Item 4 on our agenda is the Audit Scotland performance audit programme for 2014. I welcome to the committee Caroline Gardner, the Auditor General for Scotland; Fraser McKinlay; and Angela Canning. I invite the Auditor General to brief the committee.
We are grateful to have the chance to brief the committee today on the programme of performance audits for 2014, which is being prepared for me and the Accounts Commission by Audit Scotland.
As the committee is aware, the performance audit programme is part of the wider public audit model that we carry out across Scotland, together with annual audits of Scotland’s public bodies, overview reports of particular sectors such as health and further education, best value reports on councils, audits of community planning partnerships, and reports on the national fraud initiative.
The performance audit reports are an important part of the work of Audit Scotland and one that this committee is most familiar with. They underpin the committee’s role in holding public bodies to account for their use of public money. They support improvement in public services and are used by the public sector and other bodies in developing their own strategies.
That means that the way in which we develop the programme is a big part of our work and is important for us. It is something that we pay a lot of attention to and put a lot of resources into. It involves considering a wide range of information and intelligence to help us select the audits that are the most relevant and will add the most value, and it builds on the close links between Fraser McKinlay and his team, who lead our performance audit work, and the auditors who carry out the annual audits of over 180 of Scotland’s public bodies, so that we are clear on the key risks that the public sector faces.
Members of the public also raise with us issues of interest and concern directly, which we take seriously, and we keep up to date with developments in public policy, review national statistics about performance and talk regularly to the Scottish Government and people working across the public sector about the challenges that they face and the way that they see public services developing in future. This activity is an important part of our work and helps us to ensure that the performance audit programme is relevant and really adds value in areas that matter to people across Scotland.
The 2014 performance audit programme reflects the environments in which the public sector is operating, including, obviously, continuing financial pressures, growing fiscal autonomy, demographic change, public sector reform and the priorities of the Scottish Government. The programme also focuses very carefully through the lens of our own four audit dimensions, which are our particular way of looking at public services, focusing on financial sustainability, the transparency of financial and performance reporting, governance and financial management and value for money.
We believe that the programme that is set out in your briefing paper gives a good balance across the public sector, focusing on the big issues and the risks that it faces. We have taken a strong focus on public finances and economic growth, through areas such as education, skills and investment, and we have also included audits that will follow up issues that were raised in previous audit work, to help measure improvement and impact.
You will see that the paper before you covers the full range of performance audits, including those that Audit Scotland carries out in local government on behalf of the Accounts Commission, and the audits that are carried out jointly for me and the commission.
The committee can expect to hear evidence from us on the performance audits that are carried out, either for me as Auditor General or jointly for me and the commission. Those include an update on accident and emergency performance, a report on self-directed support, a report on local progress against our last public finances report, a final report later this year on Glasgow’s Commonwealth games, and a report on court efficiency.
11:45I will also bring overview reports to the committee on the national health service and colleges later in the year, and I will brief the committee on other work done on my behalf when that is appropriate, particularly on any issues arising from the annual audits of public bodies. Those will be the audits that are undertaken during 2014. We plan to publish four reports by the end of June 2014, with the remainder being published by the end of March next year.
We are, as everybody is, mindful of the independence referendum later this year and the related moratorium on publications. That means that we do not plan to publish reports between mid-July and the September referendum, although audit work will obviously continue during that period. We have highlighted indicative timings for publication in the appendix to the committee’s paper.
It is also worth noting that we aim to keep the programme flexible so that we can respond to any significant issues of public interest that arise during the year. That means that the programme may be subject to change.
Finally, this committee plays a vital role in ensuring that public bodies are held to account for their use of public money. We are always keen to hear the committee’s views on our planned areas of audit work and on any topics that the committee would like us to consider, including for future programmes. As I said, developing the programme is an on-going process and it would be good to come back to the committee later in the year to get its thoughts on potential topics after 2014.
At this stage, convener, we are happy to answer any questions that you and your colleagues have about the programme and the future direction of our work.
Thank you. Will you be looking from an audit performance perspective at how effective the changes to Scotland’s colleges have been?
