European Committee, 21 Mar 2000

Meeting date: Tuesday, March 21, 2000

Official Report 182KB pdf

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European Structural Fund Programme Management Executives

The first item on our agenda is a review of the European structural fund programme management executives, their relationship with the Scottish Executive and the role of the programme monitoring committees.

Today represents the conclusion of our investigation into the future role of the programme management executives. In January we launched the review of the new arrangements for managing the next round of European Union structural funds and we have taken evidence on that. A draft committee report has been circulated and a copy of it has been sent to the Minister for Finance.

We have the opportunity to hear the minister's reactions to the report and to other observations that have been made to him. I hope that he will also comment on the role of the programme monitoring committees. Today's discussion is not about the objective 2 plans. The minister will come back to the committee on 4 April, when we will consider the finalisation of those plans. Today, we shall concentrate on the PMEs and the PMCs.

Having said that we want to comment on PMEs and PMCs, I would like to abuse my position as convener to tell the minister that, when he comes back in a fortnight to discuss objective 2, I suspect that the committee will want to ask him about problems that many voluntary sector organisations are starting to develop. They are concerned about gaps in funding between the end of the old programme and the introduction of the new programme. I have had representations from One Plus, Community Enterprise in Strathclyde, the Association of Scottish Colleges and the Scottish Council for Voluntary Organisations. I know that other committee members have also received representations. Clearly, the voluntary sector is worried about the potential impact of the new programme. Today is not the day to discuss that, but I thought it only fair to tell the minister that we hope to discuss it with him in a fortnight.

To discuss the future role of the programme management executives, I welcome Jack McConnell, the Minister for Finance.

I know that there are concerns in the voluntary sector about the gap in funding between the end of the old programme and the beginning of the new. The Executive is actively examining the way in which we deal with that gap in funding, and we have already made provision until May or June for a number of projects and organisations that required funding to continue their work. Although we are considering that positively, it is important to remember that European funding is meant to be additional funding for those groups and organisations. The argument that they cannot survive on their core funding without European funding might call into question whether they are using European funds as added value at local level. If we provide assistance, it must not be as a substitute for the core funding that those bodies should have raised elsewhere. I hope that that is widely understood.

I will first address monitoring committees. We have received a wide range of nominations for places on the five monitoring committees. The committee has been given a copy of the monitoring committees' remit, and has almost certainly heard me say that the committees should have a much more strategic role in the next programme.

Although the monitoring committees in Scotland have performed an excellent role in the European structural fund programmes over the years, it is right that we should develop the committees' strategic role because of changes in the regulations, the new circumstances in which we as MSPs find ourselves and the constant need to justify expenditure of public money. The committees are at the peak of a structure that includes a proper management committee to deal with the operators who use the funds, and advisory groups that give advice on applications that might be successful. I hope that I will reflect that strategic role through the appointments that will be made in the coming weeks.

In seeking nominations, we included for the first time social partners and employers and employees organisations. We also asked the councils to nominate elected members rather than the officials who represented the councils in the past. Such a significant change has been widely welcomed in Europe and throughout Scotland; it is right for the monitoring committees and it puts us back in the mainstream of committee organisation for European funds.

Unfortunately, the nominations that we sought are not quite as comprehensive as we had hoped, and we need to reinforce the nominations that have been received for the three objective 2 monitoring committees in the south, east and west. We must also seek more nominations. Although the closing date was 22 February, I have asked officials to contact local and national organisations to get a wider range of people. That is partly because of the skills, experience and strategic overview that people can bring to the committee and for other reasons of geographical and gender balance that the Executive has set out as initial objectives. However, we will be able to move quickly to appoint the members of the Highlands and Islands and objective 3 monitoring committees, and I will make sure that the committee is informed of the appointments as soon as they are made.

