I am pleased to welcome an impressive array of officials from various offices. They are trying to outnumber the committee and have nearly succeeded.
That would not be possible.
We were notified of who would attend, but I ask the witnesses to introduce themselves for the record, before we ask questions. I would appreciate that.
I am the director of personnel and pay.
I am the director of corporate development.
I head finance co-ordination.
I head finance administration.
I am the deputy head of the 21st century government unit.
I am the director of information technology.
Thank you. We are covering chapter 15 of the draft budget, on areas that the subject committees do not scrutinise, generally. We want clarification on several matters.
The great advantage of the present budget process is that it works. By the end of the process, a budget bill is produced that has been more widely consulted on and on which more information is available. I am not sure whether a huge amount of scrutiny takes place, but the information is a damned sight more available for scrutiny than before.
I will stick with the juggernaut analogy. I understand your point about the process being year long, but some committees feel that although the juggernaut moves slowly, there are so many other demands on their time that it is difficult for them to jump on it and seek to influence its direction. How might such problems be dealt with in a shorter process, which would leave the subject committees with even less time to deal with the budget process and make meaningful suggestions about alternative budgets?
That is a difficult question that demands a more carefully thought-out answer than I can give at present. It strikes me that we are close to having too much information for it to be readily accessible to the committees and wider groups. I was struck by Mr Morgan's predecessor's comment, about six to eight months ago, that we should move back from the level of information that we provide to strategic, slimmed-down documents that bring the key facts and figures into play and allow committees to consider the options from that point, rather than take the present telephone-directory approach, which we took with the committee's agreement. That may be a way forward, but there is some benefit in taking the telephone-directory approach. However, that is a fairly ill thought-out response to an important question.
I would like to bring in Paul Gray. The balance is between having a fairly slim publication and being able to drill down to information through an IT system. On the two biggest bits of the budget—local government and health—it is almost impossible to determine whether the outputs, far less the outcomes, meet the Government's agenda. We need a combination of a strategic overview publication that is not the size of a telephone directory and a document that offers the ability to go into greater detail than at present, particularly in the two areas that I mentioned, in which we cannot determine what is happening.
We made a significant improvement this year with the annual expenditure report, which we put on the web with associated links to non-departmental public bodies. I am not sure whether we can provide links in the next AER to all local authorities, but we ought to explore that. I do not know whether all local authorities have websites. We could also link to all health boards; I am not sure whether they all have websites. Providing such links would begin to allow people to go into our document and have access to local government and health information for comparison purposes. Another problem is that a distinct boundary exists between the Executive and local government. Less of a boundary exists between us and the health boards or health trusts.
At a simplistic level, we are conscious that the ability to search information that is presented on the web, for example, could be better. That may go some way towards addressing the point that Dr Simpson makes. People with an interest in a subject could obtain a more refined view of that subject without having to accept information at a strategic level that may not give them the detail that they want and without being provided with the telephone directory of information that contains much detail that is irrelevant to the subject. The point is well made and I take it on board.
I am a bit confused about the budget items that relate to civil service reform. The modernising government fund seems to be a capital fund, but civil service reforms and 21st century government initiatives are mentioned without money being specified for them. Will you give some examples of what has happened or is happening under the modernising government fund, especially in central Government? Central Government is good at telling other people what to do and not quite as good at putting its own house in order. That is a common human failing. I would like examples under the modernising government fund and under the other headings that I mentioned, so that I have a slightly clearer picture of what you are aiming at.
Mr Russell would probably be the appropriate official to answer on that subject. Why do the words "modernising government fund" appear only at the start of chapter 15 of the draft budget? There is talk of the 21st century government fund and of initiatives that that involves, but nothing about the modernising government fund. Is there a reason for that?
I will answer that question. We set up the modernising government fund as a central portfolio that is, in effect, a holding bank. The fund receives various tranches from Whitehall as it is a UK-wide programme. We then use it as a feed into local and central Government projects and other areas of the office—the 21st century government unit—to cover the cost of activities.
