 Gweinwch. I welcome everyone to this. This is the seventh meeting of the Public Audit Committee in 2024. The first item on the committee's agenda is for members of the committee to agree or not to take agenda items 4, 5, 6, 7 and 8 in private this morning. How are we all agreed? We are agreed. Thank you very much. We've got two sessions of evidence this morning. The first one of those is consideration of the Auditor General for Scotland's section 22 report on the 2022-23 audit of NHS 4th Valley. Can I welcome our witnesses who are joining us in the committee room this morning, Amanda Croft, who's the interim chief executive of NHS 4th Valley, and alongside Amanda Croft is Janie McCusker, who's the chair of the board on your last day as chair of the board, so you're very welcome, thanks for joining us. Andrew Murray is the medical director on the board. Kevin Reath is the director of human resources and Professor Francis Dodd is the executive nurse director at NHS 4th Valley. So, as a committee, we've got quite a number of questions to put to you, but before we get to those, Amanda, could we ask you to make a short opening statement? Certainly, and thank you, convener, and thank you to the committee for affording us this time today to speak to you about NHS 4th Valley. In November 2022, NHS 4th Valley was escalated to stage 4 of the NHS Scotland performance escalation framework, now the support and intervention framework, for concerns relating to governance, leadership and culture. Concerns were also raised in relation to the completion of integration of health and social care, in addition to a range of performance-related issues, notably in GP out-of-hours services, unscheduled care, mental health, specifically, child and adolescent mental health services and psychological therapies. Further concerns were raised by healthcare improvement Scotland over patient safety at 4th Valley Royal and by NHS, sorry, around clinical supervision of doctors in training. In October 2023, NHS 4th Valley received a report labelled The External Review of Corporate Governance Detailing 51 Recommendations. Prior to the publication of this report, work had already begun on a number of the recommendations. The recommendations from the report were mapped against outcomes of the Board's self-assessment survey, which was undertaken in September 2023 against the blueprint for good governance to ensure that any outstanding actions were captured within the assurance and improvement plan. NHS 4th Valley formally reviewed the progress against the actions in this plan at executive level weekly, at board level monthly, and we have a specific escalation performance and resource committee to do this, and the Scottish Government reviewed progress monthly at the assurance board meetings. Significant progress has and continues to be made in several areas regarding culture, leadership, governance, integration, health improvement Scotland actions and performance, and these are laid out in the paper that we shared with you prior to today. Many of our actions in the plan are completed and work across all the priority areas is embedded in existing and future plans, normal business arrangements, and our governance process to support continuous learning and improvement, and I won't say any more. That's a useful introduction for us. The first question that we've got is going to be put to you by Willie Coffey. One of the issues that was raised in the auditor general's report was the very high proportion of the prison population that's in 4th Valley, and you didn't mention that, Amanda, but I'd like to give you the opportunity to share with the committee your views on the impact of having to deal with that disproportionately high population within the health board and what kind of impacts it has both on the finances of the health board and performance delivery. Just to give you an opportunity to set that record straight, what is it, please? Thank you very much. I'll probably say a few words and I'll maybe ask Francis to come in around the specifics around the healthcare service within the prison population. The prison healthcare we have just asked the health and social care partnership to take on the responsibility of the operational management, which is in line with the integration scheme, and over the next year we'll look at moving that into the integration joint board. That doesn't mean to say that the health board don't have a big input into that. In terms of the prison population financially, we are funded for the prison population that we have at the minute. One of our challenges is that we are aware and are starting to receive more prisoners over the next few months, that we are in conversations with Scottish Government and the justice teams, as well as the health and social care directorate about how we continue to fund that. At the minute, funding and the financial issues in the prison, we are managing quite well as far as the health service is concerned. I'll maybe ask Francis to talk a bit more about the prison population in the healthcare service. We have a mixed population across the three prisons that we provide within NHS 4th valley. We have young people, we have women and we have men in our prison population. We cover a whole range of health services within that. We cover primary care services within the prison, as well as mental health services. We provide speech and language therapy. We provide dietetics support. A whole range of health services are provided locally to prisoners within the prison environment. We are working really hard to recruit and retain our staff within the prison environment. We have gone to some innovative ways in terms of how we provide the workforce within that environment. We have open days supported by the governor from SPS within the prisons. We have Try Before You Buy, where we encourage people to join our staff bank to try prison shifts to make sure that we've got the right environment, the right staff with the right skills and abilities to support the prison healthcare within the prison environment. We also provide regular support for patients in terms of escalation to any hospital services. We work with our SPS colleagues in order to be able to do that. A full range of services. Some of the challenges are in terms of the ageing population of our prison population, in terms of the responsibilities that we find in terms of that long-term conditions management for the ageing population within prisons. We have access to the full range of healthcare provision within that. The numbers of prisoners within the population and the mix of prisoners within the population is something that we continually pay attention to and try to make sure that we have the right health workforce in order to support the needs of that healthcare population within the prisons. I suppose that just in terms of the work that we are doing, we continue to refine that. There is a huge amount of improvement work that we are doing within the prisons and we will focus on patient safety and the quality of care that we provide to our prison healthcare population as well. I think that that is probably all I have got to say, but I am happy to take any more questions. Thank you very much for that. You were saying that you are funded for that prison population, but you have got nearly a quarter of Scotland's entire prison population in your health board area. Does that mean that you need additional different skills, more demanding skills that perhaps other health boards might not need in order to deliver that care for the ageing population that you describe, Francis? I think that it is a mix of prisoners that we have got across 4th valley. We have young people, a female population, a male population, long-term conditions and that ageing population. It is an evolving picture and we have good representation with Scottish Government colleagues in terms of how we connect into the networks across Scotland but also how we identify what the issues are within our prison healthcare environment. The connections are good, we are well wired into the networks across Scotland but also a really solid connection with Scottish Government colleagues and we have a very good relationship with our SPS colleagues in terms of how we work collectively together to provide the best support that we can for that prison population. There is always an opportunity to have conversations in terms of making sure that we have the right resources to support individuals because the size is an increasing size and we work, Amanda suggested, that we have moved that over into the health and social care partnership, but from a clinical perspective and a managerial perspective as well as the professional development of the staff that are in those areas we really work hand in glove to make sure that we provide the best healthcare that we can for the prison population. It is not without its challenges. Because of the different types of prisoners that we have in each prison, that means that our healthcare delivery is slightly different and the skill mix is slightly different in each prison. As we get the increased prisoners that we are getting at the minute, we have to review whether that healthcare service delivery is applicable to that prisoner type, so we are constantly doing that in each prison, as I say. Young men and women will have different needs to long-term conditioned prisoners. That additional burden that you have in terms of the numbers or does it not have a direct impact on your financial performance? Not that we are noticing at the minute. As we get increased prisoners, that definitely will happen. We have done some work around that and what that means. We are in conversations with Scottish Government about that. Thank you very much for that. I hope to come back and later on as other colleagues develop their questions. Can I take us to some broader areas? The first one is around governance. We look at Exhibit 1 in the Auditor General's section 22 report where he notes that concerns about governance arrangements in the health board have been flagged since May 2022 when there was a Scottish Government national planning and performance oversight group report. The terms of the independent corporate government's review were not agreed for another eight months. That is January 2023. The outcomes of that were not considered by the board until November 2023. That seems an inordinate delay in addressing something that is pretty fundamental to the functioning of the board. I do not know whether maybe Janie McCuske wants to come in on that and explain why that timeline looks like it does. If I may convener, I will take us back to early 2020 when the board was in emergency footing, as you are aware. We were advised by the Scottish Government to have more of an agile footing on our governance arrangements that we did as a board. We had taken to the board on the 31 of March 2020 in terms of how we were going to operate during that timeline. We put in place a revised governance arrangements that the board met on a monthly basis. More or less stood down the committees but also had the committee chairs convened to discuss matters as it related to that timeline. We then reviewed that arrangement in June. We reinstated the Governance Assurance Committees and all committees by the end of 2020 had met in full session and we resumed by April 2021. If I am understanding your question correctly, the governance review that was conducted in that timeline was commissioned and it was anticipated that that would be concluded within about three to four months. I do not know the reasons why that did not occur. We were not carrying out that. I think that there were delays and additional interviews that were being conducted. Once that corporate governance review was undertaken, then it came to the board as soon as we had received it. I do not know if I have quite understood your question. My question is why did it take so long for concerns about governance being flagged up in May 2022? Why did it then take until the January of the following year before a review into governance arrangements was established and why then did it take another eight months before the conclusions were considered by the board? In terms of any governance arrangements that were flagged up, we, as a board, were considering all of those issues. Our committees were addressing everything that was put in front of us. In terms of the review, we were waiting for Professor Brown to finalise that. We got the final report in October of 2023. I am just confirming that date. As soon as we got that, that came immediately to the board. The dues still seem to me to be quite big delays between those different staging posts. Let me turn to another area that has been identified in a number of external examinations of the board. That is about the culture of the relations with the staff. In particular, the recurring theme is that the views and the voices of staff were not being listened to. Do you accept that recommendation? I will come in first and maybe ask Kevin and Francis to talk about the work that we have done. I think that at the time we do accept that. I think that it is important to accept that if staff are saying that. That is how they are feeling. We have taken it very seriously. Kevin, I will ask you to come in. Francis, if you might come in on the latest report and inspection where they gave us some very good feedback about what staff were saying, Kevin, please. You will see from our submission that we have done significant work on culture. We have been progressing a huge culture in changing the compassionate leadership programme, recognising that we wanted to make improvements in this area. We have done a huge amount of work engaging with staff across the organisation over 12 months now. We have done a great amount of diagnostic work in a discovery phase, which was about listening to our staff, listening to what their views were and listening to the concerns they had. We took those and we have taken those into key themes for the organisation. In the tail end of last year, we were looking at bringing that together to develop a kind of feedback to our staff to look at how we then take that work forward with them. It is very much about co-creation for us. Having heard our staff's views, we want to hear about how we can work with them to develop and deliver changes in the organisation and the culture that we have. Between now and April, we are working with our staff, taking that back out to them to hear what they want us to do and what we want to change. Clearly, we have also referenced the whistleblowing and the speak-up work that we do. I have been at a number of boards, and whistleblowing has been something that I see given great attention in the organisation. We are very much about learning, though it is something about continuing to learn how that works. The standards have been new for all boards. We have been looking at how our staff recognise how they can raise concerns through the appropriate channels. We have done some work, and you will see in our submission that we have done some work to improve that. Francis might want to comment on how we have developed that speak-up and within whistleblowing. Before Professor Dodd comes in, you referenced the note that you sent us in advance of your appearance here today. It was quite a lot of managerial