 Fel ei hwylio, iawn i'r 15 mewn tydd honi yn gyflym gwaith diolchol a bleu iawn i Comiant 2018. Mae angen i'r hyn o ag garantau o gymryddiadau'r cymryddiolio'r Chiaechi Bailley ac Andy Whiteman, ac mae hyn oedd Fulton MacGregor i'r cymryddiol i'r cymryddiol i ddeglaredu eich rhain fawr o'r iawn hyn y byd? Wrthryd i ddaid ymwyngor, ymgyngor y c Sawol 5 ac yw ymwyngor yw'r cyfryd ymwyngor? Roedd ymwyngor? Item 3 on the agenda is a decision by the committee to delegate responsibility to the convener to pay any witness expenses arising from our inquiries on the bank branch closures and European structural and investment funds. Are we all agreed on that? We turn now to consideration of the national performance framework. I would welcome today our witnesses, first of all Keith Brown, Cabinet Secretary for Economy, Jobs and Fair Work, Gary Gillespie, chief economist and Carl Tannehill, chief social policy adviser to the Scottish Government. Welcome to all three of you. First of all, what evaluation of the national performance framework has there been over the course of the past decade and has any reviews or consideration being given to improvements in the way that economic development and public policy are delivered? I am looking for specific improvements that may have been made. Yes, there have been two such reviews, light touch reviews, but I was going to make a couple of comments as an opening statement, convener, if it is possible to do that. Certainly, if you want to do that first then come on to my question, please do so. First of all, as you have mentioned, convener, it is 10 years since the national performance framework was launched, setting out a vision of national wellbeing for Scotland and charting progress towards this vision through a range of social, environmental and economic indicators. Over the past 10 years, a considerable amount of change has occurred and we recognise, of course, that it is time to update the performance framework. We have consulted widely with citizens of Scotland and asked them what kind of country we want to be. The result of that conversation is the proposed framework that I am here to discuss. Some elements will stay the same. For example, progress on the national outcomes will continue to be available for everyone through a Scotland performs website. Some of the indicators present in the 2007 version will still remain in the NPF today. There have also been significant changes and improvements. The refresh has resulted in a streamlined appearance of the NPF that illustrates clear alignment and tracking with the UN Sustainable Development Goals. We have also reviewed the purpose statement and included 11 national outcomes with 79 indicators. We have introduced new indicators on gender balance, child wellbeing and happiness, and contractually secure work. It was our aim that the revised outcomes reflect current strategies and policies but also reflect what matters to stakeholders and that is why we have had the extended consultation. Our economic strategy, published in 2015, set out the goal of achieving inclusive growth supported by two mutually reinforcing pillars, boosting competitiveness and tackling inequality. We have also recognised that there is an economic case for many of our key social interventions. I must go back to the point about specific changes that have taken place over the years. We have seen poverty, increasing attainment in schools and significantly increasing childcare provision. The refreshed NPF sees the purpose of the Government's move in line with that vision. In addition to focusing on opportunities for all to flourish through sustainable economic growth, the updated purpose at the heart of a refreshed NPF acknowledges the importance of wellbeing and ensures that growth is inclusive. The ambition of Scotland's economic strategy is captured in the national outcomes and indicators. That includes the two outcomes that are linked directly to my portfolio that we will discuss today, but also others such as we live in communities that are inclusive, empowered, resilient and safe, which now includes an additional indicator on social capital that we know is important for supporting people in all aspects of life, including employment. As part of the economic strategy, it is encouraging progressive employment practices in the promotion of fair work. We see our trade unions as partners who have an important contribution to that, and I welcome the inclusion of a new indicator covering employee voice in workplaces that sits under the outcome that we have thriving and innovative businesses with quality jobs and fair work for everyone. It is also important to note that that does not mean wholesale changes to the framework, for example, a key part of our approach to supporting the living wage. That will continue to be a key focus, as evidenced by the indicator for employees paid the living wage being retained under the same national outcome. Whether there have been changes or new indicators, that reflects the consultation process. I also reflect what you asked about initially, convener, on our changed view based on the experience that we have had over the past number of years. The other national outcome directly related to my portfolio is that we have a globally competitive, entrepreneurial, inclusive and sustainable economy, which includes indicators on both innovation and research and development, as well as overall income inequality and measures reflecting our commitment to environmental sustainability. By aligning the whole public sector around the process, we can deliver, we hope, lasting collaboration and partnership working. The NPF also provides a transparent mechanism to monitor the performance of Scotland across a range of outcomes, and I would welcome the views of the committee and individuals on it on the updated framework for this portfolio. Finally, I know that the committee are interested in the measurements and performance of the economy across a range of measures. I would highlight, for instance, that an approach focusing on inclusive growth has helped to achieve considerable results. Scotland currently outperforms the UK in terms of income inequality, as well as female and youth labour market measures. Scotland also remains the best performing of all four UK countries with the highest proportion of employees paid the living wage or more. Between 2007 and 2016, Scotland's productivity growth has been higher than any other country or region of the UK, including London. I am also pleased to see additional indicators reflecting the breadth of this portfolio within the updated NPF. That would be the initial statement that I would want to make. In addition to what I have said, I convener about some of the changes that have happened over the course of the two reviews that I mentioned in the last 10 years. At different points, you will have seen, for example, the appointment of a minister with specific responsibility for youth and female unemployment, other ministerial appointments, plus initiatives in the economic area, for example the growth scheme and many others, which I have been in response to her ability to try and achieve the outcomes that are set out in the original NPF. It is also true to say that the changes that we are making now are reflective of our experience. That is why we propose some of those changes. I do not know whether, Gary, you want to mention anything else most specifically? Just to add, convener, I think that you asked