The term "modernising government fund" does not appear often in the draft budget because it is used interchangeably with "21st century government initiatives". That reflects the fact that the 21st century government unit—a rather unholy name—was set up only in April or May 2000. Initially, the modernising government fund was held and administered by the private finance unit. We took over the fund in order to apply seedcorn funding to drive forward the agenda for better services for citizens and the delivery of services in general.
You gave an interesting example. If such projects now come under the modernising government fund, am I right in thinking that they would cover revenue expenditure as well as capital expenditure?
No. Your original question queried civil service reform and the modernising government fund. The fund had a bidding process that was open to all, but in its current form it does not cover civil service reform, which is one of my colleagues' interests.
I do not fully understand the fact that civil service reform is outside the system. Is the reform driven purely by ministers, who say that in their experience X and Y are not working and that we should do them differently? Does the civil service have an internal mechanism for deciding that it should allocate money differently between different departments or merge them? Is there an engine within the civil service that is driving reform?
The civil service reform programme is a long-term programme that is designed to improve the workings of the central Government machine—the interior workings of the Executive. It is designed to make those workings more efficient and effective so that we can deliver ministers' priorities and generally improve public services throughout the country.
Page 249 of the draft budget refers to the £3.6 million. It states:
David Palmer might want to say something about that. The money is from within the existing administration resources and is covered in the figures.
That is correct. When the bid was made, we would have earmarked funds from within the administration budget.
In anticipation of—
In anticipation of that bid being successful.
I refer to objective A of the 21st century government action plan, which is about working in partnership. Presumably that refers, in layman's terms, to a joined-up experience in which linkages are made throughout the departments with a commonality and sharing of systems.
One of the primary criteria for the modernising government fund was that work should be done in partnership. A number of the original bids were joined together. For example, an e-care project was run jointly by the Scottish Executive health department and a number of local authorities to bring together health services in a single location.
Is that model of thinking applied to the Executive's interdepartmental working? The Executive rolled forward an underspend of £9 million out of a total £191 million. That means that next year there will be an increase from £212 million to £221 million, which is fairly substantial. Where is the evidence of joining together in the administration of the Executive?
I will add fuel to your question and then answer it. You asked what the likely savings from the modernising government fund projects would be. Our best estimate in the first year was that the net positive value of £8.9 million would be achieved. I entirely agree that the point and the thrust of interdepartmental working—certainly from the 21st century government unit's perspective—are to get across the fact that joining up and sharing can produce savings.
Will Mr Palmer pick up the second part of my question?
Mr Owenson will cover end-year flexibility.
The £9 million underspend relates mainly to the replacement of the Scottish Executive accounting system and modernising government fund money, which relates to an e-procurement system. The delay in that spending was a result of contracting routes and appropriate timing for letting the contracts.
Wendy Alexander recently announced a strategy for the provision of broadband. One of the things that underpins that strategy is aggregation of public sector demand for telecommunication services to persuade the telecommunications companies to provide broadband. To what extent are you working with Wendy Alexander's department on that?
To be accurate, it probably did not at the outset. I will give the committee a little bit of history. Digital Scotland and 21st century government were originally one project under one minister and were eventually split. However, we work closely with the digital Scotland unit and provide it with information on the output from the current round of funding from the modernising government fund. More importantly, we have been providing the digital Scotland unit with information about the likelihood of projects such as data sharing projects, in which the transmission of data would clearly have an impact on the demand for broadband.
I do not have much to add to what Craig Russell has said, except that I am responsible for all the wide-area network communications that the Scottish Executive uses. I work closely with the Executive's director of procurement, who is part of the team that reports to Wendy Alexander, to ensure that all the Scottish Executive's requirements are aggregated with whatever other public sector requirements arise.
The project is obviously split between two ministers. Angus MacKay looks after the 21st century government side of it and Wendy Alexander looks after other aspects. Does the fact that the project is strung across a number of different departments cause extra difficulties? Would there be benefits to having it all under one hat?
For me to comment directly on the allocation of ministerial portfolios would be remiss. However, the Scottish Executive has recognised firmly that being able to work in a cross-cutting way is extremely important to service delivery.
It is also important to differentiate between—if you will excuse the vernacular—pipes and plumbing on the one hand and the services that go down those pipes and that plumbing on the other. We use technology to stay in close contact. The two units have a weekly meeting on a Friday by video conference, as the digital Scotland unit is in Glasgow and we are in Edinburgh.
