 Felly rwy'n ddweud y fawr o'r fawr yn ymgylchedd yma'r sgwrnodd. Mae'r fawr yn ddweud, i fawr, o hynny, a'r fawr o'r mwyaf, oherwydd mae'r fawr yn dyfodol o'r pethau ar y cyd-golion o'r rhan. Mae'r rhan o'r gymhwylltau ffordd o'r fawr yn ymgylchedd o'r fawr i'r mwyaf o'r rhan. Mae'r rhan o'r fawr o'r fawr o'r masgrwyddo'i amser o'r gweithio'r rhagorau. is even more important in the months ahead at a time when there is renewed pressure on our public services, burned out NHS staff, backlog justice system, young people who have missed out on education, that we stand up and ensure that we are led by evidence and facts without fear or favour. The first item on the agenda this morning is a decision to take item 3 in private. Are we all agreed? Thank you. Can I now turn to the main business of this morning's meeting? It's a chance for us to consider Audit Scotland's strategic priorities and future work programme. Can I welcome our witnesses this morning? We have with us Stephen Boyle, the Auditor General for Scotland. On a video link, we've got Mark Roberts, who's an Audit Director for Audit Scotland. Can I welcome both Mark and Stephen to this morning's committee? Before I move to questions from the committee, I thank Stephen for providing a written report but also now ask him to give us a short presentation that will outline the strategic priorities of Audit Scotland and the future work programme. Auditor General, over to you. Many thanks, convener. Good morning to all members. I'm delighted to be with you for the first meeting of the new session of the Public Audit Committee. I look forward to working with the committee in the months and years to come. I'm delighted to be with you to have an early discussion with the committee about my priorities and the focus of my work programme between now and into 2022. The last 18 months of the pandemic have been extraordinarily challenging for Scotland's people and our public services. As ever, I want to pay tribute to the thousands of people who provide our public services, people who have kept our services functioning in some times immensely difficult circumstances and at times at their own personal risk. As the committee would expect, public bodies' response to the pandemic shapes my work programme, but equally many of the challenges facing Scotland's public services prior to Covid remain as important and will continue to be subject to audit work. My priorities and plans for the future therefore reflect our planned assessment of the effects of the pandemic on the public sector and continue to focus on issues that were important before the pandemic struck and that remain to be addressed. My paper details the key risks and issues affecting public services in Scotland, my strategic priorities and the reporting that I plan to make over the next few months. At a strategic level there are a wide range of risks and issues facing the public sector. The table at the end of my paper sets out assessment of those risks and issues, but I will briefly highlight what I consider to be seven key themes that I have used to shape these priorities and plans in the forward work programme. The first of those is economic recovery and renewal. Rebuilding and renewing the economy post-pandemic will be critical. This is especially the case as the Scottish budget and the resultant tax revenues are much more closely linked to our economic performance than they have ever been. Further, we don't yet know what the long-term effects of the UK's exit from the European Union will be on our economy or our population. The second theme in our work programme is that of inequalities. Scotland remains an unequal country. Inequalities in wealth, education, health and opportunity persist despite years of vocal commitment and significant public spending aimed at reducing them. Covid-19 has in many cases exacerbated these inequalities. Tackling inequality in all its forms will require our focus and efforts for years to come. Public audit in Scotland has an important role to play in assessing how well public money is being spent to provide better outcomes. This is a major priority for me, and through our audit work, Audit Scotland will have an enhanced focus on inequality matters. An important element of that will also be about capturing people's experiences of public services through our audit work and through their understanding. Thirdly, convener, is the topic of climate change. The recent IPCC report set out the scale of challenge that we are all facing. Meeting Scotland's statutory emissions targets by 2045 and the 2030 interim targets and adapting public services to challenging climate will require massive infrastructural and behavioural change. Public audit will be reporting regularly on the impact public spending is tackling this significant challenge. The fourth theme is that of financial sustainability. The Scottish budget and public spending increased significantly since the start of the pandemic. We have been reporting regularly on the changes to the budget and the risks to public spending over the past year. We will be publishing our next Covid-19 spending tracker later this month. There remains uncertainty about the size of public spending in years to come and how the pandemic will impact on the long-term sustainability of parts of the public sector. We previously commented on the financial sustainability of a number of public bodies in the NHS, the Scottish Police Authority and the challenges that are currently facing local government bodies. Fifth is that of performance