Chamber and committees

Indeed. I found that approach quite illuminating in your December report.

That draws our questions to a close, and I thank Professor Graeme Roy, Claire Murdoch and Professor David Ulph for their—as ever—enlightening contributions. That concludes the public part of the meeting, as we agreed to consider our work programme in private.

Good morning and welcome to the 22nd meeting in 2022 of the Finance and Public Administration Committee. As you might have noted, I am the committee’s deputy convener, but I am sitting in the chair as convener of the meeting because the convener has unfortunately lost his voice this morning. I ask my fellow committee members not to smirk or smile at that fact; indeed, I have asked the clerks to investigate whether there has been any foul play—I am not looking at John Mason in particular.

We are very pleased to have with us the Scottish Fiscal Commission, given that agenda item 1 is an evidence-taking session on the four new reports that it published last week. Members will have received copies of the “Forecast Evaluation Report”, the “Approach to Fiscal Sustainability Consultation Paper”, “Trends in Scotland’s population and effects on the economy and income tax” and the commission’s fourth “Statement of Data Needs”.

Without further ado, I welcome to the meeting Professor Graeme Roy, who is appearing before us not for the first time in person but for the first time as chair of the Scottish Fiscal Commission; Professor David Ulph, commissioner; and Claire Murdoch, head of social security and public funding. I believe that John Ireland has been unable to make it, as he, too, is unwell.

I intend to allow up to 90 minutes for this session. I invite Professor Roy to make a short opening statement before I open it up to questions from the committee.

Thank you, Liz. We turn to questions from John Mason.

Obviously, you need disaggregated data on average payment type and on who is claiming what and when. That is a crude summary of what you are after. You say that you had that in the past. What is preventing you from getting that data from Social Security Scotland? Is it systems, organisational issues or some other reason?

Indeed. I will not ask any further questions about that, but it is clear that having access to data that is rich, disaggregated and has continuity from the legacy social security payments is critically important. I am sure that the committee will want to address that in future, and it might well be the subject of questions from other members.

I have two final questions. First—this is just to frame the evidence session—the past 18 to 24 months have been highly unusual, if I can put it like that, and have stress tested your methodology to the greatest possible extent. Indeed, I note in the “Forecast Evaluation Report” some commentary on the accuracy of employment data and your use of real-time information rather than the labour force survey, which the OBR uses. In broad terms, what lessons have been learned from the unpredictable nature of the last period? How will that inform the approach that you take in “normal times”—quote, unquote—if such times exist, and in the context of any future shocks?

Thank you very much, Professor Roy. I will ask two or three opening questions.

In broad terms, the reports examine how effective your forecasting has been to date and look forward to how it could be done in the longer term. With that in mind, and given that we know from your previous reports that there is potentially a significant gap in social security funding—a gap of around £700 million, as I recall—will you elaborate on the data requirements and the issues that you pointed out in the reports and in your opening remarks?

You touch on a really important facet, which the committee has had a real interest in when we have looked at the reports of the past year.

I have a brief follow-up—I am mindful of the time, colleagues. To what extent does the long-term fiscal sustainability report seek to understand and explain some of those long-term trends? It is one thing to observe and forecast them correctly, but as policymakers, we want to understand why they are happening, so that we can make policy decisions to address them. To what extent will the report seek to explain the sort of differences that you have just outlined?

Last week, we heard from representatives of the private, voluntary and independent sector, who feel that there is a lack of transparency in how local authorities are arriving at their rates. Looking at the methodology that is set out in the 2020 paper, I am left wondering why that is. I would like clarification on two points.

First, with regard to the four methodologies, my reading of the paper is not that any local authority should necessarily be using one methodology or another exclusively; it appears that a combination of methodologies would be the best way forward. However, that does not seem to be what is happening. Is that a fair assessment of how the framework was intended to be used?

Secondly, how is it being used? The paper that summarises the approaches that are being taken by local authorities shows that a number of local authorities are taking a survey-based approach, but they seem to have done so as a one-off, whereas the guidance says that surveys should be repeated regularly. It says that a survey of costs should be done multiple times a year. I am thinking of local authorities that have done a survey once a year or two years ago.

What work is the Scottish Government undertaking to ensure that those methodologies are being pursued as they ought to be?

Indeed. I heard that loud and clear.

Finally—and again expanding on what the convener was asking about childminders—if we look at the overall number of providers that we have, based on what the Care Inspectorate has said, we see that there has been an increase in the number of places but a net decrease in the number of providers. That is not just the number of childminders; that is across all providers. Given the fact that the bulk of the expansion has occurred within local authorities, that means that there has been a reduction well in excess of 5 per cent in the number of all types of non-local authority providers.

When the Scottish Government reflected on the impacts of the policy, that is not what was anticipated. What lessons should be drawn about the impact that the policy has had on implementation, both in the diversity of providers and in the flexibility of provision, given that most local authority settings do not provide childcare beyond school hours?

I will come on to the 2020 framework and the four methodologies. You have neatly prefigured what I was going to say next.

First, I would like you to clarify one point. It sounds very much as though you are saying that, in the sequence of events, that granular view was arrived at only after the decision to move to 1,140 hours. Would that be a fair reflection?