Enterprise and Lifelong Learning Committee, 29 Sep 2000

Meeting date: Friday, September 29, 2000

Official Report 215KB pdf

---

Scottish Qualifications Authority

Good morning, ladies and gentlemen. I welcome you all to the 22nd meeting this year of the Enterprise and Lifelong Learning Committee. We are in mid-flow, as Mr Swinney has gone on to other things—that is why I am convening this meeting.

On behalf of the committee, I welcome everyone who is here today. We have apologies from Nick Johnston, George Lyon and Elaine Thomson. I extend a welcome to Cathy Peattie, who is attending our inquiry meetings as the reporter from the Education, Culture and Sport Committee, and to Mike Russell, who is also attending as a member of that committee.

As everyone is aware, the purpose of this meeting is to continue our inquiry into governance of the Scottish Qualifications Authority. Everyone has a copy of the remit. At the risk of being tedious, I have been reminding members and witnesses that our remit is focused. We are principally concerned with issues or factors that may affect governance.

I have one small housekeeping point, which arises from the discussion at our previous meeting about the availability of papers and whether the committee would or should seek papers that might fall within the Executive code of conduct. It was the decision of the committee that I should approach the convener of the Education, Culture and Sport Committee to discuss the matter, which I did. We agreed that if, at the end of our respective inquiries, we considered that there had been omissions in the evidence that we had received—and it would be for this committee to decide whether there had been such omissions—it would be for us to make whatever requests we considered necessary to address that omission and to seek whatever further evidence we thought appropriate. Mrs Mulligan proposes to proceed in the same way on behalf of the Education, Culture and Sport Committee.

Another preliminary matter has emerged this morning, which I would like to raise before we examine today's evidence. On 20 September, when we took evidence from civil servants of the enterprise and lifelong learning department, one of the questions that was put to them concerned the extent to which the consultants, Deloitte & Touche, who are carrying out a separate inquiry into the exams fiasco, were to have access to all documents. The civil servants said that they would return to answer that question when they had given it some thought.

This morning I received a letter from Mr Aitken, addressed to the clerk of this committee. I am not complaining about the arrival of that letter this morning but, because not all members have seen it, I shall briefly read the relevant extract that records the civil servants' response on the access that the consultants will have to official documents—including advice to civil servants. The Executive's response is as follows:

"The Scottish Executive contract under which Deloitte and Touche have been appointed states that:

11.1 The Consultant undertakes to abide by and procure that his employees abide by the provisions of The Official Secrets Acts 1911 to 1989.

11.2 The Consultant shall keep secret and not disclose, and shall procure that his employees keep secret and do not disclose, any information of a confidential nature obtained by him by reason of this Contract except information which is in the public domain otherwise than by reason of a breach of this provision."

Can I raise a point, convener?

I have almost concluded. There is only one more, short paragraph.

Other members are at a disadvantage.

Does the deputy convener have a copy of the letter?

The letter should have been in everyone's mailbox this morning.

It was not in my mailbox.

It was certainly not in mine.

It is the information that we requested of the members of the Executive department who appeared before the committee, which had not arrived in time for the previous meeting. All members received electronic versions of it some days ago. I do not know whether hard copies have been made available yet.

The letter from which Mr Ewing is quoting is from Mr Aitken.

Mr Aitken was one of the three civil servants who appeared as witnesses before this committee. The letter is addressed to the clerk of the committee and is dated 26 September, although I received it this morning. Perhaps I should have been reading my e-mail more assiduously. I received this letter in the mail.

You received a hard copy of it this morning.

Yes.

The rest of us did not.

Although the letter has been in the routine dispatch and Mr Ewing has received it, other members may not have received it. The clerk is now arranging for copies of the letter to be brought to us. It should be in the domain of all committee members. I invite Mr Ewing to continue quoting the extract from the letter.

The last relevant section of the letter states:

"Under the terms of this contract"—

that is, the contract between the Scottish Executive and Deloitte & Touche, which is conducting the inquiry—

"Deloitte and Touche will carry out their inquiry and provide a report to Scottish Ministers based on access to all relevant official papers, but their final report will not make public any material which is covered by Part II of the Code of Practice on Access to Scottish Executive Information."

I raise the matter for two reasons. First, it is a clear statement that, for the purposes of the inquiry, Deloitte & Touche—business consultants from the private sector—will have more access than elected members of the Parliament. That is extraordinary. Secondly, it suggests that the report, which Mr Galbraith said would be made public, will not be made public in its entirety. Those parts of the report that relate to part II of the "Code of Practice on Access to Scottish Executive Information" will not be made public. That is a matter of grave concern. I thought it important to raise this matter today. I would be interested to hear the views of other members.

Thank you for raising the matter, Mr Ewing. I agree that it is relevant to the issues that the committee is considering. Do members have any comments?

It is clear that the issue is relevant to our inquiry. However, I would like to read the letter before I comment on it; I did not receive a copy this morning.

I am not sure whether the matter is directly relevant to the remit of our inquiry. However, like my colleague, I am always reluctant to comment on documentation that I have not read and had an opportunity to absorb. I would like to take time to study the communication before giving a considered opinion on it.

Having heard those parts of the letter that Mr Ewing has just read, I think that the issues that are raised are more properly a matter for the Parliament. I understood that the gist of the discussions between the conveners of the two committees on the on-going inquiry was that some issues need to be resolved more generally by Parliament, rather than in specific terms relating to the inquiries—albeit that those issues are thrown up in the inquiries. I tend to the view that issues about access to what is considered to be confidential information—governed by codes of practice—is a matter for Parliament.

I agree with Allan Wilson. I have read the letter and I, too, was surprised at the paragraph that talks about information being available to the consultants but not to the committee. The matter is perhaps more relevant to the Education, Culture and Sport Committee, given the level of our inquiry. However, we have not yet discussed the matter at that committee.

Mr Ewing's point is important and I am grateful to him for raising it. However, most of us are at a practical disadvantage, either having not received the letter or not having had time to read it in detail. Clerks are distributing copies, so I propose that we defer consideration of the matter until after the evidence.

Would it be possible for the clerk to copy the letter to the Education, Culture and Sport Committee? Although the deputy convener has seen the letter, I do not think that other members have received a copy. On three occasions on Wednesday we were refused information on the ground that it could not be provided under part II of the "Code of Practice on Access to Scottish Executive Information". It would be a matter of major concern if such information were to be made available to consultants and denied to the committee.

I realise that aspects of the issue raised by Mr Ewing will be of significance to the Education, Culture and Sport Committee. Our clerk, Mr Watkins, tells me that all documentation that we have received has been copied to the Education, Culture and Sport Committee. I imagine that members of that committee will receive a copy of the letter very shortly. I suggest that members read the letter during the morning and that we revisit the issue after we have finished taking evidence. Is that agreed?

Members indicated agreement.

In the light of the fact that we have several witnesses who are waiting patiently to give evidence, I think that we should proceed.

Without further ado, I would like to proceed with our agenda. I welcome from the Association of Scottish Colleges Mr Iain Ovens and Mr Tom Kelly. I think that I am correct in saying that this is the first time that we have had the pleasure of your appearing before the committee. We are very pleased to have you with us this morning. The reason for your attendance may be more sombre than we would like, but none the less I am sure that the committee will find your presence of great benefit. Thank you for your submission on the governance of the Scottish Qualifications Authority. I ask you briefly, either individually or jointly, to make a few introductory remarks. However, the main purpose of this session is to enable members to ask questions and to take evidence within the remit of our inquiry.

We have agreed that I will introduce our evidence. I am Tom Kelly, the chief officer of the Association of Scottish Colleges. My colleague Iain Ovens is principal of Dundee College, a director of ASC and chairman of our education and training advisory group.

We are keen to emphasise to the committee the extent to which the further education sector is both a major stakeholder in the services and a contributor to the work and governance of the SQA. That has tended to be overlooked, and we were a little worried that we might slip between the remits of the two committees that are conducting inquiries. The Education, Culture and Sport Committee is focusing specifically on school exam results and this committee is focusing on the governance of the SQA. It was not made explicit that either committee would consider issues that impact on FE students, which are our key concern.