Most people would accept that. What we do with IT is important, not the IT itself. Nevertheless, there has been heavy criticism from a number of directions at a United Kingdom level, not just a Scottish level, of the plans for the provision of broadband, the speed at which they are being implemented—or, rather, not being implemented—and the way in which that might handicap other areas of the economy, quite apart from the provision of Government services. I am keen to know that we are set up in a way that will let us move as fast as we possibly can.
We are, in that regard. The clear focus of the enterprise and lifelong learning department on that subject is probably helpful. That department does not have to split itself between the telcos and trying to persuade 32 local authorities about the provision of better services. It can concentrate on the telcos and trying to put the infrastructure in place. The enterprise and lifelong learning department has committed considerable resources to that. That department would have to be asked the question about progress and how willing the telcos are to meet the desire to have the infrastructure in place.
We are keen on the cross-cutting aspect, so it is helpful to have examples of it working and in progress.
I will bring the questioning back to the budget process, which is where we started. There is a fair slug of capital—£57 million—in the modernising government fund. The way in which the information is presented to us—even accepting that we now have a telephone directory-sized document—makes it difficult at any stage in the budget process, in the subject committees or this committee, for us to find out whether the way in which that £57 million is spent meets any of the objectives that the minister has set out. It does not seem that the process that we are going through at the moment will establish that. How might that be addressed?
Before the witnesses answer that question, I will ask another. I would have thought that the draft action plan, which was published at the end of last year, would have been pretty important in determining objectives and what the modernising government fund and the 21st century government unit are trying to do. However, the action plan does not seem to be mentioned in the annual expenditure report or the draft budget. Is there a reason for that?
To some extent, that may reflect my personal view that strategies, papers and action plans deliver nothing and that the measure of our success will be whether the people in the street detect a difference in the delivery of services.
I was looking at the 2002-03 figure, which is £57 million. A figure has been announced for specific targets. I assume that this is now the action plan rather than a draft action plan. When a sum as large as £57 million is allocated, we should not necessarily have to consider the detail of every little project to find out whether the Executive is making a success of the general objective.
I will deal with the first part of that question. From my perspective, the budget so far is £26 million—that is all that we have spent. Mr MacKay is deciding what the spend will be for the modernising government fund No 2. We have not committed anything on that. I believe that the amount of money was reduced for other contingency purposes, which I do not think is shown in this document. One of my colleagues might pick that point up.
Are you referring to the £15 million that was taken off the figure in Angus MacKay's statement at the end of June? Is it £57 million minus £15 million?
No. The £15 million came off the figure for 2003-04.
It is £25,985,632 to be absolutely accurate.
That is the running total of what is committed out of the bidding rounds. The £57 million has not been touched yet; there will be a separate bidding process for that. At this point, we can give the committee very little information about which individual projects will receive that money.
Three other members have indicated that they want to speak. I will ask one question. Mr Russell mentioned that he was not terribly impressed with action plans and that he was aiming for outcomes. We accept that and wholeheartedly endorse it. Nonetheless, we saw what we understood to be a draft action plan. We are not even aware whether it has been made into an action plan. If so, I would have expected one of the two documents to mention objectives and targets, but we cannot find those in either document. Why is that?
The answer is that the plan is being finalised now. It has gone back on a number of occasions because, as with many such papers, what was updated in the actions that were taken were simply changes in adverbs. We did not want to produce another plan that showed no more than a change in adverbs. A final plan is now in its final stages. I emphasise again that to meet the programme for government we believe that it is more important to push the projects forward. The action plan is useful for showing the range of activity in the public sector across the whole of Scotland, but it is not the primary vehicle for the delivery of change. The modernising government fund is the vehicle that will deliver change.
We should ensure that the document on the web links to the 21st century government website. That would be a start to providing the information. We can certainly do that.
I want to pull us towards the Scottish Executive administration costs.
I am keen to do that. Are there other points on the modernising government fund?
You said that the modernising government fund is a bidding process and that the Executive puts up only 25 per cent of the costs. For 2001-02, the Executive is putting up £25 million, so the total amount that is being spent is £100 million.
