Good morning. I welcome members to the 28th meeting in 2005 of the Finance Committee. We have received apologies from our convener, Des McNulty, who has been delayed by difficulties on the rail system, which are being dealt with. He will be with us as soon as he can get here. I assume that that is also the case for Wendy Alexander and Frank McAveety, who are making the same journey. I welcome members of the press and the public to the committee and ask that everyone switch off their pagers and mobile phones for the duration of the meeting.
I will say just a few words by way of introduction. The purpose of the bill is to create a human rights commissioner for Scotland. The commissioner's role would be to promote awareness of, and respect for, human rights. He or she would not have any enforcement powers.
I am not sure whether the eagle-eyed members of the committee had spotted that, but I thank you for drawing the matter to our attention.
We did not consider the matter in those terms. We assumed that that would take place in any event, without the need for a specific statutory power, as part of the normal budget-setting process in relation to the other commissioners and therefore also in relation to the new commissioner. I do not think that such a power exists for any of the other commissioners. There was no feeling that it was not a role for the corporate body to play; we just had not identified that there might be a requirement for such a statutory power. We assumed that that would take place as part of the normal budget-setting process from year to year.
That is an interesting answer. The Scottish Executive's working assumption is that the SPCB has the ability to determine the budgets of each and every one of the commissioners.
Essentially, yes. Although I am not an expert on the exact mechanisms, I understand that the Scottish Executive and the corporate body agree the funding to be provided for the Parliament but that we regard the detail of the commissioner budgets as a matter for the corporate body to determine in consultation with the commissioners on the basis of bids that they put forward.
The Executive's assumption is that it is entirely appropriate for the SPCB to determine either the components or the totality of the budgets of the individual commissioners. That would be the product of a dialogue, but ultimately if there was uncertainty or dispute it would be within the powers of the corporate body to determine those figures.
The short answer is yes. That is certainly the case for the totality and it would be difficult to decide whether the totality was reasonable without examining at least the main elements of the budget at some level below that. I would not want to express a view on the exact level of detail, but on the basis that the Parliament funds the commissioners through the corporate body, it is, in essence, the Parliament's money. Therefore, it would seem entirely appropriate that the decision, ultimately, is for the corporate body.
You mentioned that the sum of £1 million would in effect be the grant from the Executive to the SPCB to pay for the costs of the commissioner. By giving a grant of £1 million, are you saying that the Executive's view is that the commissioner's budget should be £1 million and that that is a ceiling on the budget, or is the £1 million just a part contribution from the Executive?
The answer is probably between the two. The Executive believes that £1 million is an appropriate provision for the commissioner's budget, so in effect it is topping up the Parliament's budget by that amount. That does not necessarily mean that we expect the commissioner's budget to be exactly £1 million. It is for the Parliament and the corporate body, in consultation with the commissioner, to decide what the budget ought to be. If it is concluded that the budget ought to be more than £1 million, the corporate body could make such a decision, but the commissioner would not be funded to the extent that the figure exceeded £1 million—I presume that the Parliament would have to find that money from somewhere else.
For the sake of clarity, if the budget is £800,000, how much money will the Executive give the Parliament?
One million pounds. We have said that we will provide £1 million—that is in the baseline.
If the budget is set at £1.2 million, the Executive will still provide £1 million.
Correct.
I will follow up on your answers to the questions about the budget-setting responsibilities. How do you reconcile the SPCB's power over the budget with paragraph 85 of the policy memorandum? That paragraph states:
It continues:
I do not think that there is a contradiction, although I see the point that you are getting at. I can envisage a situation in which the commissioner comes to the corporate body with a budget bid, but it says, "Sorry, we will not give you that much, we will give you £X instead." The commissioner may say that, in that case, he or she will not be able to carry out certain activities. That might happen but, when we talk about independence, we are referring to how the commissioner goes about his or her business and the priorities that he or she identifies. That will not and cannot extend to total independence in setting the budget, because the funding comes from the Parliament. It will ultimately be for the Parliament to decide, after discussion with the commissioner, what the budget should be. If the commissioner feels that a proposed budget settlement would be unduly restrictive and would prevent him or her from carrying out activities that they would like to do, we would certainly expect the commissioner to say so. At the end of the day, the commissioner will have the freedom to run his or her work programme within whatever budget is set—that is what we mean by independence.
So the negotiation will be on a budget bid for a figure and not on the details of the budget. Therefore, the SPCB will not, for example, say that too much has been budgeted for promotion and consultation and that the commissioner ought to spend less on that. Is the model that you suggest that the bid will be simply for a figure and that the commissioner will decide how to spend the money?
It would not be appropriate or helpful for me to comment on the detail of how the corporate body should go about its discussions with the commissioner. It is not for us to tell the corporate body how to do its business in such matters. We leave the required level of detail in budget discussions up to the corporate body to decide, in dialogue with the various commissioners.