The certification problems this year are undoubtedly a huge setback for students, after all the work that they put into their studies; for staff, after the effort that they put into preparation of the new units and courses that go under the rather inelegant title of higher still; and, of course, for the SQA. We hope that the recommendations that the committee makes will ensure that nothing similar happens in future and that we can move forward with greater confidence to create the Scottish credit and qualifications framework and other services that we are seeking, such as all-year-round assessment.

We said in our submission that we were starting to examine ways in which we could improve our relationship with the SQA. We do not see governance in the narrow sense as the target area. We are most concerned about engagement on operational matters—how the certification process works—and the strategic aspects of our partnership with the SQA. The SQA is a highly interactive organisation. It has meetings and exchanges with its various partners at different levels and at all times of the year. We are looking for improvements in certain areas. We would be happy to enlarge on that during the meeting.

That was very helpful, Mr Kelly. I will commence proceedings with one or two general questions. In the "Review and Recovery" section of your paper, you produce a diagnosis—which is very brave—in which you mention three specific topics. Those are set out in paragraphs 7a, 7b and 7c. Given what you have just said, do you feel that the association had adequate liaison with the SQA over the past year or earlier? Did the association perhaps not have quite the proximity to the SQA that it would want?

That question must be answered both positively and negatively. On the positive side, the SQA has worked hard to improve communications and dialogue with our sector. We had regular meetings with the chief executive of the SQA and there were seminars at which principals of all the colleges could discuss on-going business with the authority.

An FE focus group on assessment was also set up; the minutes of its meetings are published on the SQA website. The group considered the operational aspects of the certification process. We were concerned because it was clear that there were problems with the process, which were not drawn to a head in a way that would enable the SQA and us as a key partner to focus on how to solve them. Improvements need to be made in that area. I will be a little more specific, but the issues become detailed if we go too far down the rabbit hole. At a general level, the problem was that, until December, colleges could not interchange information with the SQA through the method that should have been usable when the awards processing system, known as APS, came into play.

Why?

Because APS was still being designed when it was introduced. The SQA decided that APS had to start on 1 January 2000 because of year 2000 software issues, which the committee will remember. That meant taking down the old systems that the exam board and the Scottish Vocational Education Council used to run separately.

From that point, we had to operate in an improvisatory mode, because the essential elements of APS were not in place. The SQA and the colleges made huge efforts to manage in spite of the difficulties. For example, we received the first vocational certificates from the SQA as early as February, but they were produced under improvised arrangements rather than by what we would regard as the normal process. We are now engaged in a major data reconciliation exercise to ensure that the data that the SQA holds for higher national certificates, Scottish vocational qualifications and stand-alone units fully match all the inputs and the data held by colleges.

That is helpful. I have one brief question before I open up questioning to the committee. Does the association feel that the board of management's mechanism of governance is properly balanced, or does it feel that representation on the board could be broadened?

Our feeling is that our representation on the board of management is satisfactory. We have two principals on the board.

Thank you. I am happy now to throw the meeting open to further questions.

In relation to Mr Kelly's first comment, I should say that I raised the matter of the impact on further and higher education colleges. We agreed that we would first examine governance but that we would consider the impact once the initial inquiry had been conducted. We will certainly examine the impact on further and higher education colleges. We want to keep a watching brief on what is happening. I assure Mr Kelly that the committee will take on that responsibility.

I have three questions. First, is the impact on colleges the same as it was at the beginning? I know that student recruitment at many colleges was heavily down. Are there differences among colleges? For example, is the impact greater on colleges with a higher percentage of HNC and higher national diploma students?

The problem for colleges is that they start earlier than universities. That fact is often overlooked. However, colleges are much more used to handling what one might regard as non-standard entry, where the object of the exercise is to find the right course for the student's level of attainment, rather than to set a threshold that the student must reach to gain a place. We aim to work with students to find the course that is best for them.

There have been difficulties with recruitment this year, because people who were relying on higher still qualifications for progression in college or a place in college for the first time were inhibited. We are trying to get a better picture of how recruitment has gone—it seems to vary. Marilyn Livingstone described cases where recruitment has been poor. Such instances exist, but recruitment has gone rather better in other cases. It is difficult to pick out the picture at the moment. The Scottish Executive has given us some reassurance that the funding council will be flexible in its funding arrangements to colleges to take account of this year's unexpected variations in recruitment. The association will pursue that.

My second question is about future requirements. You have talked a lot about flexibility of certification and all-round certification. Do you think that the SQA and the new awards processing system will be able to deal with that? For the whole lifelong learning agenda to succeed will depend on flexible entry and exit, as you have said. Will there be continuing problems?

I will deal with the technical aspects of that and ask Iain Ovens to deal with the educational aspects. We hope that the online facility—which is known as the SQA net—will be available soon. It was due to be available in June. We are working hard and we acknowledge the effort that the SQA is making to get that facility available quickly. The facility will make the business of matching candidate data much easier; it will make the rectification of errors almost instantaneous and it will remove the problem of having to convert large printed SQA reports into electronic format. Getting the facility is important; it is one immediate step that we hope to take.

There is a real concern that we will lose some of the development projects that were under way in the SQA, which were terribly important for the further education student population. We require year-round assessment of candidates for programmes of a variety of lengths. In the long term, Scotland could take a lead—because we have a single awarding body—in creating some kind of electronic assessment system that would enable centralised assessment. A project is under way at the moment and the SQA had a commitment to it. In the long run, we are keen that that should help to avert many of the difficulties that we encounter at the moment.

I must emphasise the amount of work that will have to be done to deal with many of the technical assessment difficulties that will arise—in particular, difficulties connected with e-learning and distance learning. We have to be able to reassure candidates and everyone else that we have the right standards in place. A close partnership between the FE sector and the SQA will be required to work through the technical difficulties. For example, how can we ensure that a student's work is his or her own if it has been done at home or at a distance?

My final question is on governance. You have talked about a clearer role for the FE sector. Would you like to expand on that?

Much of the engagement of the SQA with its partners tends to focus on the development of qualifications. There is a huge input into that—very few people in the FE sector do not contribute in some way to the development of the new awards and qualifications that the SQA offers. There is a danger that the emphasis on that side of the business draws attention away from the normal, but key, business of certification. At the moment, we do not have a strategic level of engagement with the SQA to discuss how the certification process is going. I am not suggesting that we could easily have overcome the difficulties that emerged because such big changes took place in one year; it was not only APS, but higher still and the merger of the—

I am sorry to interrupt, Mr Kelly, but I would like to be clear about this. Are you saying that you think your association might have had a constructive role in helping the SQA to focus during what was—by general acknowledgement—a very difficult year for the SQA in terms of volume of work?

Absolutely.

It might have been a question of seeing the wood from the trees.

Yes. There were a lot of warning signs from our systems people that they were not able to work with APS and that there was not, at that stage, a forum where we could sit down, consider the problems and ask what the SQA and the colleges could do to crack them.

There are two consequences of that. One is a question of resourcing. The difficulty is that, when the information systems people are at full stretch, inviting them to do additional work solves no problems. Was there an opportunity to have brought in additional resources? That issue would have had to have been addressed early for there to be any prospect of success. We felt that there was no mechanism to do that.

We are obviously concerned about the impact on the further and higher education sector. When you have a clearer picture of what happened, will you give the committee a written update?

We would be happy to do that, but we would need to co-operate with the SQA on it. When we have finished the matching exercise, we should know how certification for exams other than higher still has gone and we should be able to give the committee some numbers. At the moment, we are in the middle of a catch-up exercise and therefore cannot give definite numbers.

I am aware that such information is not available at the moment. Bearing in mind your first point, it would be helpful to the committee if we were kept up to date with progress.

There could be no disagreement with that, Mrs Livingstone. However, I do not think that that would be germane to our inquiry. It might be helpful, of course.

Mr Ovens, do you think that the focus groups that were established are adequate to achieve the liaison that you clearly consider is necessary, or have you something more formal in mind?

The focus group on assessment that we established was a powerful vehicle and a good model for our future direction. It consisted of representatives from a broad cross-section of colleges to ensure that we had a good picture from throughout the country, but it also involved people from a variety of levels in those colleges. The group included senior managers who have strategic perspectives and people who deal operationally with the SQA. That led to a great deal of good information coming forward that could have been used. The model should be extended to build a clear operational partnership between the SQA and the further education sector and could be used in a variety of different areas of work.

