 Rwyf, wrth gwrs, ac rwyf wedi mynd i zeithio na'n cymaint yn gweithio gydag y Pwgwr 12 o'r Rmwyfyr Oddych, yn 2015. Rwyf wedi gweithio gyrfa i sy'n gweld cymaint o'r blynyddiadau cyd-fifyrnteil ffyrdd o'r gwaithGymidd. Rwyf wedi cefnod i gael ei wneud na hwn o'r gmydd. Nghargymddai i'w hawdd o'r gwaith ar gydagon ni ниedd i sefnodol yn gweld gôr yrddau i Orfod Dwy. Can we move to agenda item number 1, collies En haven is that we take agenda item numbers 6, 7, 8 and 9 in private. Are we all agreed? Come to agenda item number 2, which is the section 23 report The Deputy Director of Colleges and Adult Learning Division of the Scottish Government, Lawrence Howells, who is the chief executive of the Scottish Funding Council, and John Kemp, the director of access, skills and outcome agreements for the Scottish Funding Council. You are welcome to understand that both Ilma Keenney and Lawrence Howells have to make a very short statement. Good morning. Thank you for the opportunity to provide evidence to this committee and respond to the Auditor General's report on colleges. As with previous reports, we found it helpful. We were pleased that the report identified that college finances are sound, that planning for mergers was good and that the sector has responded well to a period of significant change. The report equally identified some areas for improvement and we are currently taking forward action in relation to all the recommendations that Audit Scotland has directed to the Scottish Government. I am here on behalf of the director general for learning and justice, who is the relevant accountable officer for the Scottish Government. Lawrence Howells, to my left, is accountable officer at the Scottish Funding Council. I will take a moment, if I may, to outline our different but complementary roles. The director general for learning and justice is responsible for ensuring that the funding council's strategy and delivery aligns with the priorities of the Scottish Government, that it has the necessary controls in place to safeguard public funds. The funding council is accountable for delivery of Scottish Government policy objectives, the deployment of resources to that end and for all associated planning and risk management. Convener, this September will mark the fourth anniversary of the publication of Putting Learners at the Centre, which kick-started our post-16 education reform. The guiding principle of our reform agenda has always been about Putting Learners at the very centre. Colleges have since implemented the most profound set of reforms in Scottish tertiary education for more than a generation, designed to improve the sector's efficiency and effectiveness, to improve learner outcomes, and to strengthen accountability. We now have a regionalised sector with 13 regions and a reduction from 42 colleges to 15. The college reform agenda has allowed for more strategic planning of provision aligned with economic need, has improved the life chances of young people and is generating the skilled workforce needed for growth. The reform agenda has created a sector that is more flexible and responsive, better able to meet the needs of students and of industry, better positioned to respond to the expectations of this Government around increasing participation, prosperity and fairness. Colleges are now delivering greater levels of activity for less resource and with greater impact. That surely is a definition of good public service reform, especially in the current economic context. However, we have always acknowledged and I do so again that our reform programme of this scale and pace has been and remains challenging. The Scotland report has helped to capture areas of improvement for our continued attention and we are grateful for that. We recognise that there is more to do and we look forward to continuing to support the sector into the next phase. I am happy to take questions along with my colleagues. I just wanted to illustrate a few of the points that Aileen has highlighted in her remarks. This is a programme of unprecedented reform in both structures and how the college sector is funded through outcome agreements. As we know, there have been concerns over many years about the number of small colleges in Scotland and the programme of mergers that was initiated in 2011 has dealt with that issue. As the Auditor General's report shows, on the whole, has been managed well and has delivered a more efficient and effective sector. One of the key benefits of the new regional colleges is that we now have larger, more efficient colleges able to engage strategically with their region and better provide provision which meets the needs of students, their communities and employers. Just three examples of that. For example, in Ayrshire, the new Ayrshire College, covering the whole region of Ayrshire, has been able to enhance its partnership with CPPs. That has led to, for example, the establishment of a skills centre of excellence in Irving, Irving Royal Academy, which is a shared campus development between the school and the college, a very good example of how the two sectors can join together. In the case of Edinburgh, Edinburgh's new STEM Academy, Science, Technology and Engineering Academy, will recruit its first cohort of students in 2015-16, and that will create a partnership to create a curriculum between the college, between employers, between the local authority and between Edinburgh Napier University. That will transform education in the science, technology and engineering subjects. Finally, my final example from West College Scotland, where it reports annual savings of just under £6 million per year from the merger, with the majority of those savings coming from salaries, with further savings from VAT, subscriptions, licence agreements, insurance and printing. Those three examples show how the new regional colleges are more efficient, how they are able to engage with their regions, and how they are able to enhance the provision for both learners and for employers. I look forward to answering questions from the committee. Thank you. Can I just first of all ask about the regional boards? We have got 10 colleges that manage very well without a regional board, and I would actually argue that they are much more autonomous. They can react much more easily in terms of reflecting their local needs. The audit general support paragraph 36, introducing regional bodies, has resulted in a complex framework of accountability. Individual colleges have expressed concerns that regional bodies will affect their autonomy. As a Highlands and Islands MSP, I can guarantee that many of the colleges in the UHI network feel the heavy hand of an extra layer of bureaucracy. Is a regional board really necessary? It is costly, it is bureaucratic, it is time consuming, it takes away autonomy and 10 colleges manage very well without it? Is it something that we should be looking at abolishing? I think that the funding council will equally have some comments to make in relation to the regional structure. We believe that where we have regional structures in place, which is in three spaces where there are multi-college regions, and I assume that you are referring to the multi-college regional structure, which is in UHI and Glasgow and Lanarkshire. We have introduced that structure there because we believe that that provides greater accountability, because one body then at that regional level can be held to account for the regions outcome agreement with the funding council. We equally believe that that will deliver improved outcomes because the regional body can plan and fund in the best interests of students and employers across the entirety of the region. You heard what I was saying, but you say that it is greater accountability. My question was that the auditor general has brought to the committee her concerns that this has resulted in a complex framework of accountability. Is she wrong? Is it more complex? Is it more bureaucratic? Is it better? I am seeking to answer. In our view, we believe that it provides greater accountability and it provides an easier route to engagement. If I take the Glasgow structure, for example, having a single regional board that engages with the universities, the Government, the funding council, the employers and the city council, that simplifies the engagement route where previously all those institutions had to engage with 10 colleges before the mergers. They would have to engage with three separate institutions if they did not have the regional structure in place. We look to them, and clearly we are in a moment of transition in terms of the regional structures because they are not yet fully embedded. They are not yet functioning fundable bodies, in relation to two of them specifically. We expect the regional bodies to understand the level of volume, the demographics, the market need, the economic need and to help to deliver an improved service, both to learners and to local economies. That is our ambition across the regional structure. It is too early to use the language that you had used Ms Gannon about, rather than being cost and bureaucratic. We expect them to cost less than 0.5 per cent of the budgets for which they will be responsible in due course. In our view, that is not particularly costly. We expect the value add that they will provide to be beneficial to learners and to the local economy. That is our ambition. We are on a journey in terms of their establishment, their embedding and their ability to deliver. I hear what you say, but as a Highlands and Islands MSP, you are talking about the accountability between the Government and the regional board. I am talking about the accountability of a local college in its community. That is what I am talking about. It may be easier for civil servants to talk to fewer people. I am talking about the grass roots accountability of a local college in Orkney, Shetland, Western Isles or Thurso, responding to the needs of that accountable to the local business, industry and commercial needs of that community. That is very different to your accountability. I hear what you are saying. Clearly, there are college boards in each of the individual colleges, which are very close to the local community and the local economy. The chairs of those boards will all sit on the regional board alongside the principles and influence of thinking and identify synergies and opportunities across the piece. That is part of the ambition of the regional structure. Lawrence, would you like to say something about the United Nations structure? The accountability to local employers, to local people and through that, the local college will continue. What will change is that, instead of that local college having a direct relationship with the funding council in Edinburgh, it will have a more direct relationship with a body within the Highlands. Michael Foxley, the regional chair for the Highlands, was at this committee a few weeks ago. He said that he was a fierce defender of the autonomy of colleges within the United Nations. In our experience, he has demonstrated exactly the local accountability that you have talked about. I think that the chair of the regional board in the Highlands would support that. I will leave it there, but the Auditor General has expressed concerns and I have heard serious concerns. Ms McEchnie, you said that you are looking to align the priorities of the Scottish Government with the colleges. You are aligning the priorities of the Scottish Colleges in line with Government priorities. We are looking at another report this morning on ICT and the problems in the Government sector with the lack of ICT staff. Have you been allowed to make sure that student numbers in colleges are sufficient? We have sufficient graduates and experienced ICT personnel to ensure that all the jobs in Scotland are filled. I know that it is a Government priority. Is that something that you have been looking at? Indeed. I will look to the funding council to provide more detail on that, but clearly we look at the ICT and the digital agenda and see that as of significant importance to the Scottish economy. There is a great deal of work and activity taking place in relation to understanding the needs of industry and delivering against those needs through the skills provision that we provide through colleges and our universities. Some of those skills are specialist in high-level and will be delivered through some of our particular institutions such as Abertau, for example, which Abertau University provides some very specific defence-related skills in the ICT space. We are equally working with Skills Development Scotland in relation to the establishment of a digital skills academy. There is a whole range of activity that we want to ensure that we understand the needs of industry and that we seek to deliver them back. If you are doing so much work in colleges, as colleges we are looking at today, if you are aligning the college sector and the college numbers with the Government priorities, why is there over 25,000 fewer places on ICT courses and colleges in the last few years contributing to the national shortage of ICT personnel that we are about to look at? If you are doing the significant piece of work