On the programme management executives, the committee has already discussed the report that was prepared for me by Lex Gold and his working group. The report was excellent—I am very grateful to the group for its work—and its recommendations should be welcomed and acted upon. We are working on more detailed guidance to implement the recommendations, and will obviously keep members informed of any developments. The report clearly demonstrates that the Scottish model of PMEs is good and has served us well in the past, but we can build upon that model by streamlining systems, improving efficiencies, creating better evaluation and monitoring systems and sharing costs and best practice among PMEs. That will make the processes of programme management decision making, monitoring and evaluation more strategic and effective.

In the new arrangements for Scotland, it is vital that the work of the PMEs and monitoring committees ties in with policies at every level. Furthermore, a key aspect of our model is that we will continue to involve partners in decision making and the sharing of costs and organisation. The report shows that we can achieve streamlined costs and improve the quality of our service, which can only be a good thing.

I wanted to mention specifically the proposed Scottish structural funds forum and I welcome the recommendation to consider that in detail in relation to membership. I hope that if that forum goes ahead—as I expect it will—the committee can be involved in it.

Finally, what I assume is the committee's draft report in response to Lex Gold's working group report was very helpful. I would be willing to consider actively all the points that are made by the committee in that report and any additional points that are made this afternoon.

I throw the meeting open for questions and comments.

I do not mind kicking off.

Thank you for your introduction, minister—in particular your comments on the committee's paper. It is useful to hear you talk about it in those terms.

You will probably respond to Lex Gold's material and that of the committee in due course. One of the issues that we discussed in an earlier committee meeting, and with Lex Gold, was the specific role of the Executive as the managing authority of the PMEs and their work, and the means by which European partnerships can continue to play a viable role after 2006. What are your views on the role of the Scottish Executive as the managing authority? Lex Gold said that there was a potential gap in that he had not considered that in the work he undertook. It might be too early for you to respond, but even an indication of how you see that would be useful.

Those are important issues—pulling together extra strategies for 2006 is vital. Much of what is said in the steering committee's report about having a mid-term review is useful. The committee was supportive of the idea of an annual review, which could contribute to a mid-term review. We should use the mid-term review to clarify our thinking about what will happen in 2006.

It might be too early to speculate on a clear role for the European partnerships after 2006, given that it is hard to predict what the political, economic or administrative circumstances in Scotland might be at that time. For example, we will have had another six years of the new structure of local authorities by then. During that time, there might be reviews of some of the partnership organisations, such as local enterprise companies and so on.

However, important lessons have been learned from regional partnerships in Scotland. Those lessons should not be forgotten by any part of the organisation after 2006. In many ways, they could usefully be learned by various other organisations—outwith European funding—between now and 2006. I hope that the lessons will be addressed by the mid-term review and that we will consider how the partnerships between the various bodies that are involved can continue. Whether such partnerships are on the same basis as the European partnerships might be up for debate—that would depend largely on what replaces structural funds in 2006 or what other funding mechanisms are in place throughout Scotland at that time.

On the mid-term review and the exit strategy, I am keen that the programme, as part of the overall Executive strategy, should address the twin objectives of sustainability and the wider social inclusion agenda. The committee's report recommends that the Executive should look more at extending the finance that is available through public-private partnerships and at its ability to address wider social problems by using venture capital and other sources of private capital. We asked the Executive to introduce plans to that effect—is it your intention so to do?

The loan funds that operated in the east and west under the old programme were obviously successful, and I want to encourage that kind of approach across each of the programmes for the next period.

I also met the European Investment Bank, which is keen to invest in such funds in Scotland and elsewhere in Europe in future. We plan to hold further meetings with the European Investment Bank and others so that it can put forward ideas on the sort of resources that it might make available.

The idea of trying to recycle funds and to pump-prime for a longer period is good. It has been successful where it has been tried and it should be a feature over the next six years—the plans allow for that.

Before I bring Bruce Crawford back in, I will stay with that point, minister. As well as considering the potential for public-private partnerships and private capital to help boost the available funding, there is an underpinning idea that in many cases we should encourage loans, rather than direct grants, to be given. In that way, money could be recycled and could be available over a much longer period. I know that there will be occasions when that approach is not appropriate and when direct grant aid is still required. However, is the Scottish Executive prepared to consider changing direction? How quickly might that happen? We cannot afford to lose time and we might find ourselves halfway through a programme before that approach is introduced, if it is considered to be a good idea.