delivery. We are already seeing and reporting on the pressure on the performance of parts of the public service before the pandemic struck. In some cases, performance delivery has been severely hampered by the pandemic with the possibility that progress in these may deteriorate further before they improve. Backlogs in our justice system and our NHS are most visible and we will be commenting on the progress that public bodies are making in addressing the system-wide significant challenges. Six is that of constitutional change. There are still parts of the Scotland Act 2016 that remain to be implemented, such as the use of VAT powers and aspects of social security powers. Post-EU exit changes through the UK Internal Market Act and the proposed operation of the shared prosperity funds may shift the nature of the devolution settlement further. We are monitoring what that means for our work and the assurances that we can provide to the committee and the Parliament. Finally, digital transformation. There has been a significant acceleration in the use of digital technology over the past 18 months across all our lives. Digital technology can provide rapid access to public services, potentially in a more convenient way for service users and help us to lower our carbon footprints. There is also a real risk that some people in communities experience reduced access and face exclusion from access to public services. We are also considering the audit response to the ever-present and indeed growing threat that cybersecurity hacks and challenges are facing our public bodies. All of these areas will be reflected in our future work programme. I would stress, convener, that audit remains audit. We will always be focused on the core elements that constitute public audit in Scotland. Is there good financial management? Is our public bodies financially sustainable? Has value for money been demonstrated? How effectiveness have governance and leadership arrangements been? Where necessary, therefore, I will continue to lay in the Parliament section 22 reports on matters of public interest arising from the annual audit of individual public bodies. There will likely be a number of these between October and the end of this year following the conclusion of the audits of the 2020-2021 financial statements. I will also lay section 23 reports on performance audits. As detailed in the paper, work is on-going on performance audits, on investing in skills, replacement ferries for the Clyde and the Hebrides and annual overview of the NHS in Scotland. These will all be published in early 2022. We also plan to look at what happened during the pandemic and after the pandemic across a range of outputs. We will be looking at where and how the pandemic pound was spent in Scotland, over £9 billion of it last year and around £4 million growing during the course of this year—£4 billion, I should say. In the longer term, how effective that spending was. During the process of economic recovery and renewal, and the Scottish Government's involvement and support of that will be critical, we anticipate that this body of work will continue for a number of years to come. In addition to our core audit outputs, we are increasingly producing other types of outputs, including briefings, blogs and web-based updates and analysis. Those allow us to comment on key and emerging issues quickly. They are often desk-based and draw on previous work that we have carried out or pull together material that has already been published from our range of sources. The Parliament's standing orders allow me to refer such publications to the committee, then, of course, the committee may decide how to take evidence on them. This approach is part of our efforts to ensure that we are flexible, agile and dynamic in how we plan and deliver our work and responsibilities. I am joined today by my colleague Mark Roberts, our audit director, who leads on our programme development activity. Between us, we will be delighted to answer the committee's questions this morning. Thank you very much indeed. That was a very helpful introduction to this morning's session. I just wanted to begin by reflecting on some of the lessons from the last session, because this is a new committee, but we need to understand where there are underlying issues that we need to keep fully abreast of. It struck me in looking at the legacy report from the last committee that it identified recurring themes that seem to be common in instances in which organisations had not met the performance standards that were expected or, indeed, where something more fundamental had gone wrong. They spoke of leadership challenges, poor workforce planning, weak governance arrangements, failures sometimes catastrophic with the ICT projects and reflected on the absence of key data and, therefore, a failure to properly measure outcomes. I wonder whether you could explain to us how you plan to keep abreast of those themes and how you expect to be able to continue to explore them in the future work programme. I am delighted to say a few words about that. I am sure that Mark will want to come in as well, if there is anything that I have not covered or anything that he wishes to add. We agree, convener, that the PAPL's legacy report from the previous session is a hugely comprehensive assessment and extremely useful reference point for, I suspect, not just for this committee but also for how we are shaping our work to support the committee's scrutiny. Many of the recommendations and the findings of that report are reflected