On occasions the total varies. You are quite correct: we commit no more than 25 per cent of the total cost of a project, up to a maximum of £2 million.
People with whom you are working may or may not spend the 75 per cent from other sources.
The point of the modernising government fund No 1 and, more important, the modernising government fund No 2 is to attempt to lever funds in. A question was asked earlier about partnerships. In the modernising government fund No 2, the line will firmly be that there will be a commitment of funds by ourselves, the private sector and the people who are running the project. Several companies are keen to help to deliver a change in services, such as data sharing in the national health service, which is a project that will deliver considerable results.
So the Executive will put in a maximum of 25 per cent of the funds. The total cost of projects that we are discussing must be a minimum of £100 million and I presume that it could be more.
The example was given of the Accord card system in Aberdeen. I take it that no private finance is involved in that and that the additionality will come solely from the council.
Not entirely. A number of organisations such as SchlumbergerSema are involved and are likely to contribute funds. The first stage was a limited pilot, but the next stage will certainly attract funding from companies such as Microsoft and Sony.
Does central Government have anything equivalent to best value, which it expects local government, hospitals and so on to deliver? If there is a similar concept, how is it applied in central Government?
Yes. There is a similar concept. A branch of the division in which I work is developing best value in central Government. It is considering how it might apply best value to central Government departments. It is using the experience of local authorities and health boards to gain an insight into how the process works best. There is a high degree of ministerial commitment to it. Angus MacKay chairs the steering group on best value, on which the permanent secretary also sits. We are at the start of the process, but we have that concept and we are developing it.
Is that the body that was set up at the beginning of the year? I think that the Minister for Parliament sits on it as well.
Yes. I think so.
I have not heard it called the best value committee, but I recognise the body that you are talking about.
Some sort of breakdown of the figures is included on page 249 of the draft budget document, but the administrative costs seem to be in one lump sum. There is no indication of the costs of running each department, the staffing level in each activity and what that costs or what it costs to run a minister and an adviser. The document does not contain those figures. I presume that you have that information.
We hold that level of detail and I can provide it.
Why do those figures not appear in the draft budget document, or do they appear somewhere that we do not know about?
Within the annual budget documents there is a line by department stating what is spent on administration, so there is a departmental breakdown.
But there is nothing that pulls the figures together so that someone can take one look at the cost of administration in the Executive?
That is what the figure of £200 million for 2000-01 shows—that is the Executive's administration costs. It is broken down into pay, special advisers, advertising, information technology, capital and so on. Further breakdowns are given below that, but the question is where to draw the line. How much detail should we provide?
I appreciate that. Our experience of dealing with the budget is growing and we are learning as much as anybody else at this side of the process. However, it is difficult to obtain that sort of information. Some of it comes out through parliamentary questions, but there is an art form in them and we are all learning how to use the system. Specifically, the cost of the administration of the Executive is rising. What is the underlying reason for that increase? It is not just staff numbers and staff pay and conditions.
I think that the increase is explained by staff numbers and staff pay and conditions.
Is that it?
Yes, that is the bulk of it. There are some blips, for example on capital because of the St Andrew's House refurbishment project coming to an end. However, essentially we are spending more money on better pay and conditions and all the services that support that.
And that relates directly to the delivery of service? Can that be accounted for?
Absolutely.
On contracted-out services, what proportion of the administration costs are staff salaries?
Slightly over half the costs go on pay.
Are those core staff?
Yes.
What about contracted out staff or contractors?
I am sorry, but I do not have those figures to hand.
On the various objectives and targets, I was struck by the first objective, which is to
Year on year, starting with 2000-01, the administration budget is growing by 6 per cent, 1.13 per cent and 1.77 per cent, compared with the total managed expenditure—the Executive's total budget—which is growing by 7.85 per cent, 3.42 per cent and 2.94 per cent.
So should your target not be to shrink the proportion of the total budget?
We may have expressed the objectives badly, but that is in effect what we are achieving.
How were the objectives and targets developed and who determined them? There are about a dozen of them on page 253. To what extent have they lived on from the days of the Scottish Office and the old departmental report, "Serving Scotland's Needs"?
