Finance and Public Administration Committee

Meeting date: Tuesday, May 9, 2023

Official Report 652KB pdf

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Children (Care and Justice) (Scotland) Bill: Financial Memorandum

Agenda item 3 is an evidence session on the financial memorandum to the Children (Care and Justice) (Scotland) Bill. I welcome to the meeting Natalie Don MSP, Minister for Children, Young People and Keeping the Promise, and her Scottish Government officials: Brendan Rooney, bill manager; Tom McNamara, head of youth justice and children’s hearings; and Helen Duncan from the children and families analysis branch.

I thank you all for coming and welcome you to the meeting. I invite Natalie Don to make a brief opening statement.

Thank you, deputy convener, and good morning to the committee.

The fundamental principles that the bill takes forward are as follows. Where children come into contact with care and justice services or into conflict with the law, Scotland must respond appropriately, and that should happen in age-appropriate systems and settings. Our obligations under the United Nations Convention on the Rights of the Child and our commitment to keep the Promise are clear on those points, and those commitments benefit from cross-party endorsement in this Parliament.

The bill takes forward important measures to improve experiences and outcomes for children in Scotland, especially those who need extra care and support. The bill builds on our getting it right for every child principles and our youth justice vision. By helping to address the causes of the child’s offending behaviours, we can assist them to desist and to rehabilitate and, in turn, we can prevent further harm and minimise the number of future victims. In doing so, we can help to improve outcomes for everyone in society.

In relation to public expenditure, it is important to recognise the wider backdrop of the benefits that these change programmes are advancing. The negative economic and social costs to society, both at the time and into the future, of offending and crime are well documented. For example, the Promise “Follow the Money” report estimated the cumulative private costs of physical and emotional harm, lost output and public service costs to be £3.9 billion. By investing in services that take an early intervention approach, we can lead to more positive pathways being taken more often for individuals and communities.

We are coming from a strong baseline. Between 2008-09 and 2019-20, there was an 85 per cent reduction in the number of children and young people who were prosecuted in Scotland’s courts and a 93 per cent reduction in 16 and 17-year-olds being sentenced to custody. Although the Government is not complacent and it recognises that there will always be a level of offending and a requirement for care and protection in any society, the bill represents a solid step forward.

The Government has engaged widely on the forecast costs. In addition to our full public consultation, extensive engagement has taken place with a host of partners and stakeholders. The cost forecasts in the financial memorandum are based on the feedback and figures that were provided from that engagement.

I am aware that the stage 1 process has brought to light some helpful additional detail and updated information. That is part of the legislative process and we absolutely welcome it. The Government is alert to the need to ensure that forecasts can be refreshed and as up to date as possible. That is why the multi-agency resourcing and implementation group, which starts meeting next month, will be crucial to our preparations. We will work with partners to explore individual and combined resource requirements in more depth and report any necessary updates or clarifications to Parliament.

That work will feed into budget profiles for next year and the years beyond, as is the established process for financial planning regarding proposed legislation. We are, of course, mindful that parliamentary agreement is required and will therefore keep projections refreshed as the bill moves forward and is amended through scrutiny.

The issue of secure care funding has been a key topic in stage 1 scrutiny. We have had a last-bed pilot running in each of the four independent secure centres and we are exploring extending that exercise towards funding up to 16 secure beds in 2023-24, so that sufficient capacity will stand ready should the bill be passed.

We are also looking closely at the appropriate mechanisms for funding remand costs and will update when we have concluded that work. We welcome the additional insight and precision emerging from the stage 1 process in various parliamentary committees. That is integral to producing the best possible quality in our legislative output.

I hope that those opening remarks have been helpful and I look forward to taking the committee’s questions.

When might Parliament see a revised financial memorandum?

I do not have a date for that at the moment. The working group has a meeting scheduled for 5 June, and stage 1 needs to be completed before that can happen. Everything that we have heard so far from committees and stakeholders will feed into that.

So we will have a revised memorandum prior to the completion of stage 1.

No. Stage 1 will feed into the financial memo, so it will be following that.

On your point about putting the last-bed policy in place for 2023-24, is the funding for the policy continuing or has it expired?

It expired at the end of March 2023 and we are looking to expand and increase it now.

So the secure accommodation does not have the funding in place at the moment.

Not just now, but the funding would be for the full financial year, so that would not be an issue for secure care centres at the moment.

We are all pleased to hear about the updated FM. I am sure that we all agree on the worthiness of the bill, but this committee’s specific focus will always be on the money and the spend. You have indicated that there is uncertainty about the original estimates. I want to explore how you see the scale of the challenge going forward. We know that multiple areas of various sections are excluded from the original FM—those areas have no estimates at all. In addition to that, there is the group that you mentioned—I am sorry, but I have forgotten its name.