jargon in it, and it was quite long. When it came to staff relations, it mainly did just talk about whistleblowing. I think we all accept that whistleblowing is part of a suite of ways in which the staff's voices can be heard, but I would have thought whistleblowing public interest disclosures were in extremis. I think the point that, as I read it, has been made in some of these external reviews, the HIST review being one of them, is that there is not very good normalised routine communications with the staff, including, I presume, through the staff trade unions. I do not know whether Mr Reath is the HR director. You want to comment on that? I am happy to comment on that. Since I have come on board, there was already arrangements where we have a regular monthly APF, an area partnership forum meeting with our staff side reps. I meet with them every fortnight, our senior staff side colleagues. I meet with them and the employee director. We have an open communication. We look at early intervention, looking at trying to get into issues before they become bigger. It has been a really helpful sharing platform. I continue to do that with them. Every fortnight, I will be meeting with them, and there is an open door from the employee director and staff side colleagues to do that with me and with other members of the executive. The other thing we have been doing is we have embraced that in the way we do our work now. Clearly we have significant challenges to face like all boards in terms of managing financial pressures that are coming in the next year. We have been working every fortnight with our staff side colleagues on board with the executive to look at how we bring their views into frame, how they give us feedback on how we communicate with staff, how we do that and work with them in collaboration. That has been very much part of how we set our stall out to do things differently. I am an old-fashioned trade union person. When you talk about we engage with our staff colleagues, you mean that you sit down with the NHS trade unions? I do. Or you have another… Because partnership working again is meant to be a hallmark of good working in the NHS in Scotland. One of the things that we are trying to understand is the extent to which that has or has not been working. If I may come in there. At our last partnership forum, the feedback that we had from our staff side colleagues, our trade union colleagues, is that they felt visibility if their executive team was greater. They felt that we were working better. They appreciated early engagement with them, which we have been doing on a number of things, particularly the money. That is actually recorded in our partnership forum minutes. It was not an informal statement. We are getting that feedback quite frequently now. In fact, one of the bits of feedback that we had was we were finding ourselves too busy because we were engaging them very early. I think that feedback is really important to us. What we are asking for, what I am asking for from then, is that this is a two-way thing. We will engage with you, but we need you to tell us what staff are saying and you are closer to staff. That is the type of culture we are trying to create with our trade union colleagues. They are the people very close to our staff, far closer than we are. Over the past few months, we have certainly noticed that, and they are telling us that that is definitely improved. I think that the HISS inspection that happened a couple of weeks ago when Francis came in, you will get more evidence of that. If you want to come in briefly on that particular thing about staff relations under the HISS report, we have other questions about the HISS report. When the HISS team came in between 22 and 24 January for a follow-up visit on the inspections that they had previously undertaken in 22, they noticed with us that the process for escalating concerns from a staff perspective was significantly improved. Staff commented that there was a much more open culture, they felt heard, listened to, actions were taken and risks were mitigated. That was feedback from the staff on the ground to the HISS inspectors. They felt that the safety hurdles that we undertake through our normal business processes were much more open. They felt that they were a psychologically safe environment for people to see what they felt were their concerns. They felt that staff were listened to, they felt that they were escalating the right issues through that route, and that staff were then responded to through that way. In terms of that, that was an affirmation of some of the work that we have been doing, but we have also been doing some work across the nursing, midwifery and AHP community to look at what does psychological safety mean in terms of if you are a staff nurse or a clinical support worker or a physiotherapist, but trying to understand what are the conditions that we need to create for people to be comfortable to raise concerns. That has maybe not always been the case that people have been comfortable to raise concerns, but trying to work from a leadership point of view to make sure that the conditions are absolutely different and that people feel comfortable to say when things are not okay. It is our response to that and how we then take things forward with staff that reinforces through our behaviours as leaders across the organisation and role model in those behaviours to make sure that people understand that it is safe to say that things are not okay in Forth Valley, and that absolutely is what came through in the his inspection. Right, good. Thanks for that answer. I am going to bring Graham Simpson in who wants to come in on some of this area. Yeah, thanks, convener. Just on this line of questioning, Mr Reath, a question to you. What would you say you were getting wrong before? In respect of our engagement with staff? Yeah, on this whole culture question. Well, I think what we recognise is that the ability of our staff to raise those concerns, perhaps we needed to be giving them better opportunity to understand how they do that. And actually, I suppose back to what Francis has said to some extent, what I've seen is difficult. I'm hesitating slightly because what I've seen is quite an open approach since I've joined. I joined in late summer last year, and it's been very much about the way in which we set our stall out and the way we've approached this and our managers' leadership style has been about doing that very engaging approach, open approach. I think the thing I was struck by was how open our staff side colleagues were in sharing their concerns with me when I joined. So we had the opportunity to say, what can we do to sort this? How can we fix this? And how can we make sure those staff voices are heard? We've had to put some, you know, those partnership arrangements could have certainly been missing in some of our areas. We've re-established work in the acute side where that was perhaps not working as regularly and as consistent as we wanted it to. So I've seen a really open approach to the way we deal with this. Our staff side colleagues appreciate the opportunity to have that early intervention conversation where, and it's not just with me, it's with all our executive colleagues, you know, the opportunity to see what can we do before this becomes more problematic or more conflictual. So that's something that's been an element of our culture. So I don't recognise some of what was before. I wasn't there. When you came in, you could, from what you've just said, you could see there were problems that needed to be fixed. Andrew, do you want to come in? You were here. Yeah, yeah, yeah. I'll maybe come in for a couple of points then. Good morning. So yeah, I'm Andrew Murray, medical director. I'm probably the longest serving board member, so I can give a bit more of that historical context. What I would like to start out by saying absolutely is night and day in terms of those relationships with staff and where we are now is taking escalation and the work through escalation and some of what's within the various reports that we've got for us to be able to get the momentum and really the engagement with our staff. And that, looking back, I think the question was asked, you know, from a cultural perspective, what were we getting wrong and what were we not acting on? Probably a missing piece of the jigsaw between what Jenny described as the governance light, peri pandemic time and the report that was commissioned, which I agree was, it took a long time for that to be brought into the organisation. I think there was some frustration around that, but I think ultimately it was an excellent piece of work that really allowed us to make meaningful impact with a lot of the recommendations. A missing piece of the jigsaw was in 2021. There was an external review of NHS Four Valley, again, which started out as known locally as the ED review. There were four NHS executives, previous executives, who were an external group who came in to look at NHS Four Valley, and they widened out the terms of reference to look at all aspects of governance as well. And their recommendations, there was a reasonable amount of media coverage at the time, and Scottish Government colleagues were aware of that as well. So, to be fair to us on the board, that had given us a long list of potential or recommendations which then turned into action plans. So, we worked through those diligently, there was a subcommittee set up, which Jenny chaired. Really, we were attempting to correct many of the findings or many of the issues that had been raised. Some of those, though, there is a read across and Professor Brown mentions it within his report. He acknowledges the ED report. So, I think when you're looking back, there is a longer history. So, escalation doesn't come out, the blue escalation obviously comes out as a culmination of processes, and we've talked and we've heard previously about this information, we've heard about the deniery information, but actually those in themselves, those were not why we were escalated, we were escalated for leadership, culture and governance, and as I said, there is a context there. So, we had been working hard as a board working through those action plans, but we hadn't managed to have the impact of the delivery, and it took the report of Professor Brown and the escalation process for us to be able to start to transform, and I'll go back to what I started off by saying it's nine day now compared to how it was. I've got other questions on other areas. I'm going to turn then to Colin Beattie. Colin. I was going to ask a question about improving training for board members. Having read your general's report and the corporate governance review, that frankly the level of incompetence is absolutely breathtaking as far as the board's concerned. No challenge, very little scrutiny, there seems to be no understanding of proper governance. To me an induction for board members is an induction rather than training. Board members should be chosen for the skills that they have, for the expertise that they can bring to the board, and not because they come in needing training. Is there a problem with our recruitment process for non-execs? This is not the first time that committees looked at problems that have arisen within the public sector, and at least some issues were found with the way the non-execs approached the situation. I'm not blaming the board solely for this, there's other issues in this as well, but I'm focusing on the board. Is there a problem with our recruitment process? As you are aware, the Scottish Government leads on the recruitment process for non-exec directors for health boards. There are some specific skills that the board is required to have such as finance. We also now have clinical governance and non-executive director on the board, which came in after my arrival. It was a key area that I wanted the board to have that skillset for a non-executive director. Prior to that, we didn't have that skillset on the board. The Scottish Government leads on that non-exec director, and it's based on the skills that we might be looking for at a particular time when we have the opportunities for recruitment. Certainly in terms of fourth valley, I think that our non-exec representation could be expanded, but what we have now in terms of induction, when a non-exec director arrives, we actually have an induction package that we give to them. Certainly, in 2021, we have had an active governance training programme that was run by INES. There have been previous governance programmes run with the board prior to my arrival. We also have board seminars that go into specific areas of the business in detail, so it builds up that knowledge of a board in the non-execs. The primary role is to provide that scrutiny to the executive directors for the delivery. In terms of your question, I am not sure that I am fully conversant to be able to say that there is a problem. I have been involved in two recruitment processes that are led by the Scottish Government. I provided the criteria that, at that time, I would have welcomed on to the board, which was a criteria that would actually be a statutory requirement to have. I was able to recruit that skillset on to the board through that process. I hear what you are saying, that there has been training provided to the board over a period of years. There is induction and all the rest of it. It did not work so well. What is the point of training people and giving them all these guidance when it would appear on every side that it did not work? They did not take any notice of it. Where is the scrutiny? Where is the challenge? Since I have been on, we have some very strong non-exec directors who have provided scrutiny and challenged on the board. In terms of the His, we challenged on that. We got assurances at that time and, again, the His came back and deliberated otherwise that we had not fully implemented the recommendations. I provide a lot of scrutiny at the board and other non-execs to provide scrutiny at the board. Looking at the governance review and the overall picture that I am seeing here at my desk, it does not look that good. I joined the board in September of 23. I do not recognise that lack of scrutiny. I am presuming that that is because a lot of work has been done since being in escalation, but I do not recognise that lack of scrutiny at the board or in the committees. I am pleased that it has improved, but being an audit committee, we look backwards. We are looking at what was not so much what is. Trying to get to the bottom, drill down as to why this happened and how it can be prevented in the future. That is truly our role. It would appear that there have been significant gaps in governance here. We really want to get to the bottom of it and find out how we can ensure that does not happen again. There is a pattern. It has happened elsewhere, not necessarily to the same extent as this, but it has happened elsewhere. Therefore, is there an endemic problem? Is there a problem in the recruitment processes? We look at everything. Possibly, if I can speak about Fort Fally in mid-November, we did bring in a board secretary, which Fort Fally had not had in its true form previously. The role of a board secretary is exactly that, to make sure that non-negatives are inducted properly, have the right skills, support them