about a review. There is a review of the framework at the moment being undertaken by the OECD, who are looking at the impact of the framework over the last 10 years. I believe that they will report in June, so we are currently taking an interview in Stakeholds and Scotland at the moment. Right, thank you. I think that you mentioned, cabinet secretary, a number of specifics there. In passing, you mentioned education. Has performance in education been monitored and what is the result of that? As it interacts with the portfolio, of course, attainment generally has been a huge focus on that. I would not say that that has necessarily come about directly as the different parts of the previous NPF that relate to my portfolio. However, in relation to skills in education, particularly further education and vocational training, we have seen changes. We have seen a huge expansion in the number of modern apprenticeships that we have, for example. We have also seen a change in regionalisation of college provision as well, so there have been substantial changes. Those have also been linked to what we had, if you remember, back in 2011-12. In particular, a very high level of youth unemployment has come with the rest of Europe. Some of those changes have been deliberately designed to try to help us to achieve some of the outcomes in the previous NPF. Do you think that there will be any areas of conflict in the new national performance framework? It is always possible that that could happen, but the way that it is being designed in the consultation process has been undertaken. I think that I would acknowledge that some of the stakeholders would have different priorities. However, I do not think that, from my reading of them, and obviously I am most concerned with the two that I have mentioned already, that there is any inbuilt tension between them. For example, I note that another committee had an issue about whether sustainable economic growth had an inherent tension between sustainability and growth. In my view, not least because of some of the announcements that are made in terms of low-carbon and some of the environmental policies that the Government and the Parliament have had, I see it being possible to achieve both growth and sustainability. Sustainability in the more narrow sense of environmental sustainability, but also in terms of a more sustainable society. It may well be that there are perceived to be tensions, but we have put those together and listened to stakeholders. We have tried to make them as consistent with each other as possible. I want to answer the second part of my question. I would simply ask if it is your view and the Government's view that you will continue to monitor to see whether there is any tension or conflict and react appropriately. I think that tension can well be productive at times, if it leads to a discussion about how you properly achieve growth, which is a big challenge for Scotland and the UK in particular, but how you achieve that growth at the same time as looking after sustainability. I have mentioned before at the committee that, in terms of just economic growth, you can achieve 10 per cent economic growth, but it only touches on 5 per cent of the population. That is not what I would see as inclusive economic growth. Similarly, in sustainability, you can achieve very high levels of growth if you were to maximise job opportunities and industries that are very environmentally damaging. There is obviously a tension there. Our ability to make sure that we achieve what we are setting out here, which is sustainable and inclusive economic growth, will be challenged by the different stakeholders that have different priorities. We will keep that under review and look forward to the process. Indeed, the process that we are currently involved in with the committees across the Parliament will be very useful to us in helping to inform the debate as we go forward. During the recent consultation process, I would like to ask about the stakeholders that you engaged with. You engaged with a range of people in the business sector, I imagine. What was the engagement with other groups outside the front-line employment, for example, third sector community groups? You mentioned education. Can you give us an overview of the sort of people that you had in that consultation? It was very wide-ranging. I think that, just to go back to the first part of your question, we did have, if you like, a second think on the business engagement. We went back and spoke twice to the CBI and the CBI to make sure that we were getting the full input from the business community, because, as you will know, the Government and the Parliament engage with the big six in particular regularly, but we wanted to go back and check on that. I was not involved directly through the mechanics of the consultation. That was obviously in Derek Mackay's portfolio, but Carol was. Perhaps she could maybe answer some of that. The consultation had a number of parts, as you will be aware of, but the workshops specifically for the indicators had a very good attendance, I would say, particularly from the third sector and the public sector. A wide range of organisations were invited to the workshops, particularly for the outcome in which they had a particular interest, but, of course, a number of those organisations had an interest in a range of outcomes. There is a full report, which you may or may not have seen, but if you haven't seen it, we can easily provide the detail of all of the organisations. However, I would be confident that we had a pretty good representation from across all the sectors. In addition to those workshops, the refresh involved using information from the healthier Scotland and fairer Scotland consultations, which were very significant consultations, reaching tens of thousands of people across Scotland. We built on those, rather than repeating the process again for those consultations. Individual organisations were able to do a kind of online submission. From my perspective, it seems to me to have been a pretty thorough set of opportunities for different organisations to contribute to the process, and I think that we can be quite confident that the outcomes that have come out reflect a broad cross-section of Scottish society's views about the sort of country that they want to live in. Did that process identify, and we talked about how youth unemployment is no longer the big issue that it was, that that consultation process identified areas of certain sections of society not reaching their potential, which I suppose gave you a new focus into where these days we have issues about people reaching their full potential? The issues about inequality or equality of outcome came through really strongly across all the outcomes, and that is why that is now built in as an integral part of the framework. The indicators across all the outcome domains will be reported, broken down by protected characteristics and as much as possible by geography in Scotland, so that we can keep a really close eye on what is happening to the gap in the indicators over time, as well as the aggregate performance of individual indicators. It was a really clear message that came out from the consultation process. Three things jumped out at me in your statement, Mr Brown, around new focus, around gender balance, wellbeing and secure work. Obviously, we are in a situation where a lot of the powers around that can tackle some of those issues are still