You talked about a budget bid. Will it be for the commissioner or for the corporate body to decide what the commissioner does with the budget? Surely that is key to understanding what paragraph 85 of the policy memorandum means when it talks about the commissioner's independence and freedom from "external control or direction". It is not fair on the corporate body or the commissioner to leave the matter as vague as you have done.
With respect, it is not really for us to comment on the detail of the process. However, I would expect a commissioner or anyone else who makes a budget bid to say something about how they propose to use the money, in line with normal practice. If the commissioner is not successful in securing the full bid, for whatever reason, he or she might say that they will not be able to engage in certain activities in which they had planned to engage. I cannot go any further than that.
The issue is a genuine difficulty. We rehearsed it with the SPCB two weeks ago and with the commissioner for children and young people last week. Previous legislation has used a similar format to that which is proposed in the bill. The Executive—or, in the case of the children's commissioner, the Parliament—has said that it wants a post to be created and that the corporate body will be responsible for negotiating the budget. Understandably, the independence of the commissioner will be entrenched in the bill, but the grey area is whether that independence will be compromised if a regulatory body—the SPCB, or perhaps even the Finance Committee—asks why the commissioner is spending money on a particular issue.
We share a common interest—there is general agreement that there should be proper accountability for and scrutiny of expenditure, which includes discussion of budget bids. The Executive goes through similar processes with bodies that it sponsors, many of which are expressly independent. However, independence is not the same as having a blank cheque, nor can it be. There is no inherent contradiction between entrenched independence on the one hand and having to agree a budget on the other hand. The budget has to come from somewhere—in this case it comes from the Parliament—and it is entirely right that the Parliament, in agreeing a budget figure, can look to some extent at how the commissioner proposes to spend that money.
I do not want to pre-judge what the committee will say in its report, but it is likely that we will want the Executive to look carefully at that provision. It appears to cause a great deal of uncertainty in the corporate body, and certainly in the Finance Committee, about how the financial framework within which the commissioners operate is constructed so that it neither compromises their independence nor creates a sense that it is unreasonable for the parliamentary authorities to say, "We do not want you to spend your money in that fashion." We might come back to that issue.
The SPCB has welcomed the fact that it would be able to approve the office location and give consent to staff numbers.
Again, that concerns the internal budget-setting process, so I am not sure to what extent it is a question for us. I am not trying to pass the buck; I am genuinely not sure about the extent to which it is appropriate for the Executive to comment on what will be a relationship between the corporate body and the commissioner.
The Executive aims to set up the post, so the Executive has responsibility for it. If the commissioner overspent on their participation budget, for example, I presume that the SPCB would have to find that money from somewhere else. You would not give the SPCB any more money if the commissioner turned out to be more expensive than you expected, so that cost would fall to the SPCB, which would have to find the money from somewhere in its budget.
I am not sure about the extent to which underspend can happen; I do not claim to be an expert on internal accounting in the Parliament. It is true that we said that we would provide £1 million per year to cover the costs of the commissioner. We would expect a significant part of the commissioner's activity to be promotion and awareness raising. The bill proposes that such activity would be the commissioner's main focus, and it would create specific functions in that regard. I would expect the commissioner to say as part of a budget bid how much he or she proposed to spend on awareness raising and promotion. I assume that that would be accompanied by an expectation that they would stay within the limit, so that there would not be an overspend on the total budget.
The commissioner could argue that such expenditure was necessary in order to fulfil their statutory duties. The children's commissioner has argued, "This has been required of me by legislation; therefore, I have to do it."
Elaine Murray talked about the budget for promotion and awareness raising, which is laid out in the financial memorandum as £175,000. You say that those things will be central to the commissioner's role. How will the Executive quantify and ensure value for money? Questions on that exact area were asked when we dealt with the budget for the children's commissioner.
As part of budget discussions between the commissioner and the corporate body, it would be reasonable for the corporate body to look for some indication from the commissioner about what activity would come under the heading of promotion and awareness raising and what it would be expected to deliver.
Will value-for-money accountability be included in the annual report rather than in the budget-setting process?
It will probably be included in both. As part of the discussions on the budget, it would be reasonable to look for some indication of what the money would be spent on and what it would achieve. That would enable us to assess after the event whether the expenditure had been effective. I would expect that to feature to some extent at least in the annual report and possibly also in the annual accounts.
The financial memorandum covers the rental costs of the commissioner's office. Is that figure based on costs in central Edinburgh or on the considerably lower cost of office space in rural or deprived areas?
When we were estimating what the costs might broadly be for each item, we looked to comparable bodies around the United Kingdom. The rental cost estimate is drawn from seemingly comparable figures for the Northern Ireland Human Rights Commission, the children's commissioner for Wales—
Therefore, the estimate is not based on rental costs in Scotland.
It is not specific to any location.
You talked earlier about what would happen in the event of overspend or underspend and about the commissioner's relationship with the corporate body. Has the corporate body been involved right from the start in establishing that relationship or has it been just told about it?
