Chamber and committees

The tragic events in Ukraine have brought these long-standing issues to the fore.

Some members made the point that this should have happened some time ago, but it is undeniable that now is the time to lift the veil of secrecy and shine a light on who owns one of our most vital assets as a nation—our land—and to help to call out the corruption and ownership of assets that are purchased through unlawful conduct.

We want a Scotland that is, and is seen as, hostile to anybody who thinks that they can hide assets that were obtained by unlawful conduct. We support the unexplained wealth order provisions, which deliver key improvements to the effectiveness of UWOs as part of measures that will also strengthen the financial sanctions regime, which will do more to tackle corrupt regimes, businesses and individuals across the world.

On the measures included in the LCM relating to a register of overseas entities, the Scottish Government is fully supportive of measures to tackle money laundering and improve transparency of land ownership. Indeed, transparency of ownership has long been a key objective of our land reform policy and, as I mentioned, the Land Reform (Scotland) Act 2016 included provisions to establish a register of persons with a controlled interest in land.

It should be noted that UK ministers have committed to table an amendment to a sunset clause regulation-making power in schedule 4 to the bill to require consultation with the Scottish ministers before any regulations are made that impact on aspects that are devolved to Scotland.

To take up a point that Michelle Thomson made, I should say in passing that there is a lot further to go in the process, and we are taking quite a lot on trust from UK ministers. I hope that that trust is well placed and that the concerns that we have expressed are taken in the spirit in which they are intended, and are respected as we proceed.

As I said, we are entirely supportive of the sentiment behind Mr Marra’s amendment. However, I highlight that, if the bill were to be amended in the manner that he proposes, that would add little to the transparency regime in Scotland. That is due to the nature of how people had to register before 2014, and the nature of the records. People would have obligations after that was passed that they did not have then, which would create complications for taking legal action. I am happy to go into that in more detail, but it is a complex picture. Of course, our register of persons with a controlled interest in land will go live on 1 April. That will provide transparency for land and property that was acquired before 8 December 2014.

I also stress that time is short and that the UK bill needs to progress in an expedited manner to ensure that the register of overseas entities is up and running as soon as possible. As such, although we accept Mr Marra’s amendment, as I have said, we must recognise that there is no time for the UK Government to make the necessary changes.

The Scottish Government is content with all the ROE provisions that extend into devolved competence, and we recommend that the Parliament gives consent to the UK Parliament to legislate for those provisions. On reforms to the UWO regime in Scotland, the Scottish Government is supportive of the measures in the bill. As I have said, the measures that are included in the LCM will enable enforcement authorities to take more effective action against kleptocrats and serious and organised criminals who launder their funds in the UK, and they will enable UWOs to be sought against property that is held in trust and under other complex ownership structures such as opaque foundations.

I am sure that everyone in the chamber will agree that corruption and the purchase of assets through unlawful conduct are not welcome in Scotland, irrespective of from where the perpetrators originate. I urge members to support the LCM, the purpose of which is really to say—to go back to the song that I mentioned—that this land is our land, and it is not the land of kleptocrats and oligarchs. I ask all members to support the LCM.

First, I reiterate this Government’s, Scotland’s and, I assume, this Parliament’s unqualified support for Ukrainian sovereignty, independence and territorial integrity, and our unequivocal support for the package of international economic sanctions against the Russian invasion. I am sure that the whole Parliament will be united in supporting the actions that we are taking to address this flagrant violation of international law by Putin’s regime.

The people of Ukraine should know that Scotland stands with them in the face of this unprovoked and unjustifiable aggression against their nation, and they can be assured that we will take all possible steps to sever ties to Putin’s regime and those individuals who support it.

That is why I am seeking the agreement of Parliament to the legislative consent motion on the Economic Crime (Transparency and Enforcement) Bill, which was introduced into the United Kingdom Parliament on 1 March. The bill has passed its Commons stages and is with the House of Lords. The bill introduces a register of overseas entities—ROE—and strengthens measures around unexplained wealth orders and the enforcement of sanctions. That will help the UK to counter illicit financial activity from Russia and elsewhere more effectively. The Scottish Government shares and supports those objectives and the provisions in the bill.