How will you assure yourself, first, that all costs are included, albeit in estimate form, and secondly, that the costs have taken account of what is now a high inflationary cost environment? Critically, I suppose that the question that I am probing is, to what extent will the FM be given the full weight it deserves, alongside the undoubted enthusiasm for what are some very strong policies?

That is an important question. I understand the committee’s concerns around that. Obviously, the financial memo was completed well prior to my time in office but, as the member pointed out, it was completed prior to some wider issues, such as inflation. As I said, the financial memo was completed with the contribution of stakeholders and organisations, so it was a good snapshot in time of what the costs were at that point.

As we have rightly said, that will need to be updated, but we are confident that we can fulfil that. The multi-agency meeting on 5 June that I referred to in my opening statement will take forward these discussions with the appropriate stakeholders and organisations. Based on the feedback that we have already received or heard, that will be helpful.

In terms of the longer constraints, it is important to recognise the wider backdrop of the benefits that these change programmes could have and the potential savings to public expenditure. The negative costs to society—both economic and social—of offending and crime are well documented. For example, the Promise “Follow the Money” report estimated that the cumulative cost for physical and emotional harm, lost output and public service costs equated to £3.9 billion. We will need to consider that in terms of the savings that will be made in the longer term.

I do not disagree about any of the principles, but the devil will be in the detail. What I am looking for are your assurances that the multi-agency meetings will put an equivalent level of attention on the costs and the savings, which you have outlined, as they will on driving forward the policy. The last thing that you, as a new minister in post—and I appreciate that you are talking about something on which you have had no say—would want is for this to be subject to considerable cost overruns because the things that are missing from the FM are missing because they are complex and difficult and you do not have policy detail.

I suppose that I am looking for assurances, because some people think that the funding is quite dull compared with the policy; however, if you think that, you are taking a risk, and I would not want to see you do that. I am simply looking for your assurances that you will pass that on to the people who are supporting you.

Absolutely. It is a priority for us to get this right, because we want it to be implemented appropriately. As I have said, the financial memorandum was a snapshot in time. The committee evidence and scrutiny will feed into it and will help to direct and input to the conversations that will take place on the finances that are needed. We will also continue to press the UK Government for additional funding for joint priorities, and we would welcome support from across the Parliament, the Convention of Scottish Local Authorities and individual local authorities in that respect. I assure the committee that this is absolutely a priority for us, and we are well tuned into it.

On a point of clarity, will the updated memorandum take account of pay inflation, and will there be some reference to the increased demands?

As far as I am aware, it will take heed of inflation. I will pass over to one of my officials to clarify that.

Yes, it will be updated for inflation. The figures in the financial memorandum as it stands took us up to 2022-23, but we recognise that the rate of inflation has changed quite a lot since then, and we will update for that.

The memorandum as it stands appears to indicate that the calculations for social work resource are based on a social worker working 35 hours a week for 52 weeks a year. Will that formula be rejigged following the criticism that came from COSLA and Social Work Scotland?

I understand that concerns have been raised about the funding for social work. I reiterate that the figures were worked out in conjunction with various organisations, including Social Work Scotland. We very much value the work of our social workers, and I want to ensure that their engagement continues throughout the process. They will be involved in the meeting of the group on 5 June that I have mentioned.

I will pass back over to Helen Duncan on the intricate details.

I am aware of the section of the feedback from COSLA that the deputy convener has referred to. COSLA is coming at it from a slightly different point of view. We have worked out the indicative cost of an average hour of a social worker’s time, which is why we have used the number of hours worked in a week by a full-time social worker and 52 weeks for a full year. However, there is some criticism from COSLA about the weeks of annual leave within the year.

Holidays have to be paid for as well.

11:15  

Yes, holidays have to be paid for as well, and that would be reflected in the costs to the employer. It is reasonable to use all the hours across the year that the social worker is paid for. That is why we used those figures, but we will engage further with COSLA on that.

That is reassuring.

I have a final point of clarification. The memorandum recognises demand for aftercare but does not allocate any resource for it. Will you be looking again at that?

Again, it is difficult to quantify that.

Of course.

That is the case with many things in the bill, as has been alluded to. That is something that will be looked at.

That is good.

Minister, what assurances can you give local government that it will not be impacted financially by the bill?

It comes back to what I have been saying. COSLA was involved in the discussions that led to the creation of the financial memorandum. However, I understand that it has now raised specific concerns about the funding. COSLA will be feeding into the 5 June working group and we will be engaging with COSLA and working through the matter in discussion with it. Those reassurances will come as discussions go forward.