reserved, particularly in employment law. Does the framework take into account the constraints around that? How are we dealing with that dichotomy? First, at the higher level, the framework is really to be, in all Scotland, not just a Government and Public Agency's statement of ambition, if you like. We recognise within that that we do not hold all the levers, as you quite rightly say. In fact, there is a recent exchange in the House of Commons where the Secretary of State, Greg Clark, was asked whether he accepted responsibility for growth in the economies of all the nations of the UK. He said that he did, indeed. That underlines the fact that there are two Governments involved in the economy, and we cannot control all of those things. In addition to that, as you quite rightly say, we do not have all the control over employee rights. One of the major differences in the iteration of the NPF is the emphasis on fair work, employee voice. We have had a very substantial response from the STUC in relation to some of those issues. It is interesting to see, over time, if you went back five or six years, that there was certainly youth unemployment, female unemployment, and now it is about equality in the workplace. It is about gender equality. We will still be reporting on all those stats in our labour market, but other things such as the ability for employees to actually make their voice heard, where their work is fair. Some of the issues are in blacklisting that we have seen, in secure work that we have seen. They are much more taken into account than this, but we do recognise that. Moral jeopardy from establishing a target that you yourself or even everybody in Scotland cannot in themselves achieve. You have to rely on others, such as the UK Government and other agencies. We have tried to reflect that in the two criteria that apply to the portfolio and the indicators. It is a more subtle iteration than perhaps it was 10 years ago. That is why, in alignment with the economy goals that we have with other areas of portfolio, with your colleagues, it is important that you give me a bit of an overview of just how aligned the sustainable development goals are with other portfolio areas of government. They have been taken into account at the very roots of establishing all the indicators. Both in terms of the outcomes that we have mentioned and the ones that relate to this portfolio, at every stage the sustainable development goals have been taken into account. There has been a lot of discussion around that. We were one of the first countries to say that we would take into account the sustainable development goals. Once we have had the feedback from the Parliament and the committees, we intend to make sure that, if we like properly launched, we fully acknowledge that the UN Sustainable Development Goals are a fundamental building block for that. In examples of cross-portfolio working, if you like, some of the goals around sustainability, in particular environmental sustainability, are incorporated in things such as the push that we have towards a low-carbon economy, electric vehicles, things such as supporting hybrid buses, which have done very substantially over the years. That crossover happens in a number of areas. More broadly, if you look at people being happy in the workplace, they feel that they are participating and they have the ability to participate without fear. It is also a crossover to the health and wellbeing side of things. Those are the initial ones that I would think of. I do not know whether Gary or Cara will add to that. I do not have much to add to what Mr Brown has said, but there are a number of the sustainable development goal indicators that we have aligned to several of our outcomes to gender equality would be another one that we see very importantly in relation to the educational outcome, the communities outcome, the health outcome and others. We will be reporting on the sustainable development goal indicators that we have identified as being particularly relevant to Scotland's national performance framework at the same time as we are reporting on our own NPF indicators. That should help us to achieve that sort of integration that you are asking for. Because it is a whole framework, we are not reporting on individual things in isolation, so anybody looking at it should be able to see that whole package and should be able to see where those relationships that we would all want to have in place are not working as well as possible or where they are working well. Then we should be looking to reprioritise in the light of that. It is very difficult to measure wellbeing as such. That is one of your goals. How can you possibly measure an improvement in wellbeing? There are a number of wellbeing frameworks, and the OECD one is one that is most widely used, which has got a range of different indicators. It relates very strongly to the economy as well, the way that OECD measures wellbeing. There are a number of ways that we can do that, but we will be looking at population wellbeing in terms of the totality of the indicators that we have in our NPF. The chief statistician has the responsibility to go away and look at how the indicators are best. Many indicators are still at the process of working through how we can say how we are achieving those and how we measure them over time, which will appear on Scotland performs. However, there are things that statisticians protect characteristics that make it as robust as possible. I will come back to the point about wellbeing in the portfolio. Things like participating at work or gender equality or equality more generally will be contributory factors towards that sense of wellbeing. I am curious how the Scottish Government will track and report on progress towards the Sustainable Development Goals. The progress that we will be tracking, which is pretty much as now for the NPF, will be through Scotland performed. The ability friend would go in there and see how we are achieving against the indicators, notwithstanding what I have just said about the particular work streams that we have. The Sustainable Development Goals are often expressed in the same way as the outcomes that we have laid out and the indicators that we have laid out. The way to see whether the SDGs are being achieved is through Scotland performed. If we are achieving our indicators, given the fact that we have taken into account the Sustainable Development Goals, that will be contributing towards the achievement of those SDGs. I do not know again if Carl wants to say any more about that. We are also continuing to work with ONS in terms of how we would monitor the SDG indicators as well. As you will be aware, there are a lot of them, and some of them do not particularly apply to Scotland. Others are very specific, so they might be about levels of malaria or levels of HIV. Those are things that we can report on, but we have not put them in our overall national performance framework because they are so specific. We will have our reporting on the things that relate to our NPF on Scotland performs and on the annual statement that we produce when the budget is proposed. We are also linking with ONS about reporting on the wider set. Given the experience that we have had in other committees where we have been talking about the weakness of some of the data that comes forward and how uncertain it is—indeed, I mean that you will be in this committee—I have seen that in terms of things such as GDP and all