that is aligning to the Government priorities, why have you allowed 25,000 places to fall? I look to the funny case to provide a response on the detail of that, but what I would say in terms of the numbers of courses reduced, we have looked to reduce those courses that we felt did not deliver an economically valuable output. We have looked to reduce the shorter courses that were five hours or less and that might have been courses that were basic ICT skills, which we find that individuals need less now because ICTs talk from preschool right the way through the school system. The demand that might have been there a decade ago for the very basic ICT skills is no longer there because most people have the basic skills. I have got the information from SPICE. It is computer technology, computer science, programming systems, computer use, software and operating systems, text graphics, multimedia, software or specific applications. It is not like a two-hour night class or anything. This is further and higher education within the FE sector, a fall of 25,000 places. We brought together employers from the IT sector and colleges and universities just about six weeks ago for a forum on the skills that were needed in ICT. There has been a drop in demand for courses at both college and university level in ICT. There is a mismatch between the skills that people are learning in college, in university and what the industry needs. There has been a drop in computing in schools as well. All of those things are part of a complex mix of trying to get a match between what has been produced by schools, colleges and universities and the industry needs. Aliens talked about part of the solution to that being a digital talent academy in which SDS is developing. We are also, as a result of the forum that we had six weeks ago, looking at ways that we can better link what colleges and universities are doing with what employers need. It is partly about the numbers on courses, but it is also about getting people the right skills on those courses so that they flow into work. One of the issues that we heard from employers was that some of the people who were on those courses did not have the skills that they needed. There was some frustration in the colleges and universities that they were producing people with what they thought were the right skills and that they were not getting jobs. We need to get that match right as well as getting the numbers right, but we do accept that there is a gap in the number of people with computing skills flowing through both colleges and universities. I figures that we are HNCHND and graduates, but we will leave it there. I would like to explore a little bit about Arn's Length Foundations alfs. That might be a question for the SFC. Originally, colleges in 2013-14 transferred about £99 million into alfs. Is it anticipated that it will be transfers every year? If so, do you consider it likely that it will be a mixture of both private and public money being backed into those alfs? The alfs are set up to enable the colleges to mitigate the effects of the impact of ONS on their reserves and enable them to manage their money over a slightly longer term. We expect colleges to use that mechanism to enable them to achieve that goal. We do not expect that every college to be transferring money into alfs every single year, but there will be transfers. For example, some of that to manage the effects of a capital building project that maybe spans over more than one year or whatever. We also expect that most of those transfers will be to enable them to manage surpluses from commercial activity or whatever so that that can be used for longer-term benefit. From 2014, the total amounts in alfs have been reduced by £11 million to £88 million, and that is a sign that some of those resources that were put into that, the funds have been used for mostly capital projects that have been developing in the sector. I suppose that the issue about monitoring the inflows and outflows into the trusts is very important. We will, of course, be doing that with the colleges so that we understand the pattern of transfers both in and out. We will be keeping under review how effective the alfs have been in delivering their objectives. I did ask about whether it was likely that they would be both private and public money being backed into alfs? For example, public money might be transferred into alfs if it is about managing the cash flow of a building project, of a period or something of that sort. How are we going to follow the public pound here? Obviously, by the very name, they are arm's length. How do we ensure that public money is properly spent? I understand that there is a small minority of the alfs that have been set up that are not specific to the college. They are specific to further education, which could open up the possibility, theoretically, that money could be spent elsewhere. The trusts were all set up using a model. They are governed by charity law and company law, where that is appropriate. That means that the funding can only be used for the purposes for which they are provided. I am actually not aware that there were colleges. My understanding is that all the trusts are specific to the specific colleges that are concerned, and that only those colleges or the benefit of further education in those regions can benefit from that. It is important to say that this is not a totally new model. The model of using trusts to help public bodies to manage money over a long period is well established, and they are governed by charity law and the constraints on that. The money effectively can only be used to benefit further education, and my understanding is to only benefit those regions. Can I be reassured that SFC will be responsible for ensuring that the public money going into alfs is properly spent on the colleges that they are linked with? We will monitor what has happened, but they are governed by charity law and company law. That is the legal framework under which they operate. However, would you be aware if the funding was used for another purpose? We will monitor what they are used for, and we will be able to show how that money is used. In effect, that will be what money flows in and what money flows out, and how is that used? What would you do if you thought that the money was being spent on something different? We would be asking questions, and we would be drawing the attention of the relevant regulators. Do you think that the freedom of information act should apply to those foundations, given the fact that there is public funding in there? That is not a matter. I have a view on that. Do you have a view, Eileen? The Scottish Funding Council would not have a view. Sorry, I have not. It is not a matter. I have considered it, so I would want to think about that. Can we confirm for the record the Scottish Funding Council and any other discussions about those arms-length companies and any other various board meetings that you have held have never discussed the issue but complied with FOI? The question was, should FOI regulations apply to the trusts? Just to clarify, you said that it is not something that you have thought about. I am not aware of us discussing that as part of creating the trust. We helped the colleges to build the trust, building on the models that were provided to us by the legal firm that helped to advise on that. We will come on to the questioners when the committee wants to direct those questions. We will direct the questions. Just to clarify, at no occasion have the Scottish Funding Council, when setting up these trusts, have they ever discussed the issue of FOI compliance? I am not aware of us discussing that issue. I wonder if I might add to what Lawrence has said. Lawrence mentioned that the arms-length foundation model is not a new model, so the arms-length foundation model, as far as I am aware, was first utilised for the Historic Scotland Foundation, which was established over 10 years ago, and it has been replicated and improved over the intervening period in the cultural heritage sector, with the establishment of similar arms-length foundations for the national collections, for example. It is a relatively long-standing model that has existed in the public sector firmament to create the opportunity for bodies to manage their finances over a multi-year basis where it is appropriate to do so. The funding council mentioned the need to do that in relation to large-scale capital projects, for example, which will never be concluded in a single year. Those foundations have been in existence for quite some time in the public sector firmament, and they have delivered significant opportunities. Just to clarify, when most of us probably know that, can we just clarify, in terms of FOI and the point that Mr Beattie asked, has that been a discussion that has taken place within your own department about compliance with that? I am not aware that the discussion has taken place, but I suppose that the point that I was making is that those are not new models if there was an issue of FOI compliance. I would be surprised that it had not been raised before. If there was an issue with FOI compliance in relation to this type of model, because it is not a new one, I would be surprised that it had not been raised before with us, but I am not aware that it has been raised with the Government. Just one final question on the point of the FOI. Given the discussion that we have had on the table at the moment, would you be considering looking at that aspect? Given that you have raised it, we will commit to considering that aspect and discussing it with the relevant people. I just agreed to my Colin Beattie's question, and it was suggested a few moments ago that the issue had not been raised. At the last committee when this particular issue came up, I raised the issue of freedom of information, so that will be on the public record. I would have assumed that when any research was done before it came to the committee, that point would have been picked up. You raised it. The question that was addressed to us had the issue being considered by the Government of the Funny Council when we were establishing the ALF model. As far as I am aware, it had not been raised at that time, but it was absolutely subsequent to today's meeting. Clearly, having seen the product of the previous meeting that I had with the college principals and chairs on the 10th of June, we are aware that it is an issue that is concerning to the committee, so we will take it away and look into it further. The final question is for Mr Howells. In your comments a short time ago, when you highlighted the point that it is not a new model and that there are similar models in existence, it was only very recently that the Parliament agreed to extend the FOI legislation to include leisure trusts and that particular regulation through the local government and regeneration committee. I was a member of that committee at the time. In terms of the colleges, and this particular issue that we are discussing today, I would argue that that precedence has already been set in terms of the extension of the FOI, and in terms of the colleges, there is probably no strong reason for the extension of the FOI not to actually happen. I would certainly like a firm commitment from both the Scottish Government and the Scottish Government to certainly go away and look at this particular issue and to provide written evidence back to a written report or response back to the committee at a future date. One point that we have raised in the last evidence session with the college principals was that they responded by advising that the costs associated with responding to FOI requests for the trusts might prohibit the free flow of the responses to information because of the costs associated. Is that something that you think would possibly prevent us from taking us forward? I think that we need to look at the issue in the round. I wouldn't have thought that that would be the principal reason for making a decision. I think that the principal reason is that it is a principle of openness and the fact that it is part of the public domain. I would prefer to make a commitment to look at the issue and, as you request, provide written evidence on that basis. Having looked at the report from the Auditor General, the report seems to be quite positive. It is obviously looking at monitoring what is going on. The question that I wanted to ask is in regard to the staffing, how it affects staff and students. I notice in the Auditor General's report that it mentions that the changes to date have had minimal negative impact on students. I want to know what your thoughts are from the funding council and the Government as well. If you are monitoring what you have found so far, the impact on the changes of students and staff of the murders? On the subject of students, the most basic measure of how well the colleges are serving the students is that the success rate for students in colleges has continued to go up throughout the reform period. There has been no interruption in that. At a very basic level of providing courses and getting people through it, students are being served well through that. As part of the post-merger evaluation