 I welcome everyone to the 15th meeting of the Public Audit Committee in 2023. The first item for the committee to consider is whether or not to take agenda items 3, 4, 5 and 6 in private today. Are we all agreed? We are agreed. The principal item on this morning's agenda is for us to give consideration to an important report that the Auditor General published in April of this year, which relates to audit work conducted up until March of this year, so very up to date in its both data and analysis. It's a report into how the Scottish Government is set to deliver climate change goals. Can I welcome our witnesses to the committee this morning? First of all, Stephen Boyle, Auditor General, is very welcome. Alongside the Auditor General this morning is Rebecca Seidel, who is a senior manager at Audit Scotland, and Sally Thompson, who is also a senior manager at Audit Scotland. As usual, we have quite a wide range of questions to put to you this morning. Before we get into those questions, Auditor General, can I ask you to give us an opening statement? Very thanks, convener. Good morning, committee. Today I am bringing the committee my report that looks at how the Scottish Government is set up to drive delivery of its national net zero targets and adaptation outcomes. Climate change is the defining issue of our time, and the Scottish Government has set ambitious goals for tackling it. This is a complex policy area with the causes and consequences of climate change sitting across a range of ministerial portfolios and Scottish Government directorates. My report focuses on governance and risk management arrangements, which are always important, but particularly so in the context of a complex area that cuts across many areas of government and where progress needs to be made quickly. Effective arrangements can help to support policy and financial decision making and identify risks to delivering actions on time and on budget. They also provide transparency and make sure that different parts of government can be held to account for their progress. Governance and risk management arrangements for climate change have improved since 2019, reflecting its increased priority. Nonetheless, my report also highlights that there are some weaknesses and gaps. Arrangements need to be strengthened to support the Scottish Government to deliver on its climate change ambitions. The report outlines several recommendations to help to do that. Those include improving how key groups align with each other and coordinate their actions, making sure that effective reporting arrangements are in place to ensure progress is delivered, and introducing more systematic processes to identify and manage the key risks to achieving climate change goals. Addressing climate change will be a challenge for all of us. The Scottish Government will be better placed to meet its goals by improving its own governance and risk management of climate change. I'm sure that we will return through the next hour or so to some of those questions about where there are gaps, where there is a lack of clarity and how things are working. I want to begin with a question on governance arrangements. We're really interested to understand, from the work that you've done, your sense of the extent to which there is cross-government collaboration taking place in order to progress both the climate change actions and the management of competing priorities. We take evidence on issues such as Government expenditure on major capital projects, and we are now beginning to interrogate more the extent to which they contribute positively or maybe even negatively towards those net zero goals. I wonder whether you could address that question of cross-governmental collaboration. Many thanks, convener. I'll start, and I'll bring Sally in. Sally is going to support much of the governance-related questions this morning, and Rebecca will lead on some of the risk management discussions. The first thing that I would say to an extent is the answer to your question, convener, and of course to elaborate on that. It's undoubtedly complex the governance arrangements to support what's equally a very complex area of delivery that has many interdependencies across Government in terms of what may be potentially competing areas of policy and those that are aligned. We set out in the report this morning some of that complexity of governance arrangements just with the scale and breadth of arrangements. You mentioned in your introductory remarks, convener, some of the ministerial arrangements, which we know have changed since our reporting was made. We also identified in terms of some of the official level governance arrangements. We now have a dedicated director general for net zero, which is to welcome that post-holder now permanently in post following a period of interim arrangements. There's some progress. We see also at the executive team level within the Scottish Government a clarity of additional focus through dashboard emphasis on some of the decision making on climate change, so that oversight. Progress hasn't been consistent with what we would describe as the former First Minister setting the climate emergency. We would say that there's some misalignment. That's kind of the overall conclusion of our report today, that to deliver upon climate change ambitions, a 75 per cent reduction to net zero targets by the end of this decade and then the legally binding targets by 2045, there needs to be action taken both on governance and risk management reasons to ensure that that collaboration takes place. I'll hand over to Sally in a second, convener, but one last thing I would say is that the report also references some of the research that was on case study 1 that the Government and the Parliament undertook about some of the changes that need to take place. Ultimately, and I know that this remains a key focus for the Public Audit Committee, that what spending is planned, how is that set out clearly about the impact that public spending will have through the budget to meet climate change ambitions? That also needs to be much more clearly set out for the Parliament's own scrutiny of budget setting arrangements. Some gaps, some collaboration happening, but much work still to undertake. Again, I'll stop when Sally can come in on any of those points, as she wishes. As the Auditor General said, a lot of the Government groups that have been created for climate change, such as the Global Climate Emergency Programme Board and the Deputy Directors Network and the Policy Delivery Boards, are all around ensuring cross-government working and collaboration. However, what we found is that there is a lack of links between those bodies, so we do not see that there is no reporting from the Deputy Director Network. The Deputy Director Network and the Policy Boards were set up to allow the Global Emergency Programme Board to provide assurance in that collaborative cross-government working, but there are no direct links between those bodies. They are a bit infrequent, or they are not as they are set out in their terms of reference. I think that there is an understanding and a desire within the Scottish Government to have this collaborative working, but the systems are not in place that clearly support it, so it is difficult to get that assurance. I think that, in terms of your points about the budgets, as the Auditor General said, the Scottish Government and the Scottish Parliament did