with any development. I suspect that bringing that role into Fort Fally has definitely supported our development around that. I obviously cannot speak for other boards, but certainly in Fort Fally I think that that has definitely improved because I do not recognise that non-scrutiny since I have been in post, which is September. That is relative to the short time. Again, looking at the board, I would like some reassurance going forward that proper scrutiny and challenge is in place, because hopefully we have learned by all the deficiencies that have been thrown up both in the audit and in the corporate governance review. What sort of reassurance can we have that these have been rectified? We are certainly looking at strengthening and further conducting the active governance programme training for the board. We have undertaken the self-assessment at the board. We have had two external facilitator sessions of the board to identify areas where we have been strong and also areas that we have been weak. We have put in place, through the assurance improvement plan, how we will strengthen that governance going forward, so that is absolutely there. The 51 recommendations from Professor Brown's report is incorporated into that plan. There has been a lot of mapping done around that piece of work and we have a separate escalation assurance board that looks at all of that work. Certainly it is about strengthening where we are identifying the skillsets that we have, where we need to strengthen that skillset and where we need to strengthen any further induction either through existing mechanisms or anything else that we can bring on board. I can absolutely give you that assurance that that has all been taken into consideration and how we strengthen all of that going forward. I will go back to a point that I made before. Training is fine and necessary for a board in terms of new requirements, how the whole process develops to keep them up to speed and keep them on the same road. However, I expect when a board member comes and gets appointed that that person does have the skills and experience and the ability to be a board member without a huge amount of training. Otherwise, what is the point? Majority of non-exec directors will not come from a health background. I certainly do not come from a health background. Perhaps where it could be strengthened would be an induction programme perhaps by the Scottish Government into some key aspects of the business and that might be helpful. We have access to online systems and online availability, as you say, for training, but it can take a bit of time to really get into the business of the organisation. That is why you do not have succession planning so that you are not having everybody leaving and arriving at the same time. You have that networking with the existing board members that will bring along new board members so that they can understand. That is a mentoring system from within the board as well. It is an informal system, but it is not a formal one, but that occurs as well. My understanding is, from other evidence that we have taken in other sessions, that each NHS board has unique characteristics in the way that it is developed and so on. There would be a need for each board to provide a level of familiarisation with the business that the director is coming into. That is normal with anything. It is not unique to the NHS. Non-exec directors get a point to the boards of many different types of private and public organisations. I am quite against the clock. I will bring you back in, but I am going to bring Graeme in at this point. Thanks again, convener. I have a few questions. I am going to start with the current financial position. You very hopefully shared with local MSPs a paper called Finance Report dated 30 January. In that paper it said that the current forecast deficit is estimated at £10.3 million. It is highly unlikely that break-even can be achieved without additional funding from the Scottish Government and or significant improvement in the acute services division financial performance between now and the end of the year. Has there been any improvement since that paper was produced? Yes, thank you, Mr Simpson. Our latest position is that we are quite close now to delivering a break-even position. That is mainly due to additional national resources coming from the Scottish Government. We do not know the exact figure yet. Obviously, that would need to go through our board at the end of March before we made anything public, but that is our current position. The Government has offered to give you more money. All boards have had some additional resources from the Scottish Government. We are quite confident that we will be very close to a break-even position. I presume that you are still having to make savings? Absolutely. Going into next year is very challenging for all boards. We are working on our financial plan for next year, where we are looking at a significant saving as all boards are. We are in a very different position next year. We are working on that. That is what we are talking about with the trade unions. We are working very closely with them because there will need to be changes in terms of how we work and deliver services potentially. Again, that financial plan will be finalised at the board meeting at the end of March. We have heard previously, and you referred to it in this paper, that a large number of the savings are non-recurring. If that is the case, it is not very sustainable, is it? No. I will just be very honest with you. I think that is certainly my experience in the health service. I have got quite a few years as a director level in the health service and a few years as a chief executive. That is how we tend to manage. It is not the best way to do it, but in the health service. Fort Fally has not escalated for money. We have not in recent years never asked for brokerage. They have always broke even. We are the lowest rung of the ladder in terms of the escalation programme. I think that is because internally the auditors and external auditors are quite reassured and have confidence in our processes, but that does not mean to say that we have not got challenges ahead. Non-recurring savings are not the way anybody would want to go, but reality, I am afraid. That essentially means that you are going to be facing this position every year unless we can sort that out. Yes. Every single year you are going to be having to make a big savings. I am just glad that I am not a director of finance. Yes, absolutely. I am not being flippant when I say yes. It is unfortunately how we have to work. We have got a savings plan in place for next year. You will know about the agency spend and I am sure you will want to know more about that at some point. We want to bring that down. That potentially is recurring savings depending on the workforce. It is a really complex area, as I am sure you would agree, but it is not a great position to be in year on year. Unfortunately, that is how we have worked for many years. What is the implication of that for patients? They are the people that matter, aren't they? Your staff matter, of course, but at the end of the day you are delivering for the public. Absolutely. It continues to be a challenge and that is why we have robust systems in place around patient safety and governance. Any change in a funding source or challenges, our biggest challenge is workforce and getting the right workforce that is not agency, but all boards in Scotland are facing similar problems. I am not going to sit here and say it may not impact on patient safety, but we have robust systems in place to try and ensure that patient safety and quality continue as we would want it to. What is the proportion of agency staff that you employ? We are significantly trying to reduce the number of agency staff that we have. In the past few months, we have removed the off-framework agency from a nursing and midwifery perspective, so we do not use any off-framework. What do you mean by off-framework? The agencies can come to us in some ways. There is a framework arrangement in Scotland where we can go to certain agencies that broker into a certain framework payment. There were other agencies that provided a workforce to us that were in an off-framework, so they did not stick within the rules of the framework. We have completely removed our off-framework staffing use in the past few months. We did that very quickly with really good governance control that my deputy and I signed off on any of those shifts. That is the level of intensity that we are scrutinising, making sure that the quality and safety of care is not impacted by that, but looking at all the supplementary staff and solutions that we have in order to be able to provide the level of care for our patients and support for our staff to do the right job. At a time when we are under significant demand in terms of the patients coming through the system, that is one thing that we have done. We are now looking to see how we can maximise our recruitment, making sure that we have all of the options available to us, making sure that we are recruiting locally as well as internationally to try and meet the challenges in terms of some of the vacancies that we have. We are looking to reduce the number of healthcare support workers that we use through age and saying that we have reduced that by 68 per cent in the last month. We have a lot of work. Again, I sign off on all of those in-hours, and my executive director colleagues authorise those in the out-of-hours period. There is really good governance and control around that, making sure that we focus on what is the requirement for staff and patients to be looked after well and that the staff well-being is a factor in that as well. However, I aligned with what we would expect from a professional perspective around the numbers of staff that we require in order to meet the patient needs. My question was what is the percentage of agency staff that you use? Do you have that figure? I do not know that I have that exact figure. I have survived it offline. We have certainly looked at reducing that. We recognise that we have had a higher figure than Francis said that we would ideally want. That step process is moving. It will be interesting to have actual numbers. It is a tiny proportion in comparison to our substantive staff, but I can get you the number. I do not have the exact number. That is fine. Another question. In this, it was a long submission that you sent in. There was a lot of jargon in it. One piece of jargon I want you to explain. It says, this is on page 4 of your submission. Through November and into December 2023, 4th Valley has undertaken a fire break or system reset aiming to decompress the 4th Valley Royal Hospital site. I do not know what that means. Can you explain it? In redback like that, I can see exactly why it is a little bit mystifying. Because of our unscheduled care performance, it is very challenged. That really is at the heart of so many of the issues that our regulators and inspectors have picked up on, that the hiss inspection was really looking at the patient's experience in unscheduled care. The dinner revisit, which was mentioned earlier in this, again picked up issues that were as a consequence of our challenges there. Our system, and by that we tend to mean the whole system, so the unscheduled care process from people becoming unwell in the community all the way into the hospital and then all the way to discharge. Our system has, over the recent past and the last few years, has really struggled to deliver what it needs to for the patients at the 4th Valley. There are various ways that we can try and improve, and data is a big part of that. We work closely with Scottish Government colleagues to understand our data, where they see improvements. We worked recently with the Centre for Sustainable Delivery, where unscheduled care is now based, from a Government perspective. They have really helped with us understanding the opportunities within our system to improve. That sounded quite jargony, I guess, to be honest. I'll just speak in English. I'll just keep you on track. The firebreak itself is another method of doing that. It's another method of saying, how can we transform and reset our system? What it meant in practical terms was that senior managers, middlemen, everybody that could unblock decision making and unscheduled care, down tools away from their day job, and they concentrated purely on what we could do to improve unscheduled care. It took us into that real short-term rapid improvement process, and we were trying to see what we could, using the data, influence over that time. We fundamentally learned a lot. It didn't transform the system, though. That was one of our real frustrations that we undertook. We invested a lot of time and used the data, but we really struggled to unlock what we were trying to unlock, which was shorter stays for patients, better performance at the front door, et cetera. That was frustrating for us, because other systems—sorry, using that kind of jargon. NHS Lanarkshire did this, and they could see some gains. NHS Borders did a kind of similar thing, a kaizen thing, got some gains. Every system finds it really difficult to sustain it, though. We learned a lot, and it really helped refine the next iteration of our unscheduled care improvement work. That has got the output from the firebreak. CFSD data are local improvement plans as well. That constitutes our improvement processes and plans for unscheduled care and how we are trying to solve some of the long-sinding issues within the system. I am not sure I am any clearer. I can try and refire if you have a follow-up question. I am happy to leave it there. I am going to bring Jamie Greeney in at that point. Good morning. Mr Murray, did you say earlier that you were the longest-serving member of the board or just here this morning? I would need to double check, but I am pretty sure that is the case. Yes, Jamie has confirmed for me. This morning, yes. Please do not take this question personally in one sense. In that position, seeing your health board escalate to level four, which is one off from level five, which is the most serious, which means that the Government has no confidence in the board at all to deliver effective and safe care to patients. Level four is almost there. My question is, as a member of the board, both individually and collectively, how could the board have let that happen over a course of a number of years to get to the stage where the Government has had to intervene in such a fashion? Surely, as a board, you would be on-going monitoring and on-auditing of processes and outcomes and practices within the board. If this was a private business, it would be difficult to see how you would be sitting here this morning. Yes. I think that there has been, certainly from a personal perspective, a lot of reflection on how I could have worked differently. What could I have contributed that might have helped us to move forward more effectively previously? As I have alluded to, we can go back over a period of years. It is really clearly set out within Professor Brown's report. He has identified a lot of the key issues around how the executive leadership team struggles to build trust and to function. It is documented in the summaries that he is providing the