sorts of things where there is a lot of extrapolation and assumptions made, how robust is the data coming forward and can you really rely on it? It depends on which data set you are talking about, but you make a very good point in relation to the economic data. The committee has just had a very substantial investigation into that. In fact, we have offered up the fact that some of the data is not as we wish it to be. For example, in relation to exports, Scotland's exports figures come out. The ones for 2017 will not come out until next year, I think that I am waiting to say, January next year. The reason for that is because the last input to that set of data is energy data from the UK Government. We have to wait until that is available for us to produce that data. Whether it is producing data for exports in 2019 that relate back to 2017 is less than ideal in my view. I know that the committee has looked at that in relation to the labour market survey and how robust it is and how timious it is. The committee has examined that, and what we have done is established through the strategic board, an analytical unit headed up by Stephen Boyle from RBS. He is on to the convent to see how we can look at more rounded and more relevant data, much of which we will get currently just now from O&S, but whether we should be doing some stuff ourselves, as Northern Ireland does in many cases through its business surveys being compulsory, or whether we should be asking O&S to change the basis of the way that it produces data is a process that we are going through just now. In relation to a number of the new indicators, we already have that data. We have it in the labour market surveys in terms of gender, in terms of underemployment and many other indicators. That is probably true across most of the indicators that we have here, but you raise a valid point. We have to make sure that the data that we are basing decisions on is as robust and as relevant as it can be, but we are well aware of that, as I think the committee is. Just an absolutely different thing. Why are particular sustainable development goals shown under some national outcomes and not others? I have got some examples here. Under economy outcome, goal 1 to end poverty is not included, but goal 10 to reduce inequality is. Goal 12 to ensure that sustainable consumption and production is included, but the previous national outcome has been dropped. How is that? Each one has been looked at on its merits and some of those were linked to other portfolios, but in relation to mine, the feedback that we had from stakeholders was what is the most relevant measure to have and what is not covered elsewhere. I do not know whether the car wants to come back on the particular examples that have been raised, but I would also say that part of the process that we are going through, and it is true of all other cabinet secretaries as well, is to find out what the Parliament views on that. I am more than willing to listen to suggestions if there are issues about how well-covered elements of the indicators are, but I do not know if you want to come back. I would simply restate that. What is here is what seemed to be the best fit on the basis of what we were hearing in the consultation, but we recognise that there are some that could sit in other places. If the committee felt that there were important omissions or things that were sitting in the wrong place, please tell us. We would be really grateful for that feedback. My first question is on purpose targets. Before moving on to the new national indicators, the national performance framework of the Government supported by 11 or has been supported by 11 purpose targets, seven of which relate to the economy. During our inquiry into the economy, we heard evidence, including from Nora Senior, head of the strategic board, that the board in their interim report in February earlier this year has identified a number of performance gaps between what is happening in the economy and the purpose targets, including in productivity, where there was a shortfall of 27 per cent against the purpose target, and across other areas, including internationalisation, investment and inclusive growth, where Scotland's economy has failed to match the purpose target of reaching UK levels of growth over the past 10 years. My first question is, did you agree with the strategic board on the performance gaps that it has identified with respect to the purpose targets? To the extent that some of the examples that you have raised are borne out by the figures, I am not challenging the figures. I think that there are different measures that you mentioned economic growth. In some quarters, I can think of one recently where the Scottish economy outperformed the UK economy very substantially, but that has not been a sustained pattern. Recently, this week, we have heard economic growth in the UK at 0.1 per cent, a level at which, when it is applied to Scotland, it has drawn extreme criticism from yourself, although I have not noticed any relation to the UK Government's performance. I think that that is reflective of two things in particular, three things perhaps. One, oil and gas is an important factor, Brexit is an important factor, and it is also true to say that, given when the purpose targets were established back in 2007, we all acknowledge that there has been a pretty substantial change in the global economy, including the UK's economy. We have had to deal with perhaps what has been described as the worst recession in living memory. We have also had the downturn that we have seen in terms of oil and gas, and we have also had Brexit now weighing substantially on the UK economy. In relation to those things, yes, that is affected, I think. There is no question. It may well be that other things have affected it as well. However, it is also true to say that we have substantially exceeded what the UK has done in terms of productivity growth—not to the level in the purpose target, I accept that—but three times the level of productivity growth in Scotland, as compared to the rest of the UK. In terms of living wage, something that we cannot impose. We do not have the legal ability to do that, but we have the highest of all the four UK nations in terms of take-up of the living wage or people paid the living wage. In some areas, if you look at female employment or the lower level of female unemployment in relation to youth employment, for 13 of the last 14 periods, Scotland's unemployment rate has been the same as or less than the UK level, which is a substantial achievement. I have no doubt that the figures are varied. In some cases, we have not met those targets, but I think that there have been substantial external factors. Okay, thanks very much. Just for the voids of doubt, in relation to the core 4i targets, the strategic board identified gaps in all four areas. However, let me move on to national indicators, because my understanding is that national indicators will replace purpose targets with respect to monitoring and tracking the performance of the economy. Will we see the same specific target, be it time-measured or percentage target, in the new national indicators so that, going back to the enterprise and skills review, which was focusing on hard alignment, focusing on evidence-based policy and the Audit Scotland report into the enterprise agencies, which focused on the ability to measure the impact of policy, will the new national indicator set out specific