When the proposals were first developed, that was done from the starting point of what accountability mechanisms and structure the Executive felt would be appropriate for the commissioner in the light of responses to public consultations.
The corporate body indicated that it has concerns that conservative estimates have been made with regard to the salaries of commissioners and their staff. Have you any comment to make on that?
Certainly. Again, our estimates of salaries for commissioners and staff were drawn from examples of other comparable bodies around the United Kingdom.
Under one of the expenditure headings, you identify up to £50,000 for research. What areas of research might the commissioner be interested in that would justify the spending of 5 per cent of his or her budget?
One of the reasons for establishing a Scottish human rights commissioner in the first place is that awareness of human rights issues is low in Scotland. At least, it is extremely difficult to get information about the level of awareness. There simply is not much information about the level of awareness among public authorities or other sectors. We imagine that a significant part of the commissioner's early work would be to investigate exactly what the situation is.
In its response to the consultation exercise, the SPCB said:
As I said, we had some discussion with the corporate body at official level, but one could always have more consultation. In retrospect, it might have been helpful had we provided the SPCB with a draft of the financial memorandum at an earlier stage, rather than simply on publication. I am not sure how significant an impact that would have had but, in retrospect, it might have been useful to do it.
It comes down to the point that we discussed earlier: the corporate body feels exposed because the legislation is not clear about the extent of its intervention in budgetary control. Further dialogue on that point would be helpful.
I would be happy to pursue that with corporate body officials, although I reiterate that I am not sure how appropriate it would be for the Executive to take part in discussions on the corporate body's internal budget mechanisms and how it goes about budget dialogue with commissioners. Moreover, I am not sure how much value we would bring to such discussions. However, we are happy to have such discussions if the corporate body would find them useful.
In commenting on paragraph 126 of the financial memorandum, the corporate body states:
We recognise that there might be a need for such advice from time to time but, frankly, when compiling the financial memorandum we could not meaningfully estimate how much activity there might be. If we had put a figure against that, it might have created a misleading impression, which might have indicated that we had expectations of a certain amount of expenditure under that heading. We would have had nothing to base that on, and it might have proved to be totally unjustified.
To be frank, we had a bit of difficulty in drafting the financial memorandum, because the body will have independence over its work programme and the issues that it decides to take up. As Brian Peddie said, one of the difficulties that we faced was that if we had set out in the financial memorandum a more detailed, line-by-line description of what we anticipated its expenditure to be on, say, inquiries or legal fees, that would have created an expectation of how we expected the commissioner to structure his or her work programme. Our expectation is that the lines that we have described—such as promotion and awareness raising, general running costs and travel expenditure—will include costs that are incurred by the commissioner in undertaking inquiries or providing advice, if that was part of his promotion and awareness-raising work.
Paragraph 126 of the financial memorandum states:
That is an excellent question. The fact that there is a contradiction reflects the difficulties that we face in setting out estimated costs in financial memoranda in striking a balance between a level of detail that would be helpful to Parliament and not being too prescriptive. Research costs are much easier to estimate than is a level of legal activity. The degree to which the commissioner might incur legal costs, whether in legally proofing legal advice to other bodies or in the course of interventions, is much harder to estimate. The amount of legal advice is entirely dependent on the commissioner's strategic direction. I take your point entirely about the line on research. As I said, research costs are easier to identify.
There is not necessarily a contradiction. Part of the thinking behind what we say in the financial memorandum about research is that a large research programme takes a certain amount of managing. Given the effort that is required in monitoring and carrying out projects, and the likely size of the commissioner's office, we thought that it would be unlikely to be practical for the commissioner to be able to run more than one large research project at a time. That does not necessarily mean that we expect the commissioner to be running one significant research project every year: the commissioner might, in a given year, have more but smaller projects to run, or projects might run from one year into the next.
What practical measures are being considered to ensure that the commissioner uses public funds responsibly and efficiently?
I do not want to risk going back to our previous discussion about accountability. I expect that in presenting a budget bid, the commissioner would say something about the main headings under which the money would be spent and what the spend would be expected to achieve. The commissioner will, of course, submit annual reports to Parliament to describe what activity they have been engaged in, and the commissioner's accounts would be audited by the Auditor General for Scotland, which I imagine would provide the main element of control in relation to the detail of financial propriety.
Other Executive departments and Executive-funded bodies—such as local authorities and health boards—are going through an efficient government process whereby they are expected to find particular savings or spend as much as possible on front-line services. Will anything similar apply to the commissioner, or will the commissioner have a blank cheque?
The Executive is engaged in such an exercise, under the efficient government initiative, to examine the scope for bodies that are accountable to Parliament to share services, to co-locate offices and so on. We have had discussions with the Scottish public services ombudsman on that and with colleagues in the Executive who are involved in the efficient government initiative.
Thank you for your evidence this morning. The committee will reflect on the points that have been discussed.