Chamber and committees

I will come on to outcomes later—it is an interesting area that we have not covered. I want to go over some ground that has already been covered around sustainability and finances, which are important issues—we are the Public Audit Committee, after all.

The bottom line is that we have heard a lot of numbers and it is very difficult to forecast how much the benefits will cost, how much the block grant adjustment will cover—whether it will cover all or some of that cost—and, indeed, what take-up levels you will get in real time as time progresses and things stabilise. There are a lot of known unknowns there.

However, the bottom line that I think that we all agree on is that the Scottish Government is spending more on social security than it receives. I think that that is a given, and it is forecast only to increase. No matter who you ask, they will tell you that that number is going up. I think that there is a valid question in here. I am not criticising the nature of the devolution of the benefits system but, at the end of the day, ADP is a so-called “fully funded” expenditure in the Scottish budget, so the money has to come from somewhere. I have a question for the Scottish Government. How on earth is the Scottish Government supposed to make ends meet and balance the budget, given that, according to all the forecasts and as Mr Beattie pointed out, the cost of the benefits will increase exponentially over the next five years?

Okay. I will quickly cover off two final areas, one of which is fraud. Obviously, the DWP has been around for a very long time, so there is a substantial amount of fraud in the system—we all know that, and I am sure that it tries its best to deal with it. However, Social Security Scotland is a new entity and it is fully funded by the Scottish taxpayer; therefore, there is an expectation that Social Security Scotland will take the issue seriously. I appreciate that it is at an early stage, but what evidence do we have of any fraudulent activity within devolved benefits? What has been done to tackle it and to prevent it?

Yes, there will be, but let us be honest: Social Security Scotland was hugely expensive to set up. I would have thought that the tools required to identify fraudulent activity would have been at the core of the start-up costs of the operation. It is disappointing that an Audit Scotland report has identified that those tools are not there.

My final question is about operational costs. What are you doing to keep them down? The cost of delivering the system, before you even put a penny into someone’s bank account, is hundreds of millions of pounds per year. That is obviously of concern to the Public Audit Committee.

Good morning, Auditor General. I have to say that that is one of the grimmest opening statements I have heard from you since I joined this committee. The perilous state of Scotland’s college sector is of grave concern. The statistics that you have just reeled off are a testament to that. Thank you for the important work that Audit Scotland is doing in this space in identifying some of the sector’s issues and bringing them publicly to the fore.

My overarching question is: in your view, what is the current state of the college sector in Scotland and what does its future look like?

Okay. Thank you.

Good morning. I have listened with interest to the evidence, and I have questions that cover some areas that have already been covered and some new areas. In the interests of time, perhaps the person who is best suited to answer the question could do so, which will allow me to get through more questions. That will be helpful.

My first question is a wider one about ADP in general and the role that it plays in the health of the nation. As we know, Scotland unfortunately has the lowest life expectancy, and the lowest healthy life expectancy, of all UK nations—it is some two years below the UK average. That has been the case for many years. In what way will ADP fix that?

Let us look at that, then. Before you answer, I am asking about this because it makes complete sense that if you give someone more money, their day-to-day living becomes easier because they have more money in the bank to spend on things such as bills or on food and all the other things that people need. However, I think that the link is unclear. If you create a specific benefit that is designed to help disabled people, in what way does that help the recipient? At the minute, as you say, you—rightly—are not asking what people do with that money; it simply lands in their bank account every month. How do you then do the difficult task of working out whether that big chunk of cash—and it is a huge chunk of money—is actually improving outcomes for people in the real world?

That is very helpful. Someone said earlier that there is a school of thought that if you spend more on social security and stop seeing it solely through the prism of its being a cost, there may be savings to be had down the line in other areas of public policy. That is an interesting philosophy and I hope that it is true. However, if it is true, we would also expect to see costs reduce in the primary care budget, for example, because people are getting healthier; we might also expect to see the system get more people back into work, tax intake go up and so on. However, we are not seeing those things. We are seeing a system in which the cost of delivering devolved social security is going up, the cost of delivering primary health care is going up and the cost of other social care policies is going up. They are all rising. I was under the impression that if we make difficult decisions to spend more on benefits compared with spend in other parts of the UK, we get better outcomes, but we are seeing neither better outcomes nor reduced costs in other areas of public policy.

That is all really helpful and a useful backdrop to what might happen if a college is in that situation. I guess I am looking at it from a more fundamental, bigger-picture point of view, in that not just Audit Scotland but other forecasters are looking at the finances of specific colleges. There is extreme concern that some of them will be financially unsustainable without either more drastic cuts to expenditure, which presumably means job losses, fewer students or courses cut, or financial intervention from the Government through liquidity from grants, loans or other mechanisms—in other words, an injection of cash just to balance the books year by year. That does not sound to me like a long-term sustainable plan for the college sector; it sounds as if, year on year, colleges are fighting to balance the books, and eight in 10 will not be able to do so.

According to some of the unions that we have received communications from, and Colleges Scotland itself, in one of the models that they have presented to us, there is a serious risk of closure of some colleges—a “Shut the doors; we are done” scenario. Is that a risk?

Thank you for that. You talked there about a 20 per cent real-terms reduction in funding over the past five years and the effect that that is having on what colleges do. You mentioned some statistics—30,000 fewer students and staff numbers down 8 per cent—as well as voluntary redundancies, which some warned could become compulsory redundancies, and the reduction of the physical estate. The phrase that struck me most was: “less teaching to fewer students”.

Fundamentally, how on earth can the college sector help the Scottish Government to meet its main objectives of governance, improving the economy, improving the health and wellbeing of society, getting people into the workplace and skilling up young people? How can the college sector do that while teaching fewer people fewer subjects? The two do not add up, in my view, and I get the impression from your briefing that you agree.