Budget Process 2008-09
Agenda item 4 concerns the Scottish Government's draft budget 2008-09. I am pleased to welcome Muriel Robison from the Equality and Human Rights Commission; Calum Guthrie from the Scottish Council for Voluntary Organisations; Morag Gillespie from the Scottish poverty information unit; and Angela O'Hagan from the Scottish women's budget group. Unfortunately, Tim Hopkins from the Equality Network cannot be with us today as he is unwell. He has a wealth of experience in this area, but I am sure that we will be very well served by our four panellists.
I will start with a general question. The last budget document made explicit the action that each portfolio had to take to promote equality. That is missing from this budget document. What are your comments on that?
Angela O'Hagan (Scottish Women's Budget Group):
Thank you for the opportunity to come to committee today. The Scottish women's budget group welcomes the committee's interest in the budget. I will preface my answer by saying how much I enjoyed the round-table discussion; I am pleased that I was here to hear it.
I agree absolutely that measures to promote equality are absent from the budget document. First, that reflects an absence of the requirement for the budget to be subjected to an equality impact assessment. It is apparent that such an assessment was not undertaken. Secondly—this links to the earlier discussion on mainstreaming—there is no evidence of the mainstreaming thinking to which I have referred in the past when giving evidence to committees of the Parliament. Previously, I have described such thinking as being akin to someone showing their workings in the margins, as we used to be told to do at school. We need to see the thinking behind the various measures, but that appears to be absent from the budget document. We have a raft of outcomes that may be valuable in themselves, but which have no equalities specifics and no reflection of equalities understanding.
Mainstreaming is a specific approach to public policy making, which government uses to effectively analyse the different realities and experiences of women, men and other groups in order to design programmes—for example, to deliver transport, education or care—that reflect those differences. The women's budget group believes that gender budget analysis is a key tool or process in mainstreaming: we believe that it provides between policy making and resource allocation an effective bridge that leads to better policy making, which is better targeted and more effectively focused and which makes for better interventions. That is what is missing.
We are disappointed that we have lost the ground we thought we had secured through our work with previous committees, previous Administrations and the on-going equality proofing budget and policy advisory group within the Scottish Government, which the committee met recently, on making that process of analysis part of the budget process and making it visible and transparent in the budget documentation. There are positive statements about equality, but they are undermined by a lack of specificity, of targeting and of clear links between the intent, content and objectives of the programmes and the attached spending lines.
I probably have much more to say on that, but I will leave it there by way of introduction.
Calum Guthrie (Scottish Council for Voluntary Organisations):
I echo what Angela O'Hagan has said. My concerns relate to the analysis of equalities that underpins the budget. Although I welcome the high-level commitment to
"ensure that … investment and … policies promote equality and do not discriminate unjustly or perpetuate inequality and disadvantage",
the analysis of equality that is used is not clear from the budget.
There is a lot of discussion about equity but not about equality. Equity, from my perspective, is not necessarily compatible with equality. There is also a heavy emphasis on economic inequality, which to an extent disregards some of the other factors that are involved in discrimination, particularly power issues and institutional and structural discrimination. The performance target framework to which the budget is operating appears to be fairly narrowly focused on inequality of economic growth so, although there is some mention of mainstreaming, the detail of the budget does not contain much evidence of how it will take place and how Government departments will report on it. That contrasts with previous budgets, in which there has been much more specificity. There is also little evidence of equality proofing of policies, processes or spend. That is something of a retreat from previous attempts to drive mainstreaming across Government departments.
On the analysis that underpins the budget, it seems to me that there is an implication that equal opportunities is about compliance with legislation and that, in some sense, that is not compatible with the sustained growth that is the budget's headline purpose. It is an interpretative thing, but I think that it is contrary to the positive promotion message from the EHRC.
On the business case for equalities, there is a lot of work to be done on aligning performance, quality and growth with equalities outcomes, because they are not necessarily mutually exclusive. It might be more helpful to the budget to consider how they might be aligned more closely.
Muriel Robison (Equality and Human Rights Commission):
I echo what my colleagues have said. At the EHRC, we welcome the initial headline commitment to equality and are particularly pleased that there is a treatment of equality issues in the strategic outcomes. However, we are concerned that there is a lack of clarity about what is meant by equality.
That links to Calum Guthrie's point about the emphasis on economic inequality. There are references to inequality, which seems to equate to poverty, and references to equality of opportunity, which seems to refer to discrimination, but there is a real lack of understanding of what equality is and the outcome that is sought. We would expect more talk of the need to promote equality, which was missing from our discussion earlier this morning. We talked about challenging discrimination and, in a sense, we touched on the need to promote equality when we talked about public sector duties.