COSLA raised serious concerns about what the bill means financially for our local authorities. It would be good for local authorities to have some assurance that they will not be impacted. Do you think that that assurance will come out as we go through the process and that they will not be impacted financially by the bill?

As I said, we are working with local government on that, and examples of where we could have done things differently in the bill have already come up. For example, when we created the financial memorandum, we used the lower number for the projected number of hearings, but we now accept that the higher figure should have been used. That will be updated in any updated financial forecast.

With regard to your wider point about reassurances, I am using that example to show you that we are taking cognisance of decisions that have already been made and where things can be improved, and that we are working with local government to ensure that this runs the way we want it to.

Skills and training are an area that has been highlighted. Will that be covered by the updated financial memorandum?

That will be based on discussions that take place with the working group.

Local government has highlighted that it is concerned that it will lose out financially in that area due to the bill.

I have seen COSLA’s comments and I am aware of them. As I said, we will be engaging on the matter.

Social Work Scotland was quite critical as well. It said that it

“does not consider that the Financial Memorandum sufficiently appreciates the scale and financial costs of those changes.”

Should the committee be alarmed by that statement?

That is a point that Social Work Scotland made. I reiterate that Social Work Scotland was involved in the initial discussions. As I said, that is something that is on-going. If Social Work Scotland has now raised those concerns, they will be looked at and discussed as we move forward. I appreciate those concerns.

Okay. They will, I hope, be addressed.

Police Scotland and the Crown Office and Procurator Fiscal Service have noted that the legislation has potential cost implications for their organisations that are not reflected in the FM, but they did not give any indication of their scale. What engagement was done with Police Scotland, for example? Why did it not feel that it could elaborate on what the potential costs might be?

I am sorry, but I cannot necessarily give an answer as to why those bodies feel that they could not engage. They were involved in the group that was set up to establish the financial memorandum and have been engaged in the continued discussions. You said that the Crown Office and Procurator Fiscal Service had raised concerns. Is that correct?

Yes, that is right. It noted that the bill has potential cost implications for the organisation that are not reflected in the financial memorandum but did not give an indication of their scale. It was strange that COPFS raised concerns but did not quantify them.

It can be difficult to quantify those future costs. However, I will bring in my official Tom McNamara to clarify the point.

It will be helpful to the committee if I add to the level of detail on the engagement that has been happening with the key statutory and other delivery agencies going back a number of years.

The bill has not emerged from a clear blue sky in relation to the care and justice sectors. It was heavily influenced by Claire Lightowler’s report back in 2020 and, indeed, by the Promise. We have engaged across all sectors at the levels of principle and of operational implications and trying to quantify what the demand might be. In particular, we set up a rapid review group in which Police Scotland and the Crown Office were engaged.

We are trying to quantify what the implications would be of displacing more children and young people under 18 away from criminal justice and into children and family services. Those discussions have informed the population of the financial memorandum and the other accompanying documents to the bill but, as the minister said, they were all products of their time and we are more than ready to refresh and intensify those discussions—to get to the heart of the matter and the point that you raise, Mr Lumsden—to quantify the extent of the unmet demand. To help the Parliament and give the minister the advice that she is looking for, it would be useful to have some idea about the numbers that the COPFS was talking about.

Social Work Scotland also notes a lack of available secure accommodation. Who would be responsible for providing such accommodation? Do you have, or will there be, capital budget in the financial memorandum to try to plug that gap?

Obviously, this can fluctuate but, at the moment, there is capacity in secure care. There are currently six spaces and there are five 16 and 17-year-olds in young offenders institutions. However, as already mentioned, we look to expand the last-bed policy, which currently sits at four beds, to 16 beds to ensure capacity for Scottish children. That is being discussed at ministerial level and we hope to provide an update on it soon. Therefore, the answer is yes, in essence.

So that will be part of the updated financial memorandum.

Yes.

Minister, you talked in your opening remarks about the initial engagement with stakeholders and said that the evidence that they provided was the basis for the first attempt at a financial memorandum. You are now suggesting that the second financial memorandum will have to take cognisance of the fact that some of that evidence was perhaps not as complete as it might have been. What will have to be added to the second financial memorandum, given that the evidence that you took for the first one is turning out not to be accurate?

I would not say that it is not accurate. I would say that, as I mentioned, it was an accurate snapshot of the issues and the finance that would be required at that moment.

The financial memorandum was not based on the engagement with stakeholders but they contributed to it to a high degree. Wider issues, such as the cost of living and inflation, have impacted on it. They could not have been factored in when it was created. As with any legislation, we need to set out the financial considerations for the bill at the time.

