Official Report 622KB pdf
Item 2 is our annual evidence session with representatives of the Scottish Fiscal Commission on how the commission fulfils its functions. We are joined by Professor Graeme Roy, chair—this is the third time in the past week; people are starting to talk—John Ireland, chief executive; and Sue Warden, head of strategy, governance and corporate services. Good morning.
We will move straight to questions. How has the work of the Scottish Fiscal Commission evolved over the past five years?
Thank you for giving us the chance to come along and talk about the work that we do. I will highlight several ways in which it has evolved. First, we have made significant advancements in our on-going analytical capacity as more powers have come in. We have updated our modelling and improved the modelling process that we do, and that continues to be developed on an on-going basis.
The other big area that we have focused our thinking on is how we communicate and how we engage more broadly with stakeholders, which is an issue that was picked up in the Organisation for Economic Co-operation and Development’s report. We are keen to focus on and develop our approach in that regard, so we are doing things such as providing bite-sized insights to explain the Scottish budget and going out and about much more to engage with key stakeholders and talk about key budget issues. We have also recruited new commissioners who have that as a key part of their remit. That has been very positive.
That has moved us into some interesting areas, such as undertaking greater scrutiny of spending issues and looking at fiscal sustainability and the long-term challenges that Scotland’s public finances face.
Thank you. John, in the chief executive’s introduction to the annual report and accounts, you said:
“Through the year there have also been some significant challenges for a very small organisation to deal with.”
Do you want to touch on some of those?
The challenges for small organisations such as the Fiscal Commission tend to be in two areas, the first of which is staff movements. We have a staff of about 28. The bulk of those people are analysts, who all have quite specialised skills. Turnover is incredibly healthy, because it means that new people come in and we get exposure to new skills, which is great.
However, we can lose key people at difficult times. Losing an analyst in the run-up to a budget or a fiscal event can be difficult, because the recruitment period is about three months; sometimes, it is even longer. Turnover of staff is one issue. We need to ensure that we have a good complement of people, especially as we go into the budget forecast.
The other challenge tends to be around the more corporate side. For example, the Scottish Government’s move from one piece of software to manage all its finances and human resources to the Oracle system was incredibly trying because we are a small organisation and do not have the number of staff that other organisations have to manage that shift and the time that is required for responses to such Government changes is dramatic. We did not have much say in it.
You say in your annual report:
“The Commission’s corporate systems are not sufficient to deliver its work (financial systems, IT, shared services, and governance)”
and
“the risk score is expected to remain high.”
Yes. That comes from the fact that we rely on the Scottish Government for the bulk of our shared services. That decision was made at the Government’s encouragement when we were first set up. Those Scottish Government systems have been creaky for a number of years and the Government took a sensible decision to replace a lot of the infrastructure behind them but that takes a lot of work and the risks associated with that are still not clear in the sense that we do not understand exactly how those systems will evolve.
The other issue is financial planning. The Government says that it will move over to a principle of full cost recovery but it cannot tell us what that will look like over the next few years. Each year, we ask the Government for our funding for the next three years. We have been given only sketchy ideas about what the costs will be next year and no idea at all about the following two years. That can be difficult, particularly given the scale of some of the changes involved.
However, you have no reason to suggest that the existing funding will not continue at least.
I am sorry?
Even if funding was not to change dramatically upwards, there is no indication that it might decrease by any measure, is there?
No. We just need to ensure that we can do effective planning and that, when we make our asks, we have enough funding in place to cover the increased costs.
You said:
“This risk has remained amber, due to risks with our relationship with the Scottish Government.”
That reflected a point at which there was a very large turnover of staff within the exchequer strategy directorate.
You talk about it being red and amber throughout the year.
Yes. I think that it was because of those changes in staffing. It was not because the relationships were poor or anything like that. Basically, within a short space, the three deputy directors turned over. The Government has been good. It filled those posts quickly and with good people, so that turned out not to be the risk that it could have been but, in essence, that is what those markers were.
Professor Roy, the annual report talks about the work that you do giving
“media interviews, briefings, and articles”
and that you
“respond swiftly to journalists”.
It also talks about publishing reports on the website. The SFC is also involved in X and LinkedIn and is now on Bluesky. You
“engage once a month with … subscribers and, separately media subscribers”
and you do in-person breakfast events—I was at one of those last week with you. What else, if anything, can be done to boost the profile of the work that the SFC does?
There are two parts that. One is doing more of what we do. We explicitly added to the job description for our new commissioners an ability to communicate and engage. That was not in the role description in the past and our two new commissioners bring us more stakeholder networks than we had in the past, so there is a chance for us to go out and communicate much more.
