Chamber and committees

I do not think that anyone would accuse you of making up your mind too early. People just want to ensure that the bill goes forward with solid financial foundations. That is the issue that I think we are grappling with. For example, there are a number of areas where the financial memorandum fails to give any indication at all of the likely scale of costs. Audit Scotland lists a number of areas where no indication of costs has been provided, and those are significant. They include

“the costs of any national care boards ... transition costs for Local Authorities and Health Boards, including double running ... the impact of changes to VAT treatment ... the impact of any changes to pension scheme arrangements and associated contribution costs arising from pay harmonisation/rationalisation ... the extent of potential changes to capital investment and maintenance costs ... the cost of the health and social care information scheme.”

There is also the issue of transfer of assets.

There are real issues on which more information could and should be forthcoming, surely, at this point.

I point out that, in evidence to us, the Society of Local Authority Chief Executives and Senior Managers said:

“The financial memorandum does not represent the outcome of the Feeley review or the national care service consultation. You cannot see the total costs. You are not able to look at what the priorities would be within them or to properly compare alternative models against what is laid out in that financial memorandum.”—[Official Report, Finance and Public Administration Committee, 25 October 2022; c 33-4.]

One of the things that came out of the evidence is the potential impact on the viability of local authorities as an unintended consequence. The ultimate aim of the policy is to deliver for the people who require the service. If there is a conflict between the viability of a local authority and delivering the service, where would we be?

Some local authorities have smaller management teams than others, and those teams have a wide range of roles. If expertise is transferred—potentially for very good reasons—that local authority might not be able to deliver on other areas of its services. How much time has been spent looking at that issue?

The issue is not about funding having a neutral impact. If a management team is reduced, it will have a difficulty in delivering those services. It might be that some local authorities must retain similar-sized management teams. You would end up with diseconomies of scale. If you transfer some services but, ultimately, you need to leave much the same team behind, you must fund additional staff for the new services. You would surely end up with a more costly and, some might think, more cumbersome delivery.

I am aware of that, and I have also noticed that you are being very careful with your language, in saying that you will “take account” of inflation and look at its prevailing rate. I understand that you are not in charge of the budget, but huge sums of money will be dedicated to setting up the structure of the service, and those who will be in receipt of that money will be looking to see whether it will be hobbled from the start.

Given that this is a flagship policy for the Government, one would have thought that ensuring that it delivered, even against the financial odds that we are currently facing, would be an absolute priority. It alarms me somewhat that, even at this stage, there seems to be no guarantee that that will be the case.

I would appreciate that, minister, but I know that other members, including me and Daniel Johnson, want to ask about co-design. We will be exploring the issue further as the meeting progresses.

The last question is the $64,000 question from some of the people who have given evidence to us, and it refers directly to the financial memorandum. SOLACE said that a lot of the Scottish Government’s response to its concerns has been

“to say either, ‘We’ll cross that bridge when we come to it,’ or, ‘That’s a decision that can be taken locally.’”

It went on to say that

“the proposal is well intentioned, but it does not give us any certainty that we are going to get to something that will deliver consistent care services across Scotland.”—[Official Report, Finance and Public Administration Committee, 25 October 2022; c 42.]

COSLA said that, in its view, the financial memorandum delivers

“an unacceptable lack of clarity.”

When I asked COSLA, CIPFA and SOLACE whether they thought that the financial memorandum should be revisited, each of them said yes. What is your response to that?

You were asked:

“If applicable, do you believe your comments on the financial assumptions have been accurately reflected in the financial memorandum”?

I found it interesting that you basically said that you did not believe that they had been. However, the Fraser of Allander Institute took the view that the

“analysis provided by the Scottish Government is reasoned and logical.”

Will Emma Congreve explain the institute’s thinking on that?

Thank you for that. You say in your submission:

“what could be the most significant”—

that great word again—

“public sector organisational change in recent memory must not be underestimated in both time, unnecessary distractions and increased costs.”

What do you mean by “unnecessary distractions”?

Thank you.

Emma, I found the Fraser of Allander Institute’s analysis quite interesting with regard to table 3 in its submission. You say:

“Decisions relating to the number of Care Boards have not yet been made, and the figures in Table 3 assume 32 are created, one for each local authority area.”

Does it seem efficient to you to go from 32 local authorities to 32 care boards? What impact would that have on delivering what the bill is ultimately setting out to do, which is to ensure high and consistent quality of care across Scotland?