recommendations. We went through several attempts through formal development processes to see if we could improve that performance. We had that external report that I mentioned earlier in 2021, which is again referenced by Professor Brown. He has identified leadership, culture and governance issues. In retrospect, you can say that there were some red flags there. There was the frequency of a team having to go through formal organisational development to try to build relationships. You look back and think that that was something that was telling the wider board of story. I think that, speaking from the executive team perspective, there was a real desire that we tried to work as professionally as we could through that, through what were clearly challenges for us to reach collaborative decisions that were in the best interests of the patients. That was a feature of that period of time. However, we were trying to be as professionals as we could through that, because that is our role. It is about trying to work through that. However, it became increasingly apparent. As I said, when you look back, you can join those dots fairly clearly. One of the other points that I was going to mention is that there are agencies that have been spoken about who also have a view of NHS Fort Valley providing us with reports and feedback. There is also a national process called Shared Intelligence, where all those agencies come together and the health board applies to health boards. They are not part of that process, but they review all the data for the health board, and they provide a view of the organisation. In retrospect, there was nothing that came from that process. I do not think that the regulators are involved in it, but Audit Scotland is involved in it. There is a group of agencies that come together to make that assessment of an organisation. I was just looking back at some of those reports. There was never anything really identified that was an issue within NHS Fort Valley, but I think for those of us who were in the system, certainly, were experiencing some of those difficulties and challenges. We are very short in time, and I want to move on. Surely the proof would have been in the pudding. As Mr Simpson said, surely outcomes to patients are what matters. If you can see a pattern of deterioration in outcomes, for example, if you look at your four-hour emergency access compliance, it is down at 50 per cent, which is way below the Scottish average, which already is quite low. That dropped considerably over a period of time. Surely all those red flags—the CAMHS statistics, the GP access out of hours, the psychological assessment referral, waiting time and dating week waiting times, and surely all of those together over a period of time would have been massive red flags to the board that performance was in danger of escalation. I think that it was, and I think that Janice is concurring there. What I would say is that the escalation process seems to have worked, so I noted from the previous session that the systems of regulation and checks and balances seem to work. I will go back to what I said earlier. The culture within the senior leadership team is significantly different, and we are now making decisions on what we are going to benefit patients. Looking back, absolutely, there were real difficulties in the—so the acute site is where the four-hour emergency access standard is measured. There were real difficulties with the leadership within that particular site for a long period of time, but it was very inconsistent. When we were really struggling—it goes back to the comments earlier about the culture and the staff—that site really has not had the support that it needed to be able to deliver, so that was known to all within the board. I was watching our four-hour emergency access standard deteriorate. I was briefing the board on that, but it was also because of the patient harm that occurs. People are waiting over 12 hours in the emergency department and there is a recognised association with mortality. People die as a result of waiting, so these are weighty subjects. I am also taking professional advice from senior medics within the Government as well to say, I am seeing that situation happening. I am seeing the deteriorating picture, and I am also seeing a team that is not able to take the corrective action to try to improve that. I think that that was probably some softer intelligence that resulted in the escalation process being triggered. I think that it is absolutely regrettable that we had to be escalated for us to be able to make the impact and try to bring some of the benefits for patients that we were describing. Can I maybe move on to the present day? We can spend a lot of time in retrospect, and I am sure that lessons will be learned, and I am sure that there is a lot of personal regret involved in the executive leadership team. However, can I ask Ms Croft and your current situation where we are at at the moment with some of these service improvements? It is still looking quite grim for patients and for Fali in terms of waiting times across a number of key metrics, and the risk of this being a lengthy answer, which we do not have time for, but what are some of the steps you are taking right now to improve, for example, four-hour A&E turnaround, for example, 18-hour referrals for mental health assessments and so on? What are the limiting factors? We have obviously talked about workforce, we have talked about finances, but what are the key barriers that you think exist right now to make immediate improvement so that you can de-escalate out of level 4? So, I will be really brief and high-level, I am very happy to share detail in writing if that is helpful around. What are the key takeaways? Yes, so the key takeaways are that our CAMHS performance as of January is the best in Scotland, our psychological therapist has improved and is in the pack, as we call in the pack, another jargon, sorry. 64% against target of 80%. I have probably got more to-date information. Psychological therapist is definitely workforce related, and that will definitely fluctuate as the workforce fluctuates in a very specialised area, but in terms of where the team were and where they are now, I will not talk about the four-hour bit, Andrew may wish to come in, and our after-hours GP services has improved greatly. The fill rate has improved up into the 90s, Andrew is correct. Sir Lewis Ritchie who supported that work, there is a session next week with him to close that work off because the performance is very good. In terms of our planned care, you will note that Fort Valley is probably one of the best performing boards in many of the areas. I will not go into detail, I am very happy to supply you with that information, so I will tell you what the key issues are and what we need to do. We need good strong leadership, so good general management leadership, good clinical leadership at nurse director level, medical director level, and we need that across the system, and we also need the system to work as a whole system, so not just working with the acute sector around the four-hour target, working with our primary care colleagues and our integration joint boards and our health and social care partnerships. We will not do this alone as a health board, and that is the work that we are doing and continuing to do, and again since I have been in post, I have seen a huge improvement in that, so I am happy to supply any more detailed data around the performance of those access waiting times that you require. Thank you. Any updates in addition to today's meeting? It is interesting, though, that a lot has been mentioned around workforce and we have talked in great detail about executive leadership and importance of that, but the other key finding from the external review of corporate governance, which it says was the, I quote, root cause of many of the significant challenges that you face as a health board, was actually a failure to agree an appropriate business model for the delivery of integrated health and social care, and that is an area that we have not spent a lot of time on this morning, but has that improved? Absolutely. The integration review scheme, when integration first came into place, one of the key things that boards were asked to do was transfer services. I have mentioned the prison today, so we have just transferred that over. That will go into the integration, but it is a very complex system and I will not keep going on about jargon, but one of the first things that Fort Valley did was transfer those services, so mental health, primary care, GP out of hours, they were still sitting with the health board, so they have now moved over into the health and social care partnerships. The two chief officers that work in the, that lead the integration joint boards are very much part of our executive team. They are involved in every decision. We do not make decisions that will impact on primary care or health and social care partnerships, and vice versa, they are included in our financial savings plans conversations going forward. We are working really closely with our local authorities as well, so Fort Valley as a region has decided to have one anchor board institute, which is about community wealth growing instead of four. So in Fort Valley we could have four, we have three councils, one health board, we have agreed to have one, so I think that is a real signal that we are talking to each other, we are working well together, we are talking about the resources that we have collectively and how we can work with them differently, so I can go on and on and I am conscious of time. I guess my parting question is, Ms McCusker, it is your last day in the job as chair, what would your advice be to the incoming chair? To make sure that they are made aware of all the issues that perhaps led to where we are today and to understand and be briefed on in more detail of what has gone and what is to continue, so I think that that is important for an incoming chair to be made aware of any issues historical that needed to be addressed and also the focus on continuing the trajectory of the progress that the board has made. Thank you very much. I think that Willie Coffey wants to come back in. Willie Coffey, I was listening again to your comment that you made earlier on about the progress on the 51 recommendations and the benefit of some time here while colleagues were asking questions. I have got to look at your executive report, your escalation up the report that was given to the board only a month ago and it says in there that five of the recommendations have been completed. You said that many have been completed. I wonder if you would mind clarifying for the committee. It says 14 are moved into an assurance and improvement plan, but there are 32 recommendations still outstanding, so could you clarify what the actual position is? Certainly. Again, we will definitely have more up-to-date information and very happy to supply that. We are just about to take another assurance board paper to the Scottish Government assurance board meeting, get confused with all the meetings, and the current position is that we have now completed 89 per cent of those actions, which means that we have still got five high-level actions open. One of the things that we have learned to add feedback from the escalation committee is that we were concentrating very much on what we call enabling actions. So these are actions that allow us to close off that broader action. We have carried out a huge amount of work over the last three weeks just really looking at that. We have closed a lot of actions off, which does not mean that we are stopping the work, but the work has started and the work will continue in what we call our normal business. It is fair to say that many of those actions from the external review and other reviews you commented in the last public audit committee about the amount of reviews that Fort Valley has had. I forgot what I was going to say now. It is fair to say that—sorry, I have lost my train of thought there—so we have got five actions still open, and that is around some of the culture work, some of the governance work, and the main bit of work around the governance work is embedding what they call an assurance framework. Again, it is jargon, but all boards have an assurance framework, which means that all their processes are aligned to one framework. It tells you how one committee relates to another committee that relates to the board. All the leadership actions are closed, but the culture and the governance actions have still got five high-level actions open. That is a huge jump really in a month where your board paper says that you have only completed five. That is a huge jump in one month. I think that the latest paper explains that. Who is reviewing that performance to be assured that this is the genuine picture at the moment? Who is doing that verification? The board has an escalation performance and resource committee every month. We have just recently had one of those, was it one or two weeks ago, and the Scottish Government has an assurance board, and that is every month as well. The executives look at everything every week, and we are the ones supplying the information and going through and scrutinising. Have we closed that off, or haven't we? However, the board, on a monthly basis, has an escalation performance and resource committee, but we also discussed some of these actions in the relevant committees of the board. For example, the staff governance committee, the culture work is discussed in the clinical governance committee, the patient safety, his work and things. There is a number of committees that accumulate in an escalation committee that accumulates in the assurance board at the Scottish Government. You are confident that 89 per cent of those recommendations are associated with that. We will leave it at that. Before we finish up, I want to take us back to the report that was produced 22 months ago by the Healthcare Improvement Scotland unannounced inspection. For example, they reported that they found a lack of documented risk assessment, for example. They reported that the addition of a fifth bed within a four-bedded bay created what they felt to be breaches of standard operating procedures and so on, so quite serious allegations about patient care. They also spoke about the vacancy rate being very high within certain staff groups, registered nursing staff group. There was an over 10 per cent vacancy rate, and among the medical staff group, the vacancy rate was 13.76 per cent. Could you address those in turn and tell us what progress you have made in 22 months? Definitely. I will go to Francis first, and then I am sure Kevin and Andrew will want to come in. As I suggested earlier, we had a return visit from the Healthcare Improvement Scotland in the end of January. I worked with them just to make sure that I was not saying anything. We have not had the final report from them. We are working with them in terms of trying to give them additional information as well, and that is their methodology. However, what they have suggested in terms of their initial feedback to us was that the inspection team did not escalate any concerns around the care and safety provided to patients. Are there still five beds in four-bedded beds? Yes, there are. Have you carried out