I do not necessarily want to say what I think should be in the new financial memorandum; that will be something for the working group to discuss, based on the evidence that we have heard so far and the issues that have arisen with the first financial memorandum.

I entirely accept the point about cost of living issues, inflation and so on—that is absolutely accurate. However, you seem to be suggesting that more information will have to come forward in order to make the second financial memorandum more accurate.

You said that you are having a meeting on 5 June. Can you explain to us your expectations of the additional information that you are looking for so that the committee can be more confident that the second financial memorandum is more reflective of the true costs than the first attempt?

I apologise if I have given the impression that I think that more information will be coming forward. What I meant is that the information that we have gathered from stakeholders thus far, and the evidence that we have heard in committees, will ultimately feed into that process, whereby stakeholders and organisations can come together with Government to discuss those issues and present new costs.

It is not that I believe that there will be any new information. The new memorandum will be based on the discussions and the work of the working group that has already been going on thus far, which will feed into it.

No committee could expect the figures in any financial memorandum to be absolutely spot-on first time round—that is a given, as Parliament’s experience tells us.

Nevertheless, we are on the back of having a look at the first financial memorandum for the proposed national care service, which—as you know—was found, by general consensus, to be very seriously lacking, to the extent that this committee sent it back because it was just not good enough. If we come to a point at which a second financial memorandum is required, that would mean, by implication, either that additional information is forthcoming or that there would be an updated set of statistics that builds on the first financial memorandum.

I am interested to know to what extent you think that the meeting that you are having with stakeholders will bring forward any additional information, because I suggest that that is the expectation.

I think that the meeting will be very useful and beneficial for the updated costs. The timing of it is expressly to pick up on the stage 1 committee evidence, to which I referred in my previous answer, and to support any necessary revision and updating work ahead of stage 2. The costs will need uprated and updated—there is no getting away from that. As I said, however, I think that the engagement and the evidence that we have had so far will be the best method to prompt discussions around the working group and its future work.

Given the criticism of the bill that has been levelled by the Convention of Scottish Local Authorities and various other groups, do you expect that, at that meeting, they will come forward with a carefully worded argument to the Scottish Government about what they think would need to be adjusted in the second financial memorandum in order to give an accurate reflection of the costs? Is that your understanding?

Yes—absolutely. I understand that they have raised those points in other sessions with other committees, so it would be best for them to raise those in the place where we can take action on them.

The bill stands to benefit a little bit—as I understand it, other committees have been looking at it, and there is general agreement that the principles of it are good. The concern is that if we are not going to get the second financial memorandum until after stage 1 is completed, that raises questions about the process between stage 1 and stage 2. As the Finance and Public Administration Committee, it is our job to make sure that the process is absolutely watertight and that, between those two stages, the relevant information is put before the Parliament.

As I said, that has been a concern for us with previous bills. Can you give us an undertaking that that will happen so that the new financial memorandum is much more accurate on what the figures will be?

I can give an assurance that that is why that multi-agency meeting has been scheduled for 5 June. Without presupposing the express will of Parliament, that meeting has been set up so that we can get on with the discussions as soon as practically possible. We want to see the bill go through and implement the changes as efficiently as possible to the benefit of our young people, in line with keeping the Promise and keeping to the UNCRC.

As I say, the fact that that meeting has been set for the beginning of June shows the committee that this is a priority and it will be worked on as soon as stage 1 evidence has been completed.

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I understand the point about reflecting what is right for children, and I get the point about the UNCRC. What I and the committee are concerned about and have been concerned about with previous financial memoranda is the process of scrutiny of the figures that go into them. That is our big concern and it has been with various things over the past couple of years. I am just trying to make sure that Parliament is absolutely watertight on that scrutiny.

Minister, why do you want to reduce the number of cross-border placements?

Cross-border placements should really only be used in exceptional circumstances and I know that other committees have heard powerful evidence about what those circumstances are. The issue with cross-border placements is the fact that England simply does not have enough capacity, and that should not impact on children in Scotland if there is no place in secure care for them.

What do you think will happen to those young people in England?

I cannot say that at the moment. However, I know that England is working on that separately. My focus is obviously on what we are doing in Scotland. However, I have a meeting coming up with Claire Coutinho, the Minister for Children, Families and Wellbeing. At that meeting, I will raise cross-border placements and what the UK Government is planning to do to remedy the situation.

In the absence of any remedy, do you have any idea what will happen to those young people? You are going to lobby for a remedy, and I understand that and agree with you that England should change what it is doing, but if that remedy is not forthcoming, what happens to those young people?

