality of biscuit at their meetings but that is about all they will get.
In your introductory remarks, you mentioned that you are working on projects in the north-east of England. Is there anything that we could learn from your experience of operating in that area?
The critical thing that we have learned that would be useful for the Finance Committee is that those in the north-east of England have tended to work on larger geographical units and that has been more helpful. The other lesson might sound a bit cheeky, but it might come up in future business. In European funding, do not touch co-financing with a bargepole. It has been a real disaster and we should be thankful that we do not have it in Scotland.
You indicated that employment is a key way of tackling deprivation. Does that not depend on the quality of employment that is provided or created?
There is no question but that there can be in-work poverty. We often come across people who will say, if we offer them a job to apply for, "I will only be £5 per week better off and I will have to travel as well." We say to them that if they stay on benefit, they will still be on the same level of income in three or four years' time, whereas if they take the job, they might be more than £5 per week better off by then. However, we have to consider how to make work more attractive to people. There has to be push and pull on that.
I like the emphasis that you place on the labour market, which intuitively sounds the right way to go. How do you demonstrate that you make a difference? How do you demonstrate that if you were not providing the labour market programmes, the outcomes would not happen anyway?
To be brutally honest, we cannot demonstrate that, because the only way to do so would be by not existing, which is not possible. Given the make-up of some of the people who go through our programmes, we feel intuitively that they probably would not get jobs without additional support. We have just performed an exercise on the more than 1,000 people who went through our training for work programmes in 2004. Fifteen per cent of them had substance abuse problems; 72 per cent of them came from workless households; about 50 per cent of them had three or more individual barriers to gaining employment. Despite all that, more than 50 per cent of them got jobs. I cannot believe that the labour market would have absorbed those people by osmosis.
I accept that if you are delivering a positive outcome it would be harsh not to operate the schemes because that would disadvantage people, but could you do any sampling to compare similar areas in which you do not operate? Can you make the system more robust, so that you can say, "This money is being spent effectively. It is delivering something"? Your evidence suggests that money is being spent to tackle the problems using more innovative and non-traditional methods that are not as demonstrably effective.
I honestly think that it would be almost impossible to do what you suggest, partly because we work in areas—apart from Edinburgh—with high levels of deprivation. If you go to almost any city or town in the UK, you will not find a Wise Group, but you will find people doing similar things. You would need to find somewhere where that was totally absent.
But there are measures of comparative performance. The DWP gets on to—
Absolutely. We run contracts for the DWP. With employment zones, for example, it publishes national results, so we know how we are doing compared with other providers, and other providers and the DWP know. Results can throw up interesting points that might make people question the effectiveness of some of the programmes. One of the things that we are told with monotonous and depressing regularity by people who have not thought it through properly is that the ILM is expensive. Expensive compared with what—sitting doing nothing? However, you can then look at a labour market such as London, which has employment zones aimed at short-term interventions, which cost £17,000 a job. That is not an effective way of doing things.
In terms of resources, everyone—particularly your organisation—is limited relative to the other agencies and organisations in the area. Compared with the size of the public sector—for example, local authorities and the national health service—you are dwarfed. The project with Greater Glasgow NHS Board sounds interesting, but how else do you try to tap into its resources and apply them to your organisation's ends?
We have a fairly tried and tested means of doing that. We have a development and funding department that works with partners to bring forward projects that we think will work and that they think will work and are prepared to fund. Our acid test of partnership is whether people will pay for the programmes that are run, rather than whether people will sit round a table together.
I have been extremely impressed by what I have heard. In particular, I am interested in exploring your comment about your consistent and perpetual quest for improvement, the philosophical roots of that quest and the audit trail of how you got to it and grasped it. However, much more important than any of that is how you explain to your client base that they should engage with the consistent attempt to improve their lot.
It is incredibly difficult to do that. It would be fair to say that there is a culture of cynicism among many of the people with whom we work. They have had bad experiences throughout their lives, so it is difficult to persuade them that things can get better. I can illustrate that through a couple of examples.
That is extremely interesting. I have been doing work recently on the W Edwards Deming philosophy. Essentially, it says that people in any system are responsible for only 15 per cent of the outcome. The system itself, with its raw materials, training and recruitment procedures, machines, structures and processes, dictates that. As we move into a more automated future, people are now saying that the ratio is perhaps 97:3. In such a climate, can you see better ways of explaining to folk that it is not their fault that they are in the position that they are in and of giving them more hope and a more enthusiastic approach to improving their lot consistently?
One of the things that the UK Government is doing that is absolutely right is to instil in people that they have responsibilities. Accepting responsibility is a good starting point for people seeking to improve their lives, but they will also need help. For example, there is no point in someone who lives in a run-down tenement in Shettleston saying, "I can change my life," if there are no conditions around them that would allow them to do that. The job of the Executive and the UK Government is not only to create such conditions but to tell people that they must take some responsibility themselves.
In your submission, you make a strong statement in support of community consultation and argue that
Sure. The first issue is how representative people are. Studies have been undertaken that show that a local élite tends to be involved in community activism. That is great, but it is arguable that such people are no more representative than anybody else is.
That is a good point. The nub of your submission is that if decisions were put to referenda, the priority that other people gave other objectives would dwarf your objectives, as you deal with many folk who are on the edge and who need much support—people whom some might say should pull themselves up by their bootstraps and so on. I think that that is what your submission argued.
Absolutely. I am afraid that the concept of the deserving and undeserving poor is still alive and well. We have often thought that if we put a picture of a sick donkey on our promotional material, we would do rather better.
I thank David Nicoll and Abigail Howard for coming along. I do not know whether we did not ask David any difficult questions, as he did not pass any questions to Abigail. We enjoyed the responses that we heard. As I said to Ian Mitchell, we did not reach a couple of questions, which we may deal with by correspondence. I thank both witnesses for appearing.
Meeting suspended.
On resuming—
We will hear evidence from three community planning partnerships next week and the Minister for Communities will give evidence on 22 November. We wanted three ministers to give evidence, but the Minister for Communities has said that, as he has lead responsibility for many of the cross-cutting activities that relate to regeneration, he will lead on evidence giving and will be supported by appropriate officials. Given how the deprivation inquiry is progressing, we might need to invite the Minister for Health and Community Care and the Minister for Finance and Public Service Reform more overtly to speak to us in due course. However, perhaps the time is not right for that yet.