I do not think any of those targets have lived on from that—we did not publish targets before.
You did not publish targets, but I am sure that you had them—someone somewhere had them.
In the context of the budget exercise, and in particular the previous spending review, targets will have been discussed at departmental level and through the permanent secretary. They are subject to the same level of scrutiny as any other programme budget and are agreed with Mr MacKay. The bottom line is that the administration budget and its targets, objectives and outputs are subject to exactly the same level of scrutiny as other budgets.
There is a business planning process in the Executive that takes as its starting point "Working together for Scotland: A Programme for Government", which is what ministers publish as their high-level objectives and targets. That bottom-up planning process is the starting point throughout the Executive and the administration budget is no different. It gradually builds up into this document and runs parallel with the budgeting process.
I presume that it is a rolling process that is updated annually?
Yes.
In the same table of objectives and targets I see that 2000-01 is still a forecast. We could make a lot of money on horses if we were allowed to forecast races that had already taken place. What is the reason for that?
I suspect that it is simply because the gestation time of the document is so long.
Could you tell us a little more about that?
We are now commissioning the annual expenditure report for March, which is in five or six months' time. Similarly, we have to kick this document off early. It may be that the table came in early and we have not gone back to update it. In that sense it is like painting the Forth bridge. It is about the stage at which we get information and when we publish it, and the process of having to collect it throughout the various departments.
Is this is a good set of targets for your department? It strikes me that some of them are fairly vague and woolly. Even if they were met, it would not necessarily indicate whether the administration was being conducted any more efficiently.
If I were to comment honestly on them—
We would appreciate that.
To some extent, the targets are too cost and input focused. There are a couple that are quite useful. The number of
The average cost per telephone extension is £95. Presumably, if you install another couple of dozen extensions in your modernisation of old St Andrew's House you will have met your target. What does that mean? You asked about data. It seems that there is a whole lot of stuff—strategy and so on—in the table that repeats what other documents have said. It could be cut out completely because it obscures the stuff we really want to see. Apart from sick leave, which you mentioned, this table is probably a good example of meaningless targets. How many people can you shoehorn into a square metre? I do not understand the target of getting more people into less space. Is that a good thing? Are you gradually going to increase the number of people sitting in a room?
In the context of an open plan office it is important that space usage is maximised. Advances in technology—flat screen monitors—allow that to be done. That is in effect what that target picks up on. Having said that, I do not disagree with your analysis. The data on costs are important pieces of monitoring information, which it would be derelict of us as an office not to collect sometimes. We ought to know how our costs are performing.
Yes.
The last three targets are the more important indicators of how much stress the organisation is under. However, I presume that there are indicators on the number of green folders and the number of parliamentary questions that we have answered over the past six months that show a six-fold increase.
Those are much more important targets. The achievement of targets on how long PQs take to turn round or how long it takes for letters to be answered is crucial to the working of the Parliament. It recently took six months to receive a reply to an urgent letter of mine, albeit with profound apologies from the department, which could have cost an £18 million investment in my constituency. Those targets are just—we have agreed on that, so let us not amplify that point. Let us have other targets on things that are relevant to the Parliament's operation and which are meaningful. Let us find out how they are met and what progress is being made, as that will help us to understand the problems that you undoubtedly have, certainly in health, in turning round the huge number of parliamentary questions.
As you say, we are agreed.
I wish to return to the point that Donald Gorrie made and which I followed up on, on forecasts for the year. I accept your point about the timing for putting together the AER, but in various sections of the draft budget there are forecasts for objectives and targets for the National Archives of Scotland and the Scottish Public Pensions Agency. I accept what you said, Mr Palmer, but on page 264, for example, under objectives and targets, there is a 1999-2000 actual figure, which does not appear in the examples on pages 253 and 260 to which I referred. The actual-figure column is helpful. Can a column on how 2000-2001 turned out be included in the other tables, so that we can see what the outturns were?
Yes.
I wish to follow up on the same area. We do not have outturn data at the moment. Perhaps they are only of interest in following where money has gone. Perhaps outcomes are more important. However, in light of the fact that we have access to wonderful information technology solutions these days, why has it taken so long to get the outturn data? If all we end up doing is chasing forecasts, I do not know that we will get anywhere.