A mechanism is required to link the work of those groups at strategic level. Because that link does not exist, the SQA board did not receive directly information that was derived from the work of the focus group. We believe that the focus group was a wonderful model that took us toward the full and interactive partnership on which the sector and the SQA would thrive.

Would you like there to be a sort of beefed-up focus group?

I would like to see one that was either beefed up or expanded into other areas.

That is helpful.

Why was the information from the focus group not passed on immediately to the SQA board?

I should explain that the focus group was set up as a result of discussions between the further education sector, the ASC and the SQA. Concerns were expressed about how well developments were going and about problems that we could work on together. Information was circulated around colleges and on the web. I am not sure where the information went in the SQA board, but I should clarify that the focus group was not set up specifically to report to the board.

You said that the focus group results were not given to the SQA board. Perhaps you can clarify that later.

Paragraph 12 of your written submission says that you will tell us this morning ways in which the SQA could be improved. Do you think that the SQA should be preserved or should a different model of governance be investigated, such as the SQA becoming part of the civil service or becoming an agency?

There are two aspects to that. At times, it was not clear to us whose hand was on the tiller. In our view, the tiller should be the hand of the SQA—the SQA offers the awards and certificates and its job is to see that those are delivered. It failed to do that in one key respect this year. The SQA accepts that that must never happen again, but we must be clearer about the steps that could have been taken in the SQA to avoid that situation.

We are not considering a different model—such as the SQA becoming part of the civil service—because a key part of the business of further education is our commitment to the awards and certificates of the SQA. There are alternatives for some aspects of provision, such as City and Guilds qualifications, and we can look outwith Scotland for certification for certain professions and specialisms. However, if we want to move towards an integrated Scottish credit and qualifications framework that embraces everything from the most basic qualifications to postgraduate level, we need a body such as the SQA. We want an open relationship that is based on partnership. The FE focus group provided the right framework, but that was not followed through. That was the problem and that is the issue that we want to pursue with the SQA.

We have two proposals for the SQA. First, the SQA should set out explicit operational principles. The convener referred to the questions that were raised in paragraph 7 of our submission. It should not be possible for certificates that are based on incomplete evidence to be sent out. We need the right operational principles to ensure that that cannot happen. Secondly, if members read the minutes of the meeting in February of the focus group, it is clear that many of the issues about the performance of the SQA that we are debating were raised then. The question is: why were those issues not followed through?

That is the strategic level of engagement that we seek to establish with the SQA.

I agree that it should not be possible for exam certificates to be sent out with the wrong information. However, this year we have seen that not only was that possible, but that it happened—and in spades. It is surprising that you cannot envisage a partnership with civil servants. What is wrong with civil servants?

For the ASC, certification is an on-going business. Any change in structure is bound to involve a disruption of that business. There was a major failure and we would be the last people to minimise the adverse impact that it had on students and everyone else who worked so hard. However, the failure focused on a narrow area: the certification process and operational matters. That is fixable. It is clear that it should have been prevented, but the problem can be fixed. That is what we are concentrating our efforts on.

We all hope and pray that the problem is fixable—I suspect that such will be the case.

Mr Ewing, in fairness to Mr Kelly, we should acknowledge that the Association of Scottish Colleges does not have an operational responsibility for the SQA.

I am not suggesting that it does. However, I would like to ask one more question about the governance of the SQA.

The written submissions, particularly that from the Committee of Scottish Higher Education Principals, give a detailed picture of the problems that will be faced by colleges and universities this year. Those problems might have serious financial implications that have not yet been reported.

I am a layman who is attempting to understand the complexity of the governance of tertiary education in Scotland. The players include the SQA, COSHEP, two different departments of the Scottish Executive and various other groups such as the ASC, not to mention the schools and the colleges. There are so many players and—even if we correct the error this year—the problems of communication are so obvious and manifest in this admittedly complex area—

I am sorry, Mr Ewing, but I think that we are getting pretty wide of the target. If you examine our inquiry remit, you will see that our sole responsibility is the governance of SQA. While there might be a fascinating broader debate to be had about the governance of tertiary education in Scotland, I would like you to focus your question, which I accept may be entirely relevant to the governance of the SQA.

I was one sentence away from focusing that question.

I trust that I have helped you reach a swift conclusion.

I can see you performing the role of Presiding Officer in the Parliament one day, convener.

My question is quite simple. Are not all the players in the tertiary education marketplace in Scotland a bit like feudal barons? They do not talk to one another properly—they do not communicate. Failure will continue to be a possibility unless there is significant change.

I will make two points in response to that question.

There was an element of dual control over what the SQA was trying to do this year. Iain Ovens may be able to say more about that, as he was involved in what the SQA was doing and in what the higher still implementation machinery was doing. We always felt that such dual control was undesirable. We wanted a clean and clear handover of responsibility for certification to the SQA, but that was not accomplished in the way that we thought would be most desirable. That is a practical issue.

I understand Fergus Ewing's point about governance, but our sector is used to working with complexity. We network with every other sector; people who come into further education always have a history outside FE and a future that might be beyond it. We must work with everyone else, and we accept that responsibility.

However, when one deals with operational matters, one should distinguish between stakeholders—who have an interest in, but no practical contribution to make to the work—and those who have a contribution to make. One of the dangers of the present SQA set-up is that it deals with stakeholders who might not have that interest in some aspects of the SQA's work.

We would like a distinction to be drawn between those who have a stake in the SQA's development work and the main contributors to its operational tasks, of which there are but few. There is capacity to simplify those relationships and to engage more strategically with those key partners.

How?

It could be done by working in small groups. An example of the difficulties is the meetings of the old Scottish Examination Board, at which it was par for the course for there to be 30 or 40 people in a room. There is probably no need for more than half a dozen people at a meeting to consider problems such as what is going wrong with the awards processing system, but they must be the right people.

I will stick to the issue of governance and to the wider accountability and responsibility that was mentioned.

The convener referred to your written evidence on review and recovery, in paragraphs 7a, 7b and 7c of your submission. It seems to me that paragraphs 7a and 7b are markers for the Education, Culture and Sport Committee's inquiry and I would argue that issues of governance are attached to paragraph 7c, to which you referred.

You hinted broadly that focus groups had prior warning that problems were afoot, but that that warning did not filter through. However, you made the point that you are contributors to and customers of the SQA. In paragraph 3, you say that the FE sector makes

"Appointments to SQA's Board of Directors and its main committees".

How are those appointments made? To whom are those people responsible? How are they accountable? How do they report back to the wider FE sector? Is there any exchange of information at director or board level that could make such problems avoidable in future? It seems to me that those questions relate to issues of governance and to the future relationship between the FE sector and the SQA and whatever comes out of the committee's inquiry.

The wording of paragraph 3 might suggest that we nominate directors to the SQA board, but that is certainly not the case. The First Minister makes the appointments and, like any other organisation, we are entitled to make suggestions. The members of the main committees are selected by the SQA itself and the board often takes advice from committee members about who would be most helpful to committees' work.

On governance, there must be a distinction between those who contribute on the SQA's area of responsibility and those who speak to the SQA for another area of responsibility. That seems to be the current deficiency. We could investigate the certification process using a small strategic group that would include the ASC, the Convention of Scottish Local Authorities, the Association of Directors of Education in Scotland to represent schools and perhaps the Universities and Colleges Admissions Service, which is one of the major users of certification. Perhaps only six people would be needed for such an engagement. Such a group would have first alerted others to the prospect of some certificates being incomplete and would have advised them on that.

We were not told that there was a risk that higher still qualifications would go out—albeit to a very small number of candidates—based on incomplete evidence. We were not told that there would be a delay in the normal certification process, which should have happened in August for other qualifications such as higher national and Scottish vocational qualifications. At the moment, we are trying to work our way through that process.

Although I understand that and sympathise greatly, the SQA's board of management and chief executive have given the committee evidence that they were not told of the impending problems. I am anxious to establish what alternative forms of governance in the FE sector would ensure a free flow of information to those who would be affected directly by any future problems. Although the FE sector has representatives on the SQA board, those representatives have told us that they knew nothing about what was going on. How do you propose to get round that in future governance to ensure that problems are flagged up well in advance—before they affect the outcome of the certification process? Might your proposed ad hoc group have a role?

It is a question of turning the ad hoc group into something that has a place in the structure.