However, from the EHRC's point of view, the real progress will be made on promoting equalities and ensuring that the public sector duties are implemented. That seems to be missing. There is certainly a lack of clarity. Clarity is needed if we are to have meaningful goals and targets to achieve equality. We all need to have a common understanding of what we mean and what we are trying to achieve.
Despite the early references to equality issues in the targets and spending plans, they seem to be lost in the other parts of the budget, with no reference to equality and no links between promoting equality and the budget. That concerns us.
Morag Gillespie (Scottish Poverty Information Unit):
I would like to add a couple of points, particularly on the back of the round-table discussion, which had a strong focus on employment and equal treatment of employees.
I am disappointed with the budget. I come from the Scottish poverty information unit and I absolutely recognise the importance of acknowledging and addressing economic inequalities. However, given some of the changes that were implied in the budget statement in relation to how money is spent and what is and is not ring fenced, there are particular dangers in the lack of equality scrutiny that is built into the budget process this time.
Individual local authorities will take on responsibility for services that need to be equally accessible to all groups. I am concerned that that change will happen at a time when eyes have been taken off the equality and mainstreaming impact that the budget will have. There is clearly an intention in the budget that services will shift from public service delivery to the voluntary sector. I presume that that is why the voluntary sector is to get funding for capacity building. What will be the consequences? In many respects, it could be a positive thing, but what will be the impact?
Some things have disappeared off the radar. I am happy to talk more about others, but the obvious one is child care. We can no longer see clearly what is happening with child care and what priority it is given. How will it fare as part of the roll of things that will go to individual local authorities? In a year or two, will we know whether child care has been sustained, has got worse or is better? It has a huge impact on women who try to return to work or seek to participate in the economic advantage that will, we hope, be developed for Scotland.
To be clear and to put the draft budget in context—Angela O'Hagan touched on the matter—there does not appear to be any evidence that the Scottish Government used its equality impact assessment tool. Therefore, it has not been applied in determining policy and was not considered in relation to spending allocations. Should the budget have been clearer on that point?
There ought to have been an equality impact assessment of the budget overall and of the spending plans for the various portfolios. We expect there to be equality impact assessments of some of the targets that are set out in the spending plans, although there is no apparent reference to that or obligation to do it.
We acknowledge that it would be a huge task, but we support the recommendation of the equality proofing budget and policy advisory group. Each portfolio would impact assess one or two key targets each year. Over the three-year period, an equality impact assessment would be done of each target and the results would be built into future spending plans. That would give us the bottom line and work could be done to build for the future.
Picking up on Muriel Robison's last point about the EPBPAG recommendation that specific portfolios should be the focus of scrutiny, I hope that the committee might give thought to considering select areas of policy as well as the budget process overall. I also remind the committee—and, I hope, others who have an interest in the process—that the previous Finance Committee supported EPBPAG's recommended approach. Key members of that committee who are now key ministers supported an approach of working through discrete targets in specific portfolios. That process is considerably undermined by the absence in the draft budget of specific equality targets, indicators and measures.
As colleagues have said, there is a conflation of equality measures with anti-poverty and social justice—or social exclusion—measures. The Scottish women's budget group has consistently raised concerns about such an approach. The issue is not that we think that it is wrong to have anti-poverty policies—far from it—but that measures should be much better understood through clear analysis of the different experiences of poverty of women, men and other groups. Providing routes out of poverty will require different interventions to address those different experiences. That seems to have been lost.
There is almost a crisis of conviction, or of confidence, in the draft budget. At the outset, the budget document contains strong statements—which we absolutely welcome—about how the Government has no intention of discriminating and believes that investment should promote equality. However, by then giving a slightly tangled or mixed message, the document almost tries to distance itself from those statements. Without the specifics of an equality impact assessment, how do we—or the committee that has responsibility for doing so—track progress? Earlier this morning, Morag Alexander and others spoke about the importance of being able to track progress over time. Without a specific equality impact assessment—if such an analysis has been conducted, it is not reflected in the budget—it will be much more difficult to do that.
One example of how an equality impact assessment would have provided a more meaningful understanding of budget priorities—I can recall a couple of examples from memory—is the welcome focus on smoking prevention in the health and well-being spending plans. Given that previous analyses show that the majority of people who take up smoking are young women, such a spending priority is clearly a very gendered programme because there is clear evidence that smoking is a particular problem with a specific gender. Another example concerns the welcome news that the Commonwealth games will come to Glasgow. How will we encourage greater participation among groups of people who are currently less active in sport? Again, that might point to younger women.
Perhaps such an analysis has been conducted elsewhere, but it is not apparent in the budget. Where such thinking has gone on, the absence of such an assessment does a disservice to the people involved. However, it might also underline the fact that such thinking has not gone on. An equality impact assessment should be a requirement. The Scottish women's budget group believes that the current equality impact assessment tools could benefit from being considerably strengthened in how they deal with the budget. At the moment, the equality impact assessment asks simply whether a programme has a budget, but it does not equality assess the direction of spend or of the anticipated outcomes. That is what we want to see.