all the risk assessments that were required? Every single day, patients in the fifth bed in the four-bedded rooms are risk assessed every single day, and throughout the day, if those patients change, those are escalated through the staff safety huddle. What we talked about earlier in terms of staff being comfortable to raise those concerns is that, if we are unable to mitigate the risks, we try to move patients out of those areas as quickly as we possibly can. However, in order to deal with the demand, we are still relying on contingency beds to support the flow of patients through the fourth valley royal hospital site, as are a number of hospitals across Scotland. However, we have those risk assessments that are assessed every day. There is senior professional support to reassess them if there are any concerns raised by staff. We have a system of flow in the hospital to try to move patients out of those situations wherever possible. The infrastructure to support the patients in those fifth beds in the four-bedded rooms has been significantly improved in terms of the equipment and the support that we provide. However, the care that was being provided during that inspection visit, there were no concerns raised at all. The same inspectors that were here just before I came into the board in October 2022, so the previous visit was September 2022, and it was the same inspectors who came and revisited us in January, and they saw a significant improvement in the safety of care. There were no concerns around patient safety during that visit. They also saw it within the emergency department and within the acute assessment unit a very calm environment. It was a very busy environment on the three days that they were there. They said that it was very calm, well led. The staff commented that, from a leadership point of view, there was great leadership visibility and that they were able to raise their concerns. They spoke to a number of patients throughout that visit and the patients recognised that it was a busy environment, but they had no concerns around their safety or the care that was being provided to them and gave very favourable feedback in terms of the care that was being provided to them, even in the context of an incredibly busy emergency department and acute assessment unit. Where are we with things like staff vacancy rates? The vacancy rates are certainly below where we would have been at that point in time. There are a number of things that we have been doing. We have been tracking on going and speeding up the process to get recruitment in place. Under 10 per cent will be where we are, and those main groups. We track and monitor against our other boards in nursing with Withery, allied health professionals in the medical side of things, all of which I'll be confident we'll be in. I don't want to use it in the pack, but we're in the mix of the same sort of averages as other boards are facing. Vacancies are a challenge. They are a challenge. We recognise that, but we've been doing some work recently to look at our funded establishment, tying in with our financial work to make sure that we understand where all our vacancies lie, and the other part of it is getting the process right. We've been doing some, as we call it, manmarking to make sure that all these vacancies that are in the system are being progressed very rapidly. Definitely having made improvements in that space, and that's a work on going, as we speak. As has been suggested by other members of the committee, it might be useful for you to follow up in writing with some of that more up-to-date information, just so that we've got that data on the record. I think that my final reflection really is to follow on from the Deputy Convener's last salient question, which is that three of you are very new to very senior positions in the health board. Did the people who left go through any kind of exit interview? We've had exit conversations with everybody. Yes, they'll be different in every case, but yes, we're looking at lessons learned from all of this. I guess that's what we're reflecting back in. The work we've tried to do is consolidate, and we don't want interim arrangements. The work we're doing now is to consolidate that team and make sure we can do that in the best possible way. Obviously, we've filled spaces where we needed to get that traction, and that's helped us to move the agenda forward. Some of that reflection on those that have left us or moved on and changes that we've made in the executive are ongoing conversations. My question is, is there a formal process whereby somebody who leaves the health board, who's been the chief executive for a number of years, or who's been in a senior HR role for a number of years? I suppose also down to those nursing staff who've left, who have now created vacancies in the system. My question is, do you have systems in place to understand why nurses have left the health board's employ, why the chief executive left the employee? I know it's a retirement in that case, but other senior posts, people have left, you're the new team. Do you or were interviews carried out to capture and record the reasons why people left? There's two parts of an answer. One is that we have an exit interview arrangement in place that everybody would have that opportunity to have that exit interview. We recognise and we had conversations with our colleagues in the trade unions that we recognise improvements that could be made in that space. Not all of them are happening, so we want to get more consistency in that space. I guess for the senior levels, we probably do things slightly differently. That's more a kind of one-to-one interaction, which will be more detailed and reflecting on what we can learn from that experience. Jenny, last word to you. No, absolutely. I'm aware that that is offered to anyone who wishes to depart the health board, but I'm also informed that that's a confidential process. The lessons learned have to also be kept in a confidential space, but we could perhaps look at how we can transfer some of that and make sure that we're getting overarching thematic areas that are coming into understanding improvement as opposed to specific areas. Don't misunderstand me. I'm not asking for you to send in copies to us as a matter of public record people's reason for leaving. I'm just asking whether you, as a matter of good practice, are monitoring those reasons so that you can establish if there are trends or if there are other things that we've spoken about, whistleblowing, for example. If there are cultural issues, which means that you're not able to retain staff at any level if you're able to monitor that. I'm very sorry we're bang out of time, so I'm sorry I wasn't able to bring you back in, but please feel free if there's something pertinent that you want to draw to the attention of the committee. Perhaps if you capture that in a written submission after today's session, that would be something that we would appreciate. I thank you, Amanda Croft, Janie Muscusker, Happy Post 4th Valley NHS Board Life, to Andrew Murray, Kevin Reath and Professor Francis Dove. Thank you also for all contributing to the evidence session this morning. It's been greatly appreciated. I'll now suspend the meeting to allow for a change of witnesses. Thank you. I'll now take the committee back into public session. The second half of our agenda this morning is an examination of a briefing paper prepared by the Auditor General on Decarbonising Heating Homes. Can I welcome our witnesses from Audit Scotland this morning? Auditor General, Stephen Boyle, you're very welcome. The Auditor General this morning is joined by Cornelius Chigwama, who's an Audit Director at Audit Scotland. You're very welcome. Derek Hoy, who's an Audit Manager at Audit Scotland. We've got quite a number of questions to put. Before we get to those questions, Auditor General, can I invite you to give us an opening statement? I'm pleased to bring this morning my report on the Scottish Government's plans to decarbonise heating in homes. Around 15 per cent of Scotland's overall greenhouse gas emissions come from 2.5 million occupied homes. Reducing emissions from heating our homes will make a significant contribution to meeting Scotland's 2045 net zero target. My report considers the actions in the Scottish Government's heat in building strategy that relate to housing. It looks at the scale of challenge facing the Scottish Government to reduce emissions from heating homes, what steps it's taken so far and what's still to be done. The Scottish Government's approach focuses on two things. It intends to scale up its long-standing work to improve the energy efficiency of Scotland's homes. By 2045, it is targeting the mass switch away from carbon emitting systems such as gas boilers to cleaner heating systems such as heat pumps. But the scale and pace of activity must increase significantly if the Scottish Government is to realise its ambitions. The Scottish Government is working to create the right conditions now to enable households to make the changes needed, but it faces significant risks. There's a complex process, no doubt, that relies upon several stakeholders, including the public, private sector investors, industry and with the UK Government. Interrelated factors such as new legislation, public and private investment, supply chain growth and infrastructure development are all key to its future success. The Scottish Government has laid some of the foundations to enable it to move forward with its plans such as developing governance arrangements and increasing the capacity of its heat in buildings programme team. It now needs a clear plan of action to take forward the delivery of its heat in building strategy. The Scottish Government has estimated that the total cost of decarbonising heating in Scotland's buildings to be around £33 billion across the public and private sector and households. £1.8 billion of public money over the current parliamentary term has been committed. The Scottish Government must ensure that it achieves value for money from its investment, and it must work effectively with the private sector to ensure that funding and finance are available for homeowners and industry to support a large-scale change in how we heat our homes. Thank you very much, Dean. Can I pick up straight away one of the themes of that introduction, which is about the governance arrangements? In the report, you say that that the Scottish Government should finalise governance arrangements for its heating building strategy as soon as possible is the expression you use, i.e. there is a degree of urgency to this, and that seems to be quite instructive when we look at some of the dates in the report and the scale of the challenge to be met by those dates. Can you tell us what governance arrangements need to be finalised at this stage by the Scottish Government? I am very happy to, convener. I think that I will pass to Derek in a moment. I can just take the committee through some of the history of the governance around net zero within the Scottish Government and then some of the emerging plans within Government. There is some recent history, convener, if you will allow me to reflect back on our report from the summer, where we reviewed overall governance arrangements within the net zero ambitions within the Scottish Government. I noted—I am paraphrasing slightly—that it was relatively slow within the Scottish Government net zero department to have clear structures with how it wished to deliver its ambitions. There has been progress since then, but I agree with your assessment that there is a degree of urgency given the scale of change that is required, having effective governance arrangements alongside a clear, tangible plan, which is one of the central recommendations that we make in today's report. The strategy is there. We are aware, of course, that there is complexity and uncertainty with the current consultation on the future bill that might change some of the targets and how the Government will deliver its ambitions, but that needs to be rooted in a clear set of governance arrangements. Derek can say a bit more, convener, as to where the Government is going next. Thanks, auditor general. A lot of progress was made really since late 2022, when a new programme director came on board to the Heaton building team at the Scottish Government. Having that role filled has let him really make good progress in deciding what those governance arrangements would be. I would not want to go into too much detail about what those arrangements actually are because there will be very much a work in progress. When we spoke to the Scottish Government, it might be best to speak to the Scottish Government to get more details about how they are taking shape now, but things like an overarching programme board, for example, an independent strategic adviser group, those sorts of ideas that have been floated around, or not floated around, but have been discussed or set up at the time, so it might be best to speak to the Scottish Government to get an update on where those are. I think that what we took assurance from was the pace of work since that programme director came into post. A lot of work had been done in that interim period, and I do not expect that it will take much longer for them to finalise those arrangements. There was a recurring theme that has come out in the report. If I look at the third recommendation in your report, it talks about the need to identify the staff numbers and skills required. It sounds like a good old-fashioned workforce plan, which we speak about a lot at the Public Audit Committee. Is that in place? Is that what arrangements are under way to make sure that it is in place? If it is not yet, where are we on progress with that? As Derek Mackay says, the Government has made progress, certainly since we reported the more overarching report in the summer of last year in terms of staffing up its net zero department. As the committee heard evidence from the director general that the workforce plan is now in place and there is a clear direction of travel within the Scottish Government about how it will get the right people in the right place to deliver its ambitions. There is also a recognition—before we go back to a couple of specifics on governance—that there is a recognition within the Government quite rightly that it cannot be achieved by one directorate. More broadly, the Scottish Government cannot deliver its net zero ambitions itself. There is a complex chain with which it has to encourage individuals, relationships with other parts of the public sector and the absolute private sector to get this right. You mentioned one of our recommendations, convener. I think that it is intrinsically connected to the other recommendation that I have touched on briefly. The strategy is there, but it has to be underpinned by a clear delivery plan of what actions are going to be taken to support the implementation of the strategy. I think that to draw one other point that we are making in the report on governance on paragraph 33 of the report is that the Government has now, since November, put in place what they are referring to as a monitoring and evaluation framework to support the implementation of aspects on public reporting and progress of the heat and building strategy. We will need to keep on the