targets in the same way that the purpose targets did, for example, with respect to productivity and economic growth? I think that it would be useful to hear Gary's taking this, but there are two different things going on here. One was the enterprise and skills review, which you are quite right in saying, was partly designed to ensure that the strategic board, which has been established, should be able to look at and also to examine and change the nature, the extent and the relevance of the economic statistics on which decisions are based. That is why we have established the analytical unit. It should be the fact that economic decisions are based on evidence. That is a different purpose to it. No, it is not intended, with the exception of the climate change indicator, which will have a target established to that. The rest are indications of where we want to go. They can be examined as to whether we are achieving them or not by references that Scotland performs. I do not think that we are currently providing, for example, the case of the labour market statistics. All that information will continue to be there, so people can take a judgment on that, but we will judge our ability to achieve those indicators based on Scotland's performance and on the data that we currently achieve. That gives us some security about knowing whether we are going in the right direction and the basis for that on the current level of data. I do not know if you want to come in that direction. I will add a couple of things. The Scotland's economic strategy set out the ambition for the Government to be in the top quartile for productivity within the OECD. It also set out ambitions to be in the top quartile for wellbeing and sustainability. The national performance framework now starts getting into some of the issues around how it would measure wellbeing. The initial Scotland's economic strategy looked at the OECD's better life index as a potential measure for that. In a sense, we are seeing a continuation of the initial targets, but they are now reframed within the NPF. Mr Lockhart also mentioned no resenior in the work that had been done for the strategic board. Essentially, what she was reporting on was how Scotland compared relative to the top quartile countries across a range of measures, including investment, R&D, enterprise, skills, innovation and so on. What was interesting when you look at the analysis is that Scotland is green in some of those first quartile and skills, innovative enterprises, it is lower down on the number of high-growth enterprises or businesses or investment, but the interesting point is that you do not have to be green in them all to reach the top quartile. That gap analysis was, in a sense, early work to help the strategic board to inform the strategic plan and prioritisation for the whole system. It is important to view in that context that the new NPF does not have time-specific comments because it is about continuous improvement. We have heard during the economic inquiry that inclusive growth means different things to different people. Cabinet Secretary, you said yourself that there is a bit of work to be done to define what inclusive growth means and move it from a subjective definition possibly to a more objective definition. If we are moving from specific national purpose targets with hard measurements that can be tracked to this more less focused, national indicators that do not give time-specific targets, how can we measure the impact of policy? How can we say that the four eyes might be working in a particular area if we are not tracking the impact of those policies if we are not measuring things over a time-specific horizon? There is nothing to stop us doing exactly that kind of assessment about the extent to which we are achieving targets or the economic targets that we have been public about. That ability is still there. There is no information that is not going to be there. In addition to that, the indicators that are currently there will be available for a further year as well. In addition to that, as I have said already, we are more than willing to listen to any suggestions from committees of the Parliament or the Parliament itself in terms of how we could look at that. On the first point about inclusive growth, we have our definition. You are right to say that we have to ensure that everyone shares the same definition, but our definition is growth that combines increased prosperity with greater equity, which creates opportunities for all and distributes the dividends for increased prosperity fairly. If I was asked—and I think that I have been asked—at this committee previously to give my version of it, it might not have exactly the same words, but the same points about distribution, equity and fairness are fundamental to inclusive growth. I think that there is a common understanding of what inclusive growth seeks to achieve. Just to come back to the substantive point, there is no information that is not currently available that will not continue to be available. Much of the information is not produced by us, but the information that is produced by us will still be there. Scotland performs is the key in all this. It is open. Anybody can go in, they can see, they can track whether things are improving or otherwise. It will be the case. I am sure that Dean Lockhart will be very keen to know that the strategic board will be maintaining its ability to set targets to judge where the economy is performing and how it needs to improve and also to be the ones that instigate in some cases changes to economic data, if they feel that that is relevant. I do not think that there is any shortage of data to allow us to know in which direction we are going and whether things are improving. Do you still retain the ambition for Scotland to reach the first quartile of OECD countries in terms of productivity? We are always ambitious for Scotland. I have explained previously about some of the global factors and some of the more local, if you can describe, Brexit as a local factor or what has happened to oil and gas. We know that that is a challenge and we have seen improvement. We have seen improvement in exports, we have seen improvement in productivity, but the ability to achieve that is no question. I think that most people would concede that it has been impacted by a very substantial recession that fall back in oil and gas. We are not the only Government involved in this. As I have mentioned, the UK Government has conceded explicitly that it has responsibility for growth in the economies of all the nations of the UK. I make that point just to say that we are not the only actors, not indeed even the only Government in this process. We have to try to influence the things that we can influence, but others have to play their part as well. Jamie Halcro Johnston Can I just ask you—we have covered a little bit of this already—what the role of the enterprise agencies and the strategic board had in developing the new outcomes and the indicators? I think that it is true to say that the individual agencies had more of a role than the strategic board had simply because the strategic board met for the first time in December, so it came in at that stage of the process. However, each of the agencies that are there were involved in the process and have also been working towards some of those things for a number of years now. It is also true to say that the strategic board had a subsequent discussion on that. That is