To recap, the absence of an equality impact assessment makes it much more difficult to track progress and to identify the specifics that will meet the overarching targets and the national outcomes that are described. Because the outcomes are described in such high-level terms, we have real concerns about monitoring, evaluation and—to return to the point that colleagues made earlier this morning—audit and inspection of programmes.
The national performance framework that is proposed and the single outcome agreements for local authorities rang alarm bells for me. Where are the best-value duty to promote equality and the range of activities to ensure that equality is part of best value? The public sector duties are referred to in the budget document but are given pretty scant treatment. What actions will be taken to underpin pursuit of those duties? The absence of any specifics around those actions and the absence of any budget lines to support them undermine the apparent commitment to equality in the budget.
For me, the issue is about the kind of message that the budget sends out across the public sector. There is an issue about people's understanding of the mainstreaming processes with regard to equalities. I think that the budget approaches equalities in the same way a lot of organisations do, in that there is a headline policy and a degree of commitment from the people who have power, but the way in which that policy is to be implemented is something of a mystery.
Unless clearer signals are sent out to people in the public sector or organisations that are recipients of public funding about their roles and responsibilities in relation to equalities, it will be difficult to measure any progress. People in lots of different sorts of organisations do not understand what mainstreaming is. Given that the budget process drives the way in which the public sector delivers on Government priorities, it is unfortunate that there is not more detail about that, which would give people a better understanding of their roles and responsibilities and increase their accountability, which is missing at the moment.
The short answer to your original question is yes.
I would not like to give the impression that the previous budgets were wonderful equality-proofed documents. I cannot remember coming to Parliament before and being totally kind about them. However, we were making what I would describe as faltering progress—I am not known for being overgenerous about such things. I firmly believe that scrutiny on the basis of equality mainstreaming is an informative process that will assist decision making in government and help the Government to make policy. The fact that it will contribute to good decisions is what makes people's frustration and disappointment boil over.
Equality is not only about big headline issues—I will give the committee an example from an area that I have recently been researching. A lot of advice services are funded directly or indirectly by the Scottish Executive or local authorities. Advice services would aim to have good equal opportunities principles and policies in place and they will probably ensure that their accommodation is as accessible as possible for people with physical impairments. However, they might not answer the phone when their public office is busy, which does not help people who cannot get out of their homes because they are carers, or people who do not have the confidence to go to the service's office. Further, if a service cannot afford interpreters—as one told me recently—how does someone whose first language is not English get advice from that service?
Unless there is some leading by example about the ways in which equality and mainstreaming issues go all the way through those processes, how can we ask the front-line service providers to prove that they are meeting people's needs, which vary greatly? For example, are premises accessible for people with sight impairment? In most cases, they are not. People tend to think of certain principles as being important ones to follow. For example, an appointment slot of 10 minutes might not be enough for someone with learning disabilities or mental health problems. That person may need any advice to be reinforced and may need information to be written down. Services that have to meet such needs will have to think about them in advance. We should be leading by example, but there has been a real loss of momentum.
I apologise—that was supposed to be a brief answer.
We will try to be briefer with the others, but it was important to get those points on the record.
Angela O'Hagan referred to the pilots on sports participation and smoking cessation. I remember saying during the previous session that, although those pilots seemed to be very important, they attracted low-level spend. The spend was tiny, and I remember being a bit upset about that.
If we fail to follow up on pilots, does it not raise questions about the future role of EPBPAG? How do you see the future role and function of EPBPAG? Should we ask the minister that question? Obviously, we should.
I think that EPBPAG should continue, if it is valued as an active advisory body—by which I mean that its advice is acted upon and can be seen to be acted upon.
Questions also arise to do with representation from officials and to do with the departments from which they are drawn. There should be opportunities to build on that. Following the restructuring of the Government, there are clearly opportunities to draw from the office of the chief economic adviser, in addition to having representation from finance officials.
I had not intended to refer to the pilots, but I realised later that I had done so by default. It was just coincidence that, off the top of my head, I thought of smoking cessation and participation in sport. However, they are valid examples because, so far, they are the only examples for which we have budget analyses. There will be a collective memory among members of how far that work was able to proceed and of the disappointment.
Marlyn Glen's question raises wider concerns about the budget. The smoking cessation and participation in sport pilots were previously small-spend budgets. When there is a financial squeeze such as the present one, the Scottish women's budget group has considerable concerns about spend on equalities—that is, spend that targets the promotion of equalities and eradication of inequalities. Such spend is often marginal. Calum Guthrie might be better placed to comment on how the programmes of voluntary sector organisations can be effective in that. When there is a squeeze, spend at the margins will be squeezed. That is a core concern.