very close review, accompanied by a clearer, more overarching delivery plan. Some steps of progress, workforce plans are part of that, convener, but there are key steps to take, given the scale and complexity of the programme over the next five, ten, 20 years to deliver its success. Have you had an opportunity to evaluate the evaluation framework? Do you have any sense of whether the monitoring and evaluation framework that was published back in November will be up to the job that has been set for it? I think that it is probably given the short space of time between its publication and the publication of our own report, it is not something that we have taken a view on. What is fair to say is that we will continue to be engaged clearly through our audit work, both through the audit of the Scottish Government itself and further public reporting that we will do on progress towards net zero. That will be part of our assessment in due course, but we have not formed a view yet. Ultimately, of course, it is for the director general, together with the Scottish Government, colleagues and non-executives, for them to be satisfied that this is the appropriate framework to assess their progress. The other thing is a delivery plan, is it not? I think that there is talk of the production of a delivery plan by the end of this year, this calendar year by the end of 2024. Do you consider that to be a reasonable timescale? Is it coming too late, actually, when you look at the targets and the timescales that have been set? What is your opinion on that? The end of 2024 is the date that we put in the report. Weighing up the number of variables that exist here and the complexity, there may be changes to some of the timescales following the conclusion of the consultation on the bill. I think that there has to be a degree of space. I think that we are talking about a number of months here to take stock and then translate those findings into a clear delivery plan. I do not think that it detracts from the overall sense that there is some urgency to this. You will see through other parts of the report that given the importance that the transition to clean heating systems will play in delivering net zero ambitions, that has not happened at the pace thus far. That is included in the establishment of the team and the governance arrangements. All of those have to be pointed in the right direction at the right pace. I think that by the end of 2024 feels about the right time, but I think that we would start to get more concerned if it drifted beyond that. I do not know whether you are willing to stay on the record of the dilution in some cases and abandonment in others of targets. The original target was that by 2030 one million homes out of the two and a half million would be converted that we would see a complete phase out of all new gas boilers by around about those target states that we would have 22 per cent of heat. That is not households, but the measure of heat, 22 per cent of that would be generated by renewables. All of those targets seem to have been dropped. You are right when you say that. We similarly reference these changes in the report together with amendments to aspects of the targets that are indicated through the current consultation on the new bill. Our report also draws on subject experts who have also made assessments of the likely progress of the Scottish Government to deliver its interim and eventual net zero targets by 2045, most notably the Committee on Climate Change, who have expressed reservations about the pace of progress that the Scottish Government is forecasting to make. It is clear, convener, that it will be incredibly challenging to deliver the interim targets by 2030, all the more reason, therefore, that by 2045 to deliver that target, which will similarly be stretching given the scale of change that is going to be required over the next 21 years, the effective arrangements are put in place now. There is clearly what to do here. There are certainly indications in your report that you are calling into question some of these targets. I think that there is a credibility question about whether or not the scale of the change. There are 2.5 million households, and I think that you reference 26,000 households that have seen heat pumps, for example, installed. It is around about 1 per cent of a completion rate, which, by my rough arithmetic, leaves over 98 per cent of households that have not had these conversions. That is one of the most fundamental points of our report. I think that it is fair to say that, in the 2010s, the Government's focus was around improving the quality of insulation, the energy efficiency of Scotland's homes. We fairly say in the report that they made pretty reasonable progress in that environment. To deliver net zero, though decarbonising heating systems had to quite clearly become the next phase, our judgment was that the Government was slow in making the change in terms of its focus and resources into that environment. That is probably borne out by some of the statistics that you mentioned, convener, that the rate of installation of heat pumps pales into very small numbers compared with the overall target of the 80 per cent plus of gas boilers that exist. That is going to be a really complex programme. There is no doubt about that. Looking at Scotland's housing stock, it is not all going to lend itself to installing heat pumps. There will have to be careful plans and transitions to review the range of heating systems that can make the difference towards low-carbon. It is also reasonable to draw out—I am sure that the committee will explore further—how that is done in a just way, in a just transition, not exacerbating fuel poverty that exists in Scotland. All those factors are captured in the Government's heat and buildings strategy. What we are talking about now is a step change and navigating through the complexities that exist currently to deliver all of that. I myself, Kennethas and Derek, can explore very happily with some of the pillars on how that approach has been taken forward. That is very useful. Thank you. Can I turn to Colin Beattie now to put some questions to you about funding and investment? Nothing happened without money. This whole programme hangs on whether public and private investment can be obtained in very, very large quantities. One of the recommendations in the report is that the Scottish Government should clarify how it will use public money in the short and long term to support the delivery of its heat and buildings strategy objectives while achieving value for money. That is the fourth recommendation in the report. When would you expect the Scottish Government to be able to do this? And what evidence would you expect to see to demonstrate that value for money is being achieved? You are quite right, Mr Beattie, that the Scottish Government cannot achieve this alone. This is going to rely on a very clear combination of private sector investment, individual household investment, accessing grants, loans and a variety of factors to deliver it. However, the introduction of private sector finance, together with creating a supply chain, is going to be a key component of that. I will turn to Derek in a moment to maybe update the committee on the judgments of the green heat task force, which was one of the external reference bodies that the Government created. I acknowledge all the complexity, and I can explore that a bit further. I may say a word to myself about the relative investment of the Scottish Government compared to its estimate of what it is going to take in totality. I mentioned the introductory remarks. The Government's estimate is going to take over £30 billion—£33 billion—to deliver the change. It is currently set aside £1.8 billion of investment over this parliamentary term to support through a variety of different measures. Some of it is about grants, some of it is to continue existing funding arrangements in terms of insulation, Mr Beattie. That will change. I think that is an evidence that this is not going to stop at the end of this parliamentary term. We have had no involvement in this word, but I was listening to today's report from the Institute of Public Policy and Research, who is exploring the extent to which public investment in this is going to help to deliver the scale of change that is needed. Those will be policy decisions over this term and into the future. Value for money will be an assessment that is required and one that we will make in due course, but also that public officials and parliamentarians will want to make about whether £1.8 billion is enough. Is it delivering effectively? That will be set out through a combination of different ways. We will have a role to play in that. However, it is clear that there will have to be continued investment on a public and private sector basis for many, many years to come. I am going to pause if you are content, Mr Beattie. I am going to say a bit more about the engagement that the Government has had with private sector funders and where that might go next. The Scottish Government set up the GreenHeat Finance Task Force, which is a combination of individuals from across the financial institutions, the public sector and heating buildings experts to try to tease out the options that might be available to provide finance to households and businesses to make the necessary changes to how we heat our homes. A lot of the findings from its initial report—there is a second report later this year—much of the findings resonate with what we have said in our report on the huge scale of risk and challenge that there is in delivering the scheme. The market is very much in its infancy at the moment. It is not to say that funding in finance is not in place and that the mechanisms to deliver that are not in place, but the market is not quite mature enough yet for those things to take off. The role of the Scottish Government is to try to create those conditions whereby the market can then grow. Private investors will have more confidence to invest into those funding schemes. That is the kind of real catalyst that would drive, hopefully, landscape change and start moving towards the Scottish Government's aims and objectives. However, it is very much in line with the risks and challenges that are very similar to what we found in our own report, Mr Beattie. To me, there are two ways that the private sector gets involved in this. One is by directly financing projects, the scheme project, and the other by providing finance to householders to carry out whatever works are needed in their home. Has consideration been given as to what the balance on that is going to be? It seems to me problematical that by providing the facility to go into debt to do this is going to be particularly attractive to households, and I just wonder if any analysis has been done on this, if any work has been done on this? Not that I am aware of, Mr Beattie. There is certainly something we could go and look into, but it is not something we will look into as part of the audit. Because if we are looking, for example, at just transition, to what extent is the private sector going to be involved in just transition as such, transition implies helping those who are less well off to make that transition without getting into financial difficulties or fuel poverty or whatever. I am struggling to see a role for the private sector there, because the private sector requires a return. How does that work with public sector funding? A couple of aspects, and Cornelius might want to come in in a moment again. There is a huge opportunity for business here. If I can give the right statistic, Mr Beattie, perhaps to illustrate the changes, if I can lay my hands on it, that the number of accredited gas installers in Scotland dwarfs those who are currently able to install heat pumps or any other low-carbon heating system. Inevitably, to deliver that programme through regulation, investment and centres, raising public awareness will all be parts of the strategy that Government will want to play. For the private sector, with the right conditions and market certainty, so that all the signals about timescales are clear opportunities, businesses can feel confident to invest in a market, knowing what the timescales that they can plan can reskill their workforce, new entrants into the market. Based on the estimates that I have mentioned in terms of some of the numbers, there are over £30 billion at play here in Scotland. This ought to be a very attractive market, but the right conditions have to be. That is the early feedback that businesses and their representatives have given. They are looking for that level of certainty so that they can make the shift, at the right point, away from gas installations into low-carbon systems. You mentioned coming to just transition in a moment, but it is also worth acknowledging that this is part of the Government's thinking. The consultation on the bill is already exploring how some of the incentives or arrangements could be put in place so that households make the transition and then the knock-on effect back to businesses. References to trigger points when people buy a new property or sell a property, that opens up a window for when a low-carbon system has to be installed in their property. Inevitably, that will have to be accompanied by a range of loans and grants. Loans, as you mentioned, will be one of the mechanisms that the private sector can become involved in the new model of low-carbon systems. I think that Cornelius might want to say a bit more about that. Again, I want to return to your point about just transition as we are almost debating. Cornelius. Thank you very much. I guess that there are a number of issues to reflect on here. I think that there is an issue of affordability, loans being available to households so that they can afford to make the investments. But when we look at value for money, I think for households, there is a question, when does it become worthwhile for households to decide they would want to make the switch? I think that is really going to be the biggest test for value for money. If government can get to a stage where households are deciding themselves that it is worthwhile to switch from gas boilers to alternative technologies, I think then we would have cregd the value for money challenge. I think a second element of value for money is recognising that government cannot reduce emissions from houses, from people's homes, but it has other options to reduce emissions elsewhere. It has to be looking at the totality of the challenge it has. The key question there is if it is going to spend a pound on reducing emissions from homes, could it have achieved more emissions reductions had it chosen to reduce emissions elsewhere? Now, that is a question that Scottish Government will have to grapple with ways it is going to get the best returns in emissions reductions. I think you make an important point, Mr Beety, on the role of private sector and just transition. I think there is a recognition there that yes, the private sector might not have a direct role to play, but I think policy has a role to play in shaping what the private sector does in relation to just transition. I think key things to highlight there is how we are going to regulate competition as these markets emerge and what measures are going to be put