I have no difficulty with that proposal, if it falls within the financial and accountability arrangements that must be in place. The more flexibly we can use funds, the better. I am not sure whether discussions have been held on that kind of loan financing, apart from in relation to the development of small and medium enterprises. However, if the opportunity arose to use that approach and the circumstances fell within the financial restrictions, I would have no difficulty with it. Anything that helps to recycle European funds or that encourages the pump-priming, added-value role of European funds, rather than seeing them as simply a contribution to core costs, is very useful.

I have received a request from the broadcast staff for everyone in the room to switch off their mobile phones because they are interfering with the equipment.

I will switch my phone from vibrate to off.

Thank you for your answer on exit strategies and on the strategy for getting to that point, minister. How do you view the position of the Scottish Executive as the managing authority? We picked up on some weaknesses when we discussed that matter with Lex Gold—perhaps the role of the Executive was not explained sufficiently in his report. It was not clear how the Executive drove the programme management executives' strategic thinking, nor were the links between the Scottish Executive and the on-going work explained clearly. I am, I suppose, asking for a flavour of how you envisage the Scottish Executive—as the managing authority—overseeing all the work. We did not see clearly from the paperwork how that is being done. I think that I have explained my question as best I can.

The table in the steering committee's report helpfully laid out the responsibilities of the partners—that is, the responsibilities of the programme management executives and of the Scottish Executive. Those responsibilities were not specified so clearly in the past, so that is a helpful development. The key to securing good performance from people is to specify clearly in advance what they are expected to do.

The Scottish Executive has a vital overall role. It is responsible for the financial rules; it is responsible for ensuring that the various monitoring committees and PMEs are operating within the policy context that we set; and it is responsible for ensuring that there is accountability in meeting the regulations and plans that have been put in place. The Executive will also hold national reviews annually and halfway through the programmes, and will be involved in setting out the core indicators throughout Scotland. Clarification of the roles of PMEs and the Executive will ensure that the funds are better and more effectively used and that we meet the objectives that we set.

I understand the need to go down the road that you have just described. The committee is particularly interested in the reviews. Where do you see the committee sitting in the review process? How might our review capacity be brought to bear in a way that provides added value?

The annual implementation reports are very much part of the new programme. The reports will not only be about what has happened, but might include recommendations for adjustments to particular programmes and to the balance of resources. I assume that they could also include recommendations for changes to the way in which the programmes are being managed through the PMEs and the monitoring committees, if there are particular concerns or if we want to extend one area's good practice to other areas. I see the European Committee as having a role at that stage. The committee would be firmly involved in commenting on draft reports, for example. That would give members a chance not only to consider what is happening from a national perspective, but to bring to bear their local knowledge. That would not overload the committee with detail on an on-going basis, but would give it a strategic role in the process—a role that it would, presumably, welcome. I would certainly welcome that.

Paragraph 54 of our report addresses that issue. Your officials might want to reflect on the suggestions that we make.

My question relates to paragraph 54 of the report. I do not know whether the minister has had an opportunity to study it, but would he care to respond in some detail to the suggestion that is made in paragraph 54 about the European Committee's involvement in the annual review of the programmes? It is proposed that the Executive should be asked to submit a short paper stating what it has managed to achieve during the year and where it has fallen short of its objectives. It should also be asked to submit a plan for the forthcoming year. At the same time, the European Committee should have the opportunity to question the minister and his officials and to make suggestions about what could be done and, if things have gone wrong, how they could be improved.

I have no difficulty with that. As part of the annual implementation report, it would be possible for us to produce a summary that could form the basis for discussion in the committee. The committee might enjoy reading the huge documents that occasionally land on my desks. It might, however, be more productive to focus on a summary of the key points—what we were trying to achieve, what we achieved and any discrepancy between those aims and what was planned for the following year. I am sure that we can come to an arrangement on that between now and next year.