Some of the answer is about upscaling what we did in the past. The second part, of which we are very conscious, relates to the potential for a significant number of new MSPs to come into the next session of the Parliament after the election in May. We are speaking to Parliament officials about what we can do to help any induction process for new MSPs so that they have our support in getting up to speed with the complexities of the fiscal framework and how the budget process works. That will be one of our top priorities for next year.
Another priority might be to get the name and number of a good plumber, because I noticed that your report highlighted
“Boiler failure affecting the working environment for all of 2024-25.”
How long does it take to get a boiler fixed? When mine crashed, I got it sorted within 24 hours.
We rely on the Scottish Government to maintain the infrastructure of our office The boiler issue arose when the Government took the view that it did not want to replace one gas boiler with another because of its net zero goals, and that it wanted to ensure that we had a low-emission electric boiler instead. The difficulty came from the need to strengthen the mains electricity supply, which took an enormous amount of time.
Unbelievable.
That has successfully been done, we now have a new boiler and the staff are happy that it is nice and warm.
The guy who was coming to fix the boiler in my office didnae turn up last week, but that is another issue.
Other risks discussed include the fact that
“Delays to provision of two policies reduced the time we had to quality assure our forecasts and prepare our report. A third policy was provided too late to be included and required a separate publication to be produced.”
There is an element of frustration in that, so can you tell us about it?
We touched on that last year during the budget process. It relates to the late notification of policies in the run-up to the budget in December 2024—I need to get my years right. There was late notification in 2024 and you will recall that we did not put the abolition of the two-child limit into our main document but instead did an update in January.
We touched on that in evidence then. It is important to have deadlines and timelines and it is important for the Government to stick to those. It was disappointing that the Government did not do so that year, but the most recent budget process was far better and all the key deadlines were met.
That is good to know, but you have said that the
“Delayed sign-off of our indicative funding for 2026-27 and 2027-28”
is another potential risk.
Do you mean funding for the Fiscal Commission itself?
Yes.
That was last financial year and comes from the annual report. There was some delay in getting the cabinet secretary’s agreement to that, probably because the Minister for Public Finance wanted to spend some time checking what was going on within the Fiscal Commission as part of the public service reform process. This year, when there has been a spending review, the process has been much smoother. We have funding for the first year, which is shown in the budget document, and the spending review document shows the funding for the next two years. We already have that indication from the Government this year and it has been a much smoother process.
There is a wee bit here about the Oracle cloud. You say:
“The reactive nature of the stabilisation activity required has delayed any longer-term preparations to support future service offers, optimisation of the platform or participation in further phases of the shared services programme.”
How long has that been delayed by and what difficulties does that impose on your organisation?
I think that that is from the annual report. The roll-out of Oracle across the Scottish Government and the other clients that use it was delayed by six months, to October, which meant that the focus was on trying to get it vaguely fit for purpose on the go-live date, instead of trying to generate any extra value. Theoretically, it can do whizzy extra reports, but the Government was just trying to get it to do the absolute basics so that everything was ticking over and embedded before they tried to generate any extra value from the new system.
You also said, in paragraph 171:
“I note that the Scottish Government’s Internal Audit Directorate is ‘...unable to comment on robustness of the control system within Oracle at this point’.”
Yes. They were not able to give us full assurance on that. We are very small, with quite simple transactions—and not many of them—so we use a separate Excel spreadsheet to mirror Oracle and to give us confidence that, even if we are not sure whether Oracle is working, we have something to check it against. That is why John Ireland, as the accountable officer, was able to give assurance that, although internal audit could not fully sign off on the Oracle systems, we knew, as an organisation, that the numbers that we were presenting were accurate.
11:30
I understand from looking at the salary scales that you have partially retired, John. Is that right?
That is correct, and I am enjoying my four days a week. [Laughter.]
Okay. You have again come in under budget, which is obviously excellent. What resource constraints do you feel that there are on the organisation, and what work would you like to do if some of those constraints were lifted? Can you give us an example of how additional funding—and how much funding, if you could possibly put a figure on it—would allow the SFC to develop further?
I can make a broad comment, and then I will let John Ireland talk about operations and other things.
I guess that this relates to some of the commentary around the OECD review that we had, and some of the stuff in our report about the areas that we are moving into. Most of our work and focus has been very much on taxation, social security and the overall funding position, but, pushed in large part by the committee, we have been doing much more on the spending elements and developing our scrutiny of the spending profiles and trajectories. That is the big area where we see potential for further work in future.
John, do you want to talk about the specifics of this?