That is certainly on our radar. You will know that, through the annual overview reports that we have produced in the past two years on the audits of the individual colleges, we have kept a clear focus on the objectives of reform and the way in which the changes being made are moving towards them. We will be keeping an eye on the right point at which we should step back and look at the overall value for money that is being achieved and the success with which the Government’s objectives are being implemented. I am not in a position yet to give you a firm date for that, but it is certainly something that continues to be on our radar.
Okay. You list the Accounts Commission as doing some work on school education. Given the significance of education to the Parliament, is that something that this committee would have the opportunity to look at, given that it is the Accounts Commission that is doing that work?
I will ask Fraser McKinlay to answer that as he is controller of audit and reporting on local government to the Accounts Commission.
I am sure that, as has happened in the past, if the committee would like the Accounts Commission to come and do a briefing on its audit, it would be delighted to do so. If this committee would like the Account Commission to give a briefing on its report on school education at the appropriate point, I am sure that that would be fine.
I have two issues to raise. The first one is on the Accounts Commission—so this is probably for Fraser McKinlay—and borrowing and treasury management.
In the time that I have been in Parliament, it has always shocked me that local government can, according to the Chartered Institute of Public Finance and Accountancy prudential code, basically borrow as much as it wants. I am very concerned about the levels of council borrowing and debt in the Highlands, and I am even more concerned about the amount of money that council tax payers pay in interest, which gets bigger every year and obviously means that there is less money for council services.
I do not have an update on this, but an answer to a parliamentary question stated that between 2010 and 2011 the increase in local government borrowing was about £1 billion—I know that there has been a different way of accounting from 2010, so I am just going from there. I do not have the up-to-date figures, but given how cautious we are everywhere else in Scotland and within Scottish budget efficiency savings here and there, at what stage would Audit Scotland be concerned about the level of local government debt?
The most recent figure that I have states that the debt was £14 billion in 2011. I appreciate that I am not up to date on the figure, but I am personally concerned about it. At what stage would Audit Scotland or the Accounts Commission raise concerns about the increasing level of local government debt and that there are no limits on it whatsoever?
In a sense, that is exactly why the Accounts Commission has asked us to look at that topic for the past couple of years in the Accounts Commission’s local government overview report. In the past, we have routinely brought the report to the committee for a briefing, and we would be delighted to do that again this year in the spring. We have tracked the increase in borrowing and levels of debt in councils, which has been very marked.
In fact, last year the Accounts Commission called on CIPFA to review the prudential code for borrowing—which was set quite a long time ago; I forget exactly when—because our sense was that the world is now a very different place. That is what Caroline Gardner was talking about when she mentioned local audit work feeding into a national performance audit. That is exactly why the topic has been looked at.
The debt was £14 billion in 2011. What was the figure for 2013?
I am afraid that I do not have that information to hand, but we can certainly provide it. We will publish the local government overview for the present year in February. All the information will be in there.
That is helpful. I am pleased that you are keeping an eye on the issue and that you share some of my concerns.
There is another point that I want to ask about.
I have a further question, which relates to the question that I asked about education. Historically, the committee has not been able to look at the performance of councils, even when the accounts of a council have not been signed off, but given the generality of the report, would we be able to scrutinise the bigger picture in Scotland?
You can scrutinise it in a broad sense, in that, for as long as I have been involved in it, the Accounts Commission has given the committee a briefing on the local government overview. The difference between that and getting a report from Caroline Gardner lies in what the committee can do on the back of them. We provide a briefing, as opposed to something on which the committee can take further evidence. As I said, we would be happy to come and provide a briefing on this year’s report once it has been published in February.
The issue is how far we can go. It is not our role to hold an individual council to account, but if there were examples of councils behaving in an exemplary fashion, we would want to hear about that. Equally, if there were councils that were behaving in a highly risky fashion, I would have thought that that would be worthy of further comment. It would not be a case of holding individual councils to account. The issue is how we move from a briefing to more detailed scrutiny on an issue of wider concern.
