The second item on our agenda is a contribution from Audit Scotland on its forward programme of performance audits. The Auditor General for Scotland cannot be with us today, but I welcome two stalwarts of Audit Scotland who come to the committee regularly: Barbara Hurst and Angela Cullen.
Yes, please, if that is possible. I have to say that we are stepping into the Auditor General’s shoes, but they are rather large for us.
Thank you. I have a couple of questions about the current work programme. First, can you tell us a bit more about the justice overview? How wide ranging will it be? Are you considering issues such as legal aid and the implications of the changes that the recent Cadder decision brought about? What are the parameters?
I will ask Angela Cullen to tell the committee about that, as she is overseeing the report.
It is quite a wide-ranging review—that is obvious, as it is an overview. We have tried to narrow the scope to the extent that it covers the adult criminal justice system in Scotland, but it looks at all the bodies in that system, how much they spend and their performance, and it considers some of the issues that may be examined in future. To some extent, it looks at summary justice reform and how the decisions that the Parliament has made about summary justice in the past 10 years have manifested themselves in the criminal justice system.
What about legal aid?
It is in there.
Have you examined the issue of legal aid in civil cases?
No. We have narrowed our focus down to criminal justice.
Okay. What about the interface and overlaps between the different agencies? In recent years, concerns have been expressed about high rates of reoffending and the system’s ability to prepare prisoners properly for release. If some of the trailers for the Christie commission report are to be believed, it is beginning to focus on something that all of us have known for some time, which is that early intervention and expenditure often lead to greater savings in the longer term. With regard to the criminal justice system, we know not only that huge amounts of money are being spent on imprisonment but that people who are not prepared for release or given proper rehabilitation reoffend very quickly. Are you going to examine the money that we are spending on preparation for release, on rehabilitation and on monitoring those who have been released?
I do not want to give away too much of the report before we actually publish it, but I can tell you that it looks at all the bodies that work together and where they overlap. We are also looking at reoffending—after all, reducing reoffending is one of the adult criminal justice system’s performance indicators—and we are attempting to identify the spend on reoffending compared with spend in the rest of the criminal justice system. I think, therefore, I can say that, yes, we intend to cover the areas that you have highlighted, although perhaps not to the level of detail that you might suggest. We might well follow up those issues in an individual performance audit at a later date.
Sticking with the current programme, I want to move on to the Commonwealth games, which is a topical item this week. In the previous session, the Public Audit Committee expressed concern about certain management practices in the governing body, particularly in relation to pension issues, and worries over the development of some of the infrastructure in the Commonwealth games village. Will the current programme consider previously highlighted issues, and will there be a progress report on the concerns that have already been raised?
Yes. We are just at the scoping stage, which will involve taking into account the committee’s previous discussions and evidence sessions and building all of that into the follow-up work. We will be looking at those issues, but we may well consider new ones.
Thank you for the overview for new members. I cannot speak for all of us but I, for one, found it particularly interesting and useful.
The Auditor General published quite a high-level report on Scotland’s finances that captured some of the risks associated with the current economic climate and the ways in which public bodies needed to respond to it. This report, on the other hand, very much focuses on what public bodies are doing to prepare themselves, given that we know what the current economic climate is. For example, what mechanisms are they using to reduce costs and redesign services?
I have another question, although I will not hog the microphone. You have made it obvious and clear that you engage with stakeholders. How about the general public’s concerns? I am sure that all committee members are already receiving e-mails that say that the committee should examine this, that and the other. How do you guys in Audit Scotland engage with the public? Does that happen regularly?
The consultation is quite detailed. Consulting the public sector is easy. We have a specific stream of consultation on equalities. We are keen to pick up such issues, because much of our work concerns service users. We have a mechanism for engaging—largely through the voluntary sector—with service users.
Good morning. The convener made a point about the Christie commission. The sentence from the commission that jumped out at me this morning was:
We do not recognise the figure, although I would not be surprised if what you quoted is the case. We have never tried to calculate the figure. Much of our work—particularly on social care and community health services—looks at the preventative angle. Our programme refers to a watching brief on intervention in the early years, which has been in the programme for a little while. We started to try to scope work on that, but it was hard to find something to audit, largely because many preventative projects are on a small scale. We need to consider how we can build the issue into all our work rather than try to do something on preventative services, which would be hard to scope.
