Chamber and committees

But not at this scale, cabinet secretary. Going from 14 health boards down to two is a pretty substantial reform of scale—maybe you would accept that it is a wee bitty unprecedented.

We try to follow the public pound, because we want to see how every pound is spent in each of those bodies and public services. How much of that money will have to go to voluntary severance in the short term, and how much will go to upskilling, retraining and everything else?

How can this committee and others scrutinise the budget, cabinet secretary? I picked the example of Colleges Scotland earlier because there was support for it in the budget, but that support was masked because it went through the Scottish Funding Council first and then came out. I should point out that the Audit Scotland report had a lot of positives about public service reform and that it was not just about one or two of the negatives that I have highlighted, but how can we exercise our public scrutiny functions if we do not know what assumptions have been made around those discussions?

You absolutely should follow up on that, Mr Bannerman, and, if it is of interest to the committee, you should share it more widely. I am sure that colleagues will be interested in that, but it is absolutely appropriate that you do that.

Cabinet secretary, before we close this evidence session, I was looking through our previous evidence sessions and found that a theme that kept coming up was the eagerness of the third sector to be involved. That is not always about a demand for additional resource; it is the sector’s firm belief that existing resources can be used more efficiently—in the correct meaning of the word—in order to be flexible on the ground and deliver better outcomes for people.

That reminded me of a previous Scottish Government measure that I had to double-check. I have previously mentioned the change fund for reshaping care for older people, which dates back to 2011 and ran for a number of years. I mention that because it has a budgetary aspect. The fund was substantial, but the money could be spent on redesigning services only if that was signed off by councils, the NHS and the third sector, and there were mechanisms for that.

I am not saying that we should turn back the clock and go back to that, although I would be open to that. My point is more about how we ensure that, when we are redesigning services for public service reform, the third sector has a voice as local authorities, health boards and others reduce head count and workforce. If they move services to the third sector without full cost recovery, that would not be service redesign; it would just be cost shunting to the third sector.

Can you give the third sector any reassurances? Given that this is budget scrutiny, how can we make budgets promote that vital work, so that third sector organisations are seen as equal partners at the table and help with the innovation for public service reform?

Thank you, cabinet secretary. I believe that the Darien venture got a mention in Parliament yesterday as well, but we will perhaps not go there.

Moving swiftly on, I thank you, cabinet secretary, and your officials for joining us—we greatly appreciate it.

That concludes our evidence session. Before we move into private, I highlight that, at our next meeting, on 8 October, the committee will hear evidence from stakeholders with experience of public service reform in practice.

11:13

Meeting continued in private until 11:44.

I want to check on something in relation to the tagging of budget lines as preventative spend. You made the point that some of that spend is business-as-usual activity and that, when someone says to you, “But is this really preventative spend?”, you highlight that, if you did not do that, crisis would happen, so yes, it is preventative spend.

Yes, there is a baseline from this year’s budget, but in next year’s budget, there could be a huge amount of preventative spend that is really just business as usual. The approach does not actually track innovation in preventive spend.

It is not so much about this budget, although I welcome the steps that we are taking in this budget. It is more about, in subsequent years’ budgets, how we can map out preventative spend where there has been new activity and service reform, and how that is tracked within budgets.

It is definitely not new. I had a look at the Scottish college regionalisation agenda from 2011 to 2014. At that point, £52 million was made available for voluntary severance to Colleges Scotland, but it did not have a budget line. Audit Scotland reported after the event, in a 2015 report, that the money went from the Scottish Government to the Scottish Funding Council, which decided how best to prioritise moneys to support colleges. Clearly, there must have been some cost assumption at that point with regard to what went to the Scottish Funding Council. Across all portfolios, if discussions are ongoing with the national health service and public bodies such as the Scottish Environment Protection Agency, as part of public service reform, some cost assumption must be emerging in relation to the initial costs. How can we shine a light on that? One of the things that Audit Scotland looked at in 2015 was the fact that there was not necessarily the transparency that we would all like to see in relation to that.

I get all that, cabinet secretary, and we will move on, but I put on record that we are asking you those questions because you are the cabinet secretary who is leading on all that. Although the matter sits under the Deputy First Minister, you are the one who is taking all those silos apartand bringing them into your responsibility to ensure that it all dovetails and goes without any hiccups.

I think that there will be lots more on that soon. I will bring in Alex Kerr shortly, but Murdo Fraser wants to ask specific questions on some of this stuff, so I will bring him in first.

Our second item of business is an evidence session on the committee’s pre-budget scrutiny inquiry, on how the 2027-28 Scottish budget can best advance public service reform.

I welcome back to the committee Ivan McKee, Cabinet Secretary for Public Service Reform. He is accompanied by Cathy Sumner, interim deputy director of spending and pay strategy at the Scottish Government, and her PSR strategy and governance colleague, Gabrielle Cahen. I thank all three of you for coming along this morning.

Cabinet secretary, I invite you to make some opening remarks.