At the moment, the responsibility sits with the Accounts Commission rather than with the committee, as you know. I think that there are good and understandable reasons for that, given the separate line of democratic accountability that councils have. It is clear that there is a grey area between the overall picture of local government and how that feeds back into the Scottish Government’s responsibilities. I think that a briefing is the right way into the issue, but it is probably one that should be kept under review as the committee plans its work for the future.
Okay.
My second point relates to the fact that—rightly, in my view—we have heard quite a bit about the new single police force. I have welcomed that information, but the integration of the previous fire and rescue services into the Scottish Fire and Rescue Service seems to have gone under the radar. I note that you are to produce a report on that this winter, which will be almost two years since the merger took place.
There is a document to which I would like to draw the witnesses’ attention—it is the best one that I could get on the fire service. It is entitled, “An Overview of the Scottish Fire and Rescue Service”, and it was produced in October. In the summary, it states:
“During the development of this inspection report, we paid particular attention to the former Highlands and Islands Fire and Rescue Service area.”
I raised many concerns about the Highlands and Islands Fire and Rescue Service and I have no doubt that Tavish Scott did so, too. Despite the fact that there are serious concerns about the service in that area, we will not even hear about what is happening there.
The report also says:
“We have identified a number of issues that require ongoing monitoring to ensure that the special measures in place”
are not affected. It goes on to say that
“Operational Risk Information available to firefighters has not yet reached a satisfactory standard. The current service-wide project to address this issue should be encouraged and sufficient resources made available”
and that
“it is not yet clear that the Service will be able to deliver a permanent increase in training”.
I have heard from front-line firefighters who are worried about training. As a Highlands and Islands MSP, I would be failing in my duty if I did not bring that to your attention.
As Fraser McKinlay will know, there was a very critical report on the Highlands and Islands Fire and Rescue Service prior to the merger. In fact, personnel were brought in from Grampian, Tayside and Lothian to help the service. My concern is that the service is floundering again, as highlighted in the October report by Her Majesty’s fire service inspectorate in Scotland. The service is not getting the support that it needs and there are operational risk factors.
Forgive me for saying so, but the fire and rescue service almost seems to be on the back burner, given that we have heard so much about the police service integration. The fire service is also an emergency service that I think we all feel very passionate about. We should be concerned if the service does not have the resources—there are operational risks. My question is: why do we have to wait a year and nine months in order to get a report on the reform of fire and rescue, in particular in relation to the Highlands and Islands, given that we have had so much on the police?
The answer is that you do not necessarily have to wait. We set out an either/or choice in the paper—a choice that I am in the process of making—between doing a follow-up piece of work on the police reform agenda and moving on to have a look at the fire service instead. At the moment, having sat down with the team and having done our own review of our recent work on the police reform, my thinking is tending towards doing something on fire. If we make that decision, we will be reporting on the fire service in the winter of this year. You will see on page 6 of the paper—
I know, but that will still be a year and nine months after the merger, whereas we have had a lot of information on the police merger. I am highlighting concerns.
Sure. It is really a matter of focusing on where we can add value. As you have said, there are clearly some issues in Highlands and Islands in particular. Across the fire service there were also some significant challenges in bringing the single fire service together—in the same way as there have been with the police—as well as specific professional issues. We are starting work now to ensure that we are in a position to provide some assurance to the committee and to provide more information towards the back end of this calendar year about how everything is going.
We work closely with the inspectorates in this area and we were very aware that HMFSI was doing that overview report.
It is the inspectorate that is raising the concerns.
Yes, and we were very aware that HMFSI was doing that work. As regards the timing, we agreed that we would allow HMFSI to do its overview work to help develop its work programme and decide what to do individual inspections on. We agreed that we might come in on the back of its report and do a review of fire reform. The timing was deliberate. As the Auditor General said, we do not necessarily need to wait until December this year to publish a report, but we certainly did not want to start it until—
Given the serious concerns that have been raised about Highlands and Islands by the fire inspectorate, are you considering doing something earlier than December this year?