Why do you not recognise the 40 per cent figure? Did you say that that is not a calculation that Audit Scotland has made in 12 years of accounting for public finances in Scotland?
Yes.
So you are interested in understanding how the Christie commission came up with it.
Yes, absolutely. We are beginning work on an overview of the money that is going into some of those preventative services. We know that some fantastic services that are working with young people have saved money, and not always on a small scale. One in Glasgow has probably saved the health service quite a lot of money because of its work on knife crime. It has done some very intensive work and it looks as if it is fantastically successful. We are keen to build in some learning from some of those pilot projects.
Yes, but 40 per cent of £30-plus billion is an enormous number.
I know.
Some of us have tackled the issue in the past—previous Governments carried out exercises that did not get to the bottom of it. Audit Scotland must be interested in the area because, as you have said in other reports and as you said earlier, the challenge to finances is so enormous.
Yes. We are close to drafting a report on the work on reducing greenhouse gas emissions that is being done, and it will look at the central response to the 2009 act and the actions that have been put in place to achieve ambitious targets.
I come back to the first point that Tavish Scott raised about the 40 per cent, which, as he said, is a huge figure. In your future work programme, will you audit or scrutinise that figure to see whether it can be substantiated and, if so, will it influence what you do? Alternatively, will we just have to accept it at face value?
I am hearing a very clear message that the committee would like us to do something on that. We should talk to the people who have come up with that figure and do some work ourselves, not to rubbish it, but to understand how they came up with it. That would be a useful exercise for us, although it would be difficult—I am not saying that it would be easy. Perhaps we should have the conversation first, do some work and then come back to the committee with what we think is the ballpark figure.
That would be helpful. Thank you.
Good morning, and welcome back to the committee.
I think that it will come out just after the new year.
It will come out in March.
The management of ticket sales is an interesting aspect of the London Olympics. When the committee looked at the previous reports on the Commonwealth games, Audit Scotland raised concerns about how ticket sales would be handled. The committee expressed concern that some of the projections might be somewhat overambitious. Whatever view one takes of ticket sales for the London Olympics, there is no doubt that the exercise has been a huge success in terms of raising revenue—whether it has been a huge success in terms of public reaction is a different issue, but it has been remarkably successful in meeting its targets for ticket sales. Will you look at that issue specifically to see whether lessons can be drawn from the London Olympics experience?
Ticket sales are certainly on our radar, because of the interest that the committee showed previously. We have good relations with the National Audit Office in England, which has done a lot of work on the Olympics, so we will discuss with it whether we can learn anything from that process. I do not know whether the NAO has looked at the ticket sales process. Does Angela Cullen know?
Yes, I think that the NAO has looked at that process. We will speak to the NAO shortly as part of the research for our audit. Last time, we drew comparisons with other Commonwealth and Olympic games, and we intend to do that again. Because the Olympic games in London is very live at the moment, we will certainly do those comparisons.
Okay. It will be very helpful to see that information in due course.
Would you like us to look at that area?
I think that it would be interesting for you to do so. The way that energy bills are rising is a matter of serious concern, and people are not always aware that there is a connection between the subsidy regime and the electricity costs that they pay.
Okay, we can build that into our programme.
I will follow up on that point. One thing that confuses me is the plethora of information provided both for and against renewables. Instinctively, I think that going for renewable energy is a fantastic idea, but I cannot be the only one who is confused by what is said. At one point you read a report that says, “This is the way forward: it is proven, and the statistics and evidence all show that.” You then hear someone else say, “No, the cost of renewable energy cannot be justified. There are issues of sustainable and consistent delivery of energy, and the cost of subsidy for wind turbines is enormous.”
We are in the fortunate position of having someone who knows all this stuff inside out, who will lead on the project.
It would be helpful if we could have an objective opinion on whether the subsidies that are going into things such as wind farms are justified and whether the output from wind turbines and other forms of renewable energy is as claimed, whether renewables make a valid contribution and whether there are gaps. I know that it is perhaps not for you to suggest that there are gaps in energy supply, but I would be interested to know a bit more if there are cost implications of following a particular strategy.
One note of caution is that we would not comment on any policy implications. We will look at some of the evidence.