commission work on trying to assess the impact of carbon impact of budgets on offending, and this is a complicated area, and it is an area that the Government is working in trying to improve. However, I would say that the Scottish Government acknowledged that things are not perfect and that they are not aware of the gaps in where they need to try and work to fill them. I think that there is a sense that I picked up from the report that you did, but also from the recommendations coming out of the Scottish Government's own Just Transition Commission that there is a degree of impatience that the climate emergency was declared back in 2019 and in 2023. Some of these fairly basic building blocks are still not in place in a way that we would perhaps expect. One of the things that struck me, and this really picks up on Sally Thompson's comments there, one of the things that struck me was the comments around Exhibit 3 in the report, where you referred to what you described as exception reporting being in place between key Government groups. In other words, there is no routine systematic or regular collaboration in that sense. It is almost as though it will only happen not quite by chance, but it will not routinely happen. Do you have any comments on that? There is certainly a reliance on the same individuals being within the same groups, so the chair of the deputy director network sits on the programme board, the DG net zero himself links into all the corporate structures. There is a lot of reliance on individuals, rather than on reports and systematic structures. One of the risks that we highlight is that staff knowledge changes, so there can be a loss of clear rules and accountability. Different staff in the Scottish Government's understanding was different, so the Scottish Government's own governance model that it created in 2021 has not been updated, so we have created that based on our understanding of how things work, the terms of reference discussions with the Scottish Government. That was something that the internal audit report recommended should be done last year. The Scottish Government accepted that and set a time to do it, but it still has not been done. I think that the Scottish Government would say that it is around about capacity issues quite often. As a parliamentary committee with an interest in this area, part of our role is to hold Government to account, and it might be that we will consider what you have just told us, Salad Thompson, or something that we might want to take up. One of the other things that struck me about it was the question of transparency. Does the GCE, the programme board, publish minutes, for example? Does it have minutes? Does it publish them? Are they in the public domain? It has minutes, but I do not believe that they are in the public domain. No, I think that we got them through the Scottish Government. I think that the point of transparency. Again, looking at exhibit 3, there is a lot going on in terms of the different groups across Government who have an interest in climate change. To some extent, that is not surprising, given the issue that you have alluded to, that climate change is going to require a concerted effort across all policy areas, understanding and the point of exception reporting is very important, as are the escalation arrangements. Ultimately, there is effective oversight that happens, and that oversight also needs to be transparent. Government can clearly map out themselves. As Salad has mentioned, this is our exhibit, and we have pulled it together. Perhaps it illustrates on a small point just about the need for Government itself to be clearer on how all its groups interact and that they are clear about which elements are informal, which elements require formal public engagement and how they will best report that. There needs to be that next step convener that sets out clearly for the Parliament and the public about how accountability best operates on climate change matters. On a similar theme, you draw attention in the report to the deputy director network, which you described in the report as a key climate change governance body, but it seems to operate informally and again asks the basic question, do they produce minutes? No, they do not produce minutes, so there is no paperwork. It was described to us during our audit as the engine room, where a lot of the real delivery happens, but there are no minutes of the meetings. It would be useful to understand whether it is an engine room or a talking shop. I am careful in making any blanket assumption that every single group has to have that level of formality minute taken. Rightfully there will be times when officials and public body can convene together to share ideas and so forth, but there seems to be a contradiction here with the deputy director group. Those are senior civil servants who will have responsibilities across Government to assess how climate change is impacting on their policy leads. There ought to be some formality, especially if we use the phrase of the engine room and its connections into the global climate emergency programme boards and the flow-through from that. All of that requires an additional level of formality minute taking, one of those fundamentals. I am now going to invite the deputy convener, Sharon Dowie, to put some questions to you. The report states that the most recent climate change governance map reflects the arrangements as at June 2021, despite significant changes to both corporate and climate change governance that have taken place since then. The report then goes on to state that frequent changes to complex cross-cutting governance arrangements and the lack of clear documentation makes it difficult for teams across the Scottish Government to see where responsibilities lie and could hinder collaborative working on this cross-cutting priority area. Do you have any examples of where collaborative working has been hindered? I will bring Sally in in a moment. The first thing that I would recognise is that there are some mitigations here, clearly, that there was a global pandemic that took place over the early years. Recognising that that will have diverted focus and attention away from some of the governance arrangements and some of the progress that might have impeded collaboration. One example that I might refer to is positive and with more work to do. Sally may wish to elaborate on that or choose a different example. It is welcome that the Scottish Exchequer Directorate is playing a more active role on climate change matters. We set some of that out in the report. Given the responsibilities of collating both tax policy arrangements and budget setting arrangements for the Scottish budget, case study 1 highlights that there is more work to do around this area based on the research commission for the Parliament and the Government in terms of carbon assessments. Inevitably, there will be really difficult choices. I think that the Government and the public bodies as a whole and us as individuals will have to make over the course of the next decade about how we heat our homes, how we travel and the food that we eat. All of those choices will come our way, but they will be better informed by having that collaboration that is very effective and clearly set out within Government so that we are making those decisions in a transparent, careful way. That is the emphasis of today's report. Having those fundamentals of how to set