I am sorry, but as a minister of the Scottish Government, I cannot give you any assurances on that. I have said I will discuss the issue with the appropriate minister but my focus will be on the Promise for children in Scotland, and the bill works towards that.

I think that other members will have a general concern for the welfare of those young people. Also, the secure care sector in Scotland depends on the money that comes from cross-border placements. In evidence given to the Parliament Rossie Young People’s Trust said that approximately 50 per cent of the current cohort of young people are cross-border placements. If your stated intention is delivered, how do you imagine that the sector will continue to be able to meet its costs?

There will need to be a gradual change with the costs, but I have already mentioned the last-bed pilot and the increase to 16 beds, which will ensure capacity for Scottish children while reducing the capacity for cross-border placements from England. I emphasise that we are cognisant of the fact that cross-border placements will still be required to happen in exceptional circumstances, but only when it is absolutely essential for the child’s welfare.

What allowance have you made within the financial memorandum cost for a secure care place at the moment and what will that cost be after the legislation has passed? Is there a difference between the two?

Yes. At the moment, the costs for secure care are significantly higher than the cost for young offenders institutions. For the exact detail on that, I will pass over to my official, Brendan Rooney.

The costs for a secure care placement are running at about £6,500 a week. As Ms Don said, they are significantly more cost intensive than YOIs, but that reflects the level of support and provision for the young people in them.

I recognise the difference between a young offenders institute and secure care and the difference in cost, but my question is about whether you are still working with that stable cost of £6,500 for a secure care placement after the legislation is passed. Is that correct? You do not see the allowance increasing. Tom McNamara, can you provide that clarity?

Yes. We do not anticipate that the bill itself will disturb the usual weekly cost per place for secure care. Obviously, that is subject to annual fee level negotiations with the independent providers and with Scotland Excel, which manages the framework contract for COSLA.

However, you asked about the availability of secure care and the impact on the viability of the providers overall and what the Government’s interventions for all that meant. Therefore, I thought that it would be useful to the committee to highlight some of the work that we are doing with the secure care centres and some of the commissioners and purchasers with regard to preparing the Scottish secure care offer and reconfiguring that in concert with providers to match the expectations in the Promise for the period beyond 2030.

I guess that the premise of your question concerns the resourcing arrangements in order to sustain the secure arrangements on the basis that they are currently offered on—the 78 places—

No, it is not. I will pursue that point. The Good Shepherd Centre gave evidence to the Parliament that Scotland has been turning to England “to ensure sustainability”. That is based on the fact that people pay above the rates that are referenced in the Scotland Excel frameworks that Mr McNamara has just mentioned. However, the minister’s stated intention is to reduce the number of people who are paying above that rate. Therefore, how will the sector maintain the sustainability if that revenue is removed, minister?

As I said in my previous response, the 16-bed pilot scheme will go a long way to ensuring the viability of secure care centres going forward. Obviously, we have a lot of work on-going on reimagining secure care. That phase is preparation for the bill, ending the use of YOIs for under-18s and the Promise statement that

“Scotland must fundamentally rethink the purpose, delivery and infrastructure of Secure Care, being absolutely clear that it is there to provide therapeutic, trauma informed support.”

That will—

I—

Let me finish, please. The work of reimagining secure care will have four phases, and it will involve looking at issues with regard to funding going forward. However, the last-bed pilot scheme is the method that we are currently using to look at how to make secure care centres more financially viable.

The last-bed pilot scheme is about ensuring that there is emergency surge capacity. That is to ensure that, if there is a dispensation and a young person is sent to a secure care unit, there will be a space—that the place will not be full. However, the evidence that the Parliament has had relates to up to 50 per cent of the current cohort—it is not about one bed or the fact that the place is full; I am talking about financial sustainability, as I think that we all are, minister—but there is nothing in the financial memorandum to recognise the removal of that revenue from your policy intent. Is that correct?

That will be looked at when the financial memorandum is updated. Based on discussions with the minister, we will have to see how that will play out. It will not simply be the case that all cross-border placements will be removed the next day. We will monitor the on-going situation.

Therefore, with regard to that reduction over time, that monitoring could include modelling?

Yes, absolutely, it could.

Okay. That provides some assurance, minister.

I have a couple of questions on the increase in the number of cases that will go through the hearings system and the relative cost.

There have been some suggestions—and agreement—that the number of hearings will increase and that the complexity of the additional cases will be greater on average than that of existing cases that are in the system. That has raised questions about the averaged-out cost per hearing. Could you clarify whether it is assumed that the cost of the additional hearings will average out at the same cost as the hearings that are currently in the system? If so, how do you respond to the suggestion that those hearings are likely to be more complex? If you have a different cost average for the hearings, can you expand on how you came to it?

