Audit Scotland (Annual Report 2006-07 and Work Programme)
Agenda item 3 is Audit Scotland's annual report and forward work programme of performance audits for the year ahead. I formally welcome to his first appearance before the committee in the new session of Parliament the Auditor General for Scotland, Mr Black, and his staff. I invite you to brief the committee on your annual report for the year 2006-07 and on Audit Scotland's programme of performance audits for the next year.
Mr Robert Black (Auditor General for Scotland):
Thank you, convener. I, in turn, welcome you and members of the committee to this new Audit Committee. I congratulate members on their perspicacity in choosing—or perhaps agreeing to serve on—the Audit Committee. As long-serving members will know, this committee receives the richest and most diverse diet of reports, all done to a turn and served up by Audit Scotland, on what is really happening in government—as opposed to what is sometimes reported as happening. We look forward to working with you.
It is fortunate for us that the first substantive item of business is for the committee to receive Audit Scotland's annual report, as it allows us to give you a perception of the work we do, based on what we have done during the past year. The essence of Audit Scotland's role is to prepare reports for the Parliament and local authorities to provide elected representatives—members of the Scottish Parliament and councillors—with objective information to assist them in scrutinising and holding to account everyone and every body that spends public money under the devolved regime in Scotland. We also think, and have demonstrated, that through our work in gathering objective evidence on what works best, we can make a significant contribution to the holding to account agenda and to helping to improve public services.
Audit Scotland is unique, in that it is the only body that looks across the whole of government—the national health service, local government, central Government, all non-departmental public bodies and agencies, the further education sector and so on. We can look—and, over the past few years, have looked—at complex cross-cutting issues such as the youth justice system and the operation of community planning, but we can also follow public money from the centre right through to the point of service delivery, where the money is spent. We sometimes use the phrase "following the public pound".
As we say in the introduction to our annual report, we have tried to give the committee an insight into the full range of our work and the breadth and depth of our activities across the public services. We remain committed to delivering our twin aims of holding public bodies to account and helping them to improve. We oversee 200 public bodies in Scotland that, together, spend £29 billion—a very significant sum.
In the past year, we submitted to the Parliament a total of 21 reports, including four cross-cutting reports of the type I mentioned, four reports on the performance of the NHS and nine reports related to the accounts of public bodies. All the reports came to the Audit Committee in the first instance. We produced nine best-value reports on local authorities and four local government performance reports. Those 13 reports are considered primarily by the Accounts Commission for Scotland.
By far the greatest number of reports go to the audited bodies. A total of 195 reports were delivered to individual spending bodies—councils, NHS boards and so on—at the conclusion of each of their local audits. In appendix 3 to the annual report, from page 27 onwards, we highlight all the public performance reports that we made last year. I will mention briefly two major reports that were submitted to Parliament during the previous session but that the Audit Committee did not have time to consider. One of those reports—our overview of the performance of the transport sector in Scotland—is rather topical. We looked comprehensively at all spending programmes in the transport sector. The other report on which the previous Audit Committee was unable to take evidence in the time available to it was a comprehensive examination of the management of information technology to deliver information in the NHS in Scotland.
I am aware of the time pressure to which the committee is subject and that it has a full agenda. I am happy to answer questions on the annual report, to come back on a future occasion or to contribute to any seminar that the committee may hold during the recess. Our annual report is also submitted to the Scottish Commission for Public Audit, which, on behalf of Parliament, formally oversees our budget and spending. It will no doubt consider the report at one of its meetings.
Caroline Gardner has kindly agreed to introduce our forward programme of studies, which may be of immediate interest to members.
I invite members to ask questions about the annual report.
I congratulate Audit Scotland on its efficiency savings and redirected costs, which seem impressive, but why have the charges for further education audits gone up when all other charges have been reduced?
My other question is more general. In the report you refer—as you do in many of your reports—to good practice. The most important part of the process is to ensure that good practice is spread uniformly. Beyond making a report, what role do you play in spreading good practice? Do you have any function in that regard, or is it a matter for the Government and for Parliament? If you have such a function, has there ever been an audit of whether good practice is spread adequately?
I will take the second question first. The impact of our work is an issue of growing concern to Audit Scotland as our competence and the range of work we deliver increases. When we do major pieces of work, we attempt as a matter of routine to capture what seems to work best. Our reports are populated with exhibits and examples of what works best, which we attempt to encourage the public sector to take on board.
Secondly, we quite often—and increasingly so—produce material that is directed towards, for example, board members on national health service bodies so that they can follow through any action. We expect the appointed auditors of individual bodies to seize on key recommendations and to encourage boards and public bodies to implement them.
Thirdly, some pieces of work are tailored more towards helping an organisation to improve than to holding it to account. For example, we recently did a major piece of work in partnership with the audit agencies elsewhere in the United Kingdom as a contribution to the efficient government programme. We considered the costs of corporate services and benchmarked indicators that could be applied to corporate services throughout the public sector. We are encouraging the public sector to adopt those indicators.
Finally, we contribute to seminars and workshops on best practice. We participate in such activity throughout the public sector without compromising our independence. Much of that activity does not necessarily come to the attention of the Parliament.
Caroline Gardner will respond to the question about audit costs in further education.