Indeed. It is, as Graeme has suggested, very much related to that work on spending. In the multiyear ask that we put into the Government, we estimated that the additional work on spending that we wanted to do would cost about £184,000 in the next financial year, and £190,000 in the following. However, we were able to absorb about £87,000 of the 2026-27 costs and about £116,000 of the 2027-28 costs through efficiency savings across the commission, and we then asked the Government for the amount of money that we could not save, which was roughly equal to the cost of one member of staff. The Government has been very good and has given us that money in the allocations that it has just published.
But you are looking to do more as an organisation.
Yes.
So are discussions on-going with ministers on how you can grow over the next one to five years? Assuming the committee approves your reappointment, Professor Roy, you will have another four years of this.
Do you want to talk about where we are with the conversation, John? I think in principle—
I should say that the decision is on a knife edge, so do not take anything for granted.
We are, in principle, very conscious that, as far as any strategy is concerned, we have our core functions that we need to fulfil and deliver. However, we are also demand led, and we do look at where people think our focus should be. I am thinking of, for example, the push to do more about communications and explaining things, and the support for that, which is an area that we have focused on. Similarly, spending is an area in which not only the committee has a particular interest but our stakeholders, too, are interested in unpicking certain elements, and it is an area that we can certainly grow into.
Some of the communication that you have just talked about might tie in with the programme of financial literacy that we hope that the Parliament will introduce in the autumn, when the new MSPs have bedded in somewhat.
Very much so.
This will be my last question, and it is, I think, a very difficult one for any individual or organisation to answer. What weaknesses, if any, are there in the organisation, and how are they being addressed?
Do you want to talk about this from a more operational point of view, John? I can talk about it from a strategic perspective.
Building on John Ireland’s previous point, I would say that we are a small but, I think, very good organisation, and we do lots of great work. However, we are dependent on the ability to amplify, and get engagement on, the work that we do. We know that there are challenges with fiscal literacy, and with that sort of knowledge and understanding at different levels. However, I think that that is not so much a weakness, as an on-going challenge, given the nature of the fiscal framework.
Yes. Weakness is probably not the right word—apologies for that.
But it is a really important question. Indeed, we touched on some of this last week, and I know Ms Thomson is sometimes frustrated about it—
She is up next, by the way.
We focus a lot on understanding, say, the mechanics of the fiscal framework, but that squeezes out other big questions such as what this all means for the economy, public services and everything else. It is an on-going challenge for us to fulfil our really important role of delving into the detail and ensuring that it is all clear, while also being able to lift things up a level and say, “This is what it means for the people of Scotland, for public services and so on.” Indeed, the OECD pushed us quite strongly on the issue of how we make all of this a bit more real and tangible for people.
We are already thinking about things such as our insight reports, the videos and going out and engaging with people to turn some of the more technical things into things that are much more accessible.
We have already touched on some of the things that keep me awake at night—
Yes, the boiler.
—as weaknesses, or just as worries. There are issues around staffing. We have very good staff, but we want to keep them there. We want to make it an attractive place to work—and make sure that it is warm—and give them interesting work to do. We have no shortage of people who want to work at the commission. The response to our recent recruitment—
That was incredible. You had hundreds of applicants.
Yes. It was really good and very satisfying. At the same time, however, keeping people there once they sign up is a real issue. We need to make sure that the work is interesting.
A particular thing that keeps me awake at night is making sure that we have the right people there for the budget process, and that they are not going to go off sick or want to leave and get a new job, because we need to stick to timetables.
Those are the sorts of things. It is very operational, in that sense.
Yes, and a lot of it is not within your individual control. It is more a question of “Events, dear boy.”
We will move on. Michelle Thomson will be the first member of the committee to come in, to be followed by Michael Marra.
Good morning, and thank you for joining us. I will pick up on the first theme that the convener opened up. As you probably know, I try to do as much as I can to support the Scottish Fiscal Commission on the likes of LinkedIn by adding what I hope are helpful comments that will direct some traffic to you. However, while I recognise the work that you have clearly done to big up your messages and get them out there—the wee graphs that you have put up are super—the numbers are still relatively low. You still have only 835 followers on LinkedIn.
Looking at the posts, I see that there has been a bit of a burst of activity, with roughly one post per week over the past few months, but there was nothing for five months before that—there were no articles or documents. You could easily get one of your young people to write about their impressions—something along the lines of, “You may think the Fiscal Commission is about this, but this is what I’ve found.” Your documents could easily be put on there, too. If you know how to use it, LinkedIn is a very effective tool for driving traffic.
We have talked about this before; I appreciate that you have a limited budget, but if you were a business organisation, you would be doing proper work on branding and marketing. I watched the videos and it occurred to me that, although I strongly approve of your new commissioners, who are clearly already adding a great deal of value, it does not necessarily follow that the presentation style of the videos will bring people in. The challenge is how to make people care about the importance of your work.