I will bring in Tom McNamara to get into some of the more technical details and talk about some of the facts and figures.

We have worked with Children’s Hearings Scotland on the children’s panel element and the Scottish Children’s Reporter Administration on the throughput from local authorities, police and other referrers in order to quantify the demand. Mr Greer is right that it is not a case of simply having a unit cost in relation to children and young people. It is foreseeable and, in many respects, reasonable to say that if we are looking to support 16 and 17-year-olds—older young people with, arguably, more entrenched needs and risks—this is a legitimate point for colleagues in the hearings system to make.

By the same token, however, it is also reasonable to say that the young people turning 16 and 17 who have entrenched and chronic needs might well already be known to the system. Therefore, it is reasonable to expect that most of the additional demand on the hearings system will be on the offence side. I do not think that that lends itself to the simplistic suggestion that each of the additional cases that the children’s hearings system will cope with will be of a nature that has not been seen before.

We think that our projection is reasonably safe. Discussions and negotiations will home in on that with the hearings system bodies, and that approach will probably be supported by work being taken forward by the Crown Office and the SCRA on jointly reported cases—that is, the ones towards the more serious end of the scale. In cases that eventually end up being diverted to the children’s reporter and which are liable to be considered by a children’s hearing, the terms of the prosecution policy will be framed by the Lord Advocate and the Crown Office. We will be able to be really clear about this only when we have the benefit of that updated policy.

Although it is foreseeable that there will be more complexity, we have always tried to respond to additional demand in that respect. Over a number of years, the gross number of referrals to the hearings system on care and protection or offence grounds has decreased appreciably, but we have maintained the funding commitment to the hearings bodies and wider children’s services in recognition of the fact that what is left to be considered for compulsory measures tends to be more complex. The system is already dealing with difficult cases.

From a policy perspective, I completely agree with everything that you have said, and I accept your point that we should not, in general, see this as a unit price thing. However, for the purposes of the financial memorandum, we need to. For the sake of clarification, then, can I confirm that, as far as the costings in the financial memorandum for the additional hearings are concerned, it is assumed that the unit price is essentially the same as the unit price of the current average in the hearing system—or is it more?

The material that we have received from the reporter directly and from Children’s Hearings Scotland reflects the existing cases, including the 16 and 17-year-olds that the reporter already sees, and anticipates what would be displaced from the criminal justice system and what would come in afresh on welfare grounds for 16 and 17-year-olds. It then converts that to the percentage of cases that would go from initial reporter referral to a hearing, the number of appeals and the number of pre-hearing panels. All of those are factored into the numbers.

I have a final brief question. I was glad to welcome the minister’s response to my question about secure transport at last week’s meeting of the Education, Children and Young People Committee and the comment that the Government is considering either amendments to the bill in order to reflect that or taking measures in that area in one form or another. However, will that be taken into account in revising the financial memorandum? Various submissions have suggested that savings could be made in the area of secure transport provision through, for example, creating secure transport provision in Scotland. Indeed, we have previously discussed how most of that provision comes from England.

The flip side, though, of trying to raise standards in secure transport provision is that it could have additional costs. It would therefore be of interest to Parliament if it had some indication of the financial implications of changes to secure transport provision. I accept that a decision has not yet been made on what those changes will be, but can you just confirm that the financial memorandum will take that into account?

11:45  

I thank Mr Greer for that question. For the committee’s benefit, I should say that the bill makes no alterations to the backdrop regulation for secure transport, so it is not quantified in the financial memorandum. However, as I have already said, we are listening to the views that have come forward during stage 1 on that and a range of other areas, and they will be explored and any refreshed financial forecasts made for the bill.

Thanks very much. That is all from me.

Pursuing the cross-border placements issue a bit more, I presume that it is better for a young person to be nearer to the local authority area that is responsible for them. As I understand it, the local authority is still responsible for education and other measures of support.

Yes, absolutely. That is why I am saying that we really do not want those placements to happen unless they are absolutely essential or for exceptional circumstances. We do not want to remove a young person from everything that they know and from resources and support networks that could be around them. In essence, then, the answer to your question is yes.

You are not suggesting some quick cut-off—in fact, you are suggesting that it will probably take time—but the aim is that, over time, children from Kent and Cornwall should not be coming to Scotland.

Absolutely. It would be a gradual thing. It is not the case that every child who is in a cross-border placement will be removed in a short period of time; however, the overall aim is to get to a place where our young people and children are being protected and cared for in the areas where they are from, unless there are reasons for them not to be. We absolutely need to make it less encouraging for local authorities in England to want to place children in secure care centres in Scotland, so we can ensure that the capacity is there for children in Scotland who require those places.