The minister will be aware that in other regions—in England, for example—Government departments, rather than programme management executives, undertake a lot of this work. I accept what the minister says about the effectiveness of the Scottish model, but duplication was highlighted throughout the report.

Minister, you mentioned the importance of best practice in streamlining and sharing costs. How would that take place in practice and what sorts of tasks would be shared?

I talked with Lex Gold about my concern that partners in the projects also play a role in evaluating the projects. That seems incestuous and I wonder whether the report has tackled that. How can we ensure that partners do not have a dual role and instead address the wider strategic objectives? That seems hard to ensure, given this system.

It is difficult but not impossible. If we clearly set out the terms of reference of the monitoring committees and ensure that the membership of the committee is more widely based than it was before, that strategic overview can be provided. I will not appoint to a monitoring committee anyone who has been nominated by one of the representative bodies of the partners in the project unless that person is firmly committed to taking a more strategic overview and will not simply represent their own sectoral interest or organisation. I would expect to become aware during the year-on-year review of the function of the programmes if that commitment was not being demonstrated.

The issue is also important in relation to advisory groups. It is vital that we make it clear that members of the groups are there not to serve their sectoral interest but to take a wider perspective. We need to monitor that to ensure that it happens in practice.

It would be wrong to move away from the partnership-based approach, which in many respects has served Scotland well. However, we must keep in mind the fact that, although there are advantages to the partnership approach, some people who are not involved in the process feel that the system has reflected only the interests of those who are involved in it. None of the evidence that I have seen since becoming a minister points to that being the case, but I am conscious that the suspicion is there. In questions of public money, perception is sometimes as important as reality, so it is vital that we continually review the process to ensure that it is independent and strategic at all stages.

Why did we not simply introduce clear criteria and appoint independent experts? That would have removed any potential for suggestions of abuse within the system.

We did not do that because there was no evidence of abuse within the system. I am aware that it might be said that some people whose organisations benefit from the funds that are available are involved in the decision making and so must be looking after their own interests. However, it is important that the process is seen to be strategic, independent and transparent. Our job—ultimately, this comes down to the elected politicians—is to ensure that that is the case.

It would have been wrong to have moved away from a system that has, I think, had a good record on expenditure and on projects and that is viewed elsewhere in Europe as a success. We should build on that system and build fresh assurances, particularly given the transparency of the democratic system under which we are now operating in Scotland. Things are different from in the past.

Do you envisage a tightening-up of the criteria in relation to project assessment? That might go some way towards ensuring more transparency.

Yes—there should be tightening-up and consistency across the various PMEs. The use of technology will bring a simplification and a reduction in the duplication of effort. We may be able to share best practice a bit more across the various PMEs. We can streamline the process in a number of areas and we can specify the criteria. The report mentions that the criteria would be more clearly specified in advance to the organisation, so that there could be no accusation that some people had the advantage of knowing what the criteria were when others did not.

All those mechanisms, as covered in the report, are welcome and I want to ensure that they are carried through. It is all very well to have identified the issues and to have made recommendations—the steering committee has done a very good job in a short space of time—but we need detailed guidance on how that will operate in practice in the local bodies. That is the stage that we have now reached.

Could you answer the point about duplication, minister?

Criteria and project definition represent one issue, and efforts can be made to examine the compliance requirements. The process of area-based strategies could provide us with an opportunity to consider composite applications so that people do not have to make lots of almost identical applications to various bodies. The use of compatible information technology systems would enable us to streamline costs, the applications process and parts of the financial process while still providing the necessary accountability and ensuring that the PMEs retained their role. A more unified approach to business planning is important across Scotland—not just between the various PMEs but within each one.

In all the areas that we have discussed—and more—the report throws up issues that should be tackled. On each of them, I have asked officials to prepare more detailed guidance, which can then be given to the monitoring committees and implemented when those committees are in place. The PME is then appointed.