of the colleges that have been merging, we have been speaking to groups of students about their experience of the merger as part of our own evaluation. By and large, the feedback from the students has been very positive. We tend to find that many students do not notice a huge amount of change during the merger, which is a good thing. They are still doing the same courses and buildings, which is exactly what we want. One very positive benefit for students of the reform programme is that, as part of making sure that the mergers were well organised and were listening to students, we funded the upgrading of students' associations within colleges, which are traditionally lagged behind what was possible in universities. In the merging colleges, we put some funding in so that there was stronger student representation during the period in the merger, but we hoped that some of that would carry on afterwards, and it has. We now have far stronger students' associations in colleges. By and large, the feedback that we are getting from them about the reform programme is good. I suppose that I want to add that there is formal and informal measurement and evaluation of both the student experience and the staff experience. That will be visible in publications such as the FFCC's baseline report, college's performance indicators, the annual learning for all reports, the outcome agreement reports, Education Scotland reviews, which take into account staff and student experience, staff surveys, student surveys, student satisfaction surveys, UK CES skills survey, with regard to employer satisfactions. There is a whole swathe of evidence that is provided, and equally there is qualitative engagement with staff and students that provides useful information in terms of temperature checking the impact. We were very conscious clearly that the scale and pace of the reform agenda was significant, and we anticipated that there would be impact within the institutions. What we have found is that what was interesting was a TES article just last week, where a student rep indicated that there had been for him in his college little visibility of the change, so it was business as usual from a student perspective. There was clearly significant impact on staff, particularly at senior level, because they were managing quite a significant reform and change agenda. From our perspective, as you said at the start of your intervention, the Elder Scotland report is primarily positive about the reform journey that we have been on, so the college leadership has delivered successfully in relation to this transformational journey that we have been on. I will continue on the theme of the students in the situation, and the Audit Scotland report mentions that the colleges continue to meet targets for learning and delivering around 76 million hours of learning in 2013-14. Have you looked at the full-time college places that we are looking at, as that fits into people getting jobs and skills based at the end of the day? Has it become a bit more difficult for more than 25 to get part-time college places? Have you monitored that? Have you asked students in relation to that how that affects the students as well? I will say a few words, and then the funding council wants to come with some of the detail. Clearly, the Government absolutely articulated a direction of ambition for the college sector, which changed quite dramatically post our reform agenda. We sought to deliver courses that led to economically valuable qualifications, so we were looking to move students through the college system and articulate them and help them to articulate them into further learning, training or education or into jobs. That was ambition. We focused equally on young people, because ministers understood that, from research that previous recessions had impacted quite dramatically on young people. Ministers are unapologetic about the drive to ensure that we did not let a generation of young people down. I think that the youth employment statistics demonstrate that we have been successful in that ambition. We have focused on full-time courses and qualifications. It is not to say that there are no part-time courses and qualifications, because they are absolutely there. Lawrence will want to say something about increased investment in part-time courses in the past year, among other things, in relation to detail. A lot of the change has been because we asked colleges to de-prioritise very short courses, leisure courses and courses that did not lead to a qualification. That is in line with the delivering economic value to individuals and to the nation. However, colleges are still allowed in the deed encouraged to provide access courses that might fit into those categories. They might be very short, or they might not lead to a qualification themselves, but their design is to help people to move from that kind of learning into more formal learning, which has more economic value and helps people to get into jobs. That is the way that the Government priority and the Government focus on delivering value for people and communities and employers is translated. It is very important for colleges to try to make that best fit between the needs of their region and what they provide. We asked them to work in partnership with other providers or other agencies in their region to do that, particularly through the CPP, so that we try to dovetail the provision that colleges provide with other providers in their region and with the third sector. We try to get the best fit for that region. The big shift towards more full-time applies to older students as well as younger students. There are, indeed, more older students taking full-time courses between the period 2008 and 2013-14. I think that the big shift is what we have tried to do, is reduce courses that have less economic value to individuals and to the nation as a whole. It is someone who benefited from an access course. I went back to further education, and I am pleased to say that you mentioned access. It is very important, not just to myself but to everyone here, to people from deprived areas, regardless of age, to access further education. Do you have any figures that show that people from the deprived areas, younger or older, are encouraged and increasing to get into further education? Is there any monitoring on that particular aspect? Do you have the figures for it? That is one of the measures in our outcome agreements, which is the proportion of students from the most deprived 10 per cent of postcodes. The figures are that around 16 per cent of the students in colleges are from the most deprived 10 per cent of postcodes. If all being equal, if there was a perfect distribution, you would get 10 per cent. That shows that colleges are serving the most deprived to a greater extent than you would expect if there was a perfect distribution. Going up, that is one of the measures in our outcome agreements. We do not think that the reform has in any way impacted on the ability of colleges to serve the most deprived. Similarly, if you look at HE courses in colleges, they are a major part of the widening access effort for HE courses across Scotland. We use 20 per cent there rather than 10 per cent as a measure. They are overrepresented in colleges compared to the distribution in the population. I will ask if we could have the figures if we do not already. I am very happy to provide those in detail. On that issue, Dr Smith? It was on another point, convener. Is it not related to that or so? I can clarify the information relating to the student responses and the positivity from students in the whole process. Is that the baseline studies that you referred to? Are those all independent studies that have been carried out at independent evaluations? No. There is a mix that is primarily delivered by the funding councils, so things such as baseline reports will be funded by the funding councils. So has there ever been an absolute independent study carried out at the views of the students and the impact of the merger? The post-merger evaluations that I referred to are carried out by funding council staff with the students in the colleges. I am not aware that we have sought independent views on those. That is an education part of the picture. So the 140,000 students who have lost a place who are no longer students who probably would have been negatively impacted by this merger, how many of them have been interviewed to ask them their views and the impact of the merger in them? There has been a drop in the head count of 140,000. That has not been people who have lost their place. They have been able to finish their course and have moved on, and those courses have not been available, I would accept. To be fair, I am just asking about that. Let's say that it is 50,000 down. Really, the point that I am asking is that out of those 140,000, let's say that it is not 140,000, let's say that it is 100,000, how many of them have been asked, what is your view on the merger of the colleges? I mean, it might be that they say that it is fantastic that I have moved on to something else, it might be that they are upset, but have we interviewed them, have we asked them their views, have they been surveyed? Yes or no? No, we haven't. I suppose that the question is back again to how do you assess the need in a region because, of course, there are new students coming along all the time wanting to do different things. To be fair, I must say that we have just clarified here, though, the question here is, has this had a negative impact on students? That is the question. I have said here that it has been a positive experience, and that is what every single member of the panel has said so far. So the point that I am asking here is that there are 140,000 students, as far as the statistics are concerned, who are no longer in the system. I am just asking a question. Is it possible that they have not been in it? We have not asked them their opinion on whether this has been a negative impact. Can we just get some order, please, so that we can hear that? I think that it would be technically quite difficult to find those students, because you are not talking about people who have been at college because they are now gone. We are talking about a large number of the courses that those 140,000 people would have been on. We are very, very short courses of less than 10 hours. That is not the question that I am asking. It is quite clear. The question that I am asking is, have any of those people been out of the system if it has been a negative impact? By saying that, I am trying to explain how it would be quite difficult to ask them that question. Students in colleges have been impacted, we can ask. Students who, hypothetically, could have done a course that might have been there, or had those additional places still being there, are harder to ask. What we ask colleges to do as part of their outcome agreement is to base their provision on a regional skills assessment provided by Skills Development Scotland, so that we want them to evidence that they are meeting local need. Within the Government priorities, which, as Aileen has said, the Government has been unapologetic about focusing on full-time courses, because in times of straightened public finances, we need to get the maximum benefit for the maximum number of people. Those full-time courses are the most economically beneficial. In that context, we expect colleges to meet local need. That does not mean that there are a lot of part-time courses still there. What has happened is the average length of a course has gone up quite a bit, even with our full-time or part-time courses. A brief question from Mary Skall and then David Torrance. In actual fact, from 2009 to 2014, the fallen part-time students were 151,000. In 2009 to 2014, and this is an Audit Scotland figure, so 151,000 fewer part-time students. You are unapologetic about increasing the full-time student numbers by 9,000, so we have lost 151,000 part-time and gained 9,000. Is that economically beneficial in line with Government priorities? Is that the right thing to do in hindsight? The reason for the imbalance is that it takes a lot of learning hours or credits or sums for one part-time course. I would appreciate that. The amount of learning activity for one full-time course is considerably more than a number of part-time courses. In fact, in our baseline report, which we published earlier this year, we recognise that sometimes it can be as much as 142 part-time courses to create one full-time course, because some of those part-time courses were very short. That explains the imbalance between the reduction in part-time and the increase in full-time. David Torrance Thank you, convener, and good morning. Can you tell me how many compulsory redundancies have been made by colleges over the last three years? Do colleges plan to implement compulsory redundancies in the future? How is it going to be monitored? The Scottish ministers have made it clear to colleges that they expect them to reflect the public sector pay policy. They are not bound by it, but the expectation has been articulated very clearly by ministers that they should reflect and abide by where possible public sector pay policy, which