That is great.

I fully accept that there will be a new—or revised—financial memorandum, but I note that at the moment the overall total costs range from £10.67 million to £11.94 million. That is a pretty small amount compared with other bills that the committee has looked at, although I accept that it is still money that we need to look at.

The other thing that struck me was how tight the forecast was. There is, broadly speaking, only a 10 per cent difference between the bottom and top costs. That is a good thing, because we sometimes see financial memorandums that have been absolutely all over the place. How is your range so tight? Indeed, I think that there are some people who feel that it is perhaps too tight.

That question might be better directed to one of my officials. I ask Tom McNamara to answer it.

The reason why we had such a degree of confidence around the relatively narrow band that Mr Mason is referring to was that those figures were referable to the tripartite discussions that, as I mentioned to Mr Lumsden earlier, were had with the Crown Office and the Scottish Children's Reporter Administration and which looked at the types, number and gravity of cases that, if the bill’s structural changes were to go through, were liable to be displaced across to the children’s system. Those were, in turn, referable to the real-world under-18s cases that the Crown Office had dealt with in times past and the ones that had been liable to the joint referral mechanism between the Crown Office and the SCRA and whichever system ended up taking them. As we based the figures on those discussions, we felt reasonably confident about the size of the shift in demand.

So, although the future is never predictable, the costs for this bill are, in one sense, a little bit more predictable than they might be in some areas of legislation.

I would not make that claim. What we are saying is that we have discussed the matter with the relevant prosecutorial and statutory agencies in the children’s domain, and in both cases, they have taken an informed view on the range of cases that they would be likely to move across, with reference to the real-world data on the cases that were dealt with under the old arrangements. We therefore felt reasonably confident that that aspect was tight. Again, it was all about trying to offer Parliament as much precision as we could, while recognising that each and every one of those cases is, in the ultimate analysis, in the individual professional prosecutorial gift of the Crown Office.

Can you say anything about how the funding would be distributed among local authorities? If you had a few years with nobody from, say, Shetland needing the changed service, would that mean that Shetland would get no money for those years? If Glasgow had more of its share of young people, would it get a bit more money?

As far as I am aware, that would take place through the usual budget process. However, if such a specific situation were to become an issue, it could be monitored. In addition, the secure care centres in Scotland are discussing how they can manage such issues. I am confident, therefore, that that could be managed.

Some money is shared out to local government in different ways—for example, by population share, by need or by other methods.

Indeed. As far as I am aware, the money would, under the current arrangements, be distributed through the normal budget process. However, as I have said, we would have to monitor that. If it turned out that a lot of young people were needing secure care in one area and not so much somewhere else, that would need to be looked at. As I have said, the secure care centres are having those discussions among themselves, and they can work out those issues, so that type of situation could be addressed.

I want to return to the issue of the cross-border situation. I understand the point that you are, legally, responsible only for what happens in Scotland and not for what happens because of failings south of the border. However, there are cases—as I am sure that you are aware—in which young people have been accommodated well away from home, in bed and breakfasts with private security guards outside their door, in some pretty bad situations.

I know that it is your responsibility to ensure that everyone in Scotland has accommodation. However, has there been a rejection in principle of the idea that, if there were available beds, as long as the Government was able to guarantee that the last bed was available, they could and should be available to people from elsewhere in order—to go back to the convener’s point—to help with the financial sustainability of the entire system?

Would that not happen if we had people in the accommodation here in Scotland but there were still some beds available? I know that it is not easy to judge how the numbers fluctuate, but why would we not want to do that?

I can understand that. As I said, my priority would be to ensure that there is capacity and space for children in Scotland who require it. In my meeting with Claire Coutinho, I will encourage changes to the practice in England.

As part of the on-going engagement with the UK Government so far—again, some of that predates my time in office—we continue to emphasise the importance of addressing the lack of capacity in adequate care accommodation in England.

We now have a memorandum of understanding that underpins regular discussions on these issues, and I will be taking them forward now. That commenced in March 2023, and it allows us to pursue the UK Government’s intended course of action, in particular in response to its independent care review. Those discussions are on-going.

I understand Mr Brown’s point about what would happen if there was capacity in Scotland; however, the priority is to ensure that there is capacity in Scotland and, working with the appropriate minister, in England as well.

I understand the priority but I think that there is a big opportunity that might serve everyone’s interest, including the interest of financial sustainability.

My last question is about sections 12 to 14 of the bill, which deal mainly with children at court. One reason given for why more financial information is not available in the financial memorandum is the reluctance to cut across judicial discretion. I cannot say that I am convinced that a judge or sheriff might think twice about their decision because an indicative budget has been attached to that somewhere.