It is worth pointing out that, even if we were to publish a report in the winter of this year, we would obviously be doing the work a good bit earlier than that, so the start of that work is probably not that far away—if Caroline Gardner decides that that is what we want to do. Just to provide some assurance, I can also say that, for the overview report by HM chief inspector of the Scottish Fire and Rescue Service, Steven Torrie’s team included some of my team, so my team was involved in the work.
As you say, I did the report on Highlands and Islands so we are very aware of the issue. It is also worth mentioning that a lot of the issues in Highlands and Islands are pretty operational in nature and that the revamped and—if you like—beefed up inspectorate for fire and rescue is the lead scrutiny body for issues of operational fire and rescue. They are the professionals and they know what they are talking about.
The report mentions resources as well.
As you say, our interest is in the extent to which reform is meeting the objectives that are set out, how the money is being used and so on. Our interest is complementary and, as Angela Cullen said, the issue for us was to make sure that we and the inspectorate were not falling over each other as we were doing the work.
Again, I assure you that the fire service is very firmly on our radar and we are working closely with colleagues in HMFSI to work out how and when we go about the audit.
12:00
I have a couple of comments on the self-directed support piece of work that is in the programme. I should first declare an interest in relation to Glasgow region, which I represent. Glasgow City Council is involved in on-going plans to close three day centres for adults with learning difficulties. I have been involved in the campaign against that, and self-directed support has been cited—wrongly, in my opinion—in relation to the closure of those three day centres. I just wanted to put that interest on the record. I also scrutinised the legislation when it was before the Health and Sport Committee.
I am keen for the Audit Scotland report to be published so that other areas can learn from the areas around the country where there is best practice in the introduction of self-directed support. Some local authorities—I am widening it out beyond my own local authority—may be deliberately conflating personalisation with self-directed support, and in some local authorities there have been almost forced direct personalised budgets and the withdrawal of local authority services.
I hope that, when the audit report is produced, it will be finessed so as to tease out the differences between personalisation, local authority cuts to resource allocation budgets and self-directed support. In my experience—including in parts of Glasgow but, unfortunately, not the whole of Glasgow—where self-directed support works, it can work very well. However, the audit will find it difficult to work out what is self-directed support, what are decisions that have been made by a local authority flowing through its resource allocation system, and what are local authority priorities separate from self-directed support.
I am not sure whether there is a question in there, Ms Gardner, but it is important for me to put that on the record. Had I not, my constituents in Glasgow would have wondered why I had not done so when the matter arose in committee. I look forward to that report, as all local authorities must learn from best practice, wherever it is. Local authorities where there is not such good practice—which could be anywhere in the country—must improve their game quickly because vulnerable people are losing out.
It feels as though you have been sitting in on the meetings that my team have been having as they have scoped out the work and agreed what data they need to answer those questions.
The policy of self-directed support is a clear Government policy but its implementation is more difficult at a time of falling budgets and rising demand. I hope that we can add a bit more clarity about the way in which it is being tackled in different parts of the country in order to identify not only good practice in exactly the way that you have described, but the things that people are not doing as well as they need to. It is a complex area. I hope that we will be able to shine a light on how it is working so far and make suggestions for improvement in the future.
I have a keen interest in self-directed support issues, as I am actively involved with the South Lanarkshire self-directed support network, which is finding it increasingly difficult to deal with its local authority. You would look at whether self-directed support was having a positive impact and offering more choice and more control, but I am seeing less choice, less control and people being priced out of care packages—they cannot afford them and have to go back to the local authority although what the local authority is offering is not what they need. I have witnessed situations in which people have been told what they will get and there has been no negotiation or consultation.
A key element is the issue of equal pay for care staff, whether they work for a semi-arm’s-length private company, a third sector company or the local authority. There is a real issue with equal pay across care staff and a huge gap that is causing problems when people go to finance or price a care package.
You will consult the local authorities, but will there be scope for consulting service users and carers who are finding that something that they thought would make their lives easier is making their lives much more difficult?
Absolutely. In all our work, we always build in—as much as we can—the voices of the people who use services and are affected by them. It is a shame that Angela Canning, the assistant director who is responsible for this piece of work, is not here today. She could give you more detail on how we are doing that for this specific piece of work. However, we make that commitment generally and it is particularly important for this type of service, which has a direct impact on people’s lives.