states that there should be no compulsory redundancies. We have heard separately about the cost of voluntary severance to the college sector over the course of the reform journey. The absolute majority of exits have been through voluntary severance. I am aware of only one compulsory redundancy that has been delivered in one institution. It was subject to a robust business case and it was because of duplication of posts across the range of merger and transformation that has been delivered across the college sector. That is quite a small number in terms of compulsory redundancy. I do not know if the funny council wants to add to that. I am also only aware of very, very few cases. Those cases were technical compulsory redundancies because it was a time-limited contract that came to an end. We have spoken to Audit Scotland, who I understand may have more information on that. They are asking college auditors, and we will get back that information from them. We will take a view on what the implications of that are. As far as I know, it is very, very few. Can I ask about the evidence that the Auditor General gave on 29 April to the committee when she said that at this stage, and I quote column 34, we do not have it and that related to the evidence for the £50 million savings that was asserted would be made by this process. Why have not Audit Scotland been able to provide that information to the committee? I will say a few opening remarks and I will pass across to the committee. I would really just like an answer to the question, why have not Audit Scotland been able to pass that on to the committee? The funding council did provide figures for severance costs and savings, both to the committee and Audit Scotland. As has been noted by Audit Scotland, it represents 75 per cent of the total costs, which is around £46 million. The remaining 25 per cent of the costs cover a variety of issues such as ICT, marketing, project management, procurement and shared services. Some of that is hard to attribute directly to the merger, for example. We have been advised by some colleges that they do not have systems that allow them to directly attribute those costs to the merger process. That is why there is not a totality of breakdown of 100 per cent of investment in the merger journey. We expect the merger evaluations, the two-year evaluations, which are in train and are expected to conclude by spring of next year to provide much greater detail in terms of the absolute costs. One of the asks of Audit Scotland is whether all the costs should be brought together in one publication, so that they are easy to understand and scrutinise. That is something that the funding council understands. The Auditor General was wrong when she said at this stage that we do not have it. As I have said, there is not 100 per cent detail. Have you read the evidence that the Auditor General gave on the 29th? Are you familiar with it? I have read a lot of evidence. You do not agree with it. Obviously, you do not agree with it, given your answer. What I am saying to you is that I cannot remember the detail of it. If the Auditor General was stating that there was not detail on 100 per cent... There is nothing about 100 per cent, if I may say, so there is nothing about anything. You must be familiar with this evidence. This is a core recommendation of Audit Scotland over numerous public sector mergers for which this is the latest one where the Government cannot justify the figure that they asserted would be saved by this process. You must be familiar with evidence that Auditor General gave. You must be able to justify it. Your submission to this committee today has no detail on it, on the £50 million. Why not? We provided a short submission. I will ask Lawrence to provide... Do you not think that it is important to justify a figure that was made to Parliament about saving on a process that you cannot justify? Do you not think that that is important? Of course, I absolutely think that it is important. Why is it not in submission to this committee? We absolutely can provide subsequent evidence to the committee if that would be helpful about the detail of it. I will ask Lawrence to say a few words about how we worked up the £50 million expected efficiency savings and the assurance that we have that they will start to be delivered from 15 to 16 if that would be helpful. There are two issues here. There are the costs of merger and the efficiencies that result from merger. What we do have, and that is available in the public domain, is what the business plans say they expected mergers to cost at the beginning of the process. Which was how much had of interest? John, do you remember? Sorry, how did that happen in Scotland? What did that happen in Scotland? Mr Hull just asserted something. I would just be grateful for the evidence of that. The business plans for the mergers were producing savings of around about the £50 million that we had estimated back in 2012. And Audit Scotland could not find any evidence of that? I, to be fair, I don't think that that is exactly what the Audit Scotland report says. Let's just look at that. Paragal 31, none of the field work colleges could provide detailed information on merger costs and efficiency savings. Quote, none. The next sense is only information on the larger merger costs, such as voluntary severance and reduced staffing costs, which are considerably larger than some of the other savings that the Audit Scotland field work colleges said that they were having difficulty providing. When you heard from Audrey Cumberford and Paul Little just a couple of weeks ago, they were able to evidence how they had made those savings. Our view is that, as we do the post manager evaluations, there will be evidence on that. In our discussions with the Auditor General staff as they were preparing the report, I understood the issue to be, and I think that that is reflected in the wording in the report, that, on things like ICT savings and some of the other smaller savings, it is harder to measure the baseline and, over several years, talk about how three colleges coming together have saved money as opposed to general upgrading and so on. On the bulk of the merger savings, which are staff savings, we are absolutely confident that we have robust information, we know how much we spent and how much has been saved because we had fairly strict rules on one-year payback for our investment and so on. My understanding of the Auditor General's report is that there is a proportion of the savings for which they are not confident that the colleges have robust ways of measuring at this stage, not that there is no evidence on the merger savings. I suspect that that is all entirely fair, but that is not my point. When was the £50 million figure first put into the public to me by the Government or by the funding council? It was, I think, probably in 2012. Exactly. If it was in 2012, what was the basis for it in 2012? This is an audit report that looks at what has happened, not as what has happened now. The basis of the £50 million estimate in 2012 was that we had looked at previous experience of mergers, including the City of Glasgow merger, which had just taken place a year or two before. We had seen the business case for the Edinburgh merger, which, again, was slightly before these series of mergers. We had looked at our experience from other mergers in the higher education sector, and we had estimated that mergers, on the scale that we are talking about, would save roughly if they were the same size as City of Glasgow around about £5 million a year. Now, City of Glasgow has said that they have actually saved slightly more than that, but we have been quite conservative in our estimates. We then scaled the other mergers to that and produced an estimate of around £50 million. That, over time, has changed because some of the mergers have taken place in different ways. Actually, there have been more mergers than we were anticipating at that time. Broadly, that £50 million estimate has remained the one that we have worked with. We think that it is robust. The evidence that you heard from Audrey Cumberford and Paul Little just a couple of weeks ago bears that out, and the levels of savings that they talked about are consistent with our estimate. I therefore do not understand how the Auditor General could tell this committee on 29 April, and I quote, at this stage, the funding council and the Government could not give us, or at Scotland, the information that we asked for to demonstrate the cost of the merger process. Clearly, we cannot speak for the Auditor General in terms of what was intended by that, but how I understood that was about the entirety of the spend. I come back to the 100 per cent ability to robustly demonstrate the spend of around 75 per cent on staff severances and related costings. The inability at this stage provides absolute detail around the remaining 25 per cent, but we are hopeful that that further detail will be provided through the post-mergery value issues. In terms of the future, again, this committee, who are meant to look at these things in the context of the Audit Scotland advice to the Government in relation to merger processes, but this is not the first and it won't be the last that they'll say, we should just basically not worry about the figure that's given out by the Government when it first starts, because you guys will just basically justify it later on. Well, that's what's happened. Again, that's what's happened. That's the evidence committee. No, we are confident that the figure that we gave in 2012 will be achieved. As I understand it, there are two uncertainties that Audit Scotland discussed with us in preparing the port. One was, as I've said, how much savings do you get from ICT by the end of the merger project, and we will have a better idea that after the post-merger evaluations, but the other one is on the total costs of the merger. We have very robust information on what we funded as part of the merger process and how that has been spent. I can understand all that now, Mr Kemper. I'm sure you're absolutely right about that. I absolutely believe you on that now. My point though, as you rightly said earlier on, is in 2012 the Government asserted that it would save £50 million. Audit Scotland have told us, and it's in the report and it was in the evidence on 29 April that there was no quote evidence for that. So why should I, as a parliamentarian, believe anyone who makes a statement that they're going to save X when you can't justify it? My understanding of Auditor's general report is that she's saying that there is a proportion of both of the savings and of the costs that she has not got absolute evidence on. What we're saying is that that is a small proportion and what we funded, we are very confident of. Okay, I'm going round in circles and getting nowhere here. Let me try a different tack then. Is the £50 million savings achieved through a reduction in central funding to colleges or can it be directly attributed to reform activity? The £50 million savings is an efficiency saving which results from the college sector delivering more volume for less money in real terms. That's the big macro picture. So it's a cut in the, as you rightly said, I think that's very fair. It's an efficiency on the sector, it's delivering more for in real terms less. The college sector, we don't believe the college sector would have been able to deliver that reform without the benefit of reform, the regionalisation, which has enabled them to become more efficient and that's what the programme is about. In addition to becoming more efficient, as I think we've demonstrated before, we think that regional colleges are also more effective. It's a great story that I wasn't asking about that. This is the audit committee asking about the money. What I was asking is, is the £50 million savings reduction in central funding to colleges, which I think you've confirmed it is, as opposed to the reform process? Yes, I repeat my answer. I think that these two things have gone on at the same time in order to deliver the efficiencies that are required by the change in central funding and the colleges that have become more efficient through mergers. I don't have any further questions, so I thank the panel for their contribution this morning. I'll move the committee into a brief five-minute suspension. I'm very convene, so can I draw members' attention to agenda item number three? We have evidence on the AGS report entitled Managing ICT Contracts in Central Government, an update. I'd like to welcome Caroline Gardner, the Auditor General for Scotland, Angela Cullen, the Assistant Director, Gemma Dimond, the Senior Manager and Morog Campsy, the Auditor Manager of Audit Scotland. I understand the Auditor General is a brief four-minute statement. Today's report looks at the progress that the Scottish Government and Central Government bodies have made against the recommendations in my August 2012 report on managing ICT contracts. Information technology provides the opportunity to transform public services. The right skills and support are essential to making sure that this investment delivers real benefits for users and is done in a cost-effective