You have raised important points about lifelong learning and the year-long certification process. At what point would the ad hoc group become involved in that process?

It is important that groups involve operational people who have daily involvement in the issues with which the groups deal. We must find a mechanism to ensure that we do not lose such expertise and intelligence about what happens in colleges. It is a question of putting a structure in place—I hope that I am not repeating myself in making that point, but I want to answer Mr Wilson's question.

Three other members want to ask questions. However, I am mindful that Professor Stringer and Mr McAlpine are waiting. Members should keep their questions to Mr Kelly and Mr Ovens as focused as possible. We will try to make swifter progress.

I will try to make my two questions as concise as possible. First, it is clear that this year's disasters have thrown up a number of issues about relationships between the FE sector and the SQA. Was this the first year that the SQA had problems with that relationship or the transparency of the organisation? Would signs in the past have pointed to a possible difficulty, had they been interpreted properly?

My second question relates to evidence that was submitted by the former chief executive of the SQA. Ultimately, the problem that broke the camel's back was data management. Although I appreciate what you said about the APS—indeed, the principal of Dumfries and Galloway College told me that he identified problems with the APS some time ago—the crisis seems to have stemmed from a problem with paper management. Were your members in a position to pick up on that problem? Furthermore, had the structures been different, would you have been able to advise that paper management might have been a problem?

I will be frank for a moment.

I hope that you will always be frank, Mr Kelly.

The FE sector has always lived with difficulties, but has found ways of coping with them. I suppose that we have accepted that life is never easy. However, we did not realise how difficult it would become this year.

We must acknowledge that we were told by some of our specialists that there were serious problems with data transmission and verification. We could not get to the heart of the cause of those problems, nor could we find a means of solving them quickly. That is a matter of huge regret. If we had held a crunch meeting in February or March—which might have been possible, given the early warning signs—the necessary work could have been done.

People would have had to stand back and say, "The emperor has no clothes—this ain't going to work." Unfortunately, everybody was so involved in making it appear as if the emperor had clothes that they forgot to offer the observation that perhaps he did not. When one deals with operational matters such as that, there is so much engagement and conviction to make something work that one must be prepared to stand back and ask hard questions. We want a mechanism that would not only make that possible, but make it a necessary function.

That point has come across clearly.

I will make two basic points. First, if the ad hoc committee that represents various different interests becomes the essential communications bridge, what will it displace, given that there are so many other bridges?

Secondly, from your perspective, will the problems never happen again?

I remind the committee that we are not interviewing the SQA. We are benefiting from the courtesy of representatives of the Association of Scottish Colleges. The witnesses are expected to answer only within the limits of their knowledge and competence.

The question of what would be displaced if we had a formal arrangement that incorporated a focus group of experts must be placed in the context of the huge amount of work that is done by people in colleges to develop certification, subjects, assessment and so on. The arrangement that I suggest would be a better focus of that effort. Rather than displacing existing provision, it would give more weight to the work that is already done.

I have an answer to the question whether the problems with the SQA will happen again. If the right operational principles had been in place, there would have been the right safeguards. We could have known that things were not right and that they could not be corrected in time.

By the "right operational principles", do you mean the sort of mechanism that you have described this morning?

Yes.

I realise that we have only one strand of the lines of communication here, but I am interested in the ASC's view, because communication appears to be the nub of the problem. Colleges knew as far back as last September that there would be difficulties—is that right?

Yes.

When and how were those concerns communicated? There were, supposedly, lines of communication between the colleges and the SQA. What will change so that such a situation does not recur?

Mr Kelly might have covered that question at the start of the meeting when he indicated that there had been contact with the SQA, but that he was concerned about the level at which communication was taking place.

It was a continuous engagement. As I said, our context is that change and difficulty are treated as the norm, but an abnormal difficulty was not identified and rectified early enough.

The current year will be difficult. It will not go entirely smoothly, but we expect that all difficulties will be surmountable and that the normal process of certification will work well. We are much more confident that the process can be made to work, partly because we have the experience and partly because of the specific fixes that have been put in place to deal with what went wrong last year. That is part of the learning process.

I take it that Margo MacDonald's question was: if the SQA board did not pick this up, why not? My answer is that the certification process is not the sole territory or business of the SQA. It relies upon input, data management and communication with the presenting centres, of which the colleges and the schools are the two largest sets. There was a failure to consider things such as the introduction of the awards processing system in the wider context. It was considered to be an SQA process, not as a wider process that should involve presenting centres as its working partners. That is the problem that we believe can be fixed.

You say that the SQA is a highly interactive organisation. Do you mean interactive in the sense that people were considering new developments? You have highlighted the frustration that came about because the SQA did not listen to people's fears.

How the work is resourced is relevant. Until I read Ron Tuck's evidence—I am not sure to which committee he gave it—I was unaware that the SQA had decided to fund the APS from its own resources. Had I known that, our organisation would probably have asked whether that was wise. That was a major undertaking and we would have asked the SQA whether it should have looked for special or additional funding for that purpose.

Am I right in assuming that the SQA is keen to be involved in new developments, but that sometimes some of the core work that it exists to do gets lost because of that?

That is a danger. We are moving towards a review of higher national qualifications and we have made it clear that we are not willing to proceed with major changes of curriculum and certification without piloting and proving the systems first. That means that there must be an extended timetable. We must consider whether the diversion of effort to new development is likely to impede normal business. We will then have an opportunity to address the issue.

You talk about formalising an ad hoc group and about a clearer partnership. Do you mean that there should be a better structure within the SQA, which would enhance its governance but ensure that it has better communication links with organisations such as your own? That would give the ASC a better opportunity to sort things out if they went wrong.

Our particular concern is the interface with colleges as presenting centres. It seems fairly obvious that when the reviews of what went wrong are completed, the SQA will need to put in place internal arrangements to ensure that the certification process is more closely monitored and that action is taken sooner. We take that as read, to be frank, and we hope that the committee's recommendations will contribute to ensuring that that happens.

To supplement that answer, in relation to governance and strategic planning it is important that the further education sector is accorded the role that it requires and deserves and that that is fully represented in future.

Do you want a full place at the table?

Yes.

I thank Mr Kelly and Mr Ovens.

I have a brief question—

Mr Ewing, I am seriously worried about time. I allowed you a much more extensive interrogation period than I allowed other members.

I have one brief question—we do have all day, do we not?

If, as you have indicated to Margo MacDonald, you were aware of data transmission problems last September, did you convey those concerns directly to the Executive? If you did not, is not it the case that there are at least seven people on the board of the SQA who have a direct involvement in tertiary education and who presumably would have conveyed those concerns to the SQA board?

Yes, representatives of our sector on the SQA board raised the issue last year and yes, we made the Scottish Executive aware that we had concerns about the introduction and preparation of the APS.

When? Last September?

I would not say that it was as early as September, but certainly last autumn, before the change was made. Further warning signs were given. We must be fair about this. What I was acknowledging earlier is that we did not see that there was a risk that the system would fail; we saw a risk that making the system succeed was costing a huge effort for which we had previously been unprepared.

Thank you, Mr Kelly.

I want now to move to our representatives from the Committee of Scottish Higher Education Principals. Professor Joan Stringer is vice-convener of COSHEP and Robin McAlpine is its public affairs officer. They might care to make a few introductory remarks.

In view of the time, I will try to limit what I say. Members will have received our written evidence, which provides a fairly comprehensive account of the problems that were experienced by higher education institutions. It raises some of the implications and impact, some of which will be on-going. We have yet to assess what the full impact of the problems this summer is likely to be.

Unlike the ASC, COSHEP and universities and higher education institutions are not directly involved with the SQA. In a sense, the SQA should be invisible to us until we receive the outcome of students' assessments from the Universities and Colleges Admissions Service, which are provided by the SQA. To that extent, the SQA is extremely important. Potential students as well as universities and HEIs are dependent on the system working appropriately. Clearly, it did not work appropriately this summer.

As it says in the evidence, COSHEP became aware that there was a problem, the significance of which became increasingly evident over a period of about a week or two. We were not aware that there was a significant problem until the week beginning 7 August. As soon as we became aware of the problem, our early concerns were to assess the extent of the problem and the likely impact on prospective students and institutions, to give institutions as much information as possible and to provide whatever reassurances we could to prospective students that they would not be disadvantaged by the problem—we felt that that was terribly important.