Would those measures result in a reduction in management costs and in the top-slicing of 1.25 per cent?

I am wary about setting specific targets at this stage and of making specific predictions. Any organisation whose total funds are decreasing by a significant percentage—I am thinking of the whole European structural fund package in Scotland for the next seven years—should be expecting to streamline its administrative and overhead costs. If that does not happen, I will be commenting on that, as I am sure this committee will, too.

I expect a reduction in overhead costs, perhaps over a period of time—not necessarily right away. There will be some setting-up costs. We need to ensure that the reduction occurs when systems are improved. I would be disappointed if we were not working with a more efficient system in terms of value for money.

Thank you for coming along, minister. I wonder whether I could take you up on your preference to meet the EIB, which interested me a lot. You said, I think, that you will meet EIB representatives again, so you must have plans to do so regularly. Its help—cheap money to local authorities—has been of considerable assistance to Scotland in the past. I wonder whether that is still the case.

My other question is whether you can find out if the programme is still in operation whereby, if banks chose to make loans on more favourable terms than the usual commercial terms, they would receive a guarantee from the EIB. As I recollect, only English banks volunteered to enter that system, which was the source of considerable complaint from people such as myself. In the end, Scottish banks entered the system, too, and that was very advantageous. Banks were still independent, making commercial assessments interview by interview, but they could give more favourable treatment knowing that the EIB was a guarantor. I thought that that was a practical hand-out to help business. The problem was that the loans were usually given to larger rather than smaller businesses, although at some point the scheme was extended to smaller businesses.

I have not been able to find out whether that scheme has stopped. I never read about it and I do not hear about it. Could you inquire whether that excellent scheme is still in operation, and whether our Scottish banks are participating or leaving it to English banks?

I would be happy to undertake that inquiry and to give you that information. My general understanding is that the EIB is considering direct support for small and medium enterprises rather than for national banks.

The first issue that you raised is also important. Although I have had one meeting with the EIB, the plan for the next meeting is to give the bank an opportunity to speak directly to those who are involved in SME support and other forms of assistance throughout Scotland. The bank is keen to do that, so that it can outline what it might make available at a European level, the sort of schemes that it has supported in the past and those that it would be prepared to support in the future. Such a seminar could be productive, and I would encourage it, although I would not necessarily be involved in it personally.

In the meantime, I shall check whether the scheme to which you referred is still in operation and will get back to you.

The draft report makes clear our fears about co-ordination. We are told that the PMC is to be chaired by the Scottish Executive. Who exactly will chair the PMC? That position will be vital in terms of co-ordination. I know that we are not going to go into objective 2 funding too deeply, but one of our fears is that there is a duplication in aims for objective 2 and objective 3 funding. In my view, there is already duplication in the three plans that have been submitted; in several areas, some issues are being pursued that might come under objective 3.

The plans also contain a great deal about training and enterprise. I would like to know whether there will be co-ordination in the PMC between the Minister for Enterprise and Lifelong Learning and the Minister for Finance and how that will impact on the enterprise and lifelong learning strategy. Who will co-ordinate the plans within the PMC?

There is co-ordination within Executive departments and at ministerial level. I am also keen to take up the point that the report makes about co-ordination between the different monitoring committees and management executives. That is essential. Clearly, an element of the programmes might appear to lead to duplication, as different parts of the plans are framed in the same terminology. However, it is important that we have enough co-ordination between the management executives to avoid duplication. The report urges us to examine that issue, and we will do so.

The Scottish Executive will continue to chair the monitoring committees, but we have not yet announced whether the person who does that will continue to be a civil servant or somebody from the list of nominees that we have received.

It will not be a minister.

No.

So it will be an official or an appointee.

Until now it has been a civil servant. I am yet to be persuaded that that needs to change, although we have not confirmed that it will continue. The option is open to us to appoint somebody who will represent the Executive and chair the committee with civil service support.

You are happy with that level of accountability.

Yes.