On the outturn in general, the Audit Scotland timetable for auditing the accounts determines when we deliver the outturn figures. On the Scottish Executive administration data, I hold up my hands and say that I do not know. The data do not have a lot to do with me, apart from appearing in the book of which I have oversight.
We have the outturn data on the targets on space, costs of network personal computers and telephone extensions, and energy usage per square metre. I bear in mind Dr Simpson's point about the usefulness or otherwise of that data, but that information is available. It is not in the document because the document is bound and published to a certain timetable. I am more than happy to make the information available to the committee if members would find it helpful.
That would be useful. I am interested in Mr Palmer's response that you are following Audit Scotland's guidelines. I presume that what you are trying to do is beat the deadline. Would it not be better to try to have the data available as soon as possible?
Yes.
The mainstay of a finance department is the production of accurate and timely information. I suggest that the information is not as timely as it might be, especially as we have IT solutions.
That is a fair point. I do not wish to labour the point, but perhaps the target for area per occupant is too specific. A better target would be something about the rationalisation of the estate, what we are doing on accommodation and what our strategy is.
There are major differences in rental costs and how the actual cost is assessed if you are based in St Andrew's House compared with Clackmannan.
That is the other point that I want to make: I cannot see the word "dispersal" in the document. I know that it is one of the objectives that is being examined, but there is nothing in the document to indicate that there is dispersal to areas of high unemployment, such as the centre of my constituency in Clackmannanshire. That is another objective that is worth while, and there should be consideration in the budget of where we are. Even if there is no expenditure this year, it would be helpful to state that and say where we are with the process.
We will consider that for the next document.
The figures on the first line of the table on page 253, on the percentage of the budget spent on administration, do not mean a lot, because if you suddenly had a lot more money, 1.07 per cent as opposed to 1.13 per cent could represent an increase in the actual cost of running government. In private business, one would not apply a notional percentage to turnover for the cost of administration. Normally, one would set targets for what it would cost in real terms, and for what managers would have to work with.
In real terms, the budget shows a blip in 2001-02 and then falls over the following two years. It goes from £199.8 million in 2000-01 to £206.6 million in 2001-02 and falls in subsequent years to £203.9 million and £202.4 million.
And those are real-terms figures?
Yes.
Is the target good enough?
In a period in which our work load has increased, particularly since devolution, the figures show that we are operating more efficiently in real terms—one of my colleagues can give some hard examples relating to PQs and ministerial correspondence, which we refer to as "green folders". That is against the background of a total budget that has grown dramatically since the most recent spending review, which I think added £1 billion or £2 billion or £3 billion, in comparison with which our spending on administration is falling.
That is a good thing—I do not argue with that—but is spending falling fast enough? There seems to have been a very large increase in staffing at the beginning. I understand why some of that occurred, but bearing in mind the fact that staff costs are probably the biggest component, do you have a vision for containing the increase in the number of staff? I am not talking about quality or about how staff are looked after; I am asking whether you see an end to the growth in the number of staff.
We would indeed envisage an end to the growth in staffing. Mr Davidson is right to point out that there was an initial increase. That will tail off over the next year to two years. We have a fairly substantial plan to review the way in which we work and how to make better use of technology and so on. We would hope to combine the two aims to cap the increase in staffing.
Are there targets for that?
There are no specific numerical targets, but there is a budgetary target. Staffing costs will need to be contained within that.
I wish to pursue that. When the Parliament was set up, the new Administration inherited most Scottish Office staff. How much of the transition required to recognise the needs of the Parliament has now been dealt with? Dr Simpson rightly highlighted the concerns of members about getting answers to questions and letters. The Minister for Parliament has told us that staffing is the problem. Have we built enough into the system? Is the period of growth that was caused by the transition over, or is there more to come? If so, how is that reflected in the budget?
I do not think that the growth in staff is over; I think that we still need to increase the number. For example, there is considerable pressure in band B, which comprises junior and middle managers. We have made requests to recruit more staff in that band, in particular to cope with the work load generated by parliamentary questions, green folders and so on.