When a budget proposes 2 per cent cash-releasing efficiencies across the board, and when there is no specific equality spend, it is easy to do the equations and work out the importance that will be attached to different types of spend, and to work out the direction that will be given to spending bodies such as local authorities on how to meet their obligations to promote equalities and—as we heard this morning—to address previous failures to promote equalities. When efficiency savings are sought in a budget, will there be scope for public authorities, especially local authorities, to meet their obligations in equal pay disputes, present or future? We are concerned that equal pay issues and job evaluation issues are stacking up. How will equal pay obligations be met? If there is no apparent focus on equality, how will such obligations be factored in? How will we know, and how will Parliament know, the extent to which they have been factored in to the actions and performance of public bodies, if those issues are not covered in the national performance framework and if the audit inspection bodies are not picking up on the requirements that are already in place under the Local Government in Scotland Act 2003 and the best-value regime?
We will move on because we have some more specific questions to ask.
I certainly get the sense that some of the questions that we had intended to ask are being answered well ahead of their being asked—perhaps the witnesses have a crystal ball.
Do the spending allocations that are contained in the spending review reflect stated policy priorities that have an equality focus? I will use the example of action to tackle occupational segregation. What are we doing to avoid stereotyping in the modern apprenticeship scheme? The next part of my question might be for Angela O'Hagan. Do you get any sense that the women's budget group is less highly regarded than it used to be?
Who is the first part of your question for?
Morag Gillespie, preferably.
The modern apprenticeship scheme is a good example. For some years, it has been a favourite of mine as a subject that needs to be looked at more closely. People have already talked about occupational segregation and I do not want to repeat what was said earlier. For some years, we had an Executive that was concerned to close the pay gap between women and men, while it ran a modern apprenticeship scheme that was not subject to much scrutiny. When some colleagues and I examined the scheme, we found that it reflected and positively reinforced occupational segregation in the wider labour market. That is why equalities concerns need to go right through processes. It is one thing to have a high-level commitment to equalities, but it must be seen through in all the different stages.
I do not for a second suggest that that is an easy nut to crack, because there is segregation at every stage. The exams that young people sit are gender differentiated along predictable lines—more boys do technology studies and structural engineering, while all the take-up in retail and travel, and almost all take-up in textile technology, is by girls. Girls and boys then make different choices about where they continue their education. It is disappointing to note that the number of women who take on modern apprenticeships, which had been steadily increasing over the years, has started to reduce again in the past few years.
If one examines the modern apprenticeships that young people are choosing, one finds that gender segregation is still a strong element in the different strands. There have been minor improvements in some of the main traditionally male apprenticeships, such as construction and plumbing. There are now 42, rather than 21, young women doing apprenticeships in construction out of a total of several thousand—I do not have the actual number to hand. At least we have some women in plumbing, which is more than could be said a few years ago, when there were none. However, progress is minuscule.
That is where the strategic objective of having young people who are successful learners, confident individuals, effective contributors and responsible citizens comes in, which immediately makes one think that young people are not a homogenous group. Young people from black and minority ethnic groups and disabled young people are also underrepresented in flagship schemes such as the modern apprenticeship scheme. Much more could be done to ensure that such programmes lead the field rather than follow behind the heavily institutionalised discrimination that exists in the wider economy. As flagship schemes, they should lead the way in equalities.
Even when young women—who are more likely than young men to go on to higher education—graduate, they end up earning less than their male counterparts and working below the level of their qualifications. It is believed that that often happens because the flexible working arrangements that they might need because of their responsibilities as carers of children or older people are not available. There are so many examples—that is one simple example—that need to be taken forward, but modern apprenticeships could do much more to change approaches.
I am going to move on now because we are fighting against the clock.
We did not get an answer from Angela O'Hagan on the value of the women's budget group.
I hope that I can give a quick, modest answer on how we are regarded—positively, I hope. I do not think that we are any less well regarded than in the past. There is clear recognition that the Scottish women's budget group has had an important influencing role in bringing the approach of gender-responsive budgeting and gender budget analysis to support the process of mainstreaming to which the Parliament and the committee are committed. The cabinet secretary, John Swinney, has agreed to support a Scottish women's budget group event in the Parliament in the new year, and we have heard nothing to suggest that we have somehow or other fallen from grace or favour.
I do not have a crystal ball, although sometimes I would like to have one. I am fired up by my colleagues' earlier comments about audit and inspection. Those who know me know that I am fond of that particular anorak. However, I am also fired up because we are still talking about the scandal of unequal pay across the public sector and the widening of the pay gap, to which Morag Alexander referred. That cannot but arrest one's attention.
I wanted to ask about the drop-out rate for modern apprenticeships, but perhaps I will write to Morag Gillespie about that. I know that time is short, convener, so I will not raise the issue at the moment.