way. Failure to successfully manage ICT programmes will affect the public both directly and indirectly. We know that managing ICT programmes is complex and that it continues to be a challenge for the Scottish Government and Central Government bodies. In our 2012 report, we highlighted problems that registers of Scotland, the Crown Office and Procurator Fiscal Service and Disclosure Scotland had encountered when managing their ICT contracts. The report made a number of recommendations for the Government to help to strengthen the strategic oversight of ICT programmes and to improve the access to skills for central government bodies. Today's report reviews progress against those recommendations and uses information provided by the local auditors at 12 central government bodies to explore the problems that they encountered when managing ICT programmes and how they resolved them. Our report highlights that, while the Scottish Government has made some progress in trying to improve its strategic oversight and the access to the skills that are needed, that has not been fully effective and significant progress is still needed. I will briefly highlight three key themes from the report. First of all, following our previous report, the Scottish Government introduced new assurance and oversight arrangements. It developed an assurance framework for ICT programmes to support central government bodies and to gather information for the Scottish Government oversight, as part of which the Information Systems Investment Board was responsible for ensuring that bodies followed the framework. We found, though, that those arrangements have not been effective. The framework itself was not clear enough, which may have resulted in fewer ICT projects being reported to the board, and the board did not have sufficient staff and information to perform its oversight role. The Scottish Government has recently updated its oversight arrangements, creating the Office of the Chief Information Officer in February 2015 to support the board. However, the roles and responsibilities of the board and the Office of the Chief Information Officer are still in the process of being finalised. Secondly, on access to skills, as with our 2012 report, we found that the lack of key skills is still a significant problem. Public bodies are competing with the private sector for people with skills that are scarce right across the economy, and some are using short-term contractors to fill their skills gaps, which may be costly and require effective knowledge transfer. In 2012, we recommended that the Scottish Government should undertake a skills gap assessment, but that was not done until August 2014. The Government is now developing a new approach by pooling and sharing resources in a digital transformation service. This is an ambitious initiative, and the detailed arrangements are still being put in place. Thirdly, on central Government bodies' progress, we use case studies to identify and share what has worked and what has not around the public sector. It is clear that, while some progress has been made, there are still areas such as defining benefits and managing contractors and suppliers where improvements are needed. We found that bodies are using appropriate project management techniques and that more bodies are using the agile technique, but some lack the skills and experience that they needed for that approach. We also provide a short update on three of the bodies that were the subject of my earlier report. I should note, convener, that, in relation to Disclosure Scotland, we are unable to comment further at the moment on the procurement of the new contract awarded in May of 2014 due to continuing discussions between Disclosure Scotland and ATOS about non-completion of the contract. I will, of course, update the committee in due course as appropriate. As always, convener, we are happy to answer the committee's questions. I think that the major part in the report for me was page 19, part 2, addressing the skills gap and shortages. Being one of the old hands on this committee, I was here when we took evidence in 2012. As you said, there was a recommendation in August 2012. The report highlighted the lack of skills and was a key factor in the failure of central government bodies' ICT programmes. It was quite serious and I thought that it was being taken seriously by government. I was quite shocked that it took two years to do a skills gap survey, which was done in August 2014, two years after your report. The action plan was six months later. The reason that I was shocked is that I had the response by Paul Gray, the director general, to the 2012 report. Paul Gray's response gave us an absolute categoric assurance that everything was being done. He gave evidence to the committee on behalf of the Government. His paper to the committee was in October 2012. If I can say a couple of lines, we are working towards an action plan for central government ICT workforce to be available across the sector. This will be informed by data collection on the size of the ICT workforce, carried out for benchmarking purposes and starting 1 October 2012. Collection of information on the skills and capability of the workforce and future needs. That was October 2012. I sat back naively and optimistically and took them at their word. Was the committee misled by that information? We were given an assurance in October 2012 in a significant four-page response from the director general. I know that you will have seen that paper, but we were given quite a categoric assurance. I was absolutely content with everything that we were doing. We set it aside and you come back, auditor general, two years later to say that this categoric assurance is not worth the paper that it is written on. In fact, it did not take them from August to October 2012. It took them from August 2012 to August 2014 to even think about the skills survey and then six months later in action plan. Can I ask for your comments on—I am sure that you will be very familiar with the response to your report and to this committee in 2012. In my view, Ms Scanlon, the skills gap analysis should have been carried out sooner. That is one of the key messages in my report. It is fair to say that it is not that nothing was done during that period. We know, for example, that the Scottish Government set up a cross-public sector workforce stream in 2013 to address the commitment that had been made in the digital strategy and other pieces of work that were happening. However, the skills gap analysis itself did not take place until last year. That has made it harder for the Government to be thinking about how it addresses the shortage of skills that we know affects the whole economy. You heard us some of that in the earlier evidence session. I think that that may be a question that the committee may want to pick up with the Scottish Government, why it took as long as it did to analyse the skills gap and then to think about the right response to take on that. I do not know that that is very reasonable, but I wonder during your inquiry, during your gathering of data, if you discovered why a promise made in October 2012 to the satisfaction of this committee, I wondered in the collection of data and in your investigations if you discovered why it took another two years to carry out the promises that we were given. I am not sure that we can speculate on the reasons why it took as long as it did. We know that some things happened during that two-year period, but the skills gap analysis itself did not happen until the data set out in my report, and I think that it should have been done sooner. I would like an update on RAWs, but, prior to that, given that the skills, the ICT skills, were a problem in 2012—we were talking three years ago now—they are a very serious problem now. Are you concerned that there seems to be a little alignment between the Scottish Government's priorities—indeed, the country's priorities—for ICT specialists and a fall of 25,000 places in FE in recent years? I am talking HNC, HND and degrees. We have not looked at that in detail. As you know, the report that we produced on colleges was primarily looking at the reform process. I think that there may be a case for us looking at some point at the way in which the broader economic focus on digital skills is being taken forward right across the piece, through the funding counselling colleges, through Skills Development Scotland, through the higher education sector, but I am not in a position now to comment on it. However, you would expect—if there is a skills gap in a particular area—that you would expect the Government and the director general to be talking to the universities and colleges that we have the skills come from? That is one of the potential benefits of the Government's outcome approach, is to take what it wants to achieve and then join up all the parts of the public sector to deliver it. We have not looked in detail at how well that is happening or not at the moment, but we do know, as we have said here, that ICT skills are a significant challenge for Scottish public bodies and for the wider economy and that the skills gap analysis of the internal skills that are lacking took longer to happen than I would have expected on the back of the 2012 report. That is my final question, convener. We heard about the registrar of Scotland last time you were here. I have read through it, but it is not exactly a ringing endorsement that everything is wonderful, but it recognises that it needs to have the capacity to maintain service delivery. Should we be confident that the ICT systems in RAWs are fit for purpose now, given that they have significant additional responsibilities? I will ask General Moore more to come in on the specifics of the registrar of Scotland. What we have tried to do through this report is to look closely at the progress that the Scottish Government and the bodies have made in addressing our recommendations about strategic oversight and skills and to give you an update on where they are. We have not done an audit that would let us give you that full assurance that everything is now fine, and I hope that we have made that clear in the report. We have reported that they have made some progress. Morag Jammah, who would like to give us a bit more on that? As we are saying that the appendix, there have been some issues and a lot of large projects with the Land Registration Act and also delivering the requirements under the Land and Building Transaction tax. They have brought in some new people over the last year and they have produced their digital strategy at the beginning of the year and have plans in place for some significant pieces of work, such as the Land Registration and Completion Act. They have given priority to the large pieces of work and have had to bring in agency staff to deal with the day-to-day running. That is something that we are keeping an eye on along with the local auditors. I noticed that there have been quite a lot of changes of staff, new staff coming in more agency staff and I just wondered how stable it was going forward. I have to say that in a past life I have had responsibility and oversight over very large ICT projects and not one of them comes in on budget, on time or indeed delivers exactly what people want. That seems to be the way of ICT projects. However, in this particular case, I am aware that there is in fact a global shortage, not just in the UK but worldwide, of ICT experts who want to have a better word. Clearly, you have highlighted here that this is an issue for the Scottish Government and indeed across the UK. To what extent do you think that unavailability of that level of skill, how is that impacting on the Scottish Government's progress in putting in place the measures that it is looking for? Clearly, they have made progress. Clearly, they are heading in the right direction. However, the critical skills shortage, which is something that, frankly, I am at a loss to know what to do about, how is that impacting on the progress that they are making? You are right. This is a complex area. It is one that does not just affect the Scottish Government, it affects public services right across the UK and more widely and private sector companies. We have seen the problems that RBS has had in the last week or so with their IT systems. This is a widespread problem. We are not suggesting that there is a magic wand that the Government can pull out and wave and make everything okay. As we said in the earlier report, there is more that the Government can do to keep strategic oversight of projects and to identify where things are progressing less well than planned and stepping in to avoid the problems that are crystallising. We think that there is more that can be done to help to develop that pool of skills staff that Ms Scanlon was talking about that can work across different public bodies rather than each having to grow their own. In terms of the specific impact that it has, it operates at two levels. One, we see significant projects such as the cap futures IT system that I have reported on to you before, such as NHS 24 that we are still monitoring and will come back to you on due course, where major investment goes off track