Having got through most of that, our priority now is to ensure that the lessons are learned, that the right issues are addressed and that processes are put in place so that the SQA can do the task with which it is charged. We all must trust other agencies to play the role that they are given within the system, whatever that may be. We need to be reassured that we can have that trust again. That will probably mean establishing a system and set of structures that are transparent, on which we can depend for their validity, accuracy and so on.

Thank you, Professor Stringer. I thank you also on behalf of the committee for COSHEP's submission, which was extremely helpful. We all acknowledge that in relation to governance of the SQA there was a limited area of engagement by COSHEP; none the less, we felt that all the segments of the orange would not be here unless COSHEP was represented.

In regard to what you said on the need for transparency, I was interested in your view that, for COSHEP's purposes, the SQA almost ought to be invisible. What you ought to get is the delivery of reliable results when you expect to get them. On transparency, do you feel that the governance of the SQA is inadequate?

I find that difficult to answer, because we are not directly involved with the SQA, although some institutions that have higher national certificates have a closer involvement, so there is variation across the sector. As far as I understand it, the SQA was set up as a non-departmental public body, and should function in the way in which NDPBs function, which is at arm's length but with proper accountability, ultimately to the minister. It seems to me that in this case that did not operate as effectively as it might have done, but I would just be speculating on the reasons for that, and it would be wrong for me to do so.

That leads to my second question, which relates to a statement in the second last paragraph of your submission:

"There was therefore general support"—

I presume that that is support by your committee—

"for the ability of Ministers to intervene directly in the running of the SQA. It was hoped, however, that this would never again be necessary."

Was that view reached by the committee because it felt that at the end of the day a problem had arisen and nobody emerged out of the shadows to grip it, or was there another reason?

If I may go back a step, COSHEP has not been able to meet as a committee of principals since the problem occurred during the summer, but the officers, who include Mr McAlpine, have done a survey of all COSHEP members and principals and gathered the views of every institution, so there has been consultation.

One of the questions that was asked—because we knew that the Enterprise and Lifelong Learning Committee was interested in the issue—was about the governance of the SQA. The consensus view that emerged was that there were reasons why the SQA should be retained as an independent, or semi-independent, body. Part of the reason was that it does not simply undertake administrative functions; it has a professional accreditation function, which is important. It also needs to work in partnership, as Tom Kelly outlined.

However, it was felt that transparency would not necessarily be aided by moving the SQA into the civil service. What seems to have happened is that there was a problem with some of the systems and the application of some of the technology. It was felt that there was no evidence to suggest that there would have been greater efficiency if the SQA had been located elsewhere. However, COSHEP members felt that the way in which the governance arrangements worked should be examined, and that an attempt should be made to pinpoint whether there were failures in mechanisms that should have operated to alert institutions, associations, COSHEP and so on to the problems much earlier. If one is looking at new arrangements, early warning systems, sharing of information, transparency and openness, as well as efficiency and effectiveness, should be addressed.

That paragraph really ought to say that the SQA is an important organisation which should function effectively. It is important for us to get outputs correct. What that paragraph means is that the ultimate power should be there so that, if there are problems, steps can be taken to address them. It should be possible to address any difficulties that arise in an effective way, but we hope that that would not be necessary.

Thank you for your submission, in which you flag up many other issues that are not directly related to our part of the inquiry. I hope that we can come back to those points at a later date, particularly to the drop in the number of applications from English schools and to the fact that the extra places are part-funded. We need to return to the effect that those factors have had on higher education.

However, we are supposed to be considering governance issues at the moment, and you flag up two points. First, you felt that you were not informed timeously enough of the developments. You found out in the middle of the afternoon on 11 August that there was a major problem, and it was difficult for you to alert your institutions to the problems that were arising. The evidence that we have heard from the SQA suggests that the senior management of the SQA did not seem to know what the hell was happening either. There seems to have been a genuine problem with people understanding what was going on. How do you think that lines of communication could be improved in terms of the SQA—assuming that it knows what is happening—informing you of future problems should they arise again?

Secondly, you seem to feel strongly that the current structure of the SQA is correct and that you would not want its functions to be returned to the civil service. I gather that you would be opposed to such a move and that you think that the current arrangements are superior. Am I right in saying that you think that the current arrangements allow professional people and interests to be involved in a way that would not be possible within the civil service?

Given the range of professional input and the need to work with other bodies such as colleges, I am not sure that a civil service model would be appropriate. Our evidence expresses the views that were put to us by almost all the members who responded to the consultation. What I cannot say is how strongly they felt about that, but their view was certainly that an appropriate form was the NDPB. However, it needed to work effectively. What we need, as Mr McAlpine has just said, is clear, accurate and reliable data, which need to be provided to UCAS at the appropriate point, so that UCAS can then inform us.

The communication to which you referred earlier does not normally take place. There may be issues about whether it is appropriate to establish more direct lines of communication more frequently, but we have not yet thought about what those might be. There is another line of communication besides that between COSHEP and the SQA. There is also communication between the SQA and UCAS, and we should consider whether that could be improved.

What do you think would be the disadvantages of incorporating the SQA in the civil service?

This is a neutral comment. The things that the SQA has to do would still have to happen. It is not just about governance; it is about management and ensuring that internal management arrangements work appropriately. There is some evidence that that did not happen in this case.

Wherever the SQA is located, we are concerned with getting the results that we want. There are issues of flexibility, transparency and so on that COSHEP members felt would be better addressed by the NDPB-type arrangement than by the civil service structure.

Your evidence is helpful and makes clear your wishes. The SQA is in effect invisible to you in its operation, but is ultimately accountable to the wider public via the minister.

In consultation with your members, was the need for an intermediary between the two systems raised? The suggestion has come from some quarters of the appointment of a commissioner who would act as an intermediary between the NDPB and the recipients of the services—perhaps COSHEP and UCAS. Was there discussion among your members about such a mechanism being put in place?

No. Mr McAlpine carried out the consultation.

That issue was never raised. The question of communication is important—there should be none. The SQA should work; we should not need the communication. The problem was that the SQA did not make clear the potential worst-case scenario. We were given best-case scenarios a little too often, which meant that we planned for them. We are not saying that that was the likely outcome, but it prevented us from planning for a worst-case scenario.

There might be support within the sector for some sort of function outside the SQA, which would facilitate that early warning. However, the issue did not arise in the consultation. If people can have access to the information without having to go through the management, there might be support for that.

You say that there should be an intermediary between the responsible management and the client or customer. I am not sure that I agree with that, but we can discuss that later.

Do you agree that if, as you contend, the SQA is the best mechanism, the people who are operating it could not have been very good at it, and that the problem is one of personnel and management rather than of structure?

That may be outwith the ambit of the witnesses' knowledge.

I realise that. However, Isobel's boy—Mr McAlpine—has said that what people were given by management was always best-case scenarios, although we have known since last September that it was shaping up for a worst-case scenario. That demonstrates poor communication, through poor management.

Yes. However, the witnesses must work within their ambit of knowledge, although they may wish to express an opinion on areas that are outwith that.

I would not like the committee to think that it is COSHEP's view or policy that there should be an intermediary. That is an interesting idea, which is perhaps worthy of further exploration, but it may or may not be an appropriate course to take. My view is that there may be room for some additional communication.

As I understand it—at that point, I was not involved in the meetings that took place—COSHEP was being reassured that the problem affected only a small number of students, and that it concerned the incompleteness of data rather than the data's accuracy. As it turned out, those were not accurate statements. We found that out within a few days. It is not for me to judge at what point that went wrong within the SQA, because I do not have the detailed knowledge to determine whether the problem was management, systems or something else. All I am saying is that something went badly wrong.

It is important to learn from what went wrong, so that if it was about inadequate management, if the systems were inappropriate or if the problem was lack of skills and expertise, we can ensure that it is put right. Communication must be addressed; we must have an early warning system and ensure that it is acted on, so that institutions can plan. Our plans for the clearing process went out the window.

I refer to the last paragraph in your submission. I appreciate that we are looking forwards, not backwards. However, we must learn the lessons and apply them. Is there some means of communicating the intelligence that you will pick up, on whether the reputation of Scottish education has been harmed?