Have you thought about that? With the young people you are getting in, there are bound to be some very creative individuals who just know this stuff because they are in a different generation. Obviously, oversight will be needed, but have you thought about how you might be able to cheaply and effectively get down with da yoof, if you like? [Laughter.]
We might look for some tips. The Mars bar example might be a good one to follow.
You are entirely right. We are open to speaking to people about what we can do around that, and your input is really helpful. There is always a trade-off for us in how much we talk at key points in time. One reason why there is sometimes a gap is that there are periods in which lots of private conversations go on with the Government as it is working on its budgets. Those are quiet periods. However, it is important that we are clear to people about why that happens.
We have to be careful, in that we are there as the independent authority to support the budget process. We want to try to improve things and to encourage more people to engage, but the last thing that we want to do is to generate headlines for the wrong reasons. That might be a bit of risk aversion on my part, but we need to strike a careful balance there.
John Ireland might want to talk about some of the things that we are doing. We have recruited people who will really help with things such as the short insights stuff that we are doing.
In the OECD review, it came through that engagement is key. The OECD wanted to push us down the route of having a specialised communications officer. We took a different decision—in the spirit of what you are saying—which was to get the analytical staff involved. One of the key appointments was Ross Burnside, who used to work in the Scottish Parliament.
Ross has been driving the new insights blogs. Until the pre-election period starts, we have a programme to publish those more regularly. The drafting of those is done internally by staff, and some of the younger people are involved. We have some insights coming out on climate in the next few weeks, which have been written by relatively young people who have been doing work on that. Obviously, the commissioners own that and are behind the final publication. I think that the insights are starting to do that.
It is interesting that you mentioned LinkedIn. We tried to think about social media, and I naively assumed that things such as Instagram and TikTok were where we ought to go. However, we did some work and looked at where younger people get their news input and, surprisingly, we found that it comes through Facebook. With the non-established media, the primary source for young and older people is Facebook. We therefore decided to start on Facebook as well. That account does not have many followers yet, but we will be working on that and trying to boost it.
We are trying to take social media seriously. We are doing work on videos. You looked at the more recent ones. One of our younger analysts has spent a lot of time thinking about how we create them. You will have seen the improvement in quality and in technical terms. We do not film on iPhones any more—we have a camera. They are all done in Governor’s house, so everything matches up in that way. We have started to use some slightly more interesting graphics in those as well.
It is a journey. You are right that getting the staff involved more directly in front of the camera could be good. We did some of that when we were doing recruitment. We have a couple of recruitment videos in which staff talk about working at the commission, and the training videos on the budget that we did about a year ago are presented by staff members. We are starting to do that, but it is slow.
We must recognise that, when we are speaking at budget time, the voice has to be that of the commissioners. However, there are other things that we can get the staff involved in, and we hope to do so.
The other area that I want to ask about is your report “Fiscal Sustainability Perspectives: Climate Change”. As you will know, I have consistently asked people how well they are across that, because it seems to me to be utterly fundamental to read it and understand the real challenges ahead. I was shocked to find that the convener of the Net Zero, Energy and Transport Committee did not know about it. The Economy and Fair Work Committee, of which I am the deputy convener, is looking at the forthcoming climate change plan, and I have been asking all our witnesses about your report. I am disappointed to say that, so far, nobody has admitted to either being aware of the report or having read it. I have said to them, “You need to look at this.” Okay, it was published in March 2024, but the fundamental principles absolutely apply.
I know that you did a session straight after publishing that report, but there would be great merit in finding ways to keep reminding people about it. I have been surprised by how few people know about it. I do not see the point in our developing plans if we do not understand structurally what the challenges are, and I think that your report points out those challenges.
That is disappointing. We write to committees every time we publish something such as “Fiscal Sustainability Perspectives: Climate Change”. We write to the convener of the Net Zero, Energy and Transport Committee to say, “This is our report. We’re happy to come and give evidence.” I gave evidence to that committee as part of its scrutiny of the climate change plan. Similarly, with the Economy and Fair Work Committee, when we publish our budget reports with the latest forecast, we write to the committee to say, “This is our report. We’re more than happy to come and give evidence.”
I appreciate that committees have an exceptionally busy time and that things are constrained. We can keep writing and knocking on the door but, ultimately, the committees themselves and parliamentarians more broadly have to embrace and take an interest in the subject. We are more than happy to go along and speak to any committee at any time.
11:45
As we come up to a new parliamentary session, we should think about how we can get the information in that report—and whatever variants you issue, because you may choose to update it—to people, because it is so fundamental. I am playing my part, but it is probably not enough to tell people only once.
I am more than happy to write and say, “Following that evidence session, we know there’s an interest in this. We’re happy to come along and speak about it.”