for them to have had, but they were not involved in that part of the process. If you think of the membership of the strategic board, which comprises in large part representatives from the enterprise and other agencies, I think that they themselves have been involved. Once again, I do not know whether you want to add anything to that, Gary, in terms of the agencies. As I mentioned earlier, the NPF follows Scotland's economic strategy. Since 2015, we have been working with all of the enterprise agencies to discuss how we incorporate inclusive growth, how we measure it and how we develop frameworks for that, and some of that work that we now see subsequently within the NPF. In that sense, they have been involved through the enterprise and skills review phase 1 and phase 2. There was discussion of those type of outcomes. Perhaps, as Mr Brown has said, it is a bit late for the formal consultation, but certainly the people around the table have been involved to that extent. They have had a considerable amount of involvement. Does that level of involvement in designing their performance measures risk perhaps? Are they setting their own standards? I do not think that anything in the discussion that we have had with the agencies has involved changing, for example, the data that we collect. In some cases, they are responsible for collecting some of that data. I understand that point, but I do not think that there is any sense of them writing their own report card, if that is what you suggested, or even writing the criteria by which they will be judged. The benefit of the strategic board is that, were one particular agency tempted to do that, it would undermine the work of the other agencies. I think that there is less likelihood of that happening. Those things are objectively assessed. The Carnegie Trust has been involved in the process, along with, I think, Joseph Oxfam, has been involved in the process as well. They are judged against international criteria, as they were previously. We have had substantial and encouraging feedback, Joseph Stiglitz and others, about the way that we have gone about this previously. We will be judged on that in the future as well. I remind members that the chief statistician is entirely independent and has the ability to say what statistics are gathered and what their relevance is. I do not think that that has been the case. Is it the strategic board or the Scottish Government that is accountable for holding the enterprise and skills agencies to their performance measures? The Scottish Government, through ministers, is responsible for the enterprise agencies and their performance. What the strategic board will seek to do is try to make sure that those are, first of all, more effective but also aligned to a much greater extent than they have been previously. Nor have senior told this committee that the strategic board does not have any input into the agency's operational plans, but we can review them and measure the outcomes. How can they hold the enterprise bodies to account on that? Through reviewing and measuring the outcomes, and just to say on a practical level, when the strategic board has a discussion about say the performance of, I do not know, high, for example, which would be obviously relevant in your own area, the chairperson from high would be part of that discussion. They can have that discussion. The actual line of accountability is through the individual minister that provides a letter of guidance to the agency involved. Of course, taxpayers' money goes to those agencies, but the purpose of the strategic board is to see the extent to which they are working together. They are aligning what they are doing. For example, to try and get a concrete example, if the strategic board felt that there was more work that required to be done, the economy required more graduate apprenticeships as opposed to something else, they can raise that, they can propose that, they can discuss that amongst the different agencies that are there. However, the final analysis is the Government and the taxpayer that provide the funds. It is a Government that is responsible and accountable for the performance of the individual agencies. Just to follow on that line of questioning, sometimes in the past there has been the feeling that the enterprise agencies are just totally focused on bringing businesses in or creating jobs, and that is absolutely what they are there for, and we all support that. However, I think that there was the feeling sometimes when we did the review and the gender pay gap, that they were not always very focused on, let's get more businesses in, run by women, for example, or is it important that businesses, the gap between the top pay and the bottom pay, is wide or narrow or whatever. Do you think that the review of the national performance framework and related issues will maybe help them to take that wider view? I think that it will, through some of the indicators that are there, but to use the phrase, it's a journey that's already on, if you think about SDI. To be fair to SDI, they will be judged not just because that's how they want to be judged, but they'll be judged in any event on the number of jobs that they bring, the number of projects and the level of money that comes in in terms of inward investment at least. SDI for some time has been looking much more holistically at that and saying what's the quality of the jobs, are the sustainable jobs, are the jobs that address things like the fair work criteria that we would have. I think that it's also true to say that Scottish Enterprise now for a number of years have been undertaking initiatives in relation to women's employment as well, so whether it's women entrepreneurs and also the stats that we produce are much more relevant than previously in covering some of those issues. I do think that that has been happening up to now, but I do think that the indicators and the outcomes that we want to agree will be a big signpost to all those agencies that this is not just because of particular pressures that we might have had in the economy. For example, I mentioned the very big high level of female unemployment in 2011-12 and we had a response to that. This is not a temporary thing. This is how we want to see a fair and inclusive economy. This is what it's going to look like to us, so I think that this does help them on a journey that I think that they're already on. Cabinet Secretary, you've been in post for around two years now. I invite you to reflect on your relationship with the trade unions over that time, both in crisis situations when companies such as BiFab have gone into administration or perhaps more proactive situations where you're trying to bring jobs to this country. What's the value of trade unions to you? I think that as a former trade unionist myself, I think that they're very valuable and they also help us to achieve some of the outcomes that you've talked about here in terms of employee voice and fairness in the workplace. We value trade unions. We have, in my view, a very productive working relationship with them through the fair work convention and other fora, so there's been a new group established of Scottish business growth group, which involves both the UK Government and ourselves, but the trade unions are very instrumental in setting that up. In relation to some of those indicators, the trade unions themselves have come back with suggestion, which we've been happy to accommodate. Of course, those