in our work programme. We see a real synergy between the legacy report and the themes and priorities of our own work programme in the years to come. Some of those issues have been around for a long time and are not easily solved and, nonetheless, the importance of public bodies tackling them feels ever more vital. I might be touching on a few of those. We will be reporting to the committee through our section 22 reports in the months to come that will touch on some of the recurring themes that the committee has explored in recent times. We are cognisant of the fact that it remains important to continue to shine a light and strive for both assurance and improvement. We recognise the twin focus of our work in that regard. We will continue to report on the areas that we talk about in terms of leadership and the effectiveness of governance. The Scottish Government's overarching role in sponsorship arrangements is to support improvement and effective management and service delivery across all the bodies within its remit. We are also talking about, as we alluded to in the introductory remarks, how digital will transform public bodies and the important role that we have as a public auditor in both commenting on how well that is going and drawing on that overarching reach that we have across central Government to support that level of improvement. The last point that I might have made before a pause on that is that we want our work to be supporting improvement and insurance. The point that we are thinking carefully about in the legacy report is that of the recommendations that are made following an audit report, either by ourselves or any conclusions that the committee reaches and publishes. That seems to be followed through. The committee will be familiar—indeed, we are—that you will often ask public bodies and accountable officers when they appear before the committee whether the public body accepts the recommendations and findings in the audit report. However, we want to close that loop that goes beyond just that verbal acceptance to actually then seeing those recommendations being delivered. The timeliness of a recommendation of the convener can change over time. We recognise that an audit report can be a snapshot, as it were. Some of those recommendations may evolve in their relevance, and we will always be flexible in that approach. However, through our work, we want to provide assurance to the committee that those recommendations that impact of public audit is happening. I hope that that touches on a number of the points that the convener raised, but I will maybe stop and see if Mark wishes to add anything. Mark Roberts, do you want to make any further points? Thank you, convener. Just very briefly, you mentioned in posing the question of workforce planning, and I think that is absolutely right. That is a theme that we will continue to pursue as we go through. I will just add to that. We previously stressed across a number of public bodies and in a number of reports the importance of long-term financial planning, and just making reference to the Auditor General's initial comments about the importance of financial sustainability. I think that that is going to be another theme that we will continue to want to pursue over the next few months and years. Thank you very much indeed. We have identified that the follow-up and making sure that there is not just a one-day inquiry into the performance of an organisation, and then we all move on. The follow-up is something that we are keen to work with you to make sure that we are regularly updated on progress that has been made. I turn now to a further number of questions. I would like, at this point, to bring in Craig Hoy. Thank you for setting out your programme and priorities so clearly for us this morning. You talked, obviously, about Covid and the work that you are doing following the pandemic pound, and I think that the committee very much welcomes that. As you identified, it is £13 billion and counting. Can you tell us more about how you plan to track that spending? That has taken place to mitigate Covid, and how you will seek to assess how effective that spending has been. We have published two Covid tracker reports to date that have set out the quantum of money that has come to Scotland, both by spending decisions of the Parliament and the Scottish Government, and as a consequence of the flow of funds through Barnett consequentials from the UK Government to the Scottish budget. Since the start of the pandemic, I am alluded to that we are republishing the third iteration of that later this month. That has really been characterised by briefing papers and largely factual analysis. Not in any way a straightforward or simple undertaking, but given the scale of funding that has come, the sheer volume of spending announcements that have taken place. I need to check my memory, but certainly over 100 individual changes in spending announcements during the course of the last financial year. What we sought to do through that exercise was to inform our understanding through the previous committee about how much money had come to Scotland and an indication of how it had been spent. Over time, of course, we need to move from what has been spent and then to think about how well that money has been spent. We will do that through two main ways. We will be publishing a section 23 report of a performance audit in the spring of next year that we will look across both central Government and working with my colleagues in the Accounts Commission to draw in