up into governance and risk management, getting those right will make some of those decisions clearer and fairer on evidence base into the future. Sally may wish to elaborate on the role of the Scottish Exchequer or other factors that she wishes. Certainly, when the DGNet zero got put in post, he looked to refresh the programme board and has tried to work to improve the collaborative work there and has included the DGXJacker. They have commissioned the work to assess the impact of spend. A lot of the work happens within policy boards and at directorate level and we cannot see how those links are connected. The report states that a workforce plan for the DGNet zero area was expected in spring 2023, so we are nearly halfway through May. Is that timescale likely to be met? We have not had any update that is positively confirmed from the DGNet zero directorate since publication that a workforce plan has been produced. We will continue to track that, but it may be something that the directorate can confirm directly to the committee. The report refers to workforce capacity and capabilities being key challenges identified by the Scottish Government. Can you tell us more about the key challenges, what the key challenges are, and what steps the Scottish Government is taking to address them? Certainly, I will bring Sally in again to say a bit more about that. The dedicated leadership, first of all, of the DGNet zero. It felt like an important step for the civil service to say that here is the leadership and our intention around capacity to deliver climate change goals and responsibilities across Government. It is clear that the DGNet zero is not going to deliver climate change ambitions on its own, so it needs to have that understanding both through its workforce plan. That was a migration of resources from other directorates that people existed into a new directorate within Government. I bring in skills and capacity from there, but mapping forward as it were over the course of the 2020s to the 75 per cent target and then into 2045, that will require a short, medium and long-term workforce plan, a skills matrix that identifies what skills and capacity does the Scottish Government need to deliver on its climate change ambitions. That will also require difficult choices, because at the same time, the Scottish Government has already committed by 26-27 to return civil service numbers to what they were pre-Brexit, allowing for the increase in resources that took place to support Brexit discussions and then Covid size. So complex areas to be mapped and navigated through deputy convener in terms of there is a workforce plan that can deliver upon climate change ambitions. What the Government publishes imminently in spring 2023 for DGNet zero will be really pivotal. I will pass to Sally in a second, but it is also a continuation of some audit recommendations for the Scottish Government. We mentioned it in the section 22 report on the Scottish Government render last year. That real need for clear, transparent, comprehensive workforce strategy to support all of those competing ambitions, so much work to be done on this front. Again, I will pause and pass to Sally. The issue around capacity within the Scottish Government to deliver on climate change was raised at various interviews and is often given to us as a reason for things not happening. I mentioned that the governance map has not been updated because of capacity. There are other things, so often the terms of reference suggests that people make recommendations to different groups and we have no evidence of that. The issues around capacity were particularly referenced around adaptation, in which we can see that there is a lot less focus in terms of how we adapt to the impacts of climate change that we are already facing. Those have been stated by the Scottish Government in papers and in interviews as reasons for a lack of progress, if you like. When we were doing the audit, there was a recruitment freeze within the SGA, but that has been lifted towards the end of the audit. A programme manager has been brought in to work on the GCE programme board. I think that the hope and expectation is that they will be able to bring a lot of this sort of structure and rigor that is lacking. Last year's report states that governance arrangements to help Scotland adapt to the impact of climate change are less developed than those for reducing emissions. Do you know why that situation has occurred? We can certainly build on a little bit further in terms of the report, and Sally can equally say more. It may be for Government to give their perspective on why there is a difference between a very clear and focused on climate emissions reductions relative to adaptations. That is the evidence that we have seen that even in terms of—Rebecca may wish to say a bit more about how that manifests itself in some of the risk management arrangements—clear evidence that carbon emissions has been high-profile risk for Government in its corporate risk arrangements going back to the end of the previous decade—adaptations less so. Even some of the news over the past few days that global temperatures are going to increase beyond the ambition of 1.5 degrees Celsius by 2027 will inevitably bring changes to climate that we will have to adapt our lives to. We have already seen that in terms of some of the flooding arrangements, more severe and unpredictable storms that will require changes in how we live our life, but also public investment beyond what we are already committing to in terms of flood defences and so forth. That requires comprehensive governance and risk management arrangements that bring parity to work on adaptations and climate emissions reductions. We both have to go hand in hand, but we have not seen that yet, deputy convener. I will pass to Rebecca and indeed Sally if they wish to say anything further. We found that adaptation was not given as much a priority within the risk management arrangements in the Scottish Government. The failure to adapt to the impacts of climate changes is given a lower risk score than the failure to meet net zero targets. That is in large part because some of those impacts will not be felt until the much longer term, but the reality is that action to address them needs to be happening now. Because they do not feature as such a high risk score within risk registers, there is then that risk that they are not considered as much within executive-level decision making. The potential for them not to be treated as urgently as perhaps the risk of not meeting the net zero targets. We saw that coming through in the risk registers. We also saw that adaptation in other areas was not given as much focus. For example, it was not added as a formal work stream to the global climate emergency programme board until a couple of years after that board had been established. There is also not currently a performance management dashboard for adaptation as there is for emissions reductions, but that is something that we know that the Scottish Government is currently working on. Thank you very much. We are now going to move on to another area that is highlighted in the report that Willie Coffey has got some questions about. Thank you, convener. Stephen, I wonder if we could talk a little bit more about spending impacts. You have touched on it a few times in the conversation so far. Just to get a sense from you about how you see this panning out, are