with significant costs being incurred on turning that round and potentially an impact on people who rely on those services or the payments that they generate. We see it at that level. Almost more importantly, there is the opportunity cost of what could be achieved with really well-managed investment in IT in transforming services to make them more responsive to people's needs and to make efficiency savings that would help us to close the gap between the funding that is available, the Scottish Government's priorities and people's expectations around Scotland. It is that transformation potential that is really at risk because of the skills gap. Do we not come back to the basic question that is civil servants in this particular role get paid substantially less than the market? You have highlighted that yourself. Are they working around this by hiring contractors at a higher price in order to compensate for that? I do not know what else they would do. To an extent, they are doing that. You are right. We make that point here and we highlight the importance when you are doing that of making sure that you do have good arrangements for transferring knowledge and skills from the contractor to the in-house team so that you do not lose all of the expertise and experience as soon as the contract ends. I think that there is also something more that could be done, which the Government is aiming to do through the new digital transformation service, for building those skills among in-house staff, working with the FE sector and Skills Development Scotland to set out modern apprenticeships in the right area. It is a long-term thing. It is not going to fix it overnight, but it could generate some of those skills over a longer period and avoid that reliance on expensive short-term skills from the private sector. Just one other point on paragraph 30. I was quite surprised to see the comment about the Information Systems Investment Board not getting responses from Government departments. That seems pretty outrageous, does it not? We are working very hard to avoid acronyms this morning, convener. I know that you do not like them, so we will try quite hard to stick to them. We were concerned that the Information Systems Investment Board was set up as a key part of the Government's oversight and was not in a position to carry out that role effectively. There were two reasons. First, the guidance was not clear about which projects fell under its remit in terms of how you calculate the cost and which are the risky ones that should come in. Secondly, the Board did not have the capacity to chase up the bodies that were not submitting the information that was required. We think that that did significantly limit its ability to carry out its role. The Government has recognised that, and it is now changing the arrangements under the oversight of the Office of the Chief Information Officer, but it is taking longer to put in place than we had expected, given the changes that were put in 2012 and onwards. You made a comment on the staffing in that area. Is it techies that are in there, primarily? It is still unfolding the new arrangements under the digital transformation service, and I will ask Gemma, if I may, to give you a bit more of a feel of how that is coming together. It is still working in progress, though. The Office of the Chief Information Officer was just created in February, and that is quite a small office. There are currently only four staff within that office. The digital transformation service as part of the digital directorate is just being established and going through the arrangements now to recruiting staff. The Scottish Government will be able to add an update on that, certainly later on, as those arrangements are just still taking place at the moment. The new arrangements are just being put into place at the moment. It is very recent. My concern was reading this, that there were no responses from the Government bodies on how to ensure that that happened, because clearly it is a key part of that. We think that the new arrangements have the potential to resolve that. The framework itself is clearer. There will be dedicated staffing in the Office of the Chief Information Officer and the new digital transformation service, but we are not in a position yet to say that it will work in practice. As Gemma says, it is still developing as we speak this morning. In terms of the Paragraph 75 report, we have referred to this earlier about how complex those programmes are. ICT programmes are complex, and you said that the Government should consider how best to manage them. I would probably guess that that statement has been made in various reports probably since the Parliament first began. Probably going back to 1999, various reports referred to the fact that they are complex arrangements. We need to get a grip of them. We have seen in UK Government challenges in the health service about the role of ICT programmes. Is there not a need for perhaps a more thought? We just seem to say that this Government seems to have a new digital approach to this. There are all buzzwords that get used. It is not a stage where we have to think that we have tried all that before for so many years. Really, since the internet has been invented, we have referred to this. The specific comment in Paragraph 75 is about the project management technique that you use for a specific ICT project. There is not a one-size-fits-all arrangement that you can say is the best one to use for every central Government project. That is an issue that I think does need more skills at a local level and more support through the Scottish Government. Your wider point is that Government here and Governments more generally are not very good at this. It is something that has been reported on repeatedly in Scotland, at a UK level and more widely. The changes that the Government is now proposing to put in place both through its oversight arrangements and through the digital transformation service have the potential to make a difference. In a carefully-worded phrase in the report, it is ambitious that doing it is going to be difficult. The problem is, convener, that nobody knows what the right answer is. Private companies are not great at this either in many instances. Can I just say a good argument about this by the time we reach the stage where we are trying to take it forward? The technology is overtaken. It is just the pace of technology. It is running on a twin track and the Governments on that track and the technologies on the other one. It is overtaken at every opportunity. I think that there is an element of truth in that. I do not think that it helps very much, given that we know that Government cannot simply opt out of the opportunities that come from these sorts of changes. We all expect it as citizens and service users, people across Scotland do, and in order to make the savings that are needed, we all need to make much better use of technology in the future. However, there is something about making the investment in having as good skills and processes as we can afford as a Government, as a set of public services in Scotland, to get the most from it and to minimise the chances of it going wrong. I think that, up until now, the Scottish Government's approach has not demonstrated that it can do that. David Scott, you have a case study about the Common Agriculture Policy Futures programme, which you raised earlier with the committee. Indeed, we had a letter from you again on 29 June. At that time, I was just looking it up and said that the delivery partner cost had gone up—this is the IT delivery partner cost—from 28.8 million to 60.4 million, a 111 per cent rise. Is what you are seeing in the case study here the reason for that increase, the turnover of staff? Is that your understanding of what has kind of… I think that there is a wider range of things going on there. You might recall that I produced a section 22 report on it towards the back end of 2014. Without going into the detail of that, the skills gap was a problem in it. There were also challenges caused by the complexity of what the EU is requiring and by the broad scope of what the Government was planning initially as part of the CAP Futures programme. All those things contributed. I will be producing another report to the committee later this year on progress on the back of the Scottish Government audit. I know that it is a significant public money and a great concern to constituents of members of this committee, so we are watching it closely. That is one element, but not the only one in that particular case study. I appreciate that and thank you for that. It is just that in your case study, you particularly mentioned that the programme had to fill two key senior programme management roles as you fix term contracts, which I think you are alluding to in the answer to both Colin Beattie and the convener. I am trying to gauge what part of this project, where did this project really go wrong, because a 111 per cent rise in costs by any standards is pretty concerning. At this stage, I would rather refer you back to my section 22 report that set out that on a range of other factors. We are continuing to monitor it. We know that there are continuing challenges for the team. I do not want to jump into that mid-stream, if you like, without having a formal update for the committee to find out. I want to go back to this skills gap and what you said in your opening remarks in regard to competing with the private sector. It seems to come up constantly in the report. I know that Colin Beattie had also mentioned that the SQA and register of Scotland and others bodies have not been able to retain what you might call skills staff, because of the huge difference in costs. The way that I see it is not necessarily a skills gap, it is the fact that the salaries are so low compared to the private sector. Would that be a correct analysis? You are talking double on the private sector. I think that that is a symptom of the wider problem. The wider problem is that there is simply a UK-wide and probably a global shortage of those skills. Because the public sector is more constrained in salary terms, for reasons that we all understand, when people are competing for a skilled project manager or a data analyst, the private sector tends to win out more often than not. There is not a quick answer to that, except going through the sorts of process that we were talking about earlier, of developing a pool that all public bodies can call on, rather than each body needing its own skilled people and investing in the training and development of those people for Scotland as a whole, so that it does not turn into a bidding war. I am trying to make the point that the private sector does not seem to have a big problem, even though those skills have paid for through the public sector—people going to university, etc. The private sector does not seem to be short on those skills. It is a public sector more than anything else. What concerns me is that the common is constantly about the shortage of those skills when the private sector can harness it and employ those people. What is to say if we have a huge pool of the skilled staff who will all go into the public sector when they are getting double the money in the skilled sector? It is a really good point to explore. Can I refer you to Exhibit 6 on page 21? There is a table there that shows, first of all, the skills gap, as it is called here. That is the skills that are missing within Scottish Government and public bodies, according to their own survey of what they need. If you look across to the right-hand column, those are the skills shortages, the ones that people in the private sector struggle to recruit and retain. That is not to say that nobody has got them, but it means that people tend to move from job to job in return for another pay rise or better terms and conditions. That contributes back to why some of the programmes where there is a private contractor involved can still struggle. People are still moving on because their skills are in short supply and they are moving repeatedly. The only answer to that shortage is to invest in more people who have got the skills to develop them and to make sure that they are available in the economy more widely. The pay thing is a short term six, but you are always vulnerable to the next person with a bigger cheque book making a better offer. Even if we have a huge pool, we are not necessarily guaranteed that these people will work in the public sector if they are able to get it. I think that the most important phrase in this whole report has been touched on in the other paragraph, 75, that you yourself highlighted, convener. That is the issue of that. There is no one-size-fits-all solution. Prior to getting elected to the Parliament, I worked for an IT company and at a lower level, but as soon as a piece of kit left the factory, it was out of date. That is not just the nature of the business and things have moved on hugely since then. For me, the huge challenge to any public body, whether it is in Scotland, across the UK or anywhere else, is that when it comes to an ICT solution for an organisation, it is a bespoke solution. That whole issue of the