how well that money has been spent in local Government bodies too, so we are really uncovering the panoply of public services in Scotland. A crucial reference tool will be through the annual audit work of individual public bodies. Last, when the pandemic first struck in March of 2020, we were really only two or three weeks away from the end of the financial year. Very few of the monies and transactions were captured in the annual audit work that was then undertaken. A year on, we now have that data and will be able to record all those public bodies that have received Covid-related monies and begin to report through our audit work how well that has been spent. The last thing to say is that we do not think that that will end on the back of the 2020-21 audit work. We expect that there will be a long tail to Covid-related spending and our associated audit commentary on it in the years to come. In follow-up, anybody who puts their television set on will see the impact that Covid has had on our courts, schools and hospitals. Can you explain the extent to which you anticipate that certain sectors, such as the NHS, education and the justice system, have been impacted by the Covid-19 pandemic? What work will you be undertaking to specifically track their recovery in future months and years? Thank you. I will maybe start and invite Mark to supplement anything that he wishes to add. Those three sectors are the most visible, probably what we have seen across education, justice and our NHS, most directly affected, the spotlight of how people access public services and how it has been impacted. In terms of the NHS, we will be publishing our annual NHS overview report in early 2022. In that report, it is essentially a Covid-focused report commenting on how well public money is being spent in our health services, the service delivery performance of the NHS, and drawing in the NHS recovery plan that the Scottish Government published last year. Referencing also how that interconnects with some of the existing challenges that the NHS was facing prior to the pandemic, Audit Scotland had previously commented on, as it has done in its annual NHS overview reports, but in a range of other NHS-related outputs about some of the challenges that existed around IT and workforce planning in the NHS. We will do that there. Of the other two sectors, the committee next week will be presenting our reports and briefing the committee on education outcomes, which was a piece of work that I will, of course, say much more next week when we brief the committee on it, but that also touches on the impact of Covid-19 on our education sector. Again, maybe referencing briefly the previous discussion with the convener is that, given the fluid environment, none of those reports in themselves mark the end point of the conversation. We have a range of options available to us in terms of impact and follow-up, and we will continue to track and monitor them. That is one of the real value of what exists to be a flexible work programme that allows us to take stock on a regular basis and capture thereafter any changes or additions that we want to make. I have not mentioned justice, Mr Hoy, but I will maybe invite Mark to do that, given his familiarity with the sector. Thank you very much. Just on the justice sector, we published a briefing on sustainable alternatives to custody a few months ago. In the longer term, we have plans to look at that part of the justice system as a performance order. Clearly, as we see and as Stephen says, that monitor what is going on in terms of the backlog in terms of, in particular, court cases going through, that would be something that we may wish to respond to through future audit work. Again, as we are now able to flex and alter our work programme much more quickly, we can assess what is going on as the long tail of the pandemic plays out. Colin Beattie, you have a series of questions. Thank you, convener. Our journalist has three areas that I would like to focus on. First, in connection with the exit from the European Union, in your opening statement, you made some comment on that. On the business planning day, you said that you were still awaiting clarity on where audit responsibility would lie in relation to the changes that are going to occur. That is still an on-going process because there are still parts of that agreement to come into play. The UK internal market and some of the existing devolution areas are currently a little bit in limbo. I am wondering what sort of discussions you have been having, presumably, with the NAO or whoever, in connection with how these responsibilities are going to be divided up, whether there is still going to be a role for you in there for things such as the UK-shared prosperity fund, because it is unclear to me at this point how that is going to be administered, where it is going to be administered and, of course, all of that leads on to who does the auditing. I wonder where you were on that. How far you are in those discussions? Is there any clarity at all or are you in limbo like everybody else? I will do my best to shine any further light on the matter. You are right. We have identified the UK exit from the European Union as a theme for our work. On the topics that you mentioned, that is really where we are focusing our current attention. Before the UK exit from the European Union, Audit Scotland audited the common agricultural fund as part of a consortium led by the UK national audit office. Structural fund arrangements were subject to audit by the Scottish