We are about to write to the Net Zero, Energy and Transport Committee again about the climate change plan and the information that we think that it should contain on costs.
There is another aspect here—as well as the parliamentary part, there is the engagement with the outside world. We worked closely with Stop Climate Chaos and Mike Robinson on that report a couple of years ago, and they were kind enough to put out some media releases saying that they found the work interesting. We need to develop that sort of thing, too. It was unusual for us to move outside the narrow fiscal stakeholders to the wider groups that work on climate issues.
You will always be welcome at our committee.
I am looking forward to the video that will represent the economic performance gap in confectionery terms. [Laughter.]
You will be starring in it.
Definitely not.
John, you mentioned the issue of talent recruitment and retention. I recently listened to the Fraser of Allander Institute’s podcast about its anniversary. It seems that the pool of people who circulate around fiscal matters and economics in Scotland is a very small one—we see them regularly at this table. What is the SFC doing to support talent—people who are developing expertise in that space—to come through?
We do that in several ways, because it is fundamental to us. I said earlier that we get a large number of applications for our analytical posts—even junior, fixed-term appointments attract a lot of interest—so it is clear that there is some sort of flow-through.
We work with universities on that. We ask the younger analysts who are in the same age range to go along to the events that universities organise on careers. There is an intern programme that is based at the Fraser of Allander Institute but which is Scotland-wide, and we regularly employ one or two summer interns: we come up with a topic, the students come and work for us for six weeks and, at the end, they make a presentation to us on the topic. Often, that feeds into our analytical programme. We try to encourage people that way, by giving them a taste of working at the commission.
We do similar things with dissertation topics for masters students—again, there is a Scotland-wide network for which we contribute topics, and we do light supervision alongside the academic supervisor. That goes on as well.
At a slightly higher level, we have fixed-term appointments, which are very good for people who have just graduated or who have been in work for a couple of years. Those appointments provide the ability to work for us for a year or so and get experience. For us, that is really good, because we see them for a short time and we can encourage them to apply for permanent posts. We have a good track record of converting fixed-term appointments into permanent posts. That is another thing that we do at that end.
Finally, we are very open to secondments. Those are for people who have a bit more experience. Recently, one of the Fraser of Allander Institute’s permanent staff was seconded to us for a year to work on macroeconomic issues. We currently have someone who is on secondment from Audit Scotland, to cover a maternity leave. They are helping out on fiscal sustainability. That is a good way of bringing different people in and exposing them to the commission. I hope that, when they go back, they say pleasant things about us and encourage other people to come to work for us.
Professor Roy, is there more that could be done to support the talent pool?
It comes back partly to the conversation about how we engage and get more people interested in these issues. Having organisations such as the Fraser of Allander Institute and our institution to generate more interest helps with that. We need to be clear about what we do, what the Fraser of Allander Institute does and what other academics do.
In Scotland more broadly, there is a genuine challenge with regard to how we can engage academics and think tanks with such issues. The think tank community comes forward with fewer ideas and innovations than we would like it to. Similarly, the academic community engages less with such matters than we would like.
We play another role in that we are open to anyone who has an interest in this area coming in and chatting to us about how they can do research in it. If there are think tanks that are thinking about developing such work, we are more than happy to provide analytical data or anything that we have that they can run with so that they can utilise our forecasts or our commentary in the best way possible for their work.
Have you engaged with the Scottish Funding Council on the capacity and funding streams for that kind of work?
When I was at the Fraser of Allander Institute, we kicked off the economic futures programme, which was originally seed funded by the Scottish Funding Council, that was about trying to boost economic capacity. That programme is still running; it is now self-funded. If you asked Mairi Spowage or anyone else on the team, I am sure that they would welcome anything that the SFC could do to support that even more. It relies on institutions such as ours that have the budget to recruit people and to give them internship opportunities. A third sector organisation or a small think tank such as the Institute for Public Policy Research might not have the budget for that, so any support to help to encourage young people coming through to get experience in that area would be good.
I will move on to the budget process. We had the cabinet secretary in just before you—I do not know whether you caught any of that evidence or whether you were travelling. I raised with her the frustrations that were expressed in your evidence and report about transfers in budget, and she committed to having a conversation with the commission about agreeing a position on how those transfers are represented. Is that a welcome commitment? How would you take that forward?
In short, yes. We have had that discussion not only in relation to the most recent budget. The work that we did and our report are all about how the budget process can be improved and made more transparent. Anything that is done on that will be welcome.
At the end of the day, we want to be able to say, “This is what the Government planned to spend last year, and this is what it plans to spend this year.” Clearly, that is up to the Government. There might be unplanned movements, but we want to be able to be clear in saying, “This is the plan,” and showing how it compares with the previous plan.