I intend to talk briefly on the measures in the legislative consent memorandum separately. Part 1 of the bill creates a register of overseas entities to provide transparency of beneficial ownership across the UK to tackle money laundering. The register will apply to all overseas entities that own land in Scotland and throughout the UK, which will have to provide information about their beneficial owners to Companies House. The register is designed to prevent criminals from hiding behind anonymous companies and from laundering money in UK property, and it will provide more information for law enforcement to help track down those using UK property as a money-laundering vehicle.

Property law, its interface with company law and the interface with the legal systems of jurisdictions around the world are a very complex matter. Broadly, the split between devolved and reserved powers lies not in the powers in this UK Government bill but between the entities to which it applies. I will use an example to illustrate that: a registered overseas company would fall within reserved powers, but an overseas charity would fall within devolved powers. That means that the ROE provisions legislate, to that limited extent, for devolved competence.

We have liaised with the UK Government over the proposals for a number of years, and I especially welcome the engagement over the past week. UK Government ministers wrote to me yesterday to confirm that they will be tabling an amendment, to be considered during the Lords committee stage, introducing a statutory mechanism to consult the Scottish ministers on regulations made under the sunset clause in the bill.

Transparency of ownership has long been a key objective of our land reform policy, and the Land Reform (Scotland) Act 2016 included provisions to establish a register of persons with a controlled interest in land—RCI. The establishment of the register was delayed slightly by the pandemic, but it is on track to be launched on 1 April. Although the policy objective of the RCI is to shed light on who is responsible for decisions about property, whereas the ROE seeks to tackle money laundering by shedding light on who benefits from that property, there is clearly some overlap and, in due course, we will review any duplication. Together, the RCI and the ROE will provide a better understanding of who owns, controls and benefits from Scotland’s land—questions that we have been seeking to answer for a very long time.

Part 2 of the bill seeks to strengthen the system of civil recovery of property that has been obtained through unlawful conduct by improving the effectiveness of the unexplained wealth order investigative procedures, assisting enforcement authorities in taking action against kleptocrats and criminals who are laundering funds in the UK.

The reforms will help to allow UWOs to be sought against property that is held in trust and other complex ownership structures. In Scotland, the civil recovery unit, acting on behalf of the Scottish ministers, can apply to the Court of Session for a UWO. The unexplained wealth order is just one investigatory tool under the Proceeds of Crime Act 2002, but it is a powerful one. It is a court order that requires persons who are suspected of being involved in or connected with serious criminality, or who are politically exposed persons, to explain how they obtained certain property where the value exceeds their known, lawfully obtained income.

The bill includes provisions that will assist enforcement authorities to investigate the origin of property and thereby recover assets that were obtained through unlawful conduct. The bill increases the scope of the existing powers in the 2002 act, expanding the list of persons against whom UWOs can be sought and enabling them to be served on a person who is a “responsible officer” and is expected to have some control of the asset.

For situations where the property holder was not responsible for financing the acquisition but it may have been obtained through unlawful conduct, the bill contains an alternative test to the income requirement that must currently be met for UWOs. That will help to ensure that property that is held via complex ownership structures will fall within the scope of the UWO regime.

The bill provides a power for the Scottish ministers or the Lord Advocate to seek an extension to the length of an interim freezing order, which prevents a person from dealing with any property that is subject to it. The bill will increase the time to a total of 186 days for the civil recovery unit or the Lord Advocate to review material that is provided to them.

The bill will also reform the court expenses rules so that expenses are payable by the Scottish ministers or the Lord Advocate in court actions relating to an UWO only if they have acted improperly.

The LCM sets out the relevant provisions that require consideration by Parliament in so far as they fall within this Parliament’s legislative competence or confer functions on the Scottish ministers so as to alter their executive competence in relation to devolved matters.

It is worth noting that the bill also seeks to strengthen sanctions measures, which fall outwith the LCM, in the light of Russia’s aggression towards Ukraine.

That is an important point and one that I am increasingly seeing made, for example by people who understand that certain sportspeople have been caught up in sanctions and have been unable to compete in competitions that are very dear to them. These actions are necessary to undermine Putin’s regime, even if they sometimes—inevitably—catch other people. However, we should not get involved in Russophobia.