We will examine the matter and monitor any indicators that that reputation has been damaged. There has been a drop of just under 15 per cent in applications to Scottish institutions from England.

We are in a turbulent environment in higher education. We have had the tuition fees issue and the Quigley inquiry. There is a lack of information south of the border about what is happening in Scotland. It is difficult to determine how much of the drop in applications is due to the problems of the SQA. However, those problems have certainly not helped our image.

I believe that you are indicating that an early warning system would be desirable. Were you aware, as Mr Kelly was aware, that there were serious problems last autumn with the transmission of data to the SQA?

No.

Was not that a problem that was experienced by many principals of higher education institutions?

Can you clarify to which data you are referring? Are they the data on the systems or the data relevant to the information for institutions at that point—the awards information?

I am picking up on Mr Kelly's evidence. My understanding, as you ask me to clarify, is that there were serious problems with respect to the registration of students in many colleges because of the incompatibility of computer systems between the SQA and colleges. Therefore, was not that an early warning that your members, the principals, could have conveyed to the SQA, especially as there are three principals on the board of the SQA, one former principal, a dean and a lecturer?

There were data problems with the intakes last autumn—I do not know precisely what they were. We did not have particular problems in my institution. I believe that COSHEP made representations to the SQA about its concern about the accuracy of the information. I could not say what the concerns that were expressed were, without going back to the files and so on.

Could you let the committee have a copy of the representations that you made to the SQA?

Yes.

Were those concerns also conveyed to the Executive?

I am not certain about that.

Perhaps that could be checked and clarified.

Yes, we will check that.

From the full and helpful note that you have provided, I appreciate the potentially serious implications for tertiary education institutions for the forthcoming year in Scotland. You do not have a formal role in respect to the SQA. However, you are currently part of the system. What was stopping you—through all the board members—telling the SQA that there were very serious problems about data transmission, and asking whether that would lead to the possibility of a serious problem with this year's exam results?

As far as I am aware, the SQA board did not know of the seriousness of the problem. Therefore, it would be difficult for the principals or for whoever else is represented on the board to bring that information back to COSHEP. I am also not sure how many of them are nominated by COSHEP or nominated from the various institutions as individuals. I would need to check that.

So it was a management matter, rather than a structural one?

I think that you are being unfair to the witnesses.

I know.

We have asked Professor Stringer and her colleague Mr McAlpine to speak to us on behalf of COSHEP, and they have been very indulgent in trying to meet some of the breadth of questioning, which, frankly, has been generous in its embrace of the witnesses' specific functions. Are any other committee members desirous of asking questions?

Does the point about whether the board members were nominated by COSHEP, or individually, by institutions, make any difference to board members' reporting-back function? Is there such a function on the part of COSHEP members who are members of the NDPB to report back to COSHEP? Is there any requirement on them to do that?

Usually, they will provide a brief report at a COSHEP meeting or at executive level. That report might be oral or written, depending on its nature. However, usually, it would be exceptional to report back—it would happen if there were issues that the board member felt required to be brought to the attention of COSHEP.

To comment further on governance and management, if a governing body did not know or was not made aware of some of the problems, that does not mean that the governing body does not still have a responsibility to ensure that the information is conveyed. That is where I see accountability coming to rest.

That has been expressed very clearly, Professor Stringer.

On behalf of the committee, I thank Mr Kelly, Mr Ovens, Professor Stringer and Mr McAlpine for attending this morning's meeting. I also thank you for your respective submissions and for the helpful way in which you have assisted the committee with its questions.

Ladies and gentlemen, I now have pleasure in moving on to the part of agenda that is concerned with evidence from the Scottish Higher Education Funding Council and the Scottish Further Education Funding Council, which I shall abbreviate—in the hope that my plate will not drop out—to SHEFC and SFEFC. On behalf of the committee, I welcome Mr Chris Masters, the chairman of SHEFC; Mrs Esther Roberton, who is a board member of SFEFC; John Gray, who is a board member of both organisations; and Professor John Sizer, who is the chief executive of both organisations. Thank you for very much for attending our meeting this morning. I am aware that we are running slightly behind time, but members will attempt to keep their questions as focused as possible.

Thank you also for your written submission, which has been extremely helpful. The committee thought that it would be helpful to take evidence from you because you are, in a sense, comparable bodies with SQA. We thought that there might be some parallels to draw and some useful lessons to learn from that.

My first question is addressed to board members. In the papers that we received, I was intrigued to find that a recent code of best practice has been issued to all members of the Scottish Higher Education Funding Council. I believe that SFEFC has it in draft form at the moment. Mr Gray, as a board member of SHEFC, was it helpful for you to be given this code? What initiation course were you given on being a board member?

We come from different backgrounds and each of us has some of the skills that are required. There is a rolling process of appointments and reappointments to the board, so the members do not all change simultaneously. Therefore, board members learn as they go—there is no indoctrination. We are given documents on governance, control documents and an introductory pack, so that we are fully up to speed with the responsibilities that we take on.

The Scottish Further Education Funding Council benefited from the longer history of the Scottish Higher Education Funding Council and had a much faster learning curve—it did not have to reinvent the wheel.

We have concentrated on operational matters in relation to governance.

I was interested to read paragraph 4.2 of your submission, which is headed "Operational Planning". It says:

"Progress against the operational plan is monitored at quarterly intervals and reported to each Council. SEELD officials receive these reports which provide them with a mechanism for determining if there is a risk of any significant tasks going off track."

That is significant for this inquiry. By whom is progress against the operational plan monitored?

The operational plan is prepared at the start of the year. It is discussed with the council and is prepared in line with what the council wishes to achieve.

The Scottish Further Education Funding Council and the Scottish Higher Education Funding Council have a joint executive, so there is a joint committee with members from both councils. Both councils meet the chief executive and his senior people quarterly. We monitor against the agreed objectives and the time scale within which they should have been achieved. In particular, we consider areas in which there has been slippage or in which other priorities have arisen during the year—we concentrate on areas in which there has been change rather than on those in which things are obviously going well. We report our findings to the council and each council member then has a chance to question the chief executive.

Is that a fairly rigorous quarterly appraisal of what is happening operationally?

Yes.

In addition, as chairman of the Scottish Higher Education Funding Council, I meet the chief executive monthly. At those meetings, we review any matters of mutual concern. If I had concerns, I would discuss them in the first instance with my colleagues on the council. If I still had concerns after doing that, I would discuss them with the Scottish Executive, in which my main contact would be Mr Frizzell.

What is reported to the board and to the joint meeting of the two chief executives is the top of a pyramid, which cascades down into detailed operational plans for each branch and down to individual plans for members of staff. In the process of reporting to the board, I review matters in more detail with my senior management teams. One can follow things down from the board's corporate plan to the operational plan and right down to individual branches and members.

When taking evidence from the SQA, we tried to define the role of members of the board of management. Members of the board of the SQA felt that theirs was a strategic role, and that it was not their job to meddle in operational matters. As chief executive of both councils, Professor Sizer, you are clearly privy to and aware of what is happening operationally. How far down would you deem it necessary to dig if you suspected that some part of council activities was not functioning as it should?

My organisation is relatively small. Although I have a budget of £1 billion, I employ only just over 100 people and before the SFEFC was established I employed only about 60 people. I have a nose for these matters; if I sense that something needs to be pursued, the relevant director and I will pursue it right down to the lowest layer. I have been used to doing that in my previous roles.

On the other hand, I have an empowered organisation. The culture and philosophy of the organisation and the commitment of staff are important. We do not have a culture of blame. People recognise that things slip at times and feel that they can bring such matters to the attention of the next layer of the organisation without being held to account in a way that is threatening to them. I think that I have created such a culture in the organisation, but you would have to ask my colleagues at lower levels whether that is the case.

Mr Masters, is there a perception among council members that theirs is a strategic role but that, although their role has responsibility, they depend on their chief executive for information and guidance on operational matters?

Clearly, the key role of any council or board of council is strategic direction. I feel strongly that implementation of the strategy is also very important. We would view it as our responsibility—there are mechanisms to allow us to do this—to ensure that the executive is competent and capable of implementing the strategy that has been agreed by the council.

Thank you for providing us with so much documentation, which was very helpful. The lines of communication between your organisation and the Executive were much better defined than those between the SQA and the Executive.