are creative tensions sometimes between the Government and its partners, but I think that they've been very productive. I suppose that the obvious example that I would give is most recently in relation to BiFab and what we were able to achieve. What perhaps wasn't as obvious or as talked about in that process was an extremely constructive and positive relationship with the trade unions throughout that process. There's every possibility that had we not had that constructive relationship, then it could have undermined our ability to get where we got to eventually. Both in terms of crisis relationships and some of the things that we've sought to achieve through fair work, so either the living wage or the business pledge or the broader concept of fair work generally. We've got a very good relationship with the trade unions, but it is one that has its creative tensions mostly. That feedback is hugely encouraging, and I agree wholeheartedly with it. I wonder therefore why you wouldn't reference in the national performance indicators trade union membership as the employee voice, because there is a stark difference between an active trade union industrial policy and a staff association. Are you still open to having trade union membership as the terminology of the indicator? That's the information on the take-up of trade union membership. It will still be available to have and also the ability to discern whether it goes up or down as a percentage in the workplace will still be there, so we're still able to judge that. However, this is partly as a result of the discussions that we've had with trade unions, the idea of employee voice. Obviously, we should be looking at other things such as the ability to have collective bargaining as an indicator of fairness in the workplace, but it's broader than just trade union membership. That's why we've done it, but I don't know if you want to come in on that, Gary, and say anything further about that. I suppose just to say that the final indicator for that is still to be decided. From our notes, as Mr Brown was saying, it can be slightly wider than trade union membership. There may be potential looking at the percentage of employees whose pay was affected by collective agreement. It's trying to get a sense of how open, transparent workplaces are in terms of pay settings, but maybe Carol might want to add. Just to reinforce, this is one where we haven't tied down the indicator. If you use the terminology employee voice, you make it sound like a singular act of individual framework. The whole point of a trade union is that it's a collective action, and the value of that has been borne out in BiFab, so you should have a much clearer sense of trade union membership. When you look at other active countries that are growing their economies in Scandinavia, for example, the level of trade union membership is a key indicator of the health of the economy, and we should aspire to do that here. If you find yourself in a position where you have that in the face of the indicators, what do you see the role of the Government in promoting membership of a trade union, particularly within the private sector where there are historically lower levels of trade union membership? How would you encourage more people to join? I think that it's just through that encouragement that every public statement that I've made or that the First Minister's made on this has been to say, in all sorts of different cases and instances that have arisen, that we think that it's good to have trade unions as active partners in the workplace. It's good for a number of reasons, but it's good for businesses if you have a more secure, fairer workplace where people feel valued and they also feel that they have, not to confuse you, two things, a voice that they can be heard through, and one that protects them as well, so it's not them having to take it on every time themselves. We think that that is good for business, and we've said that consistently. We made a number of different statements, so most recently, for example, we had the very bad weather when some employers were not reacting, if I can put it this way, sympathetically to the fact that some employees were simply unable to get into work, or if they were to try to get into work, they could have risked life and limb and were being penalised for that, so we were a very strong statement after discussion with the trade unions about, we don't have the ability to legislate for it, about what we thought were the expectations on employers, and we're very clear with public sector employers as well. I think that at every juncture we have tried to, and we've had debates in the Parliament when we've said this, we are very supportive of trade union membership as a vital part of the economy, and that we have not had real opposition to, although I accept your point that there's much further to go in terms, especially the private sector, in the take-up of trade union membership and recognition of trade unions. I'm just moving on to one of the indicators that you're planning on withdrawing from this system around underemployment. There is a sense, or perhaps a suggestion, that in removing that, you care less about that. Is it the case that just any job will do if you're not measuring underemployment? How are you going to make sure that people are fulfilling their capacity in the workplace? I think that what we've seen is, well, it will maybe get a guy to give the stats on that, but that, as a percentage of the figures has reduced, that's not to say that insecure employment hasn't increased or that there's insecure employment is a major factor, so we're trying to look at this through the security of employment and a number of other indicators as well. The stats that contribute to an appreciation of what the level of underemployment is, and it had a different meaning, I think, than the one that is sometimes perceived to have, which is just sometimes people not being able to work as much as they wanted to work, but there are other aspects of underemployment as well. I think that we've seen a real growth and concern around the issue of secure work, and that's why we're trying to focus on that. Once again, that indicator as currently constructed will be there for at least a year, and we are willing to listen to views, but it might be worse just hearing from Gary as to why that's been chosen. I think that there's a couple of things. The underemployment definition that we report is those in employment who want to work more hours, and that was really important following the financial crisis. Obviously, when unemployment was at nearly 9 per cent, people were back in employment, but we're being constrained in terms of the number of hours worked. That's now down around 8 per cent, and it's come down from 12 per cent in the earlier 2011-12. It's still really important, but the focus now is on your point about the type of jobs. There's a new measure that's proposed around skills utilisation, asking people in the workplace the extent to which they feel they're in the appropriate job for their skills. That would pick up graduates in low-pay or low-skilled jobs, and it's probably a better quality measure for the type of interaction people are having with the labour market. We will still report underemployment in the labour market statistics that are published monthly. They are national statistics, produced by ONS and reported in Scotland. We're not really losing the measure. It will still be