The Scottish Government fully supports the application of sanctions against Russia because of its aggression against Ukraine, and we will continue to do all that we can to support the UK Government in that regard.

I close by extending the Scottish Government’s appreciation to the parliamentary authorities for their assistance in expediting the LCM at such short notice to ensure that Parliament can vote on it today. I ask members to support the LCM.

I move,

That the Parliament agrees that the relevant provisions of the Economic Crime (Transparency and Enforcement) Bill, introduced in the House of Commons on 1 March 2022, relating to amendments for Unexplained Wealth Orders contained in the Proceeds of Crime Act 2002, and provisions relating to the Register of Overseas Interests, so far as these matters fall within the legislative competence of the Scottish Parliament or alter the executive competence of the Scottish Ministers, should be considered by the UK Parliament.

On the first point, as far as I am aware, it would not be possible to give a breakdown of the offences, because, as I mentioned, many different tools are used in relation to different offences, often in conjunction with other tools, and all those tools are used in conjunction with professional judgment. However, I will look into the matter and see whether I can provide more information to the member.

The second question was about the resources that are required to carry out the work. It is the nature of the job that they will have to do it—it is very important, so the work will begin right away. As the member knows very well, it is in the nature of the work that is done by criminal justice social workers and staff in the Prison Service. Justice professionals will be familiar with the paper-based system that will be used while the review is undertaken, not least because some of the other systems that they currently use are still paper based and because some staff will have used the LS/CMI paper-based system prior to the IT system being adopted. It will not be new to those members of staff, but I recognise that the review will take time. Given the on-going, resource-intensive nature of the work, I am happy to report back to the committee and the Parliament on it.

I will update the Parliament on an issue affecting the level of service and case management system, also known as the LS/CMI system.

LS/CMI has been used in Scotland as a paper-based system since 2006, and as an information technology system since 2010. It supports risk assessment and case management for individuals with a history of offending. The LS/CMI system is used by social work and prison staff as one part of a wider set of processes to inform a number of decision points within the criminal justice system, including sentencing decisions, programmes access and prison release decisions.

In 2019, the system was centralised. As of 22 November 2021, all 32 local authorities and the Scottish Prison Service, which had each previously hosted the system locally, were migrated on to a centralised IT system.

The LS/CMI risk assessment tool is not the only risk assessment that is used within the justice system. A number of different tools are used for a variety of different types of offenders. This issue relates only to the LS/CMI risk assessment tool. A number of validated risk assessment tools support and inform professionals in their decision making. Those include risk assessment tools specifically related to violent offending, sexual offending and intimate partner violence and stalking.

In the prison environment, LS/CMI is used as one of a suite of risk assessment tools. The choice of risk assessment tool in that context is partly influenced by the nature of the index offence. Management of the assessed risk is governed by a multidisciplinary team of professionals referred to as the risk management team. The RMT is chaired by a prison senior manager who is supported by a range of professionals including, but not limited to, criminal justice social work, psychologists, health professionals, Police Scotland, local authorities, chaplaincy and third sector agencies. The challenge of assessing and managing risk draws together that diverse range of professions in the shared objective of protecting the public by preventing or minimising harm.

A recurring theme in risk management practice is the need to balance the safety of potential victims with the human rights of the offender. This multidisciplinary approach, which involves a range of professionals, is also often used for managing individuals within the community setting. Risk assessment is dynamic and, as members see, it is holistic in its nature and is never based on one assessment within the system.

I will explain in detail the circumstances relating to two issues that have been identified, and outline the precautionary measures that have been taken at every step to ensure that confidence in Scotland’s public protection arrangements is maintained. I apologise in advance for the somewhat technical explanation around some of the factors at play. Given the importance of the issues, it is right that we take a precautionary approach.

Following a call about a single case, which was raised by a user to the system helpdesk in January of this year, the system issue was explored by the IT managed service provider for LS/CMI and by the Risk Management Authority, which both provide a helpdesk service for the system. That work sought to understand whether the issue affected just that particular user or was more widespread. Following those detailed investigations, it became apparent last week that the issue affected other users of the system, and test scripts were immediately developed to identify affected cases.

The particular systems issue affects the display of information in the risk assessment part of the system. In some particular instances, the numerical risk score value does not match the risk score level that is displayed by the system. A systems issue appears to prevent any subsequent changes being made to that risk level when new information has been entered.