I have just a couple of points. The convener mentioned colleges and I remember that the committee raised concerns about how the independent trusts would operate. I am talking from memory, but I think that the Auditor General might have said that she would look at that in future. Will that be part and parcel of looking at the colleges?
There are two ways of answering that. The convener asked about a potential wider-ranging performance audit of the college reform programme and that is certainly under consideration for the future. In this year, we will audit the accounts of all the colleges and the merged colleges as they come through and, as part of that, we will look at the decisions that they have made about arm’s-length trusts and either opting into the umbrella trust that is being set up by the Scottish Further and Higher Education Funding Council or doing something at the local level. The committee will get that update later this year in our report on the colleges’ 2012-13 accounts, which are just being signed off.
Will you not have a bit of a problem there, because the trusts are independent? I do not know whether they will have any public funding, but because they are separate and arm’s-length entities Audit Scotland will have a bit of difficulty getting in.
That is one of the issues around the trusts, but we will have access to the colleges’ finances and accounts, and, assuming that there will be some, to the funding, if any, that is transferred into those accounts when the new classification starts to have an impact at the end of this year. We will therefore be able to give the committee some information about it although, as you heard in great detail at the end of 2013, there will be some limitations around that because of the structure that has been chosen.
It will be interesting to see how that works.
The other point is about borrowing and treasury management for local government. I seem to recall that, when we looked at a recent Audit Scotland report, there was concern about a long-term funding gap for local councils. I am struggling to remember exactly what it was, but I think that it was to do with funding requirements arising from housing. It did not affect housing associations for some reason, perhaps because they get their funding in a different way, but there was thought to be a substantial gap for councils some way down the line. I think that we were told that the Convention of Scottish Local Authorities was aware of it and that Audit Scotland had been in touch with COSLA, which is looking at what will happen. I hope that that will form part of Audit Scotland’s work because, obviously, regardless of whether the funding gap is related to housing, it is a long-term issue for a council’s liabilities and it will have to be funded from somewhere.
You are right, Mr Beattie. The issue did arise in relation to our proposed report on housing and it could be relevant to this piece of work, to Fraser McKinlay as controller of audit and the Accounts Commission’s continuing interest in the financial sustainability of local government. Do you have anything to add, Fraser?
Not much. I am also trying to remind myself of the discussion, Mr Beattie, but there was definitely something in there. The primary focus of the piece of work around borrowing and treasury management is looking at how councils do it by taking a thorough look at treasury management policy and process, and the process used when councils decide to borrow more money. To manage expectations, I should say that I am not sure that we will get into a lot of detail about specific service delivery areas.
I suppose that councils would also argue that one of the reasons why they are borrowing more is to invest in things and to build stuff. There is therefore an interesting question for us around what the money is being used for. We should also bear it in mind, as their debts go up, that they have some pretty significant assets to back them up.
This project is about trying to get a rounded picture of all that. In the same way as the proposed Audit Scotland housing report and some other reports, it might indicate some other areas of specific interest for us, but the project is a look at how treasury and borrowing management happens across the piece.
I have a couple of issues to mention. I do not know whether you heard our earlier conversation about the committee’s and Audit Scotland’s work in scrutinising the £2.5 billion invested through the hubcos, scrutiny of the Scottish Futures Trust, and further audit of the 5 per cent cap on long-term investment. I was wondering about your thoughts on those issues.
The committee might recall the report that I published last year—in June, I think—on developing financial reporting. That was around the same time as the report on transport infrastructure projects. The big message coming out of the report on financial reporting was that there is scope to develop more transparency about the investment programme and commitments against revenue financing for capital purposes, particularly as our financial autonomy increases. I will follow that up directly, initially through the audit of the Scottish Government in 2013-14, and I will then consider the best way to build on that report and the transport infrastructure report in reporting to the committee. That is certainly on my radar, and you will be hearing more about it over the months and years ahead.
Very good. I would also include the 5 per cent cap.
The whole transparency of the way in which investment decisions are made and of the long-term consequences is very much on the radar.