you saying that the Government needs to be clearer about its spending targets to achieve the net zero targets and so on? I think that you just said a moment ago that because of the climate change taking place, it is going to mean that we will have to spend additional money on things like flooding and flood prevention. Do you just have a little perspective on how you see the spending situation in that, looking forward to how we tackle those issues? Yeah, morning, Mr Coffey. I am very happy to do that. Before referencing the conclusions in this report, I think that it is maybe worth just referring again to publication that I know that the committee has heard a fair amount on over the past few weeks, which was the Scottish Fiscal Commission's report that looked towards 2050, so some alignment with the targets to deliver net zero by 2045 and their judgment where that if there weren't changes or reforms, particularly focusing on health and social care, that that would consume a considerably part of the Scottish budget to the detriment of our policy areas. Really looking at some of the shorter term implications, I mentioned case 31 already, that there is a lack of alignment, what is going on, but a lack of alignment so far on some of the carbon assessments alongside the Scottish budget. These are the type of clarity that we will need to see that decision makers, lawmakers and the Parliament will need to see for making budget choices that it is clear what public spending is contributing to managing the implications of climate change. That might mean that difficult choices and prioritisations, more money on adaptations such as flood defences that you mentioned and expect to see an alignment with the national outcomes, national performance framework and the Scottish budget. We would say that there is absolutely work being undertaken, Mr Coffey. There is a recognition of the need to move towards this direction, but it is that level of clarity of decision making that we will need to see and expect that that will come to fruition for the 24-25 budget cycle. It is both clarity and perhaps shifting balance and shifting emphasis that we have to face up to really in budgeting. I would agree if you are looking at the legally binding obligations that are set out for Scotland to deliver upon net zero by 2045, five years ahead of other parts of the UK. To deliver upon that will require focus in terms of high-quality governance and risk management arrangements, clarity and transparency of what public spending will deliver in terms of carbon assessments and adaptations. Those are the steps and choices that we will all have to make over the course of the next few years. You are saying in the report that there is no routine assessment taking place of the impact of policies and spend on emissions. Is that something that we need to really get a grip off so that we can demonstrate that one leads to the other? I will bring Sally in to say a bit more about that. As I said a couple of times, there is undoubtedly work happening. In 2024 we will see the Scottish Government publish its next climate change plan. That also feels like an important milestone along with the budget process to give that clarity about what is going to happen, what spending is going to take place and what the anticipated impact of that spending will be. Sally can say more. The next climate change plan, as the Auditor General says, is due at the end of this year, finalised at the beginning of next year. There is a legal requirement that that is going to be funded. It has got to currently be costed, because it is currently uncosted. Going forward, there are going to have to be costs in there. The Scottish Government themselves recognise the need for multi-year on-going funding for climate change. As Stephen said, there is work on going with the DGXJacker to try and facilitate that. On the carbon impact, it is also looking to improve how it does that in the case study 1, where the work that the Fraser Valander on climate exchange did is a building blocks to that. However, it is not something that is easy to get right, but I think that there is a commitment from the Scottish Government to consider the carbon impact on significant policies at an early stage going forward. However, the timescales for that are still not clear. You have covered a couple of areas that I was going to touch on there, but thank you for that. On the climate change plan, you also said that we need to be a bit clearer about what policies will appear in that. What do we need to do to make that abundantly clearer? A lot of the climate change committee or the expert independent body that looks at the climate change plans and the targets have recommended for the last few years that the Scottish Government really needs to be clearer about what its policies are and how they will impact on targets and outcomes. Currently, the CCC believes that there is quite a disconnect between the policies that we have and the emission reduction pathways that are in the plan, so we need to make sure that we are much clearer about how they come together. We do not know what that will look like in the forthcoming plan, but that is the intention. I am glad that you mentioned the climate change committee. We had Chris Stark, who gave evidence to our housing local government committee just a couple of weeks ago, and his message initially was pretty positive. He basically started the discussion, convener, telling us that we have basically achieved the decarbonisation of the power system in Scotland. We have basically done that, but the big ticket items that still remain and you mentioned a few of them yourself, Stephen, are the impact on our buildings and homes. That is a huge issue to transport and he mentioned industry and agriculture. Those are the big issues that are perhaps in the second half of the marathon that we are engaged in, and they will be the most difficult to deliver. Do you recognise that and accept that those are the biggest challenges that we still face? We absolutely do recognise that, Mr Coffey. Looking at the CCC's report from December, the three areas that it set out will require that real focus decisions and tough choices over the course of the rest of this decade. Certainly, I have drawn on the work of Chris Stark and his team, setting out conclusions that Scotland was ahead but has slipped behind in the past few years and has got work to do to meet its targets from the 2009 Scottish Climate Change Act. That will remain a real area of audit focus for us alongside the science climate change experts at the CCC. How we heat our homes is a piece of audit work that we are giving consideration to as well and can brief the committee further on that in due course. There needs to be effective scrutiny and transparency from policy makers, and then real clarity about what the impact of some of those choices will make to support the prioritisation. Having quantified delivery plans, that was quite a common theme throughout what he was saying. Is that something that you recognise? Are we shorter doing that kind of thing in a whole range of policy and just quantifying what we want to achieve? Take, for example, the target to reduce car kilometres by 20 per cent by 2030. It does not take a genius to work out that we need to drop it by about 3 per cent for the next seven years to get there. Is that the kind of thing that we are talking about, to quantify this and