there, but the NPF, as it is now, is picking up what people are voicing as the issues in the labour market, which is the types of jobs, the tenure of employment and the skills utilisation type of issues. A graduate could be in a very secure job in a bar, but they're still not fulfilling their capacity related to their degree. Where exactly is the skills utilisation on the face of the indicators? It's a new indicator that's being proposed. I was looking for that. It's worth saying that that is not picked up just now, and it's a point under that indicator that's not currently picked up, but we'd want to try and achieve that. It's skills under utilisation. Again, it was another measure that came out following consultation with the STUC. Essentially, that will try and pick up the issues that I've been talking about, where people are over-skilled or under-qualified in work. There's a kind of ebb and flow of indicators coming in and out to reflect where we are at a particular point or cycle in the economy and what matters to people. The proposed national outcome on tackling poverty has six new national indicators. Why was it felt necessary to increase the number of indicators? Of course, part of that touches on this portfolio, but much of it is in other parts of the portfolio. Some of the indicators relate to other portfolios. I can only imagine that that came about as a result of the same process that we've gone through in discussions with stakeholders and third sector organisations. Those indicators gave the most rounded view in terms of progress, but again, Carol would have been involved in that, if she may know what. The issue of tackling poverty was again one of the really strong messages that came out from the consultation. I think that the number of indicators is to reflect that and the importance that the people of Scotland placed on that. If that's your question, why are there six new ones? I think that it was felt to be underrepresented in the previous iteration, and it was something people felt was really important and was strongly in the new iteration of the NPF. Some of the new indicators are the cost of living unmanageable debt and wealth inequalities. When we carried out our report into economic data earlier on in the year, we found that in a number of cases, the Scottish sample size of any UK survey was pretty small. What data is available to help us to measure the new indicators that are coming in and is there anything that needs to be done to address the small sample size? If officials come back on the cost of living in the national data that we rely upon in relation to that, it is worth saying in relation to unmanageable debt that we are taking on new powers in terms of at least debt advice. That will also be a process and a bill that goes through Parliament in terms of consumer awareness. That will, depending on what the Government and Parliament eventually agree, allow us to get more information, more detailed information than we currently have in relation to that part of it. Some of those other aspects are wider than my portfolio would suggest. As to things like cost of living, you will be aware that that will be RPI CPI rather produced by the UK Government. You are right to say that there are not just sometimes examples of stats where the Scottish sample is quite small and hard to get a real feel for. It is also sometimes true to say that CPI in one part of the UK can be quite different not just in Scotland and England but the north of England from the rest. I think that there is no question that the committee knows as well, and if it has had that discussion, there are sometimes issues with the data that we currently have. I do not know if the officials want to come back on that. On cost of living, there are a range of ways of, as you will know, of recording that. We have in the past depended quite a lot on Joseph Rowntree Foundation data on that. Joseph Rowntree Foundation has just increased their presence in Scotland and are increasing their Scotland-level analysis, so that will help us, particularly with the cost of living indicator. The issue about a manageable debt is interesting. I think that it gets into something that we are very aware of, that some of those data are going to be more accurately gathered locally. The relationship with local government and community planning partnerships is going to be extremely important to get a real understanding of how some of those measures are concentrated in different parts of Scotland and particular population groups. Coming back to the question about the quality of national data, sometimes we cannot get at a national level. We felt that those were important and should be there as national indicators, but we may depend on different data sources to get a complete picture. Some of them might not be one individual indicator. Mr Brown mentioned social capital in his introductory remarks. What we will do with social capital is to present a dashboard of indicators that give us an overall sense of social capital. It may be that some of those issues, such as cost of living, also fall into that dashboard approach rather than being an individual measure, because they are so multidimensional. We have highlighted that poverty indicators are important and that there are various ways that we will be able to collect data in order to look at what the position is at any moment in time in Scotland. What are the levers that the Scottish Government has to address those issues? If some of those levers reside with the UK Government, how can we influence the UK Government to try and address them? Some of the levers that we have are, for example, the proposals that we have on child care are fundamental to trying to alleviate poverty, allowing people to get into work. It is also true to say that some of the targets that we have will be through things at the Child Poverty Scotland Act 2020. We have set out proposals for a progressive income tax policy allocating £179 million to the attainment Scotland fund. That is another basis on which, if you can improve educational outcomes, you can help to eliminate or reduce poverty by my means of having done that. We are taking a wide range of actions in relation to poverty and inequality. It is also true to say that we have obviously just passed the Social Security Bill and that is another basis on which we think that we can help to address inequality. Also, in my portfolio, we have taken on some new employment powers, which have allowed us to do things a bit differently in terms of how we can get people back and keep people in employment that are furthest away from the employment market. Those are the levers. Beyond that, there are other things that we would like to do to influence UK Government policy, whether it is in terms of benefits and the impact of universal credit or general economic policy. One of the big factors is that the UK has dealt with the global recession in a different way from many of the countries. It has gone for the idea of austerity, which has had an impact on poverty and has increased inequality. I think that we will continue to make the case to the UK Government that the austerity path, which it has gone down over a number of years, is not the right one for the Scottish economy and for us in our attempts to try and reduce poverty. If there are no further questions from committee members, I thank the cabinet secretary for coming in today. I will suspend this meeting and move to private session.