The voluntary, or third, sector has been mentioned. As you are aware, the budget outlines a significant redirection of resources from local government to the third sector. Can any of the panel members comment on the equality impact that that significant shift may have for both providers and users of services? I presume that Calum Guthrie will answer that question.
Several issues are involved, and I have lots of questions rather than answers. That is, perhaps, indicative of the budget document generally—particularly in relation to equalities issues.
Although we welcome increased investment in the third sector, it is unclear from the budget document what that will mean in practice. What kind of organisations are we talking about? Is it a build on existing spend, or is all the existing spend being bundled up into the one thing? It would be good to find out a bit more detail about what the increased investment means in practical terms.
There are other questions that are of interest to SCVO. What will the process be for managing the spend? Will it be a competitive bidding process? If so, how will that be balanced out in terms of equality impact? How does the new funding—if it is new funding—link to delivering on an overall strategy across other portfolios? That links to the points about mainstreaming that we all spoke about earlier.
There are issues to do with full cost recovery. Efficiency savings are mentioned throughout the budget document. I do not know whether there is a relationship between efficiency savings and contracting out to voluntary sector organisations, and whether the requirement for those efficiency savings would be transferred on to voluntary sector organisations. That is an area of great concern that we will want to examine closely over the coming months and years.
With regard to the third sector development fund and the Scottish investment fund, what is the relationship with the explicit equalities spend and the third sector team spend? Are they co-ordinated and integrated, or are they standalone funds? More widely, how does the proposed increase in investment link with other forms of direct and indirect funding for voluntary sector organisations across the public sector in its broadest sense? Although there is an increase in explicit equalities spend, through the equality unit there is a focus on health inequalities because the equality unit sits within the health and welfare agenda. Obviously, equalities is a much broader subject than health inequalities.
There are also issues relating to the structures that drive the equality unit, given that responsibilities are split between two ministerial teams, which could have a knock-on effect on the administration of grants. Perhaps we could explore that matter later in more detail.
Overall, the issue is how the Government will ensure that the investment delivers equalities outcomes. There are issues to do with the services that local voluntary organisations provide—particularly with regard to disability and access panels—that relate to the duties of public authorities and local authorities specifically. The budget in general and the Government's manifesto commitments aim in the same direction that social policy has taken over the past few years: the issue is streaming more resources through local structures—local authorities in particular—and giving those structures greater autonomy within a broad framework. There are issues to do with how that framework is regulated and ensuring that spend is accurately tracked and measured that have implications for voluntary sector organisations.
Those are broad remarks. I do not know whether you want to drill down on the details.
There are indeed more questions than answers in what you have said. I will write down those questions and perhaps ask the cabinet secretary to respond to them.
You mentioned how efficiency savings will affect front-line services and where they will go. Other panel members may want to say something about the transfer of front-line services and how that will impact on tackling poverty and social exclusion. We have talked about equality impact assessments, and it has been said that more money will go from local government to the voluntary sector. Should the voluntary sector look to have equality impact assessments of the money that it spends?
There is ambiguity around public sector funding and duties of compliance with various pieces of legislation. All public organisations that receive public funds have duties to perform, but what equalities compliance means for voluntary sector organisations is ambiguous. There are issues to do with whether things are done in the voluntary sector or whether they should be built into procurement processes. Some work has been done on equality factors in procurement processes; in particular, prior to the creation of the EHRC, Committed2Equality did work on race and procurement processes in local authorities. I think that around 88 per cent of local authorities in England had no processes in place for considering how their procurement processes delivered on certain duties, so there are issues in that respect.
More broadly, there will be concern about adequate funding for adequate services in a full-cost recovery model. Obviously, the SCVO would welcome investment in, and an increased local role for, the voluntary sector, but that costs money. The issues are where that money should come from, how it should be managed and tracked, how it should contribute to wider outcomes, and whether it should be part of service level agreements or part of a funding package from other funders. The co-ordination and integration of different funding streams is an issue. Again, there are probably more questions than answers at this stage.
A cynical view of the budget could be taken. One might run down its components and circle the voluntary sector bits, which could be viewed as coming second after equality duties or as being on a par with them as a route towards saving money. That is my big worry and why I said that the sector needs to be treated with care. The voluntary sector does not mean cheap services—it still means professional services and that people will be employed. However, there is a positive side. In the research that I have done on services such as advice and employability services, I have found that people who use those services are keen on, and in the main prefer, independent services. They may not always distinguish well between local authority and voluntary sector services, but in an employability setting they often distinguish between independent services and United Kingdom Government services such as Jobcentre Plus.
The research that I have done suggests that service users are likely to view voluntary sector provision as a plus. However, the sector must not be exploited, and proper recognition must be given to the added value that it brings to delivery of appropriate services—we should not seek to do things on the cheap or on the back of people working excessive hours. The disappearance of organisations such as One Plus indicates that, if the voluntary sector is to play a role, it must have more financial security than it has had until now. The sector cannot operate in a complete funding lottery—it cannot deliver essential services to large numbers of people when it does not know whether it will have money in March. In that situation, people spend more time on finances than on delivering services.