Caroline Gardner (Audit Scotland):
In broad terms, there are two points to make. First, the fees for all audits are agreed between the audited body and their auditors, within a band that is approved by Audit Scotland, to ensure that they reflect the body's particular circumstances. There has been a slight trend towards higher fees, to reflect the financial problems that there have been in colleges in Scotland.
Secondly, there is a straightforward timing issue. The financial year runs from April to March, but the colleges' financial year runs from August to July. The amount of work that is completed at the year end varies for a range of reasons, which can affect the amount that is shown in the accounts. We can provide Dr Simpson with more detail on that, if he likes. I have described the broad picture of what is going on.
That is fine.
Audit Scotland's annual report and work programme demonstrate the almost breathtaking range of activities that the agency undertakes. For example, work has been done that relates to fire authorities, migrant workers, the NHS, air quality, and central and local government. The proof of the pudding is clear to everyone in the organisational improvement and efficiencies that have been achieved through Audit Scotland's encouragement of good practice, at a cost that is a fraction of the £29 billion that the audited organisations spend.
I thank the Auditor General and his staff for and congratulate them on their work to promote good governance and value for money throughout Scotland's national and local organisations—I have seen their work in action for eight years.
I am sure that all members share those sentiments, whether we are rookies on or veterans of the Audit Committee. That is an excellent start for the Auditor General and his staff in this session of Parliament. I daresay it might be downhill all the way from here.
If there are no further comments or questions on the annual report, I ask Ms Gardner to introduce the forward work programme.
Members have a copy of our detailed forward work programme, so I will simply pick out forthcoming highlights, which might be useful to the committee as it plans its own work programme for the next few months.
Our work programme was agreed after wide-ranging consultation with a range of public bodies and stakeholders and, of course, the Audit Committee. We have tried to achieve a balance across the public sector while identifying big issues for us all. We have looked ahead to what might come over the horizon—we try to spot issues that will be important in 18 months' time. We have aimed to cover big themes such as environmental sustainability, health and community safety, and cross-Government themes such as major capital projects and the use of consultants. We will also undertake work that contributes to post-legislative scrutiny, for example in the context of mental health services and civil contingency planning.
We did not publish any reports during dissolution—there was a moratorium in the period leading up to the election—so quite a lot of reports are in the pipeline and will be published during the next couple of months. Before the committee's next meeting, we will publish in August reports on people with long-term health conditions, youth offending and out-of-hours services in the health service.
In September, work will come forward on sustainable waste management, how the higher education estate is managed, and the management of emergency and non-emergency calls to the police service. Over the winter period, there will be a major report on the performance and finances of the NHS in Scotland, a look at the school estate, and a review of free personal care, which is due in the winter of 2007-08 and is currently planned for around the turn of the year.
In addition, the committee will receive from time to time what we call section 22 reports, which are an opportunity for the Auditor General to bring to your attention issues that come out of the audits of individual bodies. Two of those are on the agenda today, on further education colleges. There may be more over the next few months, first on the health service and secondly on central Government bodies. It is difficult for us to plan those in advance as they arise when particular issues come out of audit work. They will be reported to the committee on its routine agenda.
I will stop there, but I am happy to answer any questions.
Thank you. Are there any questions on the forward work programme?
I have a question of clarification. I see that, as part of the programme, an investigation into major capital projects is planned. I do not want to pre-empt later agenda items but, on the assumption that the Edinburgh transport projects proceed, I presume that they fall under that further inquiry. Is that correct?
They certainly would. It became clear to us in the first two sessions of Parliament that the way in which capital projects are examined can often be less structured than our consideration of revenue expenditure. Before the transport issues became live in the past few weeks, we had started a piece of work to examine all major capital projects. Many of those are in the transport sector, but others are not. The aim is to do a first cut that considers them all and then agree how to keep major capital expenditure under review on a continuing basis in the future, given its importance to the Parliament and public services throughout Scotland.
Thank you. That is helpful.
The programme in front of us is full, and Caroline Gardner has identified the section 22 reports that could arise. How much flexibility does Audit Scotland have if other issues arise that we have not predicted but clearly need to be investigated?
Ensuring that we make best use of our resources while being able to respond to new circumstances is always a challenge for us. We manage that challenge by keeping a small contingency so that we are always in a position to respond to big issues as they arise. We also accept that, when that happens, we may have to slip or decide not to do pieces of work that were planned. We hope that those two approaches give us enough flexibility.
I want to ask some general questions about the forward plan and the audit process that you plan to adopt. Will there be more engagement with the public on its perception of outcomes, impacts and benefits gained from particular work? My understanding is that, in previous years, the focus has largely been on systems and processes, delivery and risk management. The public perception of service delivery is obviously important. Is there a changing emphasis to move in the direction of assessing and reporting back on that?
There certainly is. It is fair to say that much of our work has focused on the organisations that deliver public services rather than on the people who are paying for and receiving services, but that balance is shifting. For example, the work on out-of-hours services that is currently being pulled together has a strong element of research with people who have, and have not, used out-of-hours services. That was carried out to get a sense of what matters to them and whether they feel the quality of service met their needs in practice. One of our objectives for this year is to build in that work more systematically. It will not always be appropriate, but very often it will be; when it is, we should be doing it.
I thank Caroline Gardner. We note the position in relation to both reports.