to be able to report that we have achieved it or not? Absolutely. You would expect me as an auditor to say that you are going to have to draw on quantifiable evidence to make an assessment of progress. Whether it is car kilometres or tree planting, we have statistics and evidence available that there is work under way. The Scottish Government tells us that it is currently planting 16,000 hectares or trees per annum against the target of 20,000 and the CCC recommended that you need to be up at 45,000. I think that we know what the basis is. However, how we are going to get to the level that we will deliver upon climate change reductions is the next step. That has to be supported by quantifiable targets and also costed and funded at the same time as Sally Rowley mentions. Are you broadly satisfied or otherwise that we are focused sufficiently on this quantification process across the portfolio areas? I think that we are satisfied that people know what needs to happen in terms of a budget that is aligned with outcomes across the national performance framework, as we have spoken about many times, but also the carbon assessment implication of that, that the various next steps in terms of meeting 2030 interim targets at the end of 2045 has medium and long-term plans that set out very clearly what steps are going to be taken that can be measured for scrutiny purposes, absolutely. We are also very likely that a plan covering as many years as that will need to flex and change at various points to allow for circumstances and external events, but having that but being able to make those choices over the course of the next few years requires a clear baseline of where we are currently. That is the work that we see for the climate change plan for 2024 and the budget for 2024-25. Those are such important next steps, Mr Coffey. Sometimes, as a committee, we consider elements of public life that are almost unique—the national health service, for example—but the global climate emergency is something that every Government in both the north and southern hemisphere is having to face up to. When you say in the report, and just to reiterate what I said at the start, this is a report that came out just last month based on audit work that was carried out up until March of this year. At that point, you are still saying that the Scottish Government does not routinely carry out carbon assessments or capture the impact of spending decisions on its carbon footprint in the long term. Is that because they do not have the template to use? Presumably, other Governments are grappling with the kind of measures and impact assessments and so on. Is there any good reason learning from international experience why those things could not be brought in and become an integral part of decision making in the Scottish Government? I will bring Sally in to say a bit more about our discussions with Government in this area, convener. I think that the first thing that I would say is that the Government recognised that this is a gap that they need to address quickly and have set out their intention to do that in the updated climate change plan. Our view is that, for many years, there has not been a clear enough alignment between spending plans and outcomes from spending plans, both in terms of climate emission reductions but also the wider connection between budgets and the national performance framework. You have heard us make that point on many different occasions. On the international comparison, Sally can say a bit more about that. The only thing that I would not want to leave the committee's impression is that we think that this is a simpler straightforward thing to do. We recognise the complexity of doing that and there will be good reasons why it is not just a case of we had not realised we needed to do that. We know that Government is thinking carefully about this and are committed to doing it and also mirroring the judgments of the CCC that this was an essential next step. As the Auditor General has just said, it is an area that is complicated and the Scottish Government is grappling with it. The work that the Commission that we referenced in case study 1 with the Scottish Parliament is that it is proactively trying to solve the problem. It is not an area that other Governments have solved. We have meetings with the other UK Audit agencies and they are in a similar state. The NEO recently published a report on pathways to net zero and it was issued roundabout assessing impact and monitoring arrangements that they were flagging and not clear rules and responsibilities. It is similar issues that are across the board, but we did not audit those as part of this audit. I guess that my horizons are a bit wider than the UK. What are the Scandinavian Governments doing? What is happening in Germany? What is happening in some of the African states, for example? I presume that there is no point in every single Government, in every single country, carrying out its own, from the start, approach to this. There should be presumably shared understandings of how you can measure this and what the policy implications are and how you better make a measurement of the impact of decisions that you are taking on your climate change targets. You are quite right, convener. This would be an effective discussion that we expect will be taking place and has done so between the CCC and the Scottish Government, that they are drawing on experts, they are drawing on their understanding of UN sustainable development goals and they have got that clear line of sight between what is good practice across the world and then factoring that into their updated climate change plan. I think that we are all expecting to see that, as Sally mentioned, through the draft climate change plan at the end of this year and then the publication into 24. Great. I am going to move things along now and invite Craig Hoy to put some questions to you. Craig. Thank you, convener. Good morning, Mr Bourne. Thank you for an informative report into an important issue that I think, as you say, cuts across Government. I want to just look broadly at the risk management arrangements before drilling down perhaps on some of the progress or lack of progress in addressing those identified risks. However, you just made reference to the CCC and your report states that the climate change committee has recently reported that there is a high risk that the Scottish Government's targets to reach its net zero emissions and adapt to climate change will not be achieved. The report goes on to add that this high level of risk has been identified by the Scottish Government. For the benefit of the committee, could you perhaps elaborate on the steps that the Scottish Government is taking to address those identified risks? Good morning, Mr Hoy. I will invite Rebecca to set that in a bit of detail. We were building on the point that she made a few minutes ago about the connection between adaptations and meeting climate change reductions for Rebecca. As you rightly identified, the Scottish Government has identified that there is a high risk of it both not meeting its net zero targets and failing to adapt to the impacts of climate change. Both of those features are in its corporate risk register and both of them score very highly in terms of the likelihood and the severity of that risk if it were to occur. In terms of what the Government is doing to address those risks, there are a number of risk