Does the opaque nature of procurement make it more likely that councils will run what I call reverse or Dutch auctions and buy services on a price basis? There are already indications that some local authorities are beginning to invite bids from a starting level. If organisations want to bid, they must bid below that level. Is there a danger that the voluntary sector will be scooped into that process and will be seen as the provider of choice on the basis of cost, rather than of the quality of the service?
I am a glass-half-empty person. The history of procurement processes in local authorities runs from compulsory competitive tendering through to the best-value framework. The aspirations of the best-value framework, which was set up by the Local Government in Scotland Act 2003, are fairly clear, but its implementation could be slightly ambiguous. In a tighter public sector funding environment, there is an emphasis on cost saving. It is important that scrutiny bodies such as the Equal Opportunities Committee, other committees of the Parliament and Audit Scotland are mindful of how decisions are taken and of the extent to which outcomes ensure quality and compliance with legislation. That is a slightly political answer, but there is a danger that the voluntary sector will be perceived as a cheap option.
Social economy models and public-social partnerships may be positive approaches for the voluntary sector to take. There are many interesting examples of approaches that work well. However, there is a tension in procurement processes between European legislation, Westminster legislation and Scottish legislation.
The issue of procurement is interesting, but it takes us away from our core questioning and into other areas.
Procurement is an interesting topic, and I am concerned about the semi-privatisation of services. We need only consider the evolution of Glasgow Housing Association, which took over public sector housing in Glasgow. However, that is an issue for another day, as we are short of time.
I turn to the issue of equal pay, which Angela O'Hagan mentioned. It was suggested that the committee should focus on one policy area. The gender pay gap is an issue on which we could concentrate, and I would like to explore it further.
I will start with a question for Muriel Robison. In the earlier session, Morag Alexander said that the latest figures indicate an increase in the gender pay gap. Angela O'Hagan also mentioned that. What is the progress to date on promoting equal pay in Scotland? There are costs in meeting our equal pay obligations. Do you have information on that to hand?
We talked earlier about the fact that the pay gap in Scotland has increased over the past couple of years. We do not really know why that has happened, except to say that there seems to have been an unexpected dip of 12 per cent—if dip is the right word to use. Perhaps the fact that the dip was 12 per cent was more unexpected than the fact that the figure is now sitting at 15 per cent, which is more akin to the figure for the UK. For part-time workers, we have a stubborn pay gap of 35 per cent. Clearly, although a number of measures, such as close the gap, have been taken to address the pay gap in Scotland, we have not done enough thus far to shift the gap as we might have liked.
We have a large public sector in Scotland. Local government, in particular, employs a great number of women. In terms of closing the pay gap—or moving towards a narrowing of the gap—local government must be a focus. Obviously, we know of the real issues for women workers in local government in terms of pay inequalities. Indeed, in the previous session of the Parliament, the Finance Committee investigated some of the concerns around pay inequalities and compensation for women workers in local government.
I understand that about £500 million has been paid out to address those past inequalities. Our real concern is that what concerned the previous Finance Committee has, in a sense, come to pass. Despite all the work that local government is doing, women are still not receiving equal pay. The Equal Opportunities Commission undertook an investigation into the role and status of classroom assistants. The EHRC is particularly concerned about the outcome of the job evaluations that local government is undertaking, which is that classroom assistants are seeing their pay go down and not up. That is contrary to our expectation and to the expectation of local government, which has paid out on what it sees as past inequalities in the expectation that the jobs that women do would rise up the occupational hierarchy.
I cannot answer the question on the costs of meeting the equal pay obligations. However, it is inevitable that there will be costs—at least indirect costs—in the many claims that individual women are pursuing in employment tribunals. As the previous witnesses touched on, we know that 20,000 women who are employed in local government are pursuing such claims, and it is inevitable that local authorities will incur costs as a result. Costs are also involved in the delay in achieving equal pay, in the continuation of the persistent pay gap, and in women not receiving their dues.
For example, there are women who are reaching retirement age whose final salary pension will not be based on a full or true value of the job that they have done. That will lead to women being in poverty in old age. Many women who are single parents are not receiving the true value of their contribution, which obviously has a knock-on effect on child poverty.
I cannot specify the direct costs, but there will be many indirect costs as the result of the failure to tackle the pay gap in Scotland. Local government has a real opportunity to tackle it, but we are concerned that the budget nowhere identifies how that significant spend is going to be addressed. That is one of the budget's failings—there is no recognition of the big spend that we anticipate.
