“How government works in Scotland”
Item 6 is a briefing from the Auditor General on his latest report, which is entitled "How government works in Scotland". It is the first detailed study to map out the structure and organisation of Government in Scotland since the introduction of devolution. It is intended to be a reference source and is designed to illustrate the systems and lines of responsibility by which public servants are held accountable. I invite the Auditor General to brief the committee on the report.
Mr Robert Black (Auditor General for Scotland):
As members of the committee know, the Scottish Parliament is responsible for some £20 billion of public expenditure in Scotland. Now that the systems have settled down following devolution, I thought that it would be appropriate to examine the systems of accountability, governance and performance management throughout the public sector. It seems to me right that the responsibilities and accountabilities of public bodies in Scotland and how they relate to one another should be as transparent and well understood as possible. The report attempts to fulfil that.
I draw the committee's attention to the small Christmas present inside the back cover. It is a wall chart, which is an attempt to capture in a way that can be easily read the overall framework of the organisation of public bodies in Scotland. We are circulating the report—including copies of the wall chart—widely to places such as public libraries.
More than 200 public bodies contribute to the government of Scotland these days. They can be divided into five main categories, which are described in some detail in the report and summarised in the wall chart.
First, we have the Scottish Executive's core departments and executive agencies. The core departments are primarily concerned with the provision of policy advice and funding to other bodies in pursuit of policy objectives. The executive agencies are constituent parts of the departments, with a stronger focus on the operational management and direct delivery of public services.
The second category that I identify is what are called sponsored public bodies, such as non-departmental public bodies, national health service bodies, nationalised industries and public corporations. Those may carry out executive or regulatory functions. They may also be involved in the management and direct delivery of services. They tend to operate within a policy framework that is set by ministers but manage their day-to-day activities free from ministerial intervention.
The third category is local spending bodies. Those include further education colleges, higher education institutes, local enterprise companies and registered social landlords. They tend to be not-for-profit bodies that are largely or wholly publicly funded. They tend to be subject to less ministerial control and are primarily involved in the direct delivery of services to their communities.
The fourth main category is local government bodies. They are primarily, of course, local authorities, but also police bodies and fire boards, which are accountable through elected councillors.
Finally, there is a small number of other public bodies. Those are mainly United Kingdom-wide bodies with lines of accountability into the Scottish Parliament and bodies that are independent of ministers.
The report is primarily a factual account of how government works in Scotland, but there are a number of general conclusions and issues which, if the convener is so minded, I might share with the committee.
Sure.
The first is that the more that certain public bodies are responsible for direct local service delivery and are therefore independent of ministerial control and intervention, the more they tend to be accountable to the general public. On the other hand, we have public bodies that have a great deal of ministerial contact and whose first line of accountability tends to be to ministers and, through ministers, to the Parliament.
That means in effect that it is all the more important that those bodies that deliver services to the public and are more independent of direct ministerial intervention and control have strong corporate governance arrangements so that they can be held to account through the audit process, in public and, if appropriate, by the Audit Committee.
Another issue that occurs to me concerns the cross-cutting services agenda. In recent years, ministers have sought to improve the delivery of public services through greater emphasis on partnership working. Cross-cutting initiatives are important and a growing means of delivering public services. It is recognised that a multi-agency approach is required and that public bodies are dependent on each other to achieve partnership objectives. That means that there might be a need for new collective approaches to accountability, and we are exploring that within Audit Scotland and with the Executive, as you can imagine.
To put flesh on that, one example, which is described in some detail in appendix 5 of the report, concerns the arrangements for tackling drug abuse. That one single cross-cutting initiative involves five departments reporting to a Cabinet sub-committee, with the Executive providing support to 22 area-based drug action teams. Each of those action teams includes representatives of local authorities, police, the NHS, prisons and the voluntary sector. That clearly poses some interesting questions about accountability, as each and every accountable officer or chief executive of each and every one of those bodies is accountable for the public funds that are used. In relation to tackling drug abuse, however, they are reliant on their partner organisations, and they must therefore be held to account collectively. It is a complex agenda and one that the Audit Committee might well wish to bear in mind.