registers at different levels within the Scottish Government that outline actions to address the various risks to not achieving the Government's climate change goals. Sometimes those actions are quite vague and it is not clear exactly what needs to happen or what the Government intends to happen and what the expected impact of that action would be. While there are a number of different actions against the variety of risks, they cover things relating to staff and capacity to governance, to developing plans and strategies, and a whole range of things. What we found was that the actions are often quite vague, so by that we mean that they are often not time-bound. It is not necessarily clear by which point the Government anticipates that those actions will be completed. They are not specific enough, so the language might be around developing a plan or enhancing engagement. It is not quite clear about specifically what plan and what it will include or engage with who and by when and to what purpose. One of our main findings and recommendations related to that is that the Government needs to be much clearer about the specific actions that it intends to take to help to reduce the risks that it has identified and to be very specific about that, and then to put in place a systematic process to assess progress against those actions. What we also found is that it is quite difficult to tell what impact those actions have on reducing the risks that it has identified, because there is not a consistent process in place to allow them to monitor and track that and to evaluate the impact of those actions and to see what that means in terms of helping to reduce the risks that they have identified or not. Obviously, I think that pages 19 to 21 of the report contains the exhibits that identify those risks. Exhibit 4, the Scottish Government's risk structure, Exhibit 5, the overview of the Scottish Government's climate change risk registers to which you referred, and Exhibit 6, the Scottish Government's overview of the key risks to achieving climate change. Looking at those three exhibits, in the light of your answer there, is your primary concern around the adequacy and the scope of those risk registers and the measures taken by Government, or is it the efficacy of the actions that they are taking? Probably both. The Government has done a good job, particularly since the appointment of a director general for net zero for putting specific risk management arrangements in place. For climate change, we have seen the establishment of a risk register specifically for that director general area. We have seen an increased focus on risk management, specifically relating to climate change. However, we found that there are still some gaps there in terms of the processes. That means that it is not working as effectively as it could be or should be. What that means is that there is a risk that barriers to meeting the Government's overall climate change aims and objectives could be getting missed in executive-level decision making. If they are not featuring highly enough on risk registers or if those risks are not feeding through to the correct forums for discussion, then there is that risk that they might be getting missed or not given the focus or treated with the urgency that they require. The Government has put in place, as you can see from the Exhibit 6, a number of different risk registers. There are appropriate risks identified in there, but it is about being more specific about those actions that need to be taken and fully evaluating the impact of those actions. If it is felt that they are not having the desired impact, then reviewing them again. We also make a recommendation on putting contingency plans in place for high-risk areas. If progress is not being made, what is the plan B? If those actions that have been identified are not doing what they need to do, what do we now need to consider doing going forward? Just briefly, to a layman looking at perhaps the structure and those three different exhibits, is there a risk that it is too cluttered that you end up with the mechanism but too complicated for what essentially should be quite an easy dashboard to read in terms of progress? I think that it is about how all those things are linked together. It goes back to the point that the Auditor General and Sally made earlier about governance arrangements not being as joined up as they could be, and it has not always been clear where the reporting lines are. The same applies in terms of the risk management process. It is good to see a number of different risk registers at different levels of the Scottish Government so that risks have been discussed by appropriate people at appropriate levels, but it is about making sure that there are clear reporting lines between them and also being very clear about where the escalation lines are, so if it is felt that risks need to be escalated, it is not always that clear how that will happen and where it gets escalated up to. Mr Ball, just on the risk of not meeting the net zero targets, it has obviously been given a high risk score, meaning that it is very likely that those targets will not be achieved. You also state that the impact of that would be severe. Could you just give us an impression of what severe would look like? It is hard for me to be definitive on that. I would defer to the Committee on Climate Change Expertise. It has set out that there is a high risk of not meeting climate emission reduction targets in its own report at the end of last year. To offer an audit perspective on that, I will draw on the fiscal commission's report that, without meeting some of the climate and budget challenges alongside the wider prioritisation that will be required for the Scottish budget, health and delivery of other priority areas, we will likely see public services under real strain and significant weather events that will change how we are leading a life and require further public expenditure to meet that. It is clear that the Government recognises that the challenge is that we need to collectively meet over the course of the rest of this decade and beyond. What we need to see now is that, through the climate change plan from next year, alongside really clear governance arrangements and effective risk management arrangements, to support that decision making is the next steps and recommendations that we make through our audit report today. Obviously, the term just transition is now quite commonly used if not commonly understood in all quarters of our adventure. What checks are in place to ensure that next year's targets are met in a way that is fair to all and that is truly a just transition? For example, in relation to both the national economic interest and national security interest last year, the UK spent £40 billion buying oil and gas from Norway. Would it be right to have broader concerns, for example, that, if we wind down Scotland's oil and gas sector, that there is an impact that does not necessarily mean that that just transition is fair to all? The first thing to say is that our audit did not look at just transition arrangements into the future. We recognise that this is a dynamic area of public spending and policy choices, and even that is reflected in some of the cabinet secretary structures that have evolved since we reported. Beyond that, it will be about prioritisation and probably difficult choices along the way to deliver a balanced