From reading the memorandums and other documents that you provided, it is clear where the minister might intervene, what sort of information the minister might require and so on. We have a copy of a letter from Henry McLeish to Robert Beattie that refers to three letters of guidance. I know that part of the reason for the greater clarity is that you are involved in the disbursement of funds and are directly responsible for implementing Government policy on lifelong learning and so on—probably you would expect policy to be transmitted to you and discussed with you. Is it unusual—this may be difficult to answer—for an NDPB to have such clear lines of communication with the Executive?

I do not have direct experience for any other NDPB. When I became a member and then chairman of the SHEFC, I assumed that we were not unusual. Of course the mechanisms that are in place could always be improved. However, my assumption is based on a sample of one NDPB; Esther Roberton's opinion is based on a sample of two.

I draw on my experience of several years ago as chief executive of an NDPB and that of being a current member of the SFEFC. In terms of the process of letters of guidance, how the relationships work and so on, the SHEFC and the SFEFC are not unusual. We had such clarity, relationships, contact and trust in the NDPB of which I was chief executive.

I must praise my colleagues, Chris Masters and the SHEFC, from whom we were very fortunate to be able to learn.

I do not think that I have ever worked in an organisation that has such clarity in its operational plan—I now use that clarity elsewhere. As a council, SFEFC developed the corporate plan and strategic directions, which were then translated into an operational plan. That plan can be identified by the most junior member of staff, who can recognise what he or she does and how it fits into the plan.

Robert Beattie and I are the SFEFC's representatives on the joint co-ordinating committee with Chris Masters and one of his colleagues. We are clear that it is not the council's job to interfere in operational matters, but that we have, as representatives of our council, an absolute duty to ensure that the operation is satisfactory so that we can claim to fulfil the strategic objectives that we have set. As a newcomer to the organisation, I felt comfortable immediately. That was partly because we had specified the sort of information that we expected to get, which allowed us to report back to our colleagues who were able to ask more questions. However, there is a degree of trust: we take our colleagues interests very seriously in the JCC, which saves them having to be too involved in operational matters.

When the Scottish Higher Education Funding Council was set up, Sir John Shaw was its chairman. He brought with him the Bank of Scotland's model of the relationship between a board and an executive. I had significant experience in several similar bodies—not NDPBs—including during consultations and in a university context. The model that we developed was based on the assumption that although the council makes decisions and determines the strategy and the executive advises the council on delivering the decisions, the executive must be seen to be accountable to the council. We set up mechanisms to ensure proper internal accountability and accountability between the executive and the council. Sir John and I worked that out at an early stage.

We have refined the model. I sit as an observer on other higher education NDPBs and I was able to pick up best practice from them. The ability to observe the way in which other people operate has been a significant advantage. It is also good to have people on the board who bring experience from the private sector and other public sector organisations. Our basic philosophy is that the council makes decisions and the executive's responsibility is to advise the council, to deliver on those decisions and to be held accountable. I expect my council members to grill me. I often say to Chris Masters that we need to have constructive creative tension—we grill each other positively.

Before 1992 and the establishment of the SHEFC, how were your functions discharged? The SQA made several proposals to the committee about improving the discharge of its functions. The SQA mentioned that prior to its establishment, ministers' representatives attended meetings of the Scottish Examination Board and SCOTVEC as a matter of course, but that practice had ceased. Your submission refers to the fact that Scottish ministers no longer send representatives to SHEFC meetings as a matter of routine. Would you like that practice to be reinstated?

Your submission mentions

"close and continuous contact between the Council executive and department officials on governance matters".

The SQA had liaison committee meetings, but told the committee that the minutes of those meetings were not transmitted to the board. Do you have any mechanism for relaying the minutes of your meetings to board members? Is that something that should happen to ensure good governance?

A representative of ministers is always welcome to attend council meetings. I understand that at our next council meeting, we will be joined by a representative of the Executive. It is important that such representatives have the opportunity to mix with and meet SHEFC members on a less formal basis. We hold an annual dinner at which we discuss strategy—we would invite an Executive representative to that. We will hold such a dinner in a couple of weeks' time and an Executive representative will be there.

There is no formal liaison between the Scottish Executive and either of the funding councils, although we have regular contact at various levels. When I am involved in discussions with Mr Frizzell and others on matters that concern the responsibilities of the council, I report back automatically. Members will recall that I am also a member of the council. Such discussions frequently lead to a communication from the Executive either to me or to the chairman of one of the bodies. If I received such a communication I would make it available to the chairman and probably to the council, depending on whether the chairman thought that that was appropriate.

What happened before 1992?

The Scottish Further Education Funding Council was formed following the recommendations of the Garrick report—the Scottish end of the Deering report. Before that, the funding of further education colleges was dealt with directly by the department. There has been no significant change to the SHEFC since 1992, apart from the fact that ministers are much more visible and involved than when they were based in London.

We have heard about the possibility of an early warning system for possible problems in the SQA. Do you feel that your role as paymaster and your close involvement with every tertiary education institute in Scotland means that you should be part of such an early warning system? Were you part of that system last autumn?

We do not have regular contact with the SQA. We have occasional meetings to touch base. Before August, nobody brought to my attention any problems regarding the SQA that might have impacted on the functions of the funding councils. I can assure the committee that both the ASC and COSHEP do not hold back from bringing their concerns to my attention. I have regular liaison meetings with both organisations.

I was on leave when the problems arose, but the matter was brought to the attention of my deputy. I acted quickly to relax the funding constraints. I did so in consultation with Dr Masters and Esther Roberton—Robert Beattie was unavailable. Both the chief executive of UCAS and representatives of COSHEP said on television how much they appreciated the prompt action of both funding councils.

I was not aware of the problems. I meet the institutions annually—without the chief executive—and I meet the chairmen of the governing councils. At none of those meetings was there any indication that there was a problem.

I refer to the registration difficulties that were experienced by many colleges at the beginning of the academic year in 1999. That was not the same problem as the one that we heard about from Mr Tuck and which was the ultimate cause of the SQA difficulties. None the less, do not you feel that the serious information technology problems with the registration process last autumn might have indicated that there would be similar serious problems with the transmission of data for the purpose of exam certificates?

I was not aware that there was a problem.

That was not our primary concern. We are a funding body that allocates resources and we are concerned with delivering Government policy on participation. We acted as soon as there was an indication that there was a problem about delivering Government policy on widening access and increasing participation. We did so partly because we recognised that there was a problem and partly because the two representative bodies made representations to me. I discussed with them what action it would be best to take to help alleviate the problems.

Was that action to relax the overshoot role from 3 per cent to 4 per cent?

Yes it was. It was also, in the case of higher education, to relax the undershoot role as well.

Do you think that those relaxations will be sufficient?

We must wait for the data from the early statistics returns, which I will have to report to the council. If there is a continuing problem, the council will have to decide what action it wishes to take. One would not want to set this in black and white. We responded in a way that the institutions' representative bodies both said that they were happy with, but we agreed that we needed to review the situation. I think that both councils would still adopt a flexible approach.

Ultimately, the SHEFC and the SFEFC are proxies for the students and we must act in their interests. Both councils will want to do that when they have the data that show the outturn from the problems of which we are all aware.

I fear that this line of questioning is not germane to the governance of the SQA, Mr Ewing. We must restrict questioning to that subject.

On the governance of the SQA, do you agree with the judgment of Highland Council, that the events of this summer have demonstrated how unacceptable it is that an organisation with so much national responsibility should be so far removed from the Scottish Executive and its customers?

I do not feel qualified to comment on that.

Neither do I.

I hope that I will stay within the remit of our inquiry, convener.

Although you were not formally notified of difficulties in the system, it is a small world and Professor Sizer talks to a lot of people. Did you receive no informal indication? We are trying to work out the best means of communication throughout the sector, so that such communication is cohesive.

No we are not, Ms MacDonald. That is nothing to do with our remit. We are concerned solely with the governance of the SQA. I ask you to restrict your questions to that.

I know that Professor Sizer has a huge network, so I am interested in the information—formal or informal—that was available.

Although the question falls outwith the terms of reference, if the convener wishes me to answer it, I am happy to do so.

I am not sure about the specific aim of your question, Ms MacDonald. What do you want the witnesses to comment on, in relation to the governance of the SQA?