one-size-fits-all, it just cannot happen. Every organisation is different, every public body is different. The private sector does get it wrong as well, and it costs the private sector huge amounts of additional finance as well. It is one of those areas where no organisation is ever going to get this correct, just the complex nature of trying to devise an ICT solution. I wanted to get that on the record because I do not think that everyone would fully appreciate the fact that these are bespoke solutions for individual organisations. You are right that a lot of what we are talking about in here are bespoke solutions either because nobody else needs to provide a service like that or because the way in which the policy direction takes it means that you are trying to do something that is not simply an off-the-shelf solution. That is absolutely a fact and it affects the way banks develop their IT systems and major retailers and everything else, as well as the internet-based businesses that are so important these days. On the other hand, I do not think that that is the reason for Government to say that it is all too hard and that either we are not going to do it at all or that we accept that it is going to go wrong. I think that the two things about getting good governance and good oversight in place and doing what we can to build that skill base and to make sure that it is available to all public bodies rather than each and each needing their own are the things that could make a difference against that difficult background. Exactly. I do not challenge what you said there at all, because I absolutely agree with it, but at the same time I think that that understanding, that wider understanding, needs to be appreciated. I think that in this report on the auto general mentioned in our opening statements is that we have used case studies to highlight and there are a lot of case studies in this report compared to some of our other reports. Some of them highlighting things that perhaps did not go well or why problems have been experienced, but we have also highlighted where we have looked at things in individual bodies at different stages of those projects that we thought were interesting that others may want to go and look at and think about. That is a different way of doing it. I have not thought about doing that and maybe pick up on some of those lessons and share them more widely. We absolutely appreciate that there is no one-size-fits-all. We are trying to direct bodies to hear something that you might want to think about doing. The point that Sandra White was making around the competition between the public sector and the private sector in terms of recruitment, I wonder if the auditor general found any evidence of maybe more innovative examples of recruitment encouraging people perhaps to spend part of their career or a shorter time in the public sector or attracting people to the public sector on things other than pay. Some people may be prepared to work in health and education because they might value the benefits that that would have for society but also for their career or in terms of location and people wanting to work in Scotland who are perhaps not otherwise based in Scotland. Were there any examples of that, or do you think that there is more that could be done? I am going to ask General Morag in a moment if we have any specific examples. Before then, it is worth saying that one of the Government's aims for the digital transformation service is to do exactly that sort of thing, to think about how you could give people new and unusual career paths that might bring in modern apprentices and give them the chance to get experience early on of different types of projects to bring people in with a really exciting project to transform the way that e-health operates, for example, but to do that in a way that does not rely on each body having to bear the risk itself doing it at a Scotland-wide level. General Morag, anything we can add to that from experience so far? We know that as part of the workforce stream that they did as part from the digital strategy that they are trying exactly that to really to promote working within the ICT sector, within the public sector, is not just based on pay but the other benefits that go alongside that. That is something that they are looking at. Like the other generalist said, the digital skills transformation service is really looking to do that, to try and bring people in to say, look, you can actually work on some really, really interesting ICT projects in the central government. There is a lot going on. You do not have to work on just one, you can work across a number and to try and provide that kind of career pathway for people to try and encourage people to stay within the central government sector for longer, so they are looking at that to try and make that career pathway for people to try and encourage people to stay. I suppose that that would be welcome, but is there also an opportunity though for people who maybe do not want to have a career in the public services but would be prepared to spend part of their career, so a few years working, I am thinking of people perhaps working internationally, we might be prepared to come to Scotland to work on a specific project for people at the time because they believe it would enhance their safety and also they would get things out of it other than money should reward. I think that you are right and I think that there are two dimensions to that. At the moment I think that that is primarily happening through the sort of contracting route that we talked about a bit earlier. Mr Scott talked about the cap futures programme, where the programme directors, senior people have been on short-term contracts, it is very important in those circumstances that you are doing what you can to make sure that they transfer their skills and experience to their teams so that you are not back to square one when they leave. More generally I think that there probably is as part of the digital transformation service a real place for thinking are there people maybe in their 50s who are coming towards the end of a career in the private sector who might want to give something back to work for a lower salary for a period of time to really change the way public services are delivered and I think that there probably is an opportunity. I am not sure that we have seen much concrete evidence of that so far but it is a sort of thing that I would expect the Government to be planning into the digital transformation service and the approach that it takes to doing it. Thank you convener and good morning. One of the things that got me as I was reading through this report yesterday evening was a lot of it has been covered here, I will try not to jump in top of what has been already said but obviously looking through the report and the idea of the skills shortages you see. I rather have got the impression reading this last night before I had listened to what had been said today that some of the problems were being faced with in terms of the timescales something is not being done and the likes simply is because the skills shortage is there and I am just not being able to do this. The other thing was on the back of it given the dubious reputation of some public contracts in the past that have gone out in terms of the senior project management of those projects whereby the people running them may not be technically knowing of what is required but perhaps have a degree of interference has there been any I know that was one of the things that I was a bit concerned about in the last report that you brought through and we obviously seen some poor management practices that were brought through in your last report but how do you feel about what you've seen just now because I do see a degree of improvement particularly with the likes of the case studies that you put in at the end good practice that's brought in as well as some of the things that haven't happened I was just wondering has there been any evidence of interference perhaps with the student that have been can I ask you to elaborate a bit on the question about the sort of interference you might be thinking about well simply because of the fact that in terms of the clarity that is given in terms of where this project is where it has got to be at a particular time and as we're going through suddenly making a different policy decision shall we say to veer off and cause problems for those who are actually trying to implement the project I don't think that's come up as being a major issue in the work that we've done here the work that the problems that we've seen that have continued and you're right there have been some improvements but the areas where we think that there hasn't been enough progress are first of all the arrangements for oversight and problem solving and support when things are behind through the information systems investment board and secondly the work to really understand what are the skills that are missing and start investing in developing them in the public sector it can be a problem with projects that the requirements change or the under agile particularly particularly it becomes clear that you couldn't do what you originally planned to do because the technology won't support it or it's too complex and you then have to reshape your plans to meet the the timescale and the resources you have got we've seen that happening but I wouldn't see that as being interference in the way that I think you're asking about general more I do you want to add anything to that no nothing to that it was just a thought that some of the things here had been not as quick as it could have been because of XYZ whatever it may be thank you and just a brief final question from Mary Scanlon I'm sorry for going back three years but we were actually promised then by the government that they would have a strategic oversight of significant ICT programmes and part one of your report starting paragraph 10 that strategic oversight led to an ICT assurance framework in February 2013 which was not clear enough and has not enabled the government to fulfil its oversight role that's total failure and then paragraph 2 the information systems investment board was to oversee the implementation of the framework but it didn't have sufficient information I mean you just couldn't make this up or capacity to perform its role and as if that wasn't bad enough it didn't receive all the ICT investment and assurance information required from government bodies I mean this is just total incompetence and failure we've got promises made three years ago of a strategic oversight I won't rehearse the arguments given them with laws in BT and the need for a central strategic overview but we've also got the government where one part of the government can't talk to the other and they're trying to look at a framework which isn't in your own words sorry to general the framework wasn't clear enough to enable the government to fulfil its role I mean if you were given marks out of 10 you would barely have a one there I mean that's really serious failure and if we look at the skills gap the government can look to the universities it can look to the FE colleges it can look to its apprenticeship programme it can talk to SDS there's a huge role there so I think it's all very well sitting back and blaming one person or another or the private sector pay higher salaries they only do that because of supply and demand and we have insufficient people coming forward so can I just ask are you disappointed about the promise of the strategic oversight that was made on the basis of the four organisations that you looked at last time and the problems that they had and you know are you disappointed with what we've got here which is really just in my view total incompetence I think as the report says Miss Cannon as I said in my opening remarks I don't think that the progress that's been made on governance and oversight of the investment or on addressing the skills gap is as good as it needs to be the problems with the framework were really that the lack of clarity about how you should calculate the costs and the risks of the projects that should be under its remit the new guidance addresses that but we yet to see its effect in in progress the staffing of the board wasn't sufficient to enable it to chase up the information that wasn't submitted on time and the time taken to do the skills gap analysis was longer than I think it should have been the reasons for that I think really a best explored with the Scottish government but the government departments didn't even talk to each other you couldn't get information from other departments the board the establishment of the board I think was a good first step but as always it needs to work effectively in practice the guidance for how the framework should be applied wasn't clear enough about which projects were in and which were out and the staffing available to the board wasn't enough to let it chase up the information that it needed but didn't have that's the finding of my right words I think I'm grateful for your diplomacy thank you okay can I thank the other general on the team for time this morning and just to remain colleagues that will