As of this week, there were 103,394 assessments in total on the live system and, of course, individuals can have more than one assessment. There are approximately 24,000 open cases on the live system. An open case is one where there is some on-going management of the individual in the justice system, which requires use of LS/CMI. I am advised that, from the work that was carried out over the weekend, there were 1,317 assessments where the calculated score did not match the final risk need or level. Of those assessments that were affected, 1,032 relate to closed cases and 285 relate to open cases.

The system enables social workers to override the risk level shown on the system and, of the 1,032 closed cases, there are 537 where an override has been applied by social work. That is the professional judgment being applied to a risk assessment. That means there will be 495 closed cases that appear to contain a risk level that is affected by the system error. The 537 cases that have an override applied will need a case-by-case review to determine whether the override superseded any error.

Officials have taken immediate action to review open cases that the justice system is still managing, and I will say more about the review process shortly.

On Friday of last week, my officials issued an immediate update to users of the system—principally, justice social work but also SPS staff—to make them aware of the issue and provide a temporary solution, so that cases could be identified on the system and a form of override applied.

Work is on-going to identity the specific affected cases and, on Tuesday, my officials issued details of the open cases and locations of those cases to users of the system, and asked them to specifically review risk levels and scores and take any necessary actions.

The action in those cases will have been for users of the system to determine whether the risk level that was shown for the cases that they manage was correct, and to apply an override if not. Users of the system were also asked to involve partners, if there was any impact on the on-going management of that individual within the justice system. My officials are assembling returns from users of the system as they do so. To date, 150 returns have been received, and no users of the system—social worker or SPS—have advised the Scottish Government of any public protection risk as a result of that systems issue.

Justice social workers, whether community or prison based, are trained professionals and will always apply professional judgment to every individual that they manage. The nature of risk assessment is holistic and wide ranging. It is not mechanistic and is never solely based on the LS/CMI risk assessment tool.

The initial error has been investigated as I have described. Further to that, and as part of that investigation, previous change logs and helpdesk calls have been reviewed in parallel, to explore any issues that interact with the systems issue. It seemed only sensible to do that. From those investigations, it appears that there might be another area of risk scoring, in relation to alcohol or drug use, that creates an error. Although the extent of that is not known, it is clear that it might affect the risk score. As presently reported, the initial evidence on the system indicates that the score is likely to be higher rather than lower, so it overstates risk rather than understates it.

Given that this second issue has been identified as potentially affecting cases, I have—again as a precautionary measure and to ensure that we take no risks with public protection issues—agreed the following actions.

All social workers have been asked to review all open cases on the following priority basis: cases that are due for imminent consideration of release from prison, or for entry into multi-agency public protection arrangements, or to move on to licence.

Justice social workers have been asked to move, with immediate effect, to the paper-based system that is part of the agreed contingency plan in the event of any system failure. Extensive support from Community Justice Scotland has been put in place should there be any immediate training implications. Other risk assessment tools in the system are paper based, however, so the system that those professionals move to will already be familiar to many of them.

We are working with the IT company that manages the system and, if necessary, additional expert IT capacity will be deployed to assist with the rigorous assurance process of every element of the system that we now need to carry out.

I have convened a risk review group, which will be led by the Risk Management Authority, to work through, as a matter of priority, the open and closed cases to assess whether the errors have had an impact on how those cases were managed in the system. I reiterate that this work is being done to provide further assurance, and not because we are aware of any issues around the management of offenders due to the issue. I am keen that this work concludes swiftly, and I am, of course, willing and eager to report back to the Parliament on its outcome as soon as that group has concluded its work or has initial findings that it is appropriate to share.

In terms of further actions, officials have written to other justice partners with an interest in these matters, including Police Scotland, the Parole Board for Scotland, the Scottish Prison Service and the Scottish Children’s Reporter Administration. Officials have also written to victims organisations to ensure that they are sighted on the issue and so that officials can offer necessary reassurance around the work in hand. If any of the victims organisations would find it reassuring to meet with me so that I can reassure them about the actions that are being taken, I am more than happy to make that offer, as well as to involve them in these processes.