I know that the convener asked you about the gap in the core funding for some voluntary groups. You assured us that they should not be relying on European funding, past or present. That is another area where I feel that there may be a lack of co-ordination. The funding priorities in the draft plans for the west and south of Scotland give a clear indication that the partnerships will continue to fund organisations in the same way. Therefore, if the gap is bridged, the organisations that have written to us to express fears about the gap will continue to be funded in the same way as they have in the past, contrary to what you have just said. An immediate role for the PMC might be to examine the draft plans, because some of them continue that motion.

I think that I may have been slightly misunderstood. The point that I was trying to make is that the funding of all the various projects across Scotland from the European structural funds is meant to produce added value in the organisations that receive it. Based on that understanding, it is not easy to justify the argument that it is vital to maintain funding because the organisation or complete projects might fold if there is a three or four-month gap. People who make that argument should be cautious, because the schemes should add value. That does not mean that there is not a good case for providing support in some cases, such as the need for continuity of project participants, facilities or staff. We will genuinely consider the matter very seriously and I am happy to talk about it in a bit more detail in two weeks' time, as the convener requested.

I want to make it clear that, increasingly—given that European structural funds have a limited lifespan and that we are in the business of providing added value to the organisations and projects that are in place—the funds should not be seen as providing base support to keep organisations going.

First, I want to say a little bit about the gap in funding. Continuity of staff is a big issue at the moment. I thought that there had been some sort of guarantee that the issue would be examined to ensure that nothing untoward happened.

Secondly, I want to go back to co-ordination between the PMEs, which strikes me as an area where sharing of best practice could be really valuable. I understood from what you said that you do not quite know how that will be operationalised, but that you will take the idea away and consider it.

Absolutely. A key element of all this is to ensure swapping of best practice. You are right to say that there was a guarantee that we would consider filling gaps to try to ensure continuity for organisations. The point that I am trying to make is that it is vital that European structural funds are not seen as part of general Government funding—they are a limited part of our overall budget and have a very specific purpose. It is critical that organisations across Scotland do not come to rely on them too much, in their own interests. Those who have known for some time that the gap was coming should have been preparing for it. I am keen to ensure that that has been the case before we make some final decisions.

Another point that was mentioned in the steering committee's consultation process was the training of staff in PMEs, particularly in relation to sustainability and the horizontal themes in general. Has that been taken on board? To get any benefit, that would have to be done early on.

That is being taken on board in a number of ways. We are keen to improve training and to share training across PMEs. There are issues about the training of staff to assist with organisations and about planning for the longer term. Scottish Natural Heritage will be involved with training on sustainable development and the Equal Opportunities Commission will be involved with training on equality aspects. Those are key themes in the new programmes and discussions on them are taking place.

The lack of representation on the monitoring committees from higher and further education was mentioned. Will that matter be addressed?

I would imagine that each monitoring committee will have some representation from the higher and further education sector. It is critical that the people on the monitoring committees represent the wider interests of their whole area or the whole programme, rather than their sectoral interests; it is also critical that the right people serve on the committees. I am considering nominations carefully because it is important, particularly in the geographical programmes, that the nominees from higher and further education have a wider geographical interest rather than a specific sectoral interest. I am not keen on the idea of appointing to a monitoring committee someone who is an Executive official or a representative of a higher or further education institution that is outwith the geographical area—I do not think that that will happen.

Finally, how will the Scottish co-ordination team co-ordinate across the system? Will it do that at the start of the process or all the way through? How does it relate to the monitoring committee, to the Executive and to this committee?

We are considering the remit of the co-ordination team and will review that alongside the idea of a structural funds forum. In due course, I will be delighted to provide members with a note on the outcome of those discussions.

I have two points, one of which follows from what Sylvia Jackson said about the involvement of the higher and further education sector. You have said that you will examine matters closely to ensure that there is transparency and an equitable use of funds. In its review, the committee will want to ensure that there has been no disproportionate allocation to those who have been involved in the process—I think that that was the point at which Irene Oldfather was driving. We have an opportunity to ensure that there is complete objectivity. Secondly, who do you expect will chair the Scottish structural funds forum?