Absolutely.
I will not add to your programme, but I have a couple of general questions.
On service delivery in the third sector, I will ask Angela Cullen to talk a little bit about what is coming through around Scotland’s public finances, because it is clear that there is a risk. We do not audit the voluntary sector, although, of course, we look at the large sums of public money that it might receive. That is our way in.
I will be brief. We have considered the third sector in our second piece of work on Scotland’s public finances. Obviously, we have considered the potential impact on the third sector of the squeeze on public sector budgets. However, the more important point is that this is about doing things differently, including through the third sector. We touched on that in our second piece of work on Scotland’s public finances, and we are looking for good examples of where that is happening.
The phrase “watching brief” is obviously our jargon. I apologise for it; we desperately try not to use jargon. When we say that we will maintain a watching brief, we mean that we will use a number of activities to do so. I said that our financial audit is part of the public audit model. Every public body has an auditor, and part of the watching brief activity will be carried out through that activity. If there is something big, the auditor will keep an eye on it, and we will be in dialogue with them on whether we should escalate work into a national report.
This question might be more relevant for John Baillie, who will give evidence later. There are a number of organisations that are not strictly speaking voluntary organisations but are arm’s-length bodies set up by local authorities. There has been recent publicity about Glasgow, but it is by no means unique. Where do those bodies fit into the public audit process? They are set up to be legally separate from local authorities, so they are not strictly speaking caught up in “An overview of local government in Scotland 2010”, but they have responsibility for significant sums of money. No doubt there is internal auditing and a legal audit process that they have to follow, but from the point of view of carrying out public scrutiny through the audit process, where do they fit in? Does the local authority do that auditing? Given that they are independent arm’s-length bodies, I think that that would be difficult. Does Audit Scotland do it? Can such audits come back to the committee? By setting up arm’s-length organisations, do councils in effect take huge areas of public expenditure away from public scrutiny?
I will do a body swerve on that question. The Accounts Commission has just published a report on arm’s-length organisations in its “How councils work” series. We are happy to deputise for the Auditor General on this occasion, but given that the chair of the Accounts Commission is sitting behind us, I think that he can answer your question.
Okay. I will ask him. Thank you.
I have a couple of questions. I note that telehealth is in the current programme and that telecare is to be kept under review. What is the rationale behind separating the two? I would have thought that there would be a number of cross-cutting themes there. For example, issues might arise in the telehealth audit that could lead to a review of telecare being accelerated into the forward programme, rather than just being kept under review. What was the rationale behind separating the two, rather than doing a joint audit of the two systems?
That was very much a pragmatic decision about the art of the possible. The focus on telehealth is very interesting: it is about looking at the savings that might be generated in the acute hospital sector from using technology in different ways. When we were scoping it, we had a conversation about whether we should do the bigger theme, but that would have got us into quite complicated crossovers. What we really wanted to do was see whether there were any potential savings from using technology more smartly in the acute sector. Having said that, in the scoping exercise that we did, a number of themes around telecare emerged, but they related to the community setting. We did not want to lose them. The sums of money involved were not huge compared with some of the other things that we are looking at, but they are still important to people’s lives. We could have combined the two themes, but the honest answer is that it was easier to just look at telehealth, because we could really focus in on the money relating to that strand of activity. It was a judgment call. It might be that we made the wrong judgment, but that is how we made it.
Time will tell, but hopefully you did not make the wrong judgment.
Yes, absolutely. I hope that what is coming through is that the programme of performance audits is not a dry, technical programme that just looks at technical process issues around money. The bulk of the money that is spent in Scotland is spent on services for people, and that is very important in what we do.
First, I declare an interest as I am a local councillor. That will be particularly relevant when we come to the item on local government later on the agenda.
Angela Cullen will help me out on the specific reports that we are following up at the moment, but we are aware that, when we publish a report, it can be that it goes out there and we get a lot of publicity, but nothing happens. We are also aware that the committee is interested in follow-up, because you have asked probing questions of us in the past. We are trying to build in a systematic approach to following up some key reports. You will notice that we have put a few of them into a column of reports that we will follow up on a national basis. This year, there are also some that we have mandated all our local auditors to follow up locally. Angela Cullen will have to remind me which three those are.