Government's internal audit auditors reporting to the European Commission. Following the UK's exit from the European Union and the planned arrangements for the UK-shared prosperity fund, as I mentioned to the committee in private session on the business planning last week, we are tracking and monitoring it and having discussions with the national audit office. After the meeting with the committee last week, I have since had a subsequent discussion with the national audit office's controller and auditor general about the shared objective that his office audits Scotland, and I would presume extending to the other UK audit agencies, work closely together, not just to await but also to shape the contribution that we can collectively make to auditing the arrangements that are decided by the UK parliaments in this respect. We think that we have an offer to make based on our experience and our involvement in this work, and that that is known and understood by ultimately who will be the decision makers. Unfortunately, all that is not a definitive position yet, Mr Beattie, that says that I am clear on how this will ultimately be audited across the UK. What we are clear on is that we have an offer to make that we are ready and willing to do, so once we are able to report back to the committee on how we expect that to be taken forward. So at this point you are really unaware of what your role in the future is going to be once all this settles down? Like so many other people, we are awaiting clarity. We continue to have a legacy arrangement in respect of the common agricultural funds in the UK in respect of some of the capital schemes that are still operating through the Scottish Government in conjunction with the European Commission, but in terms of the future arrangement and how the auditing of the UK share prosperity will fund, aspects of what that will mean for the levelling up fund and how and if that will apply directly from the UK Government to local authorities in Scotland. We are participating in the discussions and making known our offer and our interests, but like many others we do not yet have exact clarity as to how that will operate. It was actually going to raise cap funding. That continues into next year, does not it, 2022? Presumably you will continue your present auditing up to that point by which stage. I am assuming that there will be some clarity as to how that funding is going to work. Yes, we are continuing to audit cap funding and I expect to do so for probably another couple of years in respect of many other funding arrangements that contain revenue, annual funding to farmers and crofters, but there is also a capital funding element of it to support farm buildings and other infrastructure works for relevant farms and farming businesses. That will continue for another couple of years yet and we will continue to discharge our responsibilities on that point too. What the future holds is probably a similar point to the successor arrangements across all European funding. We are ready and willing to participate in those conversations, but unfortunately we are not yet able to provide clarity as to how exactly that will operate. Obviously this committee is very interested in how the audit structure is going to work going forward, but there seems to be an awful lot of gaps and at the moment you seem to be in the same situation as we are. As we say, we are awaiting clarity. We have made known our interests and, I think, based on our experience in this year, we think that we have got an offer to make and to support public scrutiny and assurance, but you are right, we do not yet have the clarity that we are looking for. Now, assuming that some clarity has come somewhere down the line, are you ready to carry out any additional work that might be necessary to put that in place? Assuming that there is a role for you in this, that there is going to be some function of this within Scotland? I think that the conversation that we would probably want to take at that point is to gauge the size and scale and scope of those responsibilities, whether that is something that we can accommodate within our existing staffing and resourcing arrangements. If it is felt appropriate through discussions with the Parliament, the Scottish Commission on Public Audit and our board, we would look to have those further conversations if it meant a significant shift in the scale of the audit activity that was required. As I say, Mr Beattie, we are ready and willing and I look forward to those discussions. I am guessing that Covid-19 has kicked that into the long grass in terms of measuring the outcomes and so on, but in your report or in your briefing paper you say that you talk about the financial pressures that are having an impact on performance of some public's services and the impact on delivering these national outcomes. Given the comprehensive impact of Covid-19, it is probably not surprising, but maybe you could give a little bit more background on that. Happy to, and again I will invite Mark to follow with any contribution that he wishes to make. Audit Scotland has said many times, both my success and myself, that we are supportive of the national performance framework. We think that it makes a welcome contribution to the transparency, parliamentary and public awareness of how well public money is being spent. It is a core part of our purpose that we are not just auditing what public money is being spent but what outcomes and what difference it has made to users and public services. We agree, Mr