Audit Scotland (Annual Report 2007-08) Audit Scotland (Work Programme)
Item 3 on the agenda is consideration of Audit Scotland's annual report. I invite the Auditor General to comment on the report.
I am pleased to be able to present, before Parliament goes into recess, the Audit Scotland annual report for the past year. The committee will recall that Audit Scotland's accounts and annual report are presented formally to the Scottish Commission for Public Audit, which holds Audit Scotland and me, as the accountable officer, to account for our use of resources and performance. However, given that the Audit Committee receives most of our reports, I thought that it was important to present our annual report to it, and to summarise briefly some of the main features of our work in the past year.
For the past year or so, scrutiny of public performance has been a significant policy issue in the Government; Parliament has also been concerned with it. Members will be aware that earlier this week the Government announced significant changes to scrutiny arrangements. In the report, we discuss the significant role that Audit Scotland has played in assisting the development of thinking about those arrangements.
Audit Scotland's primary roles are to hold to account and to help to improve. I hope that throughout the annual report members will find evidence and case studies of how our work has supported accountability and helped improvement, not least by our presenting reports to the committee so that members can take issues further than we can. For example, the Audit Committee took evidence on three of our national reports: "Dealing with offending by young people", "Police call management—An initial review" and our comprehensive "Overview of Scotland's health and NHS performance in 2006/07". In addition, I need not remind the committee that it held evidence-taking sessions on what we call a section 22 report—a report linked to the accounts of an audited body—that I issued on Western Isles NHS Board.
That leads on neatly to consideration of the enormous amount of business that we conduct that does not really surface in the Audit Committee. I refer to the audit of more than 200 public bodies in Scotland. As the report indicates, in the past year Audit Scotland and the firms that work with it produced more than 200 final audit reports. Those audits are the foundation of our work and are part of the key mechanism for providing independent public assurance that public money is used appropriately. I expect the reports to be used by boards and others who are in charge of public bodies to improve oversight and performance of those organisations.
We do a lot of work on taking our findings and expertise out into the wider world of government. Teams from Audit Scotland made presentations to more than 50 external conferences, seminars and training events, and we serve on well over 50 external bodies and working groups. That is a way in which we share our expertise and knowledge and help improvement, but we also learn from doing it. We always, however, ensure that we observe the independence and objectivity of the audit process. In other words, we never contribute on policy matters, but where we think that there is audit evidence of how things can be done better, we will take part. That external work now takes up quite a lot of our time.
Another highlight of the year, as the committee might recall from our previous meeting, is that we completed a further round of the national fraud initiative. We identified significant savings and overpayments—the cumulative savings for the exercise in the past few years amount to about £37 million.
Over the summer, we will consult on two matters. First, we want to consult on our priorities for the next five years. We will go to audited bodies and stakeholders in government and the Parliament to ask for their views about what our priorities should look like. That work will inform a fundamental review of our corporate plan, which we hope to publish in the autumn. Secondly, we will consult very soon on the forward work programme of studies. Under the next agenda item, I will inform the committee about the process that we intend to put in place for that.
Before our new programme starts in earnest, we will present to the committee work that we already have in the pipeline. I will place on the record the reports that will come to the committee for the rest of the year and through into the early months of next year. During the summer months, a report will come out on the new general medical services contract—the general practitioners' contract. Also during the summer, we will present a report on palliative care services, which is to do with services for people with terminal illnesses. We will present an update on day surgery and look at the use of consultants—not national health service consultants, I hasten to add, but professional consultancies—in government.
We will produce a report on NHS asset management, a long-heralded report on the monitoring of the rail franchise and a report on diagnostic health services. Towards the end of the year, we will have the financial overview of the NHS in Scotland. We undertake a review of the overall performance of the NHS system and health services in Scotland every second year. That will be a review of the financial performance of the NHS in Scotland. Finally, we will produce a report on energy efficiency in the public sector and how well the Government is doing on promoting and improving energy efficiency.
That is a brief overview of the last year and of what is in the pipeline. Under the next agenda item, we might touch briefly on the arrangements for putting in place our future programme. I am happy to take questions or comments.
Will you comment on the forward work programme now? We can then have a discussion on the two items together.
Surely. As I mentioned a moment ago, we will consult during the summer on the forward work programme, on which we value very much the opportunity to hear the views of people such as committee members. That is absolutely central to providing support to the committee as part of our work in scrutinising the performance and use of resources in public bodies in Scotland. I am always conscious that we can take issues only so far on the basis of audit evidence and that the committee can probe issues where it is difficult for audit to go. The committee has done that on a couple of occasions—I do not think that I need to give examples. It is really important that we have a shared understanding that we are addressing the issues that really matter.