around consumer protection. So these are things that may be important in thinking about just transition and the question there is, do the powers around this lie with the Scottish Government or some of this is for the UK Government and that then raises an important question on how the Scottish Government and the UK Government are working on these issues. Thank you. Now, the Scottish Government at the moment, just focusing on just transition, already has some financial support schemes in place. Has the Government actually estimated how quickly those current schemes will become oversubscribed as the schemes for individuals? Because clearly there is a limited amount of public funding. You are right, Mr Beety. Canelius might know a bit more about the forecasting, but just for the role of just transition, it effectively looks to insulate, pardon the pun, households currently experiencing fuel poverty or at risk of experiencing it from being forced to adopt a low-carbon heating system and thereby exacerbating their exposure to fuel poverty. Currently, the Government sets aside a range of measures, one being funding to social housing providers £200 million over the course of this parliamentary term. As a very live risk, if you are looking at the committee's attention to Exhibit 3 in our report, the percentage of households experiencing fuel poverty was 24 per cent before 2019. That is risen to 35 per cent, all with the energy crisis cost of living challenges. Those all have to be factored in to ensure that, as we transition to low-carbon heating systems, which we must, that does not draw new households into fuel poverty or for those already experiencing it for their circumstances to deteriorate. The Government has set aside funding to the extent to which that will be eaten up by demand. It is probably quite difficult to forecast. Canelius might have the most up-to-date figures, Mr Beattie, but this will be set on a rolling basis through each annual budget process. The key thing to highlight is that fuel poverty remains quite high. The latest figure that we have is 35 per cent of households in Scotland are considered to be in fuel poverty. If you consider what Government is investing at the moment, it probably highlights that actually maybe more is likely to be demanded going forward. To what extent that is, we haven't been able to see any assessments done by the Scottish Government, but I think it's fair to say that more resources would be required around protecting households. It's certainly a very startling figure 35 per cent in fuel poverty. Yes, the Scottish Government is obviously going to have to find more money to be able to make that transition for those individuals, and that's a huge task. How challenging is it going to be to actually achieve a just transition in decarbonising heat for homes? 35 per cent, that's a huge amount. This is incredibly complicated. As we mentioned to some of the factors that will have to be overcome, tackling fuel poverty, the Government, to meet its own ambitions by 2040, no more than 5 per cent of people of Scotland will be fuel poor. It's probably too loosely, Mr Beattie, to talk about step change, but this is a hugely significant challenge from where we are currently, approaching the middle of the 2020s, in 16 years time to move from 35 per cent to 5 per cent. That will require not just a just transition but also a significant move from in existing circumstances. The strategy covers aspects of this, as we expected delivery plan 2, so continuing to support effective insulation of properties is easier said than done, because some of the more straightforward insulation will be done already. Much of Scotland's housing stock isn't easy to deliver effective insulation in the age of the properties that's conditioned. Tenement buildings don't easily lend themselves to effective insulation. Some of the housing stock will be harder to retrofit to low-carbon systems as well. There is a very significant challenge to be met. Your assessment that more funding will be required is fair. The sources of that funding, whether it comes from private sector or probably more likely increases in public sector funding, will have to be part of that plan. Graham Simpson wants to come in on some of these points before I bring in Willie Coffey. Graham? Thanks very much. I've just been reflecting on everything that's been said so far. What struck me is that we've got very ambitious fuel poverty targets, as you've said already. I just wonder whether there is a bit of a contradiction between having those targets, which Parliament set, and wanting to decarbonise, which right now, if one was to think of getting rid of your gas boiler, there's a very good chance that you could end up with a very expensive heating system to install and be something that costs far more to run. Is there a risk of people being plunged into fuel poverty if they were to make the move now? If we were left to the market, Mr Simpson, that would be a very clear risk. Even just reading before today's session, for example, the price per unit of gas is currently lower than that of electricity. The decarbonising process is one that is moving away from fossil fuel-based to renewable based but electric-powered systems. Those are very clear factors that will have to be weighed up to deliver both those. They may or may not be competing demands, but they're both very challenging. To deliver the statutory target of no more than 5 per cent of people experiencing fuel poverty and to deliver the 2045 net zero targets to decarbonise Scotland's heating systems, both are going to require clear plans, navigating all the complexities that we touch on in the report, but they are undoubtedly stretching. We'll end up in fuel poverty. I'm simplifying it, but you'll end up there because the cost of heating your home is too much for you, in essence. You rightly say that if you go on to a fully electric system, at the moment that costs far more than gas. That's correct, isn't it? That balance has to change. Those will be one of the safeguards that will be the hallmark of the Government's plans to ensure a just transition. Moving towards fuel poverty targets are under the same banner. The complexity of that is hugely significant. The Government recognises that. It will be very important to see what comes out of the consultation, then future legislation, governance monitoring arrangements and so forth. Both aspects of decarbonising Scotland's heating systems are treated with equal priority over the course of the years to come. Thank you. I think the auditor general is right. The risk of, I don't want to say plunging, but increasing fuel poverty is there in this transition. But maybe if we look at the two pillars to decarbonising, improving energy efficiency and then changing the technology, one would expect that if we are able to make progress on improving energy efficiency, that actually reduces the amount of energy that households are need, so that could mitigate some of the impact on fuel poverty. Now, as the auditor general said earlier, the Scottish Government has made progress on improving energy efficiency, but I think there's still more to be done around that. On the second pillar, I think that's where the challenge is that switching from gas to alternative technologies. At the moment, the alternative technologies are much more expensive than the gas options, so I think that is where the risk is greater, so it's how do you balance that energy efficiency side with what options you have around switching from gas to alternative sources. Have you done any analysis of the difference in costs? What would cost the average household to switch from gas to something else? I know that there are various alternatives. How much would it cost to maintain those systems? It wasn't part of the scope of this report to do that type of analysis for what it means for individual households. I might want to say a bit more about some of the insight that we have, but I think that we'll probably have a greater feel for that, Mr Simpson, following the conclusion of the consultation on the next bill about where the Government intends to go. At a high level, the price varies depending on the property, the type of system that's chosen, any groundwork that's necessary around the property, but you're looking at the last estimates. This is a fairly broad scale, so I forgive me for that. Between £7,000 and £15,000 is the anticipated cost of installing a heat pump. There are other options, and for some properties, a heat pump won't be possible. You'll be looking at modern electric storage systems. There's then the option around heat network district heating systems that are various models. It's probably not easy to say with any degree of confidence about what an average might be and how that relates to individual properties. Nonetheless, you can say that, at a relatively high level, for almost every household, this will be a significant investment that people will want to plan for, want to know what finance is available and what grants are at their disposal. I'll turn to Derek if he wishes to add. The general is probably not too much more sad, to be honest. Mr Simpson, have we looked at an average cost? No. The main reason for that is that I'm not sure how much validity there will be to calculating an average because there will be so much variation in that cost based on a whole range of factors, such as property age, building, fabric, et cetera. We didn't really see much value in trying to carry out that exercise, but, as the other general points out for any household, it's going to be a significant investment. I suppose that the other thing to mention is looking at that over the long term as well. It's a significant investment just now that the cost of a clean heating system at the moment is, on average, more expensive than, say, replacing a gas boiler like for like. However, those costs could come down over time as technology develops, economies of scale are achieved in the industry. You would expect those costs to come down over time, so I suppose that, bearing in mind that we're looking at a 21-year timescale from now, although that's the situation at the moment and it could be more expensive, that could change over the course of the next few years. There are a lot of different factors involved and a lot of unknowns. I'll just make a final observation, convener. That, if we're just talking about housing, I think we can deal with new housing relatively easily and the government is looking at improving the standards of new housing. I was at an event last night looking at just talking about passive housing. There's serious consideration being given to introducing new building standards so that new homes would meet those very high standards of energy efficiency, which I think could deal with a fuel poverty issue almost overnight. I think it would be very positive, but the challenge is the existing housing, so probably that's where the money has to go. Is that something you'd agree with? I would recognise the scale of the challenge, and that's going to require effective engagement across many different stakeholders. We've mentioned individuals, private finance into the system, engagement with the UK Government in terms of the capacity of the energy grid, but perhaps also maybe just to mention passive house, Mr Simpson, about clear and effective engagement with social housing providers and the representatives in Scotland, given the density of people living in fuel poverty will be living in social housing. There is a clear expectation around what is expected of them, but funding is available to support both the increasing confidence around insulation and then what transition arrangements are in place for low-carbon systems too. Thank you. I'm going to bring in Willie Coffin next. Thank you very much, convener. Auditor General, the public perception of all of this isn't great. I don't think that still a lot of work needs to be done. We've said that before, and I think that we're saying it even now. When constituents talk to me about this transition, they ask a number of questions. What are the solutions on offer? I don't know where to find them or who to talk to about them. They ask if they'll be helped to install, subsidy help to install whatever the devices are, but the main question they ask is how much is this thing going to cost me to run? To get your view, what do you think is the one key sea change element that will begin accelerated transition to take place? I think that I know what it is. It's the cost of electricity. It's four times higher than gas. Even if we've got an army of heat pump engineers appearing from somewhere, even if we've got great subsidy schemes on offer, people will vote with their wallets and say no thanks. It's too expensive, because if you switch from your gas consumption just now to electricity consumption to heat your house, your bill, your electricity charge ratio is four times higher than it is at the minute. Do you think, do you accept that that is the key challenge that we face to affect the transition that we need at pace? That is one of the key challenges to overcome. There's no question about that. That will require the public to engage and have confidence in transitioning from a fossil fuel-based system to a low-carbon system. People will make both environmental but fundamentally economic decisions for them and their families. If that is going to be at the expense of fuel poverty or other aspects of how they lead their lives, some will do it voluntarily. We've seen in the report that there have been some early adopters of heat systems going back nearly 10 years, but those are still very low numbers that we are talking about of 5,000 or so compared to targeting over 1.8 million households with gas boilers. There's an enormous scale of change to take place. Derek might want to say a bit more, Mr Coffey, but I absolutely want to record that the Government recognises that that is one of the key challenges. The badging under a public awareness strategy when we set some of the detail out of paragraph 72 of the report might well be very well aware of what grants are, but I accept your premise that people will make economic decisions and they'll want to be satisfied into the longer term what they are signing up for and what that cost might be. That will be one of the challenges that the Government will have to overcome together with its partners. The relationship that it has with the UK Government in terms of the grid capacity and what some of the underlying cost drivers are for the disparity in price. I'll just turn to Derek, if he wishes to. Just on the public engagement, hello, Mr Coffey. From the evidence we've gathered, there's a real acceptance at the Scottish Government that that is a really important part of this. It's putting an awful lot of effort into getting that right. That's a lot of very early stage, so it's hard to say how effective that will be. It's good that they've got a strategy in place, they've also got indicators in place to monitor how effective that will be, and they're planning to come back and evaluate the public engagement strategy in 2026. Aside from that alone, there's a lot of other work going on as well. In the appendix 1 of the report, you'll see the list of various consultations that have gone on around this area, around the matter of