Equal pay is a long-term issue, and we will have to address with ministers and cabinet secretaries the ways in which it can be taken up, because the local authorities, in trying to catch up on equal pay—which they failed to deliver over many years—are now having to cut back in other areas. That is what has led to situations such as classroom assistants' pay going down. It is women, in general, who are losing money because of the need to catch up on equal pay for other women. That seems a most ridiculous situation, and it will have to be addressed through central Government rather than through local authorities—whether that is the Westminster Government or the Scottish Government is an issue that will have to be sorted out. Do you agree?
Bill Wilson can come in, and then Muriel Robison can answer the two questions together.
My question is on an issue similar to that of the classroom assistants. Muriel Robison said that wages have dropped due to job evaluation—that presumably suggests that something is fundamentally wrong with the way in which we evaluate jobs. On the one hand we are paying compensation because we think that women's jobs—such as those of classroom assistants—are undervalued; on the other hand, we evaluate the jobs and contrive to come up with the opposite solution. How can we get things so wrong?
I agree that there is a fundamental problem. To answer both questions, there is a failure to carry out equality impact assessments. If local authorities could undertake full, proper equality impact assessments of their job evaluation schemes and the outcomes, the problems might be addressed at local government level without having to go through tribunals and so on—at least with regard to women being properly valued for their contribution. The way in which the job evaluation schemes are being implemented does not properly recognise the value of the contribution that women are making in relation to skills and the demands of their jobs.
That links back to the earlier discussion about women being worth less and their contribution being undervalued because of a failure to address historical disadvantage. At one time, it was not against the law to pay women less—how much jobs were worth was decided according to whether a man or a woman was doing it. We are not there any more. Jobs should be properly and objectively evaluated, and the fact that mothers—as in the case of classroom assistants—do them should not mean that they can be paid less.
I will bring Angela O'Hagan and Morag Gillespie into the equal pay discussion, on the question of the Government's overarching purpose of increasing sustainable economic growth. Will you comment on how gender-based pay inequalities impact on the pursuit of sustainable economic growth and add anything else that you want on the gender pay gap?
Just a small question, then.
Two minutes should do it.
I will defer to Morag Gillespie on this. Equality is not an inhibiting factor to economic efficiency. We must build an economy that—this phrase has been used many times this morning—allows everyone to contribute to their full potential. That must involve recognising the discriminatory forces that are at work in the labour market, in the training market and in how we construct regeneration and economic development policy. Those discriminatory forces lead to an occupational segregation that has characterised and classified Scotland as a low-wage economy and to a situation in which low-paid workers continue to subsidise company profits or public authority yield. We ask who pays for that, and the answer lies in the indirect costs to which Muriel Robison referred: child poverty, family poverty, poverty in old age and the maintenance of families on low incomes.
I am not making a party-political point—that is not my business. As someone who has worked in development agencies and other organisations that look at poverty in Scotland and the UK, I know that in recent years there has been a rise in in-work poverty and households of in-work parents have been becoming poorer. The purpose and focus of a Government economic strategy must surely be to build an economy that does not rely on perpetuating inequality based on gender discrimination and the pay gap, women having access to only parts of the labour market, and families bearing the cost of economic development.
My apologies—I had more to say on that than I thought.
Angela O'Hagan is right. My earlier point about women graduates going into jobs below their capability reinforces the fact that it is inefficient to have the occupational segregation that persists in the labour market. Discrimination and occupational segregation are positively not good for business. We are not using people's skills and we are not directing or helping people to choose the paths that are best suited to their interests, skills and abilities. From a very young age, people are being strongly directed and having their gender views reinforced on the routes that they should take.
My other comment relates to a point that Mary Senior made earlier about power relationships. That issue always concerns me. As money gets tighter in the public sector, the people who will feel the squeeze most are those at the bottom. With all due respect, it will not be senior civil servants and well-paid officials in local authorities. However gifted they are, they do not feel the squeeze—it is the people at the bottom who feel it.
I was trying to think through the squeeze in public funding, so I looked at the hourly rate of employees in the public sector. The figures are for the UK, but the situation is not very different in Scotland. For full-time men workers, the rate is £8.19 an hour. For full-time women workers, it is £7.49, which is an almost respectable gap, but for part-time women workers it is £5.91 an hour. That is not about the hours that they work but about their hourly rate of pay. To me, that highlights the fact that there is a problem for the future with the public sector squeeze. Particular groups will have to pay for that, and they will be in jobs such as classroom assistant, delivering child care or doing other care services that are the core functions of local government.
I am amazed that a national review of child care with the aim of improving retention, training and skills in the sector could have been carried out without covering pay and conditions. Do they not matter to women? Let us face it: 97 per cent of people who work in the child care sector are women. Do pay and conditions in child care not matter because the workers are women? I am gobsmacked that such a review was carried out. The people participating in the review made the same point—it is on the record in the Scottish Executive publication.
