Education Committee, 31 Mar 2004

Meeting date: Wednesday, March 31, 2004

Official Report 275KB pdf

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Scottish Qualifications Authority

The next item is consideration of correspondence on the funding of the Scottish Qualifications Authority. We asked for the information at an earlier point, although I cannot remember the details of our request. We have the evidence before us this morning and the question is whether we want to do anything further with it now or leave it for our discussions on the budget.

This committee first raised concerns about SQA funding—I think that Rhona Brankin first raised it way back in September—following the resignation of David Fraser. Although we did not pursue the matter then, there was concern about the rising costs to local authorities.

The explanation from the SQA is particularly helpful in that it gives the background to the SQA's request for increases. Indeed, all the papers are helpful in setting out what contributed to the increased expenditure, about which we had questions.

We need to assess what we want to get out of this. My concern is that a decision was taken about self-financing for the SQA that led to an £18 million shortfall. If there has been an agreement by whomever—that is what we need to determine—that the SQA needs to be self-financing, we need to ask who should pay for that and whether the financial provision that was made at the time of the initial decision allowed for the deficit to be dealt with. We need to ask whether the Executive should have dealt with that, and whether it was reasonable for the SQA to pass the costs on to local authorities.

It might be helpful to look at the matter in the context of the budget because issues arise that concern the SQA. A general principle is at stake, which has recurred in a number of our inquiries and, indeed, in our scrutiny of the Education (Additional Support for Learning) (Scotland) Bill. That principle is about the extent to which, when a decision is made centrally by the Scottish Executive, financial support or the financial memorandum is carried through. Are there examples in which the burden has ended up on council tax payers, as is the case with the SQA, and in which decision making and responsibilities were open and transparent? There is something useful for us to explore in relation to the general principle of local authorities picking up the tab for nationally made decisions. Was there, for example, a clear understanding at the time of the original decision that council tax payers would pick up the tab? On the one hand, we could say that that would be reasonable but, on the other hand, we could say that that is an example of stealth taxation.

I am not sure that the Convention of Scottish Local Authorities takes that view. It is concerned about timescales, which is valid, but it also says that it does not have any particular objection to picking up the tab, although it wants to see evidence of improvement, which is a slightly different issue.

Council tax payers might have an objection.

I was just talking about COSLA's letter.

The background information is useful in explaining the position. I understand from that information that the SQA was set up to be self-financing.

Absolutely.

It has always been self-financing and it should have been expected that that would be the longer-term aim. It is quite clear from the letters that we have received that the first priority is to have a sound operational platform and to get assessment working properly, because that was where the major mistakes were made in the past. We have then to consider that the SQA had not fulfilled its requirement to be self-financing and that it was getting considerable subsidy from the Executive, which had to be put right.

We would not gain anything by hearing from witnesses at this stage. We need to continue to monitor the situation and to seek further information about how successful the SQA is. My understanding is that not all the financing of the SQA will necessarily come from payments from COSLA; the SQA is considering other ways of bringing in funding and selling its products. Perhaps we ought to monitor how successful it is in doing so.

We can proceed by getting further written submissions, which will give us the most up-to-date information. There might not be much to report since the letters were written on 17 February. However, the principle is that we must not have a fiasco with exams, such as we have had in the past. It is our duty to do what we can to protect pupils. If a problem is likely to arise, we should alert the Executive. It cannot do any harm to seek further information in writing.

I do not think that there is any further information for us to get; we were given pretty up-to-date information. We could ask why the information landed on councils' desks so late, which is a valid question.

We could seek further information on whether COSLA will have a problem gathering the £18 million.

That is an issue for COSLA, rather than for the SQA.

I presume from what you have said that this year's exams will not be affected.

I do not think that there is any suggestion in the paperwork that there are any problems with the exams. I hope that that issue has been resolved. All the indications in the paperwork are that it has.

I tend to think that the issue would be best dealt with within our consideration of the budget. We suggested examining one or two budget lines in detail, particularly with regard to value-for-money issues, which is what Fiona Hyslop suggested. Given the highly critical nature of the letter from COSLA, which indicates that there was absolutely no discussion between the SQA and its clients with regard to raising fees, and the substantial increase in fees that we are seeing, it would be most appropriate for us to include the matter in our budget consideration.

Adam Ingram said what I was going to say; I agree totally with him.

I do not agree. I think that we need to monitor the situation—it is a time of change. The SQA and local authorities need to sort out the matter; we just need to keep an eye on things. What is important is that the SQA is on a sound financial footing. We have to be clear about the SQA's financial footing so that it can maintain its duties as regards assessment of young people.

The response that we have had from the Executive indicates that it is not the case that the local authorities will be expected to pick up the entire £18 million. The Executive is budgeting for providing deficit funding of £15.3 million in the next financial year and £11.5 million in the following financial year. It is obviously stepping down the amount of deficit funding that is being made available, but it is not withdrawing all the deficit funding for this year. In future years, we need to monitor how successful we are in managing that deficit funding downwards.

We do not seem to be a world apart. Fiona Hyslop said that, before we did anything as a committee, we would need to be satisfied that our intervention would be helpful. It does not seem that our intervention would be particularly helpful. The situation is difficult and it is clear that the SQA and COSLA need to be helped out. Given that local authorities have representation on the board of the SQA, I hope that the situation will resolve itself in time. All members can ask questions on parts of the budget process and we will have a meeting to discuss that in due course. I do not think that we need to decide to pursue the matter actively, other than through our normal business.

Elaine Murray made a valuable point. My concern is about how the £18 million of public money—the deficit that is being supported—translates into future management. Where will the burdens lie? Will they lie with the council tax payer? Elaine Murray says that the information that we have indicates that there might be a staggered reduction in the continued deficit funding. As part of our remit on the budget, it would be entirely appropriate to ask the Executive about the figures that Elaine has quoted.

I will sum up and find out whether we can arrive at a conclusion. Anyone can ask questions on the budget—there is no issue about that—and I am sure that individual members will wish to do so. I am not sure that the area is one that we want to go into in great depth; I do not think that it merits such detailed consideration. I think that there are more important matters that we could choose to investigate in depth. We can discuss that with our advisers.

I take Ken Macintosh's point about local authority representatives being on the board of the SQA, which is important. However, I am struck by the fact that, although the sums that were involved at individual authority level were comparatively small beer, the increase had landed on people's desks just a fortnight before the budget—which I think is what COSLA said. It might be worth our while to ask the SQA for an assurance that, in future, it will improve the timing of such announcements, which we could usefully do immediately. Apart from that, we can consider the issue when necessary later on. People can return to it when we consider the budget, but there is no need for any formal decision today. Is that reasonable?

Members indicated agreement.

We will move into private session for consideration of item 5.

Meeting continued in private until 12:12.