The next issue that I want to highlight concerns performance. I have mentioned that good public accountability, particularly for those bodies that are delivering direct public services, requires good corporate governance, good audit and public reporting on how those bodies are performing and looking after public money. There is also a requirement to have performance systems in place that will provide reliable and meaningful information on achievements and on how well bodies perform. I believe that audit has a role to provide independent assurance and challenge on the performance reporting that is made public.
The next thought that I would like to share with you is that public audit has a key role in supporting democratic scrutiny. I remain committed to working with the Scottish Parliament's Audit Committee to help to hold public bodies to account. To date, my reports have covered a wide range of topics across all sectors. The annual overview reports on the NHS and the further education sector are well known to you, and I intend to develop a similar approach in relation to central Government. In my opinion, accountability and scrutiny have been significantly strengthened under the Scottish Parliament, and the report that we are considering today might help to highlight the complexity of the accountability arrangements that exist in Scotland. It should help the committee and the Parliament, as it is helping Audit Scotland staff, to hold public servants to account in an informed and effective way.
I am happy, as always, to answer any questions that members may have.
I thank the Auditor General, and I welcome Lloyd Quinan to the committee.
As we will be looking at the subject in detail under item 7 on today's agenda, I ask members to make comments only of a general nature at this stage.
I am interested in appendix 5. I have not studied it in detail, but it is even more complex than it appears. Mr Black mentioned the DATs, which are drug action teams, but most of the 22 teams are now DAATs, or drug and alcohol action teams. One of them is a substance abuse team—an SAT, not a DAT. It is a complex area, and I know from lodging parliamentary questions that it is very difficult to find out where the broad sums announced by ministers are actually going. I am not suggesting for a moment that the Executive is trying to obfuscate the situation or prevent us from finding out, but it is difficult because it has been the principal cross-cutting issue so far.
I have another general point and I would like to know whether the Auditor General has addressed it. I remember being on the Finance Committee when we were examining the whole structure of the Scottish Executive. Sarah Boyack and Rhona Brankin will know far more about that than I do. We made comparisons with Whitehall, which is in departmental silos whereas there are no departments of the same kind in the Scottish Executive. Depending on the issue that a Scottish minister is dealing with, he or she can therefore go to one Scottish Executive department or another, rather than having his or her own departmental base and backing. There are many arguments against the Whitehall silo structure, as it leads to friction between ministers, but I wonder whether the Auditor General looked at that in the process of compiling his report.
The short answer is no, not directly. The report is purely a description of the system as we find it. It is fair to conclude that the great majority of expenditure in Scotland will continue to be driven through departmental accountability. However, it is also true to say that resources at the margin are increasingly going either to programmes that have earmarked funding for a particular purpose or to cross-cutting initiatives, such as tackling drug abuse. Within the Executive, a lot of attention is paid to making internal systems more effective and joined up. We are increasingly seeing performance indicators being developed on a cross-cutting basis, which we would all welcome. Good progress is being made on that.
In its own quiet, effective way, audit is making a major step forward in democratic accountability. I believe that the report is an important innovation, which explores new territory in mapping out and interrelating the range of government institutions in Scotland. The effectiveness and efficiency of the machinery of government are of major importance for the functioning of our whole democratic system, and I look forward to exploring further the issues and ideas that will be stimulated by Audit Scotland's pioneering work and by the work of the committee.
The report will be not only of academic significant but of more general interest. It should help that we now have committee members who have practical inside experience of Government machinery. I look forward to the inquiry.
I wanted to add my welcome to the welcome extended by other members of the committee. Those of us who are in the system, whether as members of the Parliament or as members of the Government, take a lot of the information in the report for granted. However, it is very useful to map out the whole system, so that members of the public and people in different bodies and organisations can see how they fit in and how the lines of accountability are set out.
Keith Raffan's point is valid. About three and a half years into a new system, now is a good time to set out the lines of accountability in practice. It is right to identify the issues associated with cross-cutting initiatives. As Keith said, ministers are responsible not for a particular department but for subjects within a department. Over time, there will be other things that we will want to reflect on. The report is important and I hope that it gets wide circulation, so that people who will find it useful can get access to it.
Absolutely. I wish that I had had this report when I taught on central Government in further education.
I thank the Auditor General for Scotland. The committee will now move into private session.
Meeting continued in private until 14:27.