How much of that increase in staffing will come about as a result of pressure from the likes of Dr Simpson and me, who are keen to have questions and so on turned around quickly, and how much of it comes from the administration associated with the plethora of Executive initiatives, with their grand names, such as "21st century government"?
I am not sure whether we can be specific in defining how many staff deal with each area, but the pressure of work created by the Parliament and by the Executive's accountability to Parliament is significant in terms of the need to increase the number of staff, particularly in band B. Policy development tends to involve more senior staff, many of whom are in band C. There may be differences in the pressures on different grades; it depends on the work. I hope that many initiatives and the things that Ian Walford mentioned, such as the invest to modernise fund and civil service reform, are geared towards reducing such pressures. I mentioned the use of information technology to speed up and smooth out processes, which would mean that fewer staff were required.
Where in the process is information about the requirement for more staff to address particular needs or the reduced requirement for staff arising from service improvements or efficiencies made available? I am not aware of that information coming to us or to the subject committees. Could that information be made available?
We have some way to go in developing our work force planning processes. The pressures are generated through the business planning process: departments may recognise that they have certain amounts and types of work to do and that they do not have the staff to do that work. That generates a demand for staff, which we need to deal with across the organisation.
I think that explains why, when Elaine Thomson and I attended a meeting with voluntary sector workers yesterday, we heard that one of the problems for the sector is building any kind of relationship with people in the Executive.
The bid for staffing resources initially goes to our management group; it is signed off by the Minister for Finance and Local Government.
I seek clarification on that 30 per cent churn rate. Does that apply within departments?
It is in the core Scottish Executive, and takes into account new starts, leavers, changes in job, promotion and so on.
How does that rate compare with that of a normal industrial or commercial organisation?
We do not have that information, but we ought to look for it. My instinct tells me that a 30 per cent churn rate is high.
So does mine.
I want to discuss the associated departments and the difference between the annually managed expenditure figures in the annual expenditure review and in the draft budget. The figures were running along at about £5 million each year. They have now dropped to about £1 million. Is that to do with capital charges? What has caused that significant percentage change?
The only means at the associated departments' disposal are capital charges.
Can you say why the annual capital charges have dropped from about £5 million to about £1 million?
We will have to investigate that and write to you about it. I do not have an immediate answer.
That is fine.
I have a general question about procurement, referring to page 252 of the draft budget. I am aware that there are at least three e-procurement companies in the health service, which either have or are about to have software. Here we are, however, setting something up nationally and spending money on it.
There are representatives of the national health service trusts on the project board that is responsible for the e-procurement project. We are conscious that a number of diverse systems exist—wherever one starts someone will always have started another somewhere else. The main lever for getting the public sector to join in the e-procurement initiative will be the benefits that will be available from aggregated procurement. We will need to demonstrate those benefits to get a public sector-wide commitment to the initiative. We accept that people will not be able to stop buying things immediately. Getting people on board will be a process rather than a big bang.
If trusts can buy in effective centralised NHS procurement systems from the three commercial groups that are already functioning—I think there are two in England and one is about to start in Scotland—should they not do so now, rather than wait for the development of software projects? In my experience in the health service—I am sure that your experience is similar—although we say that such systems will take two or two and a half years to produce, by the time they have been tested it takes four years for them to come in. What relationship do you have with the private groups? Do you examine what they are doing? Do you think about buying over a company if it has a good procurement system?
A Government department would not think of buying over a company. That is a straight answer to the question. Because there are representatives of the health trusts on our steering group, we would expect to be able to link effectively with the initiatives that the health trusts have in hand. When we appoint a supplier—which will be subject to the minister's approval—we will need to engage with other potential suppliers, but as that is commercial I would not want to go into particular details in this forum. I accept Dr Simpson's point that e-procurement cannot be done in an isolated way. If there are opportunities elsewhere we shall not re-invent the wheel.
On behalf of the committee, I thank our six witnesses for the time that they have given us and for the way in which they have answered our questions. There is no doubt that we shall see them at the same stage of the budget process next year, by which time—if they are a microcosm of the Executive—two of them will have moved on to other positions. We shall wait and see. Thank you very much.
Meeting adjourned.
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