Chamber and committees

Does Joanne Walker have anything to add?

I want to return to some of the points that were made at the beginning of this session. The discussion regarding preventative spend was of particular importance, especially given the real challenges that we have ahead of us. Of course, we are 10 years on from the Christie commission. Although such measures are difficult to implement from year to year, will the panel reflect on whether we have done enough to embed Christie in the way that we devise policy and structure the budget? I think that the key word is “cross-portfolio”, which has been mentioned. Do we devise and implement policy in a sufficiently cross-portfolio way? Should the budget, rather than being structured around silos, be structured around outcomes? I will go to John Dickie first, as he got the grilling on preventative spend at the beginning of the session—at least, I think that it was a grilling, convener.

Does either of the other witnesses want to comment? It might be your last opportunity.

Moving on, but related to the previous question, there have been a number of suggestions, both at this morning’s meeting and in written submissions, that we need to have a look at the fiscal framework. Thinking about Christie, I wonder whether, as well as looking at the fiscal framework, we need to consider how we can use and benefit from it.

The fundamental outcome of the fiscal framework is that, if there are increases in tax revenues, we have that money to spend here, in Scotland. I am at risk of making a gross oversimplification, but one way of thinking about it is that the best way of tackling poverty and inequality is to ensure that more people are in well-paid employment. Are we sufficiently focused on ensuring that policies remove barriers to employment and that such employment is sufficiently well paid? Let us use the living wage as the minimum benchmark.

Does anyone fancy having a go at answering that question? Polly Tolley is smiling most broadly, so we will go to her.

Does Joanne Walker have any observations about the way in which taxation operates in Scotland?

I will move on to retail. I wonder whether we are sufficiently concerned about the impact of Covid on the retail sector, considering that 10 per cent of employment stems from retail and associated industries, and the sector is the largest source of private sector employment. That is coupled with the fact that online sales, as a proportion of retail sales, have increased by about 50 per cent. According to the Office for National Statistics, about half of those sales are from—I love this euphemism—“non-store retailing”; I think that we all know which big non-store retailer, whose name starts with an A, that probably refers to, at least in terms of the lion’s share.

In addition, furlough is coming to an end. Are we about to see a cliff edge for our high street retailers? If their trade is currently down by 20 or 30 per cent, as current figures show, that is not sustainable, is it? What are the consequences of that?

I will go to Mr Robertson first.

I point members to my declaration of interests. In particular, I am a director of a company with retail interests. I am also a trustee and vice chair of the ADHD Foundation charity.

I ask for clarification on declarations of interests from the secretary to the commission. Is it relevant to declare any governance or, indeed, audit roles with external organisations that we might have? Members might want to reflect on making those declarations.

I request that members reflect on whether they have any audit or governance roles with external organisations and maybe use the opportunity to declare those now.

Thank you very much for those answers, which provide us with a good overview of the challenges and changes that Covid has brought.

I started with the macro, but I hope that you will forgive me for diving straight into the micro. In looking at your accounts for this year, I see a number of variances that I might expect, such as a decrease in expenditure on stationery and an increase in information technology spend, but two line items jump out at me, the first of which is a 44 per cent increase in rent and rates. I would like an explanation of that, because it is quite a large increase not only in percentage terms, but in actual terms, especially at a time when people were using buildings less. I am keen to understand why that occurred.

Likewise, expenditure on staff recruitment was up by 44 per cent. That might not be a significant amount in actual terms, but I would be concerned if that indicated underlying staff churn. I would be interested in an explanation of why staff recruitment costs increased so significantly in the year.

I begin by asking the big question. Covid-19 has clearly disrupted life over the past 18 months, but it strikes me, and has been alluded to by Professor Alexander and Stephen Boyle, that it has had a fundamental impact on how Audit Scotland conducts an audit. I always think of auditing as requiring some level of being able to eyeball and assure that what is on the accounts is actually there. If you are working remotely, it strikes me that that is fundamentally disrupted. In broad terms, how has that impacted your ability to conduct an audit?

More important, we are all aware that Covid-19’s impact is not just temporary, but is likely to alter how we work in long-lasting ways. Which of the changes that you have made this year do you see persisting? What impact will that have on the way that Audit Scotland organises itself in the future?