The consultation paper will come out soon—within a few days, we hope. It will be a joint exercise with the Accounts Commission, which has oversight of local government. It will set out a long list of potential topics that we have identified as being areas in which we might undertake examinations. With the convener's agreement, we will send the consultation paper to members of the committee so that they have it over the summer. If members want to make any suggestions or discuss any ideas, please get in touch with us: we would be delighted to deal with members individually in any way that is appropriate. We certainly intend to bring the consultation paper to a future meeting of the committee for a general discussion before we take final decisions. The more informal the discussion, the greater the value we will find in it.
Do members have questions or comments on either item 3 or item 4?
One of the pages in the report—does it have page numbers?—contains a section on "Further supporting democratic scrutiny". I think that it is page 16. As I said at a previous meeting of the Scottish Commission for Public Audit—by the way, that is a great body that has some good people on it—I know from other things that I do that Audit Scotland's work in developing countries is very well thought of. We should commend the Auditor General and his staff for their good work in helping those countries.
Another point for which they should be commended is mentioned on the page—you should have better numbering—on Audit Scotland's staff profile, which is 50 per cent female. That is very encouraging. As we can see, there are females in very high levels within the Auditor General's staff. Other departments—and, looking around me, the committee as well—could learn from that.
On the future work programme—I look forward to that summer reading—I welcome the fact that we will have a report on consultants, which I think is long overdue. I must not prejudge the report, but I am looking forward to seeing it.
I also welcome the fact that Audit Scotland will report on monitoring of the rail franchise. In doing that, will Audit Scotland consult the service quality incentive regime—SQUIRE—inspectors, who monitor the performance of the railways? I did not know about them before, so I wonder whether those inspectors were listened to when the rail franchise was renegotiated. I would find that very interesting. Will Audit Scotland's report discuss the work of the SQUIRE inspectors and what they found?
Yes.
That was a short answer.
We have heard an impressively massive range of activities to improve on and prioritise good practice and value for money. Audit Scotland's work is summed up on the annual report's front page:
"Holding to account and helping to improve".
Without doubt, Audit Scotland is a major national institution that does superb work for the public good. I just want to say well done and thanks.
I was about to make a similar comment. If Audit Scotland has managed to secure £37 million of savings through the fraud initiative—just one initiative—the savings that come elsewhere in the public sector through the work that Audit Scotland does must be almost incalculable. I know that that would never be said in the annual report, but it should be said and it should be recognised. The value of Audit Scotland's work must be pretty high in financial terms as well as in the good practice that it promotes.
Turning to the future work programme, is there any scope for Audit Scotland to do a bit of work on introducing best value to the wider public sector? As Charlie Gordon mentioned previously, public bodies more widely should be able to gain the benefits of best value. Might Audit Scotland have a role in promoting that and in helping such bodies to deliver?
The short answer is yes, absolutely. We see that we will have a significant role in that. As the committee is well aware, best value is a statutory duty that is enshrined in legislation for local government, but there is equally a duty on all accountable officers in the public sector to achieve best value. That is captured in documents that almost have the strength of law, so accountable officers are required to accommodate best value. We need to recognise that different parts of the public sector operate under different governance arrangements and therefore have their own performance and accountability arrangements. However, the fundamental principles of best value—which, to capture them in a phrase, are to use resources wisely, well and properly—extend across the whole of the public sector.
In the health service in particular, we have developed an audit toolkit that will allow us progressively to assess the performance of health bodies against the core criteria of best value. We like to think that, initially, the final reports of the health board auditors that I mentioned will reflect that analysis and that, in the future, we will be able to reflect the extent to which best-value principles are applied in our reports to the Parliament on the performance of the whole health service.
We are committed to best value in principle and are starting to do things in practice.
As you have heard, the committee values the work of Audit Scotland, which is of an exceptionally high quality and makes a difference to the quality of life and use of resources throughout Scotland. We commend you for that.
We may want to engage with you to influence your future work programme. We would encourage you to consider best value, which was mentioned by both Charlie Gordon and Willie Coffey, and how best that can be approached, notwithstanding some of the issues that you have raised.
Just before you move on, as this is the last meeting before the recess let me thank the committee for its support. As I mentioned earlier, we can take issues only so far in holding bodies to account, and it is this committee on behalf of Parliament that finishes the job by, for example, taking evidence both in hearings and in writing from accountable officers.
Finally, I should say that I do not do the work—it is Audit Scotland that does the work for me. I have a fantastic team, so it is great to have the opportunity to pay tribute to what it does for me. I will make sure that your kind remarks are relayed to the staff whom you do not meet terribly often, if ever.
Thank you for that.