heat decarbonisation and energy efficiency improvements. I think that it's something that the Scottish Government is very aware of. They're certainly not under any illusions at the scale of the task to sway public opinion on the side, but going back to the original point, things like cost are going to be a major factor in it. There's a role for the Scottish Government to try and provide clarity on that, how much these systems will cost, what's the best system for your particular house, for example, so there's a lot of work that the Scottish Government can do to divide people with a bit more assurance and confidence, but there are factors outwith the Scottish Government's control as well, for example the cost of electricity that will undoubtedly play a part. That's the fundamental bottom line question for me. Consumers, the Scottish Government, even we don't control the price of electricity or the price of gas, so we're relying on co-operation from our partner Government to look at this electricity to prices in the UK or amongst the highest in the world. That's the bottom line. If you say to people, make this transition, it'll help the net zero, progress towards net zero, people will say, how much? What does it want to cost me? So that there needs to be in my view, convener, some work that reduces the cost of electricity. People have talked to say why when we're producing over 100% of our electricity needs in Scotland from renewable sources, is it costing me a fortune to use it? Why is it? So energy companies are still generating and creating the profits from this, but the public aren't getting the benefit. For me, convener, that's the key to getting this transition rolling faster, to do something on the price and all the rest of the factors are important, auditor general, but they will only chip away at 2 million, 1.8 million houses with gas central heating boilers in there just now if people think that the cost to replace that and to use it and to pay for it is going to be excessively high. Maybe just briefly on that with Mr Coffey, I think we recognise in the report that engagement between the Scottish and UK Governments is one of the fundamental pillars of delivering the successful transition, recognising the distinction between devolved and reserved powers between the two Governments. The other aspect that's the case in the Government strategy is this about regulatory intent that they have, what their plans are around different dates that will fundamentally force consumers to make the change. As you would expect, that is far more likely to succeed in terms of people's willingness to comply if they recognise both the environmental benefits of it but don't feel that hitting them in terms of what it's going to cost them compared to where they were. So there's no doubt that there is work, there is engagement and there's regulatory clarity that will help that transition. Thank you very much. I mean one of the factors which is at play here as well is and I think this is part of the consultation which is ongoing around the proposed legislation which I understand I think will come before Parliament before the end of the year is also within the housing market. So if you buy a property there's an expectation that there'll be a condition put on that purchase that within a certain timeframe you will convert which again could have some interesting consequences couldn't it? Yeah, like you convener, I was aware of that aspect of the consultation. I think you would expect I'm sure as parliamentarians you'll have the opportunity to scrutinise that and to explore how that might be implemented as well as intended and unintended consequences of it but there's no doubt that regulation will play a key part in terms of driving a level of change that's required especially I think as Mr Coffey has touched on that so many other variables that exist along with both the price of electricity together with supply chain availability of private finance so yes we'll wait with interest the next stage of the legislation around this. Thanks. Deputy convener, Jamie Greene. Thank you. There's a lot of very good ground that's already been covered but I've been listening within 10 and wanted to mop up a few other areas where you might share your wisdom. One is on the first of all I think is more just an overarching discussion around how we define fuel poverty at the moment in the modern world. The technical definition is that a household would need to spend more than 10% or more of their net household income on fuel stroke energy consumption and if that reaches 20% of the net income it becomes extreme fuel poverty as we know but it doesn't take very much to fall into that category and even someone on a fairly substantial income perhaps a higher tax bracket paying household would quite quickly find themselves in the position where their annual fuel bill might be £2,500-3,000 which very easily in their net income takes them into that bracket so there may be a is there the worry that there's a sort of assumption that people on very low incomes or people on various benefits or the sole victims of this current sort of fuel energy issue. I can alias my witness a bit more about some of the definitions deputy convener but I think probably maybe just again referring back to exhibit three in the report we're just looking at the step change of the increasing number of households in Scotland who have been classed as experiencing fuel poverty and agreeing with your assessment also that that goes further into extreme fuel poor that some people will experience too you know in the circumstances that we've seen over the past few years with energy price shocks as well how that's distributed across different you know socioeconomic factors across the country I think it is relevant no doubt that if depending on the choices that individual households make what their housing costs might be too you know I guess again expect that that will be a key part of the government's thinking to step back for a second and we just to to ensure that they deliver both these challenging targets the statutory targets of both net zero by 2045 and then the significant reduction to only 5% of people in scotland to our fuel poor by 2040 that's going to require real focus plans all the various pillars around around regulation and awareness too and can you let's make when I say that more thank you yeah so I think in terms of the the definition I mean it's it's not something we examined a lot in the in the report I mean partly because you know the aesthetical standards that I'm sure Scottish government follows around around this but it's Stephen says I think if you were to look at the distribution of the people who are counted as in fuel poverty that is likely to distribute across different socioeconomic groups but I think it's fair to say that you know probably a lot of them are going to be within the law income categories I think that's all I would say at this stage you know the actual definition itself there's a lot of standards I think that guides how Scottish government applies that is it therefore the case that one of the issues is that a lot of the schemes that exist and I was looking at your appendix to your own report or to general appendix to you on the delivery schemes is it seems to be quite a complicated stroke complex environment of subsidy so there are a number of schemes we have warm home Scotland delivered by warmworks we have area-based schemes delivered by local councils home energy Scotland grants delivered by the energy savings trust and so on and the number of households that are actually getting proper conversion of heating systems out of it is in the tens of thousands as opposed to the hundreds of thousands or millions but it does seem quite a complex landscape and that's that's been referred to by our other members is that something that could be simplified do you think or or you know because the risk is that if you leave things as you said to the market alone and people's only exposure to accessing improvements is via the private sector advertising these schemes and in their own way but equally with a view to making profit in their own way then it becomes quite a dangerous environment for the consumer yeah I think there is a there will always be a fundamental role for government alongside the market especially if the government's statutory targets that the parliament signed up to are to be delivered the trick to pull off here I think it's that as I mentioned earlier the government's focus has in the 2010s was around improving the energy efficiency of properties and I think as reasonably saying in the report they did that well you know so properties have become better insulated but to ensure that just transition it's again they're going to have to not move the focus solely again on to decarbonise the heating systems but do both continue to support effective energy insulation and building on Mr Simpson's earlier example of passive house you know effective retrofit and so forth but that's done on a shared objective. Tis of the specifics around the different schemes if I can maybe step back on an overarching basis that has to be simple and easy for people to access you know so accessing the right schemes and knowing where they can get grants what loans are available all falls under fundamentally as I've kind of one of the pillars of the government's plans is around public awareness and giving confidence both to individuals and the market so there are many moving parts to this at the moment but all the more reason I think where we got to in overall inclusion in the report really regardless of the strategy we've got to have a clear delivery plan that underpins it. Well that's interesting I mean you talked about the sort of incarnations and we hark back to the days of when solar panels on rooms was was the big thing and then it developed into we'll come and insulate your home and there's some grants available for that and then you can top it up yourself and we're now talking about holes you know root and branch taking out your current heating system and replacing it with new technologies and most people probably don't understand what those technologies are does that open up any risk of increased exposure to you know to to rogue companies to scams to fake grants scenarios to misleading advice being given to consumers and so on is that something that often particularly should be paying attention to? Regrettably I think there is a risk that consumers especially with such a fundamental change in market conditions here that and that we are talking about a need for a development of a new supply chain new providers some will be providing finance some providing insulation service and I think you know history is littered with examples where there's such changes in market conditions that rogue operators will look to take advantage of ambiguity so I think you know it's not the government hasn't recognised that we think there is a you know an engagement strategy and awareness strategy but there have to be effective safeguards in place about you know scams as we've seen in the past so often we'll have a role and I think consumer Scotland too you know the new public agency well I'm sure we'll want to give some consideration to what its role might be in that environment too. That's assuming we have the people to do the work as you said there's a huge amount of people out there can install new gas boilers but that marked shift to installing new technologies and maintaining those on going there has been a fair amount of pushback from industry in terms of their what's on offer the incentives to do that retraining and reskilling staff if there's not really a market that exists there's a bit of chicken and egg involved of course but how you know do you think that the government is is acutely aware of that do you think the plans that they've produced to ensure that we've got the people to do that transition are robust. I'll pass to Cornelius to say a bit more about the government's plans around creating a supply chain workforce before doing that I think I was struggling to get the statistic to illustrate the scale of change I've now put my hands on it so it's a note of paragraph 76 that Scotland currently has 200 accredited air source heat pump installers relative to 8700 gas installers you expect that's going to have to flip them to effective engagement by government, enterprise and skills agencies, father education colleges, universities so that this becomes an integral skill. Cornelius wants to come in I think we can often phrase this as a you know that this is a risk to success and you know this is a challenge to overcome but there's an enormous opportunity if the conditions are right and government is able to provide confidence to the market and to consumers too that there is as I've mentioned 30 billion pounds potentially at play here in terms of economic growth and financial opportunities but again Cornelius can say more about the the government's plans in this area. Yes I think this is an area where you know government has been doing quite a lot of work through its supply chain development programmes I mean in relation to skills specifically you know we have things like the new mobile centre for heat pump training which is trying to provide training opportunities in a flexible way we've got the climate change imaging skills action plan which again is trying to make investments in skills but the real test released the numbers and as the auditor general says you know we only have 200 certified installers so this would suggest that whatever investments are being done in skills development in this area will need to scale up and potentially scale up very very quickly. When we did the audit work I think we did identify a number of challenges which are in in our report I think one of them is around the funding schemes available for for retraining and upskilling and the key issue there being around you know them being complex and challenging to access funds that that's what people are trying to access them have have said some companies also still a bit reluctant to to make those investments you know the market is still growing there's a lot of uncertainty as to what pace the market will will take off so again these are things that will impact on the choices that are being made around skills investment when you start looking at the larger companies that are looking at the wider UK market I think they will then be looking at well what pace of growth are we likely to see in the UK vis-à-vis Scotland and I think they will be making their investment decisions taking that into account given the UK well the rest of the UK is on a much slower timeline so I think those are the key issues really that I would say are coming out of the audit work that we have we have done. Thank you I appreciate we're out of time convener so I'll park with other questions. Thank you very much indeed Jamie and can I thank Auditor General you for your evidence this morning and also Derek and Cornelius for the input that you've given us we will now need to consider what our next steps are and who perhaps we need to invite in to give us more evidence on this really important subject of both public policy and I think consumer interest as well so with that I'm going to draw the public part of this morning's proceedings to a close.