The imaginative response might be to say that anything agreed through discussions with the judiciary will give an indicative budget to be used only for that purpose. It might also be helpful for Parliament to look at potential costs, while also ensuring that the judiciary did not feel in any way fettered.

I understand that that is an issue and it could certainly be looked into as part of updating the financial costs.

I will return to something that John Mason asked about, which was the lower and upper estimates of the cost of ending the keeping of under-18s in young offenders institutions. The lower cost estimate is £5.41 million and the upper cost estimate is also £5.41 million. It seems unusual that there is no difference between those two figures. Can you explain that? Is the figure completely fixed?

I will hand over to Brendan Rooney to talk in detail about that.

The figures may not be completely fixed: we have talked about inflation and other issues. At the time, those were the best and most precise forecasts that we could give. They are based on the weekly and annual costs of secure care at that time. That is why they are fixed.

Those figures are predicated on the number of children in YOIs being at 16. Care was taken with the financial memorandum so that the costs to both central Government and local government were not underestimated. As the minister said, there are currently five children who are in young offenders institutions but who, under the provisions of the bill, would be transferred to secure accommodation. The costs will probably be significantly more than they are at the moment. There has been a lot of discussion about the fluctuation, and the numbers go up and down, but those are the numbers that were deemed most appropriate at the time.

The figure seems to be based on the £6,500 weekly cost for secure accommodation. So, my final question is about whether the cost for a 12-year-old in secure accommodation is the same as the cost of a 17-year-old. Would we expect to see differences between those two costs?

It might be helpful to add to what Brendan Rooney just said. The weekly cost of a placement in each secure centre is agreed during our annual contract negotiations. That is why there is no fluctuation. The high fixed costs associated with a secure care placement in a given centre, such as staffing, are negotiated with each of the centres at the start of each year, via Scotland Excel. Those costs do not vary according to age.

Each child or young person who is placed in secure care requires intensive support, which gives us the usual anticipated costs. There is some flexibility. An even smaller microcosm of that very small, but high-demand, cohort of young people will need additional augmentation and reinforcement. For example, an individual child might need to have empty rooms on either side or might need additional specialist input. That will cost more than the average £6,500 to £7,000 a week. If an individual child needs something extra, that is negotiated with the individual centre.

So you do not anticipate that secure accommodation providers will charge more for a 17-year-old.

No, we do not, because secure accommodation providers already care for 17-year-olds. The average age of a child in secure care at the moment is about 15 and a half or 16. They already care for 17-year-olds, as I said. The key distinction in the bill is the supervision status of the kids who go into secure care.

So, there is no intention at the moment to revisit the Scotland Excel framework in terms of the costs that are paid.

12:00  

Not as a direct consequence of the bill. That is why I mentioned during my earlier remarks that the bill cuts into a context that is suffused with change around the necessity of the sustainability of the existing centres, which is predicated on the 78 beds in the four centres. We are engaged in a Promise-keeping exercise alongside the secure care centres to reimagine and reconfigure secure care to meet Scotland’s needs in the period beyond 2030, and what might be needed to ensure viability in that period might not be the same as the current break-even point of 90 per cent occupancy. In addition, on the national and local contribution in Scotland and what secure care centres might need in the period beyond 2030, that might look a wee bit different.

That is partly based on the evidence that we have heard that the sector relies on cross-border placement money to keep the lights on.

It is very important to the sector under the current funding and contractual arrangements.

Up to 50 per cent of placements are cross border.

Again, the prevalence of cross-border placements varies from centre to centre. The extent of the reliance on that money therefore differs from centre to centre, and the extent of the expectation of the contribution that is made by the Scottish Government and other partners varies, as well—that will need to be resolved over time.

There are four centres, and I have evidence from two of them stating that they are reliant on that money. It is worth emphasising, minister, that your stated policy intent of reducing the number of or eliminating those people is not a marginal issue. There are concerns from across the committee for those young people—young people in England as well as those in Scotland—and their welfare. I understand your legal responsibility in that regard, but, on a human level, we all have great concern for the outcomes of those young people.

More generally, we are concerned about the fact that we have a sector that is entirely dependent on that money, yet I am not hearing a lot of evidence from you or your officials that that is being dealt with in the long run. There is talk about dealing with it in 2030. Let us hope that the meeting with agencies in June comes up with some answers, and that, when we see the second version of the financial memorandum, it is in a state that we can agree with.

Thank you for your evidence today. That brings to a close the public part of the meeting. We will take the rest of the agenda items in private.

12:02 Meeting continued in private until 12:17.