The obvious way of doing that would be through the protocol that we have with the Government that covers the level and type of information that we need and the dates for all of that. At the moment, we ask for and are given indications about that, but if it was written down as part of a formal process, we could then report back to the committee, for example, about how it went.
So you think that it would be useful for the committee to ask the Government to change the protocol, in agreement with yourselves, so that you can agree on how such transfers are represented.
Yes. John Ireland might want to come in on that but, in principle, the protocol would be the obvious way of doing it. It is transparent and clear, and everyone sees it.
Yes, the protocol is the obvious vehicle. In that protocol, there is something that we report on to the committee each year, which is the draft timetable for fiscal events. Setting a requirement for agreement by a certain date would be the obvious way of doing it.
As well as the transfers that Mr Marra has raised, the other thing to mention in this context is the classification of the functions of Government data, which is the data that allows us to make systematic comparisons by year on spend. Having a date in the protocol for the provision of that COFOG data that is sufficiently in advance so that we can analyse it would be a helpful step in the process.
It strikes me that it would be sensible to review that protocol before the election in May.
We are meant to review the protocol every two years. We had a version of it that was about to be signed off just before the budget, but we wanted to make some last-minute changes, which delayed it for a bit. However, we have a version that is almost ready to be signed now.
So there is an opportunity to set out an agreement on that at this time.
Yes.
That is excellent. Thank you, convener.
No bother. I call John Mason, who will be followed by Liz Smith.
It is good to see you again. Quite a lot of issues have been covered already. You say that your staffing budget is under pressure, but a lot of people are applying for jobs, which suggests that the salaries are okay or attractive enough. How do you reconcile those two aspects?
There are a couple of things that attract people.
Professor Roy is smiling.
There is a relative scarcity of opportunities, which encourages applicants. We pay Scottish Government main salaries, which are very competitive. We notice that those salaries tend to be above those of other Government departments outside London so, in a sense, the salaries are good and attract people.
The other thing that attracts people is that we are part of the single labour market within the wider Scottish civil service. Therefore, someone who gets a job at the commission can then apply for internally advertised jobs in the Scottish Government. As a small organisation, we offer new entrants the ability to work for us for a couple of years, gain experience, do interesting things but then move to an analytical role in the Government. That career path makes us very attractive as well.
That would make turnover almost inevitable.
It does.
The report notes that there were six vacancies out of a staff complement of 28, which jumped out at me. However, you have already touched on that.
Sometimes, these things happen in bursts. There was a burst post-Covid, and we expect there to another one next year, because people have been around for two to three years and are starting to get itchy feet.
It is a measure of your success.
Yes. It is a nice problem to have.
The commission’s weekly working hours have gone down from 37 to 35. Are people working harder or do you need more staff? How does that work?
As the convener mentioned. I have gone down from five to four days a week, so I can speak from personal experience. I think that, if people have shorter working hours, there is improvement in wellbeing and, potentially, productivity. We tend to find that people work incredibly hard during fiscal events, when we are writing our reports, then take the flexitime that they have accrued during the non-busy periods.
The pressures tend to be less about having staff available to work on reports and more about the lack of time for model development and maintenance—that is, the background work—and for ensuring a pipeline of short articles and attractive video content. Such tasks come under pressure due to the shorter working week. Another example is the impact of additional public holidays.
Okay. You said that you have been to some of the Scottish Parliament committees, but you have also been to the Scottish Affairs Committee at Westminster.
Claire Murdoch was representing the commission as part of—
Is that a regular interaction, or was that a one-off?
It depends, in part, on what the Scottish Affairs Committee is looking at and scrutinising, but it does not happen regularly.
We do not attend annually. Claire Murdoch attended quite recently. We have had commissioners attend—for example, Professor Alistair Smith, who used to be a commissioner, went a couple of times. It happens when that committee is looking at fiscal issues on which it needs expertise.
I am surprised that Michelle Thomson did not ask about this, but I was struck by the change in the male to female split of applicants that you have had. Your report says that 61.9 per cent of applicants did not identify as male, compared with 33 per cent the previous year. Did you do something that led to that change?
Last year was a little unusual, in that we received more than 500 applicants for one of the posts that we recruited for. I tried really hard to get a diverse group of people to apply for that corporate post, and I certainly succeeded on that front, but that really skewed the data.
There are longer-term trends to consider. Economics has traditionally been a very male-dominated discipline. It got much better and much more balanced a while back, but unfortunately it seems to be changing again, and the graduate population seems to be becoming more male dominated.
12:00
You said that you have been making an effort to reach out and spend time doing interviews with the media. Do you think that, on the whole, people in the media understand the SFC, Scottish finances and the budget? Are they beginning to understand those things better?