be discussing this item in private later in agenda item number seven and it draws attention to agenda item number four which is the section 22 report the 2012-13 audit of north Glasgow college we have written submissions from the Scottish government and the Scottish funding council regarding the AGS report entitled the 2012-13 audit of north Glasgow college welcome colleagues comments on this there's a couple of things with this I mean I'm doubtful how far we as the public audit committee can take this but I think there's two things firstly there's reference being made to four other four other colleges who have had problems I think we need to you know be responsible of us not to at least start asking questions about that and understanding the issues around that I don't know how far the auditor general's gone in terms of looking into that and obviously anything we did would have to be in the back of that the options that we've got I think are limited I think I think we should do a report on this I don't think we should just pass it on to another committee and hope that they're going to pick it up I think we should put a committee report with it I mean I'm happy if anyone else has got an idea as to what they can actually physically do over and above that I think there's been some progress made in ensuring that this won't happen again I think the SFC have tightened things up however it is it is a concern it is a worry and you know I don't think we can just as I say close it down pass it off and walk away just to clarify there's another section 22 report that refers to the other colleges and we're in a position to seek further information from the auditor general and that so that will allow further information to be sought from the auditor general and that so just to let colleagues that should be known I agree with the Colin Beattie's comment regarding putting together some type of report on this I will I do welcome further information coming and I look forward to to seeing that in due course but I mean certainly this particular issue of the North Glasgow College it's it's been around now for some time and been discussed in this committee for some time and I think I think it would be useful for us as a committee to try to actually pull together some of the information that we've received because obviously it's not as if we actually have inquiries that run every single week on particular issues I think it would be useful to kind of pull together for us to put together a report on what we actually have received information at the evidence that we've received as well from the oral sessions and to then possibly hand it over to the education committee or else we may even take a decision to maybe do some further work on it at some other point but I think it would be useful for us to actually collate the information in a report first of all. Thank you very much chair obviously being a substitute the committee I've not been about in the committee on my other reports but I do think the report is good the one from the Scottish Government I think it's fairly upfront and honest and one of the issues which I hope when you look at the other colleges as well you will look at is the fact that sanctions were visited upon North Glasgow college basically on the actions of the previous colleges which they inherited I think that's quite a tell-in aspect of the report that any college who is still there inherits other colleges anything detrimental that college with the name inherits that and I think that's a lot of the problems which has happened in North Glasgow college perhaps I should declare an interest to have met with the college it's not in my constituency anymore but I have met with the college and the staff and the trade unions there as well and they are very concerned about what's happened so anything that can be done to stop it happening in any other college would be more than welcome and I do thank the committee for the report that I've got there and I certainly would look at the other colleges as well that have been mentioned in the section 22 report. Drew Smith? Just to read one of the colleagues that I think has a need for a report and presumably that we would publish ourselves and that presumably considering a draft report we've been in a position to know the contents of other reports that are coming from the auditor general so that could influence us as to whether or not the two things should be continued and that would feed into the same piece of work or whether they're entirely separate issues and we could publish us as a standalone report of the committee. Mary Scanlon? I think that the issues have been around for some time but I think that we should also bear in mind in the morning that we're talking about skills gaps is that the money that's handed out in Severance pay is money taken away from training and educating young people. I'm with Colin Beattie on this. I think that it's a very serious issue. I think that as an audit committee nobody should get away with the sort of lack of an audit trail that they pursued. Everyone that takes from the public purse like ourselves have to be absolutely open, accountable and all procedures must be robust and emblematic of good practice. I did agree with Sandra that I thought the Government response was helpful but the Government response was mainly based on recommendations and so whilst I can't pick fault with it, for example, not being the chair of the college and the remuneration committee, which allowed the lack of an audit trail, I would like something convener that is a bit more robust going forward because this is not going to be the last time we'll be looking at Severance payments. Given that we have some more colleges, some more concerns raised by the Auditor General coming to us, I am in favour of doing a report and ensuring that the Government responds and makes sure that the correct systems are in place. I just want to follow up on the very valid point that Sandra made. We could, and this is something that we consider when we are doing the report, we could, for example, perhaps recommend that the SFC consider sanctions against the college but the difficulty with that is what Mary Scanlon brought up, that the money that was paid to the people who came out of the pockets, if you like, of the students. Similarly, if the college is penalised, again, we're taking money out of the pockets of the students. It's a very difficult one because, obviously, around this table we would like to see some sort of sanctions but if we do, we're harming the very people that we don't want to. Okay, so can you just try and put it together so I think that we've all agreed that there will be a report. I think that the scope of it is something that we need to consider as well. I used to take on the point that Sandra made about sanctions, but I think that the committee makes a really, I think, qualifies that issue in terms of, I still wouldn't just put students, it would be all our employees who are affected who are left and we know there are some well-publicised examples in Glasgow where those at the lower end of the pay scale don't quite enjoy the severance arrangements that others have enjoyed and those are the people who seem to be more affected. That would be something that we can look at as the approaches that it's taken with senior members and staff seem to be quite different from those at the lower end of the pay scale. I think that that's something that perhaps we can look at at the same thing to make sure that there's consistency in the approach that that's given that there's quite substantial sums of money being spent in the merger process and severance payments. What is the consistency when it seems to be that those who have paid much less seem to be given less consideration, as it appears to be the case, and I think that's something that we need to look at given less consideration. We'll agree to collect a report in private at some of the future meeting. Okay, thank you colleagues. I move to agenda item number five. We have a progress report update from the Scottish Government in relation to the committee's report on accident and emergency performance update. We've already noted the Scottish Government's substantive response to the committee's report. Do colleagues have any, do members have any comments? First, I'll raise a couple of points if I may. The first is this, undoubtedly from Paul Gray's answer, some useful information here, although I didn't quite understand some of it. For example, on page four in the Annex about workforce, there's a wonderful centre which says, in the middle of a paragraph on shape of training, while providing a robust mechanism to ensure linkage across the wider UK landscape. With the love of me, I'm not sure I know what that means, and he doesn't say what the robust mechanism is, so it'd be quite helpful. There's just some clarity around language, which would be helpful, I'm sure. But what I really wanted to know is, are we due to get another report on this from Audit Scotland? This is obviously very, very topical, literally every week at the moment. In terms of our continuing interest in this, will this come back at some stage through Audit Scotland work, or how else is Parliament scrutinising this? I recognise a lot of this now is in turn on other committees' responsibilities in terms of policy around Audit. Auditor General doesn't have anything planned at this stage, but I think that we should suggest that to Auditor General and seek some advice from her as to when she might want to further consider this. Is there any other comments on it, colleagues? What's been said, that we should at this point just note the progress. Is that really still? I think that, to be fair, we were planning a trip to Ninewells. We thought that this report raised very, very serious concerns. We took evidence from the NHS Grampian, Floreth Valley and Tayside. Tayside was an absolute beacon of good practice, and we wanted to learn from that. It's been difficult to get that visa organised, but, in actual fact, Tabby Scott says that this issue is very topical. The recent figures for meeting the target are lower than when the NHS wrote the report, so things are getting worse. I know that there are particular issues around Glasgow, with the three hospitals merging into one. I can appreciate that, but the overall figure across Scotland is not good. What we did learn in evidence is that this is the 24-7 open door to the NHS, and we did want to look into that further. To be honest, I don't particularly just want to note this report. I think that we have an obligation in the increase in presentations to accident and emergency, and all that went behind that was incredibly important to the national health service, and it impacted on GPs, ambulance services and all sorts of things, so I don't particularly want to note it and leave it behind. Things are actually not getting better, they are getting worse. I just throw another wee issue into the mix, it's on page 4. I do agree with Tabby Scott that I wasn't quite sure what that meant about nationwide, so it's not quite good to get a clarification on that one. The Scottish International Medical Training Fellowship, I would be interested to note if the committee could find out if the new immigration laws that are being put through by Westminster, which the nurses have raised as well as the profession has raised, will have an impact on our recruitment internationally? The RCN has raised it as well, so I wonder whether the committee could look at that particular part as well. Can I suggest that there is a suggestion to take some of those issues forward on the points that Mary Scanlon has made that we might be asked Paul Gray to come to a future session? I think that would be helpful to ask that we might be able to fill out the inquiry. No, it might be help to amplify some of it and might be an opportunity for some of the points that Sandra White's raised down to be raised during that comedy. What I was trying to do with note the progress was really to close down this report, so it does not mean to say that we could not ask the Scottish Government for figures going forward in a few months' time. I agree with your suggestion, convener, that would help with Colin Beattie's point. That will be a few months' time anyway, because it is now going to be September before Paul Gray can come in front of the committee. I think that Sandra White may have scanned and raised serious questions. In the context of what we have been looking at over a period of time, we have had a very good idea to ask. I would welcome Mr Gray to appear before the committee in September. Is that agreed? Yes. Before the committee moves on, I am proud to say that I have just mentioned that there are two names of sports staff who are leaving us. Firstly, Jane Williams is moving to another committee to help committee, so I am sure that we all wish Jane the very best. Tom Williams is also leaving us for much further fuel, he is going to Sweden to understand, so I am sure that the whole committee would wish Jane the very best, whom we will see in Parliament, but we will believe in Parliament in the very best future. We will now move the committee into private session.