We have to try to locate the points over the past year at which mistakes in the system occurred.

No, we do not. We are here to consider the governance of the SQA within three areas of remit, which are before members. Our principal purpose in inviting the two funding councils today is to learn whether they, as analogous bodies, can offer any constructive advice from their own operation and experience. It is most unlikely that they will have intermeshed directly with the SQA—there would be no need for them to do that. We are here to consider the councils' models of operation and whether there are any useful lessons to be learned that would assist us in discharging our committee responsibilities in relation to the remit of the inquiry.

I was asking about the informal networks because a couple of witnesses have mentioned them.

What is your specific question for our witnesses?

Were you aware of the problems?

I was not, but everybody was aware that the SQA faced significant challenges in introducing changes. However, I was not aware that there was a major problem until I started reading about it in the press. I received no formal communication from the SQA and, as I said, I am not really a key player in the matter. The SQA had to communicate with the people whom it served—institutions, students and schools—but it did not have to communicate with the funding councils. I was made aware of the problems formally through the funding councils and the institutions. As I said, if those institutions have a problem that they think the funding councils should address, they are not slow in coming forward.

I have one final question to ask. Is there a whistle-blower function in the councils or the joint executive arrangement?

I think that there is a formal whistle-blower function in any organisation. Both councils have an audit committee and both function as one would expect them to. Both committees include joint representation from the councils—John Gray is chairman of the SFEFC and a member of the SHEFC. On whistle-blowing, my guess is that the audit committees would be one of the first routes. Another route for whistle-blowing would be via the secretary of the council, who can speak to me directly without going through the chief executive.

We also have a formal whistle-blowing procedure for staff, which I would be happy to let the committee have a copy of.

That would be extremely helpful. You have described your managerial culture, so would you expect that any incipient problems in the two councils would not go unremarked?

It would be dangerous to answer that positively. However, from my experience outwith the council, I would say that John Sizer and his team have created an open management culture and that such a culture is the key to good governance. As John Sizer said, there should be a culture of correcting problems rather than of allocating blame.

From the earlier evidence, one difference that struck me between the SQA and the organisations that Chris Masters and I represent is that we have very small councils. There are only 12 of us and we are appointed by ministers. In our group—I think that this is mirrored in Chris Masters's group—a strong sense of corporate, collective governance emerged quickly. Although I agree that one should never say that problems will always be spotted, if there was even a whiff of concern, John Sizer would not be allowed to get away lightly, either by the SFEFC or by the SHEFC. We take a strong corporate line.

Members should also remember that I have responsibilities as the officer who is accountable to the Audit Committee of the Parliament. I have to take that very seriously.

That brings us to the end of this part of the proceedings. On behalf of the committee, I thank Mr Gray, Professor Sizer, Dr Masters and Mrs Roberton for attending and for being so forthcoming in their answers to our questions.

I wish to move on to the matter that was raised by Mr Ewing at the beginning of the meeting regarding the letter of 26 September from Mr Aitken to the committee clerk, copies of which have reached all members of the committee. I have had the opportunity to look at the letter more carefully. It seems to me that, once it has heard all the evidence, the committee might decide that it wants to take further evidence. If the committee feels that evidence has been deficient, or that it wants to request further evidence—that would be agreed with the convener of the Education, Culture and Sport Committee—the committee is perfectly entitled to do so, regardless of the status of that evidence.

That deals with the matters that are disclosed in the letter. I appreciate that there might be a wider political and parliamentary issue, Mr Ewing, but to be frank, I do not feel that it is the committee's role to take up that issue. That might be the role of individual MSPs. If the committee agrees, I suggest that, for the purposes of our inquiry and to discharge our obligations under our remit, we should progress as I have indicated.

It is a matter of principle that the Parliament should have available to it all relevant and necessary evidence. That principle should be applied to this inquiry—and I say that after having heard a number of witnesses this morning and previously who have stressed the need for complete openness and transparency. I am concerned that we might not receive information that must be relevant—if only in that it exculpates the minister by showing that he did not fail to act upon the advice of civil servants. If he acted properly, it would surely be useful to establish that in our inquiry. Otherwise a shadow will hang over the minister, regardless of one's political point of view.

If, as Mr Tuck said, the problem was purely internal, what is the problem? What is there to conceal from our inquiry? If Mr Galbraith was innocent in all respects and if the civil service advice demonstrates that, why should not he disclose the information?

On principle, I could not agree to a decision to withhold evidence from the committee, but it seems to me—

Mr Ewing, I am not suggesting that for one moment. I said that to discharge our obligation in relation to our remit, the committee must decide whether it has heard all the evidence that it requires. Having read the letter to which you have referred, I believe that the evidence therein—that may be made available to consultants—will be much more relevant to the Education, Culture and Sport Committee. It will fall to that committee to make a fairly radical decision on what it expects or does not expect.

It is appropriate that we continue with our inquiry. It might be that, once we have concluded our taking of evidence, we decide that there are omissions from it or deficiencies in it. The committee will have to address that issue and decide upon it. It would be premature to take action now, other than that which I have outlined.

I agree. Mr Ewing is making a number of assumptions that are not based on any fact that has been presented to us. There are considerable leaps in logic in what he says. I imagine that it is very unlikely that, on the issue of governance, any advice was passed between ministers and advisers that would be of any relevance to our deliberations. However, I take Mr Ewing's point that a question arises from the letter as to what constitutes relevant official papers. That does not concern our inquiry, but it might do later.

I have outlined my proposed course of action. Does the committee agree to it?

No.

I am happy to place on record your disagreement, Mr Ewing.

I wish to put forward a counter-proposal. The committee should write to the Minister for Enterprise and Lifelong Learning and the Minister for Children and Education to request that all the documents and evidence that have been made available to Deloitte & Touche should be made available to the two parliamentary committees that have the responsibility and duty to conduct a full and open inquiry into the exams fiasco.

I second that.

Are there any other suggestions?

Only your own, convener.

For absolute clarity, we will have a show of hands, both on Mr Ewing's counter-proposal and on my proposal. Mr Ewing's counter-proposal is, that the committee write to the Minister for Children and Education and the Minister for Enterprise and Lifelong Learning to request that all evidence made available to Deloitte & Touche be made available to the Education, Culture and Sport Committee and the Enterprise and Lifelong Learning Committee.

Are we agreed?

No.

There will be a division.

For

Ewing, Fergus (Inverness East, Nairn and Lochaber) (SNP)
MacDonald, Ms Margo (Lothians) (SNP)

Against

Goldie, Miss Annabel (West of Scotland) (Con)
Livingstone, Marilyn (Kirkcaldy) (Lab)
Murray, Dr Elaine (Dumfries) (Lab)
Wilson, Allan (Cunninghame North) (Lab)

The result of the division is as follows: For 2, Against 4, Abstentions 0.

Counter-proposal disagreed to.

My proposal was not that we should rule out procuring such evidence as Mr Ewing suggests, but that to do so must be a decision for the committee in relation to our inquiry. We shall request that evidence if the committee decides to do that.

The proposal is, that further written information should be requested from the Scottish Executive only if that is felt necessary after all evidence has been taken.

Are we agreed?

No.

There will be a division.

For

Goldie, Miss Annabel (West of Scotland) (Con)
Livingstone, Marilyn (Kirkcaldy) (Lab)
Murray, Dr Elaine (Dumfries) (Lab)
Wilson, Allan (Cunninghame North) (Lab)

Abstentions

Ewing, Fergus (Inverness East, Nairn and Lochaber) (SNP)
MacDonald, Ms Margo (Lothians) (SNP)

The result is: For 4, Against 0, Abstentions 2.

Proposal agreed to.

I am unfamiliar with part 2 of the "Code of Practice on Access to Scottish Executive Information". It might be interesting to see a copy of that, so that we can find out how relevant it is to what the committee might want to do.

I am sure that that is not a secret and that the clerk can make that available if necessary.

The committee's next meeting will be on Wednesday 4 October. I am afraid that it will begin at 9 am, as our agenda will be lengthy.

Where will the meeting be held?

Our meetings tend to be held in Edinburgh, thank goodness. It will be in the chamber.

My papers say that the meeting will be in committee room 1.

The clerks are busy conferring; they will confirm the location of the next meeting. Thank you for your attendance this morning.

Meeting closed at 11:42.