Those whom we engage with in the media understand.
We always reach out to the media, and we did so this year. We have a very good media conference immediately after the budget—basically, all the main print and broadcast journalists attend. My sense is that they get it, and we do not have to give the same explanations as we might have had to give in the past. The questions are getting much harder and tougher. They are not asking us to explain the process and they get the income tax relative position, pressures on spending and the like.
The big challenge is volume. This is a broader comment about media, which is similar to the point that I made about think tanks. The budget is a big thing for a short period of time, and then, because there are so few journalists who are focused on public policy in Scotland, they move on to the next thing. The challenge for us is regularly drip-feeding the information through, and that is one of the reasons why we try to separate out our publications through the year. We have the budget, which is hopefully at the end of the year or the start of the year, and there is a fiscal sustainability report in the spring. We also have a new publication that we have pushed into the fiscal update, which is basically about getting ready for the Parliament coming back. Then we will usually have a medium-term financial strategy at some point in late spring. However, this year that is more likely to be published in the autumn. We try to spread out our publications so that we can engage with the media as much as possible, but we know that they are under a lot of pressure.
During the past two years, you have very successfully worked to simplify the explanation of the budget through blogs, better diagrams and so on. Have you had a good response to that? Is there positive feedback that it is helping?
Yes, I think so, but I can answer only based on the events that I speak at. John Ireland might want to talk about some of the pick-up more generally. The improvement and investment in visualisation have helped quite a lot. We can see that through attendance at media conferences. We have to correct stories much less often. We always monitor the situation, and we know when someone has misinterpreted something that someone has said. That is coming through. When we go along and talk at various events, we get feedback.
The main issue is how we increase the volume of coverage, and having two commissioners who are up for that and keen to do it gives us a chance to significantly amplify the work that we do.
Will that continue? In the autumn, when the Parliament in the new session is embedded, there will be more training on the budget. Will that be extended to parliamentary staff as well as to new MSPs?
Yes. We have done quite a lot of work with parliamentary staff. We get a good turnout at the SPICe breakfast seminars and so on that we do for staff.
There will be new MSPs, but their support staff will also be new. We do things that are not public, and we are always happy to speak to any member of Parliament or their staff, so that they can ask any questions about the process and how it works. That will continue post-election.
Much of what I was going to ask about has already been covered, but I have one question about your engagement with the media. The media is a necessary evil for all of us, and I say that as somebody who was once a journalist. Given your impartiality and, as you referred to earlier, your risk aversion, how do you codify your media engagement? Do you not want to put the head in the lion’s mouth too often?
That comes down to how I try to think about chairing the organisation and what to do.
Impartiality—and independence—is fundamental to us as an institution. If we lose that, it is gone. That is absolutely crucial in the role of the institution, so it is always right at the front of our minds when we are engaging, and we are very careful all the time about the language that we use and what we say. There is then a risk in terms of the balance when we think about how much we invite junior colleagues to start going out and saying things. What is the relationship there? We always have to balance that, because, if you lose the impartiality, it is extremely difficult to get it back.
In saying that, I think that we are open. We are really happy to chat to people and explain things. If people want to run a story, we will check whether it is factually accurate; it is up to them how they write it politically and so on. We are very open, but the important thing for us is the impartiality. If people are going to use arguments and they do it with numbers, you might disagree with the argument, but at least the numbers are right and correct.
Back in 2014, Ed Balls put some pressure on George Osborne to give responsibility for auditing manifestos to the Office for Budget Responsibility. I was very sceptical about pulling an independent body into an election campaign. I assume that you would be sceptical about any similar calls in Scotland for that process.
That is a really interesting question, and the OECD touched on that as part of the review. Other fiscal institutions have that role; in the run-up to an election, they, in essence, audit the plans that are put forward by parties. Ultimately, what we do is determined by what the Parliament wants us to do. Taking on that role would require a change to the Scottish Fiscal Commission Act 2016, but if the Parliament wanted us to do that, we would of course go down that road.
However, there are important things to think about in that regard, because we have a clear protocol for our relationship with the Government. A lot of the engagement is between our officials and civil servants, and there is a code that governs that. I come back to my earlier point about independence and impartiality. How we would engage during the heat of an election campaign with—I mean no offence—politicians who are trying to win that election while ensuring that we did not get caught up in that would require very clear rules on what was dependent on it.
In the annual report, I see that, under potential risks in relation to partner organisations, part of the reason for remaining at amber on the risk register is the election process, “changing timetables and processes” and the potential for
“a new finance committee after the Scottish Parliament elections.”
Is that a vote of confidence in us or a warning about what might follow?
I could not possibly comment on that.