I wish to double-check something. We receive regular reports, under the major infrastructure audit report, on the Forth crossing, the Southern general hospital and so on. Do you conduct separate audits? We get reports from the Scottish Government; do you have an input into those in any way? Do you have an on-going audit process there, or do you have to audit those projects separately at the end of the whole process?
I audit all that investment through the body that spends the money. A lot of the transport investment goes through Transport Scotland. I appoint auditors to Transport Scotland, who carry out the audit every year. As appropriate, I produce reports that pull some of that together for the committee, like the one last summer on the five major transport infrastructure projects. The same is true for other major bits of investment: they are audited through the audit of the body that is doing the spending—for the Southern general, that is Greater Glasgow and Clyde NHS Board. I take assurance from that.
However, from time to time, I will report to the committee so that you have an overview. As I said in my answer to your previous question, there is room for the Government to continue to develop the way in which it increases transparency about the investment programme. We have seen some good progress on that, there is probably more that can be done, and we will keep an eye on that programme in future.
Would an audit of job creation or employment programmes be possible under your remit? I am referring to your examining the work of Scottish Enterprise, Careers Scotland and other organisations, and the effectiveness of public employment programmes.
That would certainly be possible. I have quite wide-ranging powers under section 23 of the Public Finance and Accountability (Scotland) Act 2000 to examine the economy, efficiency and effectiveness with which government uses its resources. We work very hard to focus on areas that matter to people in Scotland and to the Parliament, and to define our work in such a way that our skills, as auditors, can add value.
We have a piece of work on modern apprenticeships that will come to the committee quite soon and which is starting to build that strand of work for us. Fraser McKinlay’s team is doing some work for me—stepping back and looking at the whole economic development brief—to consider how money is being spent and how best we can target our audit effort to help with that in future, while not going beyond the bounds of what audit can properly do. You can expect to hear more about that, but we are still developing our thinking in that area.
It will probably not be this year but, perhaps in the following year, we will get something about economic development in general, will we?
Quite possibly. We will continue that conversation with you as our thinking develops. It would be good to come back to the committee later this year regarding the 2015 programme and the years after that.
Welfare is clearly a reserved issue, but there are a number of spending commitments under welfare reform for which the Scottish Government has responsibility, including the mitigation of the bedroom tax, various reforms of disability benefit and so on. Have you ever examined those areas? Would you consider examining those areas?
I will ask Fraser McKinlay to speak, in a minute, about the work that he and the Accounts Commission are doing regarding what councils are doing to respond to welfare reform. At the level of the Scottish Government, the team that carries out that audit for me is very focused, both on the risks that welfare reform throws up for public spending and on the measures that the Government is putting in place to mitigate those risks. That is so that we understand those risks and so that we are in a position to report on them if that becomes appropriate or necessary. A lot of the work, as you will understand, is going on through councils, and Fraser McKinlay is better placed to update you on that.
Those same principles apply to the work around councils. The work does not get into the nature of the reforms themselves, but it relates to the impact of the reforms and to how councils are preparing themselves. We did a survey of councils last year on behalf of the Accounts Commission, which gave us a sense of how councils were preparing to deal with the various welfare reforms and the impact on finances, rent arrears and so on. Other people are doing things, too. The Scottish Housing Regulator produced a report last year on the impact of reform on the housing sector.
12:15The issue is on our radar, in terms of keeping the programme live; the question for us is how best to get into it. I am not sure how one would do a performance audit on welfare reform, so the question is whether we target a particular sector or community. There might be different ways of doing the audit work, but the issue is up there as a key risk, which we are keeping an eye on.
In your performance audit programme, in the section on reports on local progress, one of your potential audit questions is whether
“elected members ... demonstrate ownership of financial plans”.
In respect of the new Anderson high school in Lerwick, which will be built by Hub North Scotland, the answer has to be no. The Auditor General and the Accounts Commission might want to consider why that is the case. No European Union procurement rules apply to the building of the school and local members do not know how much the project will cost and are given no financial updates on it. Members have been given a notional figure for the percentage of work that will go to local firms, based on the good will of the hubco operator.