Some members of the committee might remember them. We specifically selected three reports that were published two or three years ago as we would expect improvement to have happened in that time. We have asked the auditors to follow up the reports on improving purchasing through collaborative contracts and the result of the McClelland review, which happened a few years ago; waste management in local government; and the use of consultants, by which we mean management consultants and not NHS consultants, and consultancy services. The latter report was on central Government, but it is equally applicable to all three sectors and the recommendations could be applied elsewhere. Those are the three topics that we have asked the auditors to follow up. Because those reports were published a few years ago, we would expect the recommendations to have been implemented by now, and changes to have been made.
If the outcome of that work shows that everything is going fine, we probably will not do anything else, but if there are particular issues, we might well draft a national report on the back of that.
That is really encouraging, convener. It might take some of the workload away from us, if we were thinking that we might have to step in and do that work, so that is helpful. On the checklists that you mentioned, is it too early to ask whether there is any evidence that bodies are using them, effectively or otherwise?
We have done quite a bit of work to look at impact locally. We ask our auditors to let us know which bodies have used the checklists and what they are doing as a result, so we have some statistics—which, of course, have gone completely out of my head—about where they are used and whether there is just a paper exercise or whether they genuinely lead to changes in practice. We could certainly share information for some of the reports with the committee, because it is interesting to see how seriously different public bodies take the checklists.
That is very helpful.
I can add to that. As Barbara Hurst said, the auditors follow up on the checklists through the annual audits on the back of our reports. We produce impact reports on each of our performance audits. They are generally about 12 months after publication, but the timing may flex so it may be 14 or 15 months depending on what is happening—we keep an eye on the situation. We publish those impact reports on our website, so they are publicly available and everyone can see what has happened as a result of our reports.
That is excellent. My second question is on the ninth work package in the forward programme—on the efficiency of clinical services. You ask in the paper for a view on whether you should focus on maternity services or stroke services. My personal preference would be for you to concentrate on maternity services. Through my constituency case load, I am aware that there are a number of cases involving medical negligence in the birth of some children. There seems to be a rising cost. Is there any opportunity for you to look at that aspect and see whether any lessons can be learned and improvements made? It may be more of an interest to the Health and Sport Committee, but as the potential costs are significant I wonder whether you would want to concentrate on it.
That is an interesting question. We have started to have conversations about some clinical services, and the professional view is that it would be better to look at maternity services because a lot has happened around stroke services. We would certainly be interested in the costs of medical negligence. We have a good working relationship with Healthcare Improvement Scotland. It may have done some critical incident reviews, and we would try to make use of any work that it has done on maternity and build it into our work.
It would also be more helpful if the theme of the investigation centred on the user and how the service impacts on parents and children rather than strictly on managing the reductions in budgets and so on. Is that possible?
Maternity is an interesting case. I was at a European conference a little while ago, where a colleague from Germany made a presentation on a review that they had done of maternity services. In true Teutonic fashion, they did a time-and-motion study and allowed six hours, I think, for throughput per woman. That felt quite tight. All I am saying is that we would not go down that road.
I am glad to hear it. Thank you.
Okay. We shall try to avoid a diplomatic incident. [Laughter.]
Good morning. First, in relation to local government, let me express the fact that I am also a local authority elected member.
That is an interesting issue. In the overall scheme of things, the service does not account for a huge amount of money, but we included it in the programme because it is so critical for people. Again, we had to make a judgment call. We have not included education transport in the report; we have focused on health and social care transport. We will publish on, I think, 2 August—sorry, dates do not stick in my mind—and we will bring that report to the committee at your next meeting. You will have an opportunity to think about whether to pursue the issue and whether you want us to do any further work. That will be the opportunity to look at the report, which has some interesting findings.
I look forward to seeing it.
I, too, declare an interest as a local councillor.
I ask Angela Cullen to pick up on that one.
We are quite far advanced with that audit, too, and we will publish the report in September. So, luckily, we already know the emerging findings in it. The work is looking at the impact of the planning legislation that was introduced in 2006 and how it has been implemented at local level. It is also considering performance on all planning applications, so it includes householder and major applications. We will also be looking at the money that is spent in the area. The report will certainly look at the timescale for approval of planning applications.