budget and deliver the right outcomes that meet policy objectives for the Scottish Government, which includes just transition alongside meeting climate change emission reduction targets and spending where we need to mitigate climate change through adaptations alongside all those other policy areas that will have an impact on climate change but are public spending in their own right. The task will be balancing all of those, and I think that as our report looks to set out, Mr Hoy, Governments will have a better chance of meeting all of those competing priorities by having strong risk management and governance arrangements in place. Just in terms of, obviously, the report does not look at just transition, but do you plan to or is it intended to take more of an interest in the potential impact both on individuals and organisations if a just transition is not delivered on the timetable as planned by the Scottish Government and then what impact might that have on its achievement of its net zero targets? As you will know, we keep our forward work programme under a regular review about adjusting for a range of different factors, including change of Government priorities and implications on service users. In terms of our next steps around climate change work, we are planning to do some further audit work around heat in homes, and we will give further consideration to what just transition means, what public spending is planned for just transition alongside future carbon emission reduction and adaptation work, so we will keep that under review. Do you know why, until December 2022, before a specific adaptation risk was added to the Government's corporate risk register? Was there a particular reason for that? I think that there has been a range of factors that will likely be relevant, not least the report from the CCC, which drew attention to that. Governments' attention and focus have been on a range of different factors, including the pandemic and the after-effects of that. It is true to say that carbon emission reductions have been the priority. We have seen that through our work in terms of governance and risk registers. It is now there, but we expect additional focus on adaptations as we go forward. In terms of the timeline of why it took to December 2022, Rebekah Llywyddyn can see more if she knows. As the Auditor General said, that is reflective of the lack of focus on adaptation in general terms, compared to the focus on the 2045 net zero target. Going back to my earlier point, that is largely because some of the impacts will not be felt until the much longer term. The risks around adaptation appear in the director general net zero risk register in March 2022, but, as you point out, it did then take until December for that to filter through to the corporate risk register. It is really important that that risk is on there, so that it is being considered at that very high executive level when decisions are being made. Just in broad terms, most people and organisations are obviously alert to the requirements to meet those net zero ambitions. In terms of the public purse, do you think that the public sector, the local government, will be right through the NHS estate, for example? Are they prepared for the quite significant costs that are coming down the line to achieve their own targets that will be required to feed through to the national target? First, I would say that all public bodies are legally obliged to do so to play their part to meet net zero ambitions. Much like the Scottish Government itself, public bodies need to have clear plans in place that have public spending, aligned to outcomes and aligned to carbon assessments. I think that, like the conversation that we have had already in some Sally's responses, we are not seeing that clearly coming through yet. That will be a focus for our work, but we are really the onus on public bodies, too, so they are absolutely clear about what their public spending and services are doing to deliver what is it primarily intended to do, but that carbon impact is also set out. On a technical point, your report suggests that focusing on the short-term impacts is not necessarily appropriate for assisting and assessing the impacts of climate change, because obviously the most severe impacts will be on the longer-term projections. Do you think that the Scottish Government has indicated that it agrees with this point in your report? If so, what steps is it taking to review how it calculates the risk score for climate change adaptation? On the Government's understanding and clarity of the report, as you would expect, we have gone through the factual accuracy check and the associated recommendations for that. In terms of the Government's next step, they might be a better place to set out what their intent is, but I can offer more. The Scottish Government recognises that point. You will see in our report that we have made a recommendation that, in identifying actions to address risks in future, we would expect the Scottish Government to take those longer-term impacts into consideration. In discussion with them, that was a point that they recognised. As the Auditor General said, in terms of the action that they are taking now to address that, I think that the Scottish Government would be best placed to advise on that. I will bring Willie Coffey back in again, who has a point to put. Willie Coffey, thank you very much. It is just on the comments that were made in paragraph 24 that Craig was leading on risk here. Could you explain to me that the risk that was established in 2019 and we would probably all put that on a corporate risk register if we were writing it ourselves that we might not meet net zero targets? Are you saying that there has been no review of that from then to now, and therefore it remains as high as it was then? Given the comments that Chris Stark made that we have largely decarbonised the power system, does that not tell us that the overall risk must surely have diminished? That is how I see it, but I would appreciate your view on that and why you would lean on to say that it is very likely that we do not meet net zero targets. What is that based on, if we have that evidence in front of us, that there is a reduction? I think that there is a range of different sources that the Scottish Government is drawing on. Bear in mind that this is the Scottish Government's assessment that there is a high risk. I am also referencing the CCC's report from December, which it said that the Scottish Government did not meet seven out of its eleven targets. Scotland is leading on decarbonising or was leading the rest of the UK, but it is now of a similar level of progress. Scotland is also relying on transport emission reductions as being one of the primary drivers. The report also references that Scotland is not purchasing as many electric cars as other parts of the UK, so there is a range of different points in the CCC's report that point to progress being required to address that high risk. Ultimately, it is for the Scottish Government to decide what it considers to be a high risk, Mr Coffey. What we have set out in the report is that it is fine to say that there is a high risk. What needs to be really clear is what actions you are going to take. I think that our assessment was that there was a lack of alignment between the actions that were planned to address the high risk and the risk itself, along with the other factors in terms