Some underlying assumptions go right through the institutions that are making decisions: the Scottish Parliament, the Scottish Government and local authorities. The people at the top are loaded with assumptions. If they were truly carrying out the equality impact assessments that Muriel Robison and Angela O'Hagan talked about, they would stop and think before the things that I have mentioned followed through and caused damage for people.
Muriel Robison might have answered the question that I was going to ask, which was whether the Parliament could somehow make it a rule that local government should undertake equality impact assessment before carrying out job evaluation. I think that the witnesses would agree that such an approach would be much fairer. We have just come from a meeting with local government workers who are being downgraded as a result of job evaluation. Would it be helpful if the Equal Opportunities Committee suggested that equality impact assessment should be carried out before evaluation?
It would be helpful, although there might already be obligations on local authorities to do that. Failure to follow through on public sector duties is a problem. There is an equality element in best value. Equality impact assessment is a central element and local authorities should be undertaking such assessment, to meet their equality obligations. A route might currently exist in that regard.
That brings us back to the fact that audit bodies do not focus on the fourth element of the best-value obligations. We might be able to do more, and I would not discourage the committee from pressing the issue.
Thank you. Sorry for raising that issue, convener.
Your comments were useful.
What positive measures should the Government take to promote equal pay across the public sector? What impact would such an approach have on pay in the private sector?
I talked about the need for greater awareness of and follow-through on current obligations and duties on local authorities and the public sector, such as the requirements to consider pay objectives in gender equality plans and to produce equal pay statements. If possible, we should ensure that local authorities are called to account, through Audit Scotland and other inspectorates, who should pay much more attention to ensuring that the public sector carries out its duties on equality—the audit bodies are also under an obligation to ensure that equality is mainstreamed into their work. In the first instance, we must ensure that the public sector follows through on its obligations. That would be a positive way forward.
On the pay gap, sorting out equal pay in the public sector will have an inevitable, positive knock-on effect on the private sector. Calum Guthrie mentioned CCT. Moves to the private or the voluntary sector are often about cost savings, but if we can set the right example in the public sector in relation to setting pay, we hope that women will not be undervalued in either the private or the public sector.
It is important to show the positive economic effects of such an approach. That is the way forward. We heard evidence this morning that the private sector is picking up on the issue, which was emphasised at the conference that I attended.
Our focus is the scrutiny of the Government's spending plans. Will Muriel Robison or Angela O'Hagan comment on the role of the audit process in holding government to account in meeting its statutory duties to deliver on equality? It is all very nice to say that government should deliver on equality, but can the audit process force it to do so?
It certainly has a role. The EHRC is concerned—as its predecessor commissions were—that the inspectorate bodies are not paying as much attention to equality issues as they ought to be. For example, local government has paid out £500 million in equal pay compensation, but none of the inspectorate bodies picked that up at all. It was completely unplanned expenditure, but it ought to have been addressed a long time ago.
I had not realised how much my earlier comments had pre-empted the question, so I am not sure that I have much more to say.
On compulsion, the best-value regime and the Local Government in Scotland Act 2003 already require equality to be taken into account and require equality impact assessments to be conducted. The public sector duties not only require to be complied with to the letter of the law but, as Morag Alexander said, present a tremendous opportunity to refocus how we approach equality. The duty to promote equality understands equality in all the ways that Morag and other colleagues have talked about: quality of service, services being appropriately accessible to all members of the community and people being treated with value and respect at their employment.
There is a clear role for the audit and inspection function under existing legislation. In the round-table discussion, the committee asked whether there was a need for additional legislation. There is already a significant body of legislation that would be powerful were it to be used. It is available to the committee and other bodies in their scrutiny.
I will say something on scrutiny as opposed to audit. There is a clear role for this committee and other parliamentary committees in holding to account the audit bodies, which are accountable to the Parliament. I come back to the earlier comments on recommendations from EPBPAG and the previous Finance Committee about taking a portfolio target-based approach to scrutiny and following through the spending plans. The Scottish women's budget group would certainly encourage the committee to consider doing that. As an organisation, albeit completely unpaid—that reflects what we are talking about; I am an unpaid member of the Scottish women's budget group, as are all its members—we certainly hope to do it with the appropriate Government ministers and portfolio officials. However, I also hope to do it with my EPBPAG hat on.
Perhaps, rather than accepting that the statutory duties have been complied with and that equality impact assessments have been undertaken, we need to dig a little bit deeper to find out what they consist of and whether they deliver where the resources go.
I have a quick point about scrutiny. It is important to use voluntary sector organisations, given that they have direct experience of issues in local communities and the multiple components of those issues. I am sure that there are many organisations that would be keen to speak to you formally and informally if they are not already doing so.
That point is well made and we will take it on board.
I thank all the members of the panel for attending. That has been a thorough examination of the budget and will help us when we question the minister about it.
Meeting closed at 13:23.