Beattie, that the intended outcomes that are set out in the national outcomes and the national performance framework will suffer as a result of the pandemic. We have seen some of the challenges already across our public services in delivering those outcomes. What matters therefore, both in terms of the financial sustainability element of it, but as the Government and public bodies implement their recovery and renewal arrangements, that is reflected in realistic but also stretching national outcomes that is reviewed appropriately and set out to see what Scotland can achieve. Factoring in none of this is easy but what the multiple moving parts that exist, how public services will need to change and evolve, tackle the challenges of inequalities, climate change and digitalisation access to services. We will continue to track the national performance framework and national outcomes closely through our work. We can expect to see quite different national outcomes, but again, for us commenting that they are realistically reasonable, they are stretching and how well public bodies are achieving them. Mark Roberts may wish to say a word or two more on that. Just to echo what Stephen said in his introductory comments, there is a blend of things that we all want to pursue. First, the progress against those outcomes. We were seeing things coming under pressure prior to the pandemic. Obviously, there has been the massive and acute shock of the pandemic, which has occupied a huge amount of Government and public sector time and rightly so. What we want to do in terms of our order of responses is to continue to keep an eye on those long-term outcomes and how well those have been delivered. Our work will continue to be a blend of looking at those long-term, in some cases intergenerational type issues and outcomes in which the national performance framework seeks to secure and also looking at what has been the short-term impact. I think that it is just characterising our future workers as a mix of the long-term and the short-term. No doubt, your reports in the coming months will reflect some of those strands. Just finally, I was going to raise the question of the NFI, which is due next year. As you know, this committee in the past has offered Audit Scotland support in terms of strengthening your hand with that, because there was perceived to be a weakness that this fairly useful tool, in fact, is not mandatory. It seems extraordinary that councils and so on can decline to take part. It also, if you remember, we talked about other public bodies who might benefit from being part of that, who were not at this point included. You know, you do not have the power to compel and I think the committee had a feeling that maybe you should have. I wondered if you would have further thoughts about that, how you are going to make NFI really effective next year and how you are going to deal with bodies that cannot be bothered to take part. Given the fact that there has been all the Covid and everything, those bodies have been under stress, under strain, this may not be a priority for them. How are you going to handle that? Thank you. I might say a word or two first before I address the specific. Broad risks have increased exponentially during the course of the pandemic. The scale of money that has come to Scotland that our public bodies have spent at pace, our memories fade quickly but we all recall the urgency that was happening across all our lives in the early stages of the pandemic and the need for money to get where it needed to be, for service to be delivered at real pace. Through our audit work, as I mentioned to Mr Hoy, we will be carrying out that assessment through the annual audit activity and assessing how well that money has been spent. There are limitations, although fraud, by its very nature, can be difficult to detect and can last for periods of time before being assessed. There are a range of factors. We have published a number of publications highlighting the need for effective and good governance for audit committees and boards to be alert to fraud risks. Some of the warning signs that typically exist in a fraud context mention introductory remarks about the cyber and hacking risks that pertain to fraud. On the specific point that you made about the NFI, we remain committed to the national fraud initiative. We think that it represents a useful and effective method for those bodies that participate. Forgive me, Mr Beattie, but I have forgotten the exact number of fraud that has been detected over its lifetime, but tens of millions of pounds—if not hundreds of millions of pounds, I think that I am saying—has been saved to the public purse. We are talking, as those points you made about, at the margins of public bodies or quasi-public bodies who do not voluntarily participate. Of course, we would like everybody to participate and we would welcome further conversation about opportunities and arrangements to do so. It is something that we can take away for more conversation with our UK Audit Agency partners and the Cabinet Office in UK that coordinates all the national fraud initiative. Whether that leads to mandatory participation, I hope so, and it is something that we continue to engage with on the committee, but I stress that the front risks that public bodies are facing have grown exponentially. We would welcome any additional powers and focus on it to tackle those risks. Many members of the committee are new and not familiar with the past history and the discussions that have taken place. However, I am