of who owns that risk, what is that going to mean in terms of delivery dates, spending and so forth, but the overall assessment of high risk is probably one that I would recognise, but in terms of the specifics around it, it would be for government to say. Thank you. Just continuing on the theme of risk management in a final series of questions that we wanted to put to you, one of the things that we read towards the end of the report was reference to an exercise that took place in the summer of 2022 inside the net zero directorate, where it carried out what you described as a risk housekeeping exercise. The result of that was a conclusion that, in the DG net zero directorate, the maturity level on that housekeeping exercise was novice to organised. My understanding is that what that means is that the directorate had only just started to implement processes in line with the Scottish Government guidelines, so it was a very early stage, a novice stage. Do you have a concern about that? Given that this is the directorate, which is supposed to be showing leadership and driving forward this agenda across the whole of government? I will bring Rebecca in and say a bit more about some of our additional conclusions that we set out slightly after the paragraph that you mentioned, convener. The first thing that I would recognise is that this is a relatively new directorate within the Scottish Government. It is an important step change that there is now a director general to deliver on net zero. As I mentioned earlier on this morning, that staff will have migrated from other departments to form DG net zero. However, in terms of the maturity of risk management arrangements, that they were still novice in the summer of 2022 shows that there is quite a long way to go on such an important policy priority area. That needs to happen quickly in terms of having robust, effective risk management arrangements to support the delivery of such an important policy objective work to do. As we set out further on in the report, our own assessment of some of the risk management arrangements also identified a number of areas for improvement that Rebecca can touch on. Just before I come on to more detail of what we found in our report, on the risk maturity assessment of novice organised, just for information, the committee might find it helpful. There is a scale of seven, and the novice organised is a third from the bottom. As you recognise, convener, there is still some way to go there. I think that we would hope that the recommendations that came out of that review alongside our own recommendations will help to support the Scottish Government in strengthening its risk management arrangements further. We have touched on some of the gaps and weaknesses that we identified in our report already. For us, the key things are about having robust processes in place and evidence-based processes in place to allow the Government to identify risks to not meeting its climate change goals, and then putting very specific actions in place to address those risks, and then having a systematic process to assess progress against those actions. Alongside that, it has been very clear about who owns the risk, how risks are escalated, and making sure that contingency plans are in place, as I said earlier, in case the actions are not having the impact that they were anticipated. On some of those things, there are pretty basic requirements. I will look to you, auditor general. It seems to me that the report points out that details of planned actions are vague and that they do not include completion dates. Neither is there any estimate of expected impacts. That is pretty rudimentary, isn't it, if you are carrying out a programme of work that is designed to bring about transformative change? We agree, convener. There are some of these fundamental tenets of risk management arrangements. We also reflected our ambition with today's report to set those out to elicit the kind of change that absolutely has to happen to support the effective delivery of the Scottish Government's leadership role in delivering upon climate change ambitions for the changes that we will all need to make across public bodies and, as there are individuals in the private sector, having clear, consistent risk management arrangements is one of those fundamental building blocks. To repeat, there is work to do to get that all done effectively. The other area that you mentioned in the report is that the GCE programme board does not have risk management arrangements in place, despite a recommendation from a 2019 internal review, that that ought to be a priority. In 2019, that was something that was identified as a priority, and here we are in 2023, and it is still not in place. If I can say more about what our understanding is of expected progress arrangements, inevitably there is a link between governance arrangements and risk management. I think that we have seen throughout the report about a complex area with a lot of governance happening around it in different places, the clarity around risk ownership, escalation arrangements through to corporate board and so on. I think that we are seeing some progress, convener. I would say that particularly the Scottish Government's executive team is now very clear through its performance reporting, the different settings that it operates in, and that ownership of risk is there and under the direction of DG net zero. However, it is still quite early days, and especially when we consider the time frame from the climate emergency being declared in 2019 through to some of those works, not happening over a three-year period, the pandemic aside, we would have expected to see stronger arrangements in place. Rebecca, I can say a bit more if she wishes about the GCE programme board. As the Auditor General said, we were surprised that the GCE programme board did not have its own risk register in place, given its remit to provide oversight and assurance of climate change at a corporate level. You will see from our report that we have recommended that they do put one in place and make sure that that has clear reporting lines to some other wider climate change governance arrangements. We do not entirely know why that was not put in place. We do know that there were changes between 2019 and now, one of the most substantial being the appointment of the DG net zero towards the end of 2021, and that saw the progress made in putting specific risk management arrangements in place for climate change. However, we do not know why nothing has happened over that period. Obviously, we would like to see our recommendation implemented as soon as possible. One of the considerations that the committee will have to make is whether it would be useful for us to invite officials from the DG net zero to give evidence to us and perhaps if we were to decide to do that, we could put some of the questions that have arisen this morning from our session with you to them directly. For the meantime, I thank Auditor General for the evidence that you have led this morning, but also, especially to Rebecca Seidel and Sally Thompson, for the very useful evidence that you have also contributed. I should have mentioned at the start that Colin Beattie had submitted his apologies for today's meeting, so, for the record, I just wanted to have that recorded. I am now going to close the public part of this morning's committee session and move us into private matters.