It seems to me that we have moved back from conventional procurement and the days when we tendered for a new school and knew how much it would cost and so on—we could set rules on such things—and into a position in which central Government sets up a hubco and there is a take-it-or-leave-it situation at local level. There are profound issues of financial ownership, as you rightly suggest, and I would be grateful for an assurance that the local progress report would get into that kind of issue, in the context of the points that Ken Macintosh made.
The important answer to your question is that oversight and scrutiny of the way in which big investment decisions are made is at the heart of what we are trying to do across the programme and into the future. We made a start last summer in our reports on developing financial reporting and transport infrastructure, and we will continue to look at how big investment decisions are made and how we get the right balance between local ownership and local sustainability and economies of scale and centres of expertise—there is a trade-off in that regard.
I talked about the audit dimensions through which we try to focus our work. Financial sustainability is one of those; others are governance and financial management, transparency of financial and performance reporting and value for money. All those issues come together in big investment decisions. I guess that you will not see much of that in the piece of work that we are considering, but you will see more of it as we increase our focus on how investment decisions are made and how transparent they are, to give us all assurance about future sustainability. Does Fraser McKinlay want to add to that?
Not really. I think that you covered the issue.
We are talking about a new form of procurement, which in the case that I described affects local government and, ultimately, local taxpayers. Many criticisms were rightly made of the private finance initiative at its most pure—a new system was invented many years ago and trialled and we all know where it went wrong—but my worry is that if the current approach is allowed to continue willy-nilly over several years we might suddenly find that we have mortgaged future generations of local taxpayers, because people simply do not know what the position is. There is a profound in-built danger of not having a real, hard audit of the process.
We have reported in the past and continue to be concerned about the ability of people who have an important governance role, particularly but not exclusively in councils, to understand the complexity of public finances. There are many different ways in which money is found and spent—authorities might borrow or create a new arms-length external organisation, for example. That is not to say that authorities are doing bad things, but there is a question whether people fully understand the risks and liabilities that they are taking on or how to monitor the situation.
We are interested in the wider pattern in that regard. As Caroline Gardner said, over the next period we hope to get a clearer understanding of and more transparency around issues such as the hubco programme.
I would like to ask another brief question. Broadband infrastructure is mentioned later in the report and I very much support that work, as the report scopes out what needs to be looked at. It is a good investment, and it is right that Government does those things, but it is a question of getting to the people who do not normally get helped by such programmes. That has not happened since 1999 and the current programme is not going to make it work either. It is the most hard-to-reach people who are left out and they do not have to be in places such as my constituency; it is happening all over Scotland, and it would be helpful if further work could address that area of concern.
I would also like to comment on broadband infrastructure, and I echo what Tavish Scott has said. My constituency is Edinburgh Western, where there is extremely high-speed broadband until you get past the airport, after which it plummets to speeds that seem like the Dark Ages at times.
The Scottish Government has an on-going broadband initiative, and councils are also encouraged to look for funding from the UK Government. Local authorities in Edinburgh and Aberdeen were encouraged to apply for moneys and did a whole host of work over nine, 10 or 11 months, only to find out that there were procurement difficulties, so the whole thing was scrapped and they were then encouraged to go for a lesser initiative. That seems to me an awful waste of money and a brutally bad piece of management. As the local authorities are involved, as well as the UK and Scottish Governments, it would be really handy to know whether the problems have been overcome. It now looks as if my constituents will be waiting a lot longer for high-speed broadband, just 10 miles down the road, so I would like to know what is being done. If that could be brought into the audit, that would be helpful.
That is helpful information for us. Angela Cullen may wish to pick up on that.
Apart from what you see in the appendix to the report, we have done a wee bit of work, but we have not started scoping that piece of work yet. The comments that you raise are certainly things that we can build into the scope of the audit.
It is virtually a weekly mailbag issue for me, with people in rural parts of Edinburgh Western such as Kirkliston and Queensferry asking, “Where is our digital broadband?”
I thank the Auditor General and her team for their contribution. We shall take item 5 in private.
12:22 Meeting continued in private until 12:37.Previous
Section 23 Report