Before I let Patrick in, I will just note that one difficulty is that parties publish manifestos after the postal ballots have been issued—all the main parties did that at the last election. In addition, how would you know which parties’ manifestos to look at? There are dozens of parties, and some might complain that you had not looked at theirs but that you had looked at the more mainstream ones. I think that that would be a difficulty for you.
I want to briefly follow up on the impartiality point. When it comes to what impartiality means, I imagine that you face a similar challenge to the one that most of the media face. To some, it means treating all opinions with equal respect, whereas others would say that impartiality means calling out falsehoods and not treating every opinion as equally valid. Do you feel that part of your role in being impartial is to proactively call out falsehoods when they are made?
Yes, and particularly when that is defined around our work and what we do. I have very clearly said that I am more than happy for people to challenge our work, criticise it and say that they have a different view about it—that is entirely fine. However, if people used our work in a way that was wrong or potentially misleading, we would be clear about having concerns around that.
Coming back to the point about the broader community, we do not have a role such as that of the Fraser of Allander Institute, which can opine more broadly on things. For example, we cannot—picking up on Mr Hoy’s point—comment on the Opposition parties’ policies and ideas. That is not for us, because we are only allowed to comment on Scottish Government activity. If a party comes out with a tax policy, you will not see us commenting and saying whether it is good or bad or what the costs would be, because that is not in our remit.
I want to come on to an issue that relates to the way that your remit is constrained in law, which means that Parliament would have to decide to change it. Is there a gap in the information that is available to the public and to the political environment, given that your remit is focused on the Scottish Government?
At a previous meeting, we discussed the fact that you do not do forecasts for council tax. I am not sure whether council tax raises quite as much as non-domestic rates, but it is in the same ball park. It is either the second-biggest tax in Scotland or a close third.
Whether we are looking at forecasting or the concept of fiscal sustainability, councils deliver significant services in Scotland, and the same question about the sustainability of their finances in delivering those services that applies to the Scottish Government’s finances applies to them. Does the fact that your function applies only to the Scottish Government not mean that there is a serious gap? Most of your discussion of the local government budget is about the outgoings from the Scottish Government, rather than about how that money is used and how services are delivered.
In answering that, I will stray into personal opinion rather than commenting on the view that the commission might have. We were deliberately set up to operate in the context of the fiscal framework and the transfer of fiscal powers to the Scottish Government and, therefore, the Parliament. We were set up as one of the supporting mechanisms to give the Parliament reassurance about those arrangements.
Because the institution has settled down and we are making a contribution, that could lead to demands for us to have a broader remit and to be able to think about the public finances in all the devolved areas. You are right that we do not have a role in areas such as local government. There is no fiscal framework for local government. Council tax is outwith our remit because it is a local tax, but it clearly matters a lot to people and is an important part of the whole budget process. However, we do not have a role to play on council tax.
Similarly, as we have already discussed, we engage only on Scottish Government propositions; we do not engage on broader propositions that are aired in Parliament. I am starting to stray into the issue of, if people are happy with the institution, what the long-term objective for it is.
That is the case despite the fact that much of what local government does—whether we are talking about the way that local government tax setting gets interfered with by central Government or the fact that the nature of its services is often defined by central Government—is a consequence of decisions by the Scottish Government, albeit that they play out at local level.
Yes, that is right. We can do some things as part of the expending work—for example, we can look at the evolution of specific grants to local government—but how the big general revenue grant operates and is allocated is not part of our remit.
If the Scottish Government or the Parliament, in a future session, were to decide that that should change and that the commission’s function should be broadened, would the commission be able to take that on?
Ultimately, the commission will do what it is instructed to do and what any future piece of legislation sets out in that regard. A resource request would have to be made and we would have to think carefully about how such a change would be operationalised.
I come back to the point that we have a protocol with the Scottish Government about when we get data and how information is provided. If we were to move into a much broader area, such as local government, or to undertake engagement on broader policy issues, the Parliament would have to be really careful to ensure that we had the resource that we needed in order to be able to do that and the rules and processes in place to underpin it.
That is a very important point. You would need to have the resources in order to be able to do that work.
I have no further questions. Is there anything further that you would like to say to the committee?
I have said this before, but I want to thank the committee for the scrutiny that we get, which makes us better in how we perform as an organisation, and for the general support that the committee provides in helping to promote our work. We got some help explicitly with the recruitment of our two new commissioners, which was really welcome. That helped us to get a broad pool, which has been really positive for us.
Thank you. I hope that John enjoys his one-day-a-week retirement. I have no doubt that we will see you again before too long.
We will now have a break for a few minutes to allow for a change of witnesses.
12:14
Meeting suspended.
12:16
On resuming—
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