I have also written to the Criminal Justice Committee today, to make it aware of the issue. I will continue to update the committee as more information becomes known.

It is important to reiterate that this issue has not resulted in any concerns being expressed by social workers, in the community or in prisons, around any offenders who are in the justice system. Our approach will always be precautionary and evidence based.

I am updating the Parliament on the issue to ensure openness and transparency, but I hope that the steps that have already been taken, and the openness with which we are dealing with the matter, provide members with some reassurance.

I have confidence in the professionalism of our justice and health professionals who every day manage changing and evolving risk across a range of offenders. As has been explained, LS/CMI will never be the sole determinant of how the justice system deals with the risk that is associated with an individual. There is much more by way of judgment and process involved, and determination will often involve a multidisciplinary range of professionals, who are never just following what is displayed on the system. I am very grateful to them all for their continued support in ensuring that we retain confidence in how we protect the public from offending behaviour as we move forward.

I will continue to update the Parliament on the matter, as appropriate. I am happy to take any questions.

The member is correct in saying that it is never just the LS/CMI assessment that determines, for example, prison release. A multidisciplinary team of professionals, which is referred to as the RMT, governs the management of assessed risk in prison. A prison senior manager chairs the RMT, supported by a range of professionals including, but not limited to, criminal justice social workers, psychologists, health professionals, Police Scotland, local authorities and third sector agencies. A range of other specialist tools for assessing the risk of sexual and violent offending are also often used alongside the LS/CMI—it is not, to use the old phrase, the only tool in the box. It is probably not even the most important one, considering the professional judgment of the list of professionals that I have just given.

Notwithstanding the further work that we have to do, I am confident that the answer will be one that reassures the member—he will perhaps be reassured if I write to him with the exact details of the matter.

The member is making an outright political attack when the matter is quite serious and the public are possibly concerned. Honestly, we are just getting sick of this script—“The SNP Government this, the SNP Government that.” Perhaps the member should treat the issue as seriously as it should be treated. The issue is serious and can cause people concern, so it deserves a serious discussion rather the political rhetoric that we have just had from Mr Findlay once again.

Yes. As I have said, I am happy to do that. I think that I am due to appear before the committee for about two and a half hours, on different issues, next week. It will be up to the committee—[Interruption.]. I apologise—I did not hear that. I will be happy to answer any questions that are asked. If the committee wants to change the nature of its questions as a result of today’s statement, the Government will be responsive to that.

I have already committed to come back to Parliament on the issue. There is a judgment to be made about when it would be appropriate for me to do that. It is a judgment on which we cannot win. I want to make sure that Parliament is informed as soon as possible. That has been the injunction from the Presiding Officer. I have sought to inform Parliament as soon as possible. It is six days since we were made aware of the issue. Much work has been done to make sure that we can get as much information as possible to members. As and when we have more information to provide to members, I will, of course, come back to the committee and the Parliament. In the meantime, I will also be happy—this relates to Pauline McNeill’s questions—to correspond with individual members.

In relation to the specific issues that we face, I have mentioned the additional resources for the review group and the Government’s willingness to provide additional resources to help the professionals who are involved in that exercise.

However, I think that Maggie Chapman’s question is a wider one about resources more generally. Our recently produced vision for justice will give her a clue as to how we intend to best use the resources that we have. She mentioned victims. As I mentioned in my statement, we will contact victims organisations—I think that they will have been contacted by now—and will involve them in the process through membership of the risk review group, should they wish to take that up. We will work with victims organisations rather than directly with victims, for reasons of which Maggie Chapman is, I am sure, well aware.

Keith Brown has identified an error in his contribution and has provided the following correction.

At column 93, paragraph 8—

Original text—

I will respond directly to Mr Kerr’s question. On 24 January, a member of the Scottish Prison Service who was using the system found an issue with it. They contacted the help desk that is provided by those who are there to support the system. They had to be certain that it was not an individual user issue, and it took time to do that. They ran tests in parallel with the system. That took until 23 February.

Corrected text—

I will respond directly to Mr Kerr’s question. On 13 January, a member of the Scottish Prison Service who was using the system found an issue with the system and contacted the helpdesk. They had to be certain that it was not an individual user issue, and it took time to do that. They ran tests in parallel with the system. That took until 23 February.