One item that you say you want to keep under review is major transport infrastructure projects. Over the years, there has been controversy about major infrastructure projects. You mentioned the Edinburgh trams project, which I think will excite interest for some time yet. If you recall the history of that project, you will remember that Audit Scotland was involved in 2007 in preparing a report. To an extent, that gave a financial envelope for the project and, if you like, gave encouragement to politicians to proceed. The trams report was a bit different for you, because you do not normally comment in advance on projects, but there is a precedent for that.
There are two parts to your question.
To take the smaller of the two projects that I mentioned, the Borders railway, whose job would it be to say that the figures that have been produced are robust, that the projections are accurate and that the project has a clean bill of health?
Angela Cullen can come in on this. Our skills lie in knowing whether the process by which those figures were arrived at was sound. I am not sure that our skills would be in second-guessing the costs themselves.
No. We would expect the project manager—whoever is the senior responsible owner for the project—to do that. It is their job to ensure that the estimates are accurate and the project planning timetable is as accurate as possible. Although we would come in and, as Barbara Hurst said, look at the process for doing that, we would not go back and recalculate all the figures, because we are not construction experts. It is difficult for us to do that. However, we have a methodology for considering the processes. We have done it before and we have reported to the committee.
Have you looked at the processes in relation to the Borders railway?
No.
No.
Will you?
That is for discussion. It is why we have put it in the programme. We are consulting on whether we should be doing that. If so, we would need to think carefully about how we did it.
Those of us who have responsibility for making decisions on legislation and finance need to be assured that the processes are correct, because we will get it in the neck if something goes badly wrong further down the line. I must confess that I have major reservations about that project. I would like to know whether the processes were properly followed and whether we are moving forward with a project that is sound.
I will carry on the convener’s line of questioning. The point about process is entirely fair in the context of Audit Scotland’s role. The private sector says that 10 per cent of the estimated project cost will be spent before a private sector project is finally signed off and sanctioned. Oil and gas provide the best example of that. I have been close to a couple of projects in the area recently, and the private sector’s observation to me about the public sector is that we do not help ourselves, because the Government of the day—whether it is local government or national Government—wants to make the big announcement about the total sum, when that is not the way to do it.
Such a process is not in place. It is a difficult decision to make; the public sector is quite different, because many projects need parliamentary approval before they can go ahead and I assume that there needs to be some sort of estimate of the project’s cost before parliamentary approval is given. The process is different, so I am not sure how the practice of going ahead with a project and spending 10 per cent before knowing the ultimate cost could be adopted in reality in the public sector. If the Parliament thought that such an approach was appropriate, the message could be relayed to the Government and the public sector, but the approach is not currently taken. We look at the processes that are in place for estimating costs—
I am well aware that the approach is not currently taken. I took bills through the Parliament two sessions ago and I would appear in front of parliamentary committees, guessing what the sum would be. I hold up my hands and say that that was not a good process. The area needs to be looked at in depth, because if we are to do public procurement of enormous projects—and for the Forth road bridge project we are potentially talking about £1.8 billion of taxpayers’ money—we have to be better at it. If the Parliament has to take a raincheck on knowing exactly what the figures are, thereby gaining more by achieving a real project cost, the Parliament’s interests and, more to the point, taxpayers’ interests will be protected.
May I pick up on the point about the report that we did on the trams in 2007, just to get this on the record? Some of our findings have been slightly misrepresented in various places. We did a limited piece of work, which looked at the governance arrangements at that time. We did not look at a whole range of issues to do with funding, or anything to do with that. I wanted to put in context what we did on the trams at that time.
We have to be careful. As Barbara Hurst said, our role is not to step into the process and begin to manage projects for organisations. However, surely Audit Scotland’s work and the feedback that is given must start to pay dividends in major capital projects, in the context of closing the loop and learning from mistakes. In Public Audit Committee meetings in the previous session of the Parliament, I recall that we said that we want more effort to be put into the early stages of project planning, to ensure that financial planning is rigorous and can stand up to scrutiny by whoever is involved in the project’s management. I hope that the work will pay dividends in future, as projects are rolled out.
Thank you. This is a suitable point at which to draw the discussion to a close. I thank Barbara Hurst and Angela Cullen for their contributions.
Next
Section 23 Report