The recommendation is that I will chair the Scottish structural funds forum. That is one reason why I will have to think about it before I make the final decision. I imagine that the forum will be chaired by the minister who is responsible.

Thank you for your attendance, minister. This meeting has been very helpful. If there are any substantive points that will change the gist of our draft report, I will ask Stephen Imrie to incorporate them into the report, but I do not think that I have heard anything that fundamentally changes our view. Is the committee agreed that the draft report should be taken forward as the committee's report?

Members indicated agreement.

We look forward to seeing the minister again in a fortnight.

Or even next week in Brussels.

Quite possibly.

I want to raise one point about the chair of the PMC. I am unsure whether an appointee or an official will chair the PMC. The PMC is the authority that implements the strategy for European structural funds across Scotland—it is accountable for the financing and the co-ordination of the Government's policy across all departments. I do not think that an unaccountable, appointed chair would provide sufficient protection for the use of that money.

I would be interested to hear other thoughts on that. In discussions that I have had with a range of organisations, this has not been raised as a major issue. Many organisations are fairly flexible and are not unhappy about someone other than an Executive official chairing those committees. I have been told that, if there is to be any change, people must be given time to prepare for it. The committee chair must be someone who has the expertise and the time to make the system work properly. Whatever we suggest, we must be careful that we are not changing things for the sake of it. We must ensure that any change will enhance the process.

I want to pick up on a point that the minister made on technical assistance budgets and management costs. Lex Gold's report has identified duplication in some areas. The minister spoke about the way in which that duplication can be resolved to some extent—

Can we stick with Ben's point? I will come back to your comments. Are there any other views on who should chair the committees?

I may be showing my ignorance, but I thought that there would be a PMC for each of the five areas. I agree with Ben, but in practical terms it would be impossible for the minister to chair all those committees.

I do not think that the intention was for the minister to chair all the PMCs.

Ben's point is that an official from the Scottish Executive would chair the committee and that it might be better for another organisation to undertake that role.

No. I would prefer an elected representative or an official. I thought that there was only one PMC, but five PMEs. Is that right?

No, there is a PMC in each PME.

In that case I would rather a Scottish Executive official than an appointee chaired the committees.

That is what happens now. We have not recommended a change.

The minister said that he had not decided yet; he said that the chair might be an appointee.

We could recommend that the present system continues or we could suggest a change.

I thought that the minister said that he was yet to be persuaded of the need for a change. I took that to mean that the current arrangement would continue unless someone persuaded him otherwise. I do not think that there should be change.

I am not exactly sure what is being proposed, but it would be folly to break what seems to be a strategic connection between the Executive, the implementation of the overall strategy and the appointment of the chairs of the PMCs. If the arrangements were altered, the Executive would have no direct involvement in the PMCs and their role in overseeing the implementation of the strategic agenda.

I suggest that our report should say that we see nothing to suggest that the current arrangements should change but that, if a change were to take place, care should be taken to ensure a strategic overview, continuity and accountability.

I wanted to make a point about overhead management costs. Paragraphs 41 and 42 and the subsequent section on funding mention duplication and co-ordination. It might be helpful to follow up on the minister's point, which was that, as we are streamlining costs and systems, we would expect a reduction in management costs over time. We might want to strengthen that point.

The minister has already indicated that that is his expectation.

That is also the expectation of the committee.

We could say that we agreed with the minister's view that there was an expectation that management fees should be reduced when funding was being reduced.

That is important for organisations on the ground. Some organisations do not access the PMEs when compiling their applications as much as others do, and yet they are still top-sliced for a significant amount. It would be helpful to reinforce the point that, because organisations will be sharing costs, we would expect the amount that is top-sliced to be reduced. That would send a message out to people on the ground that we support them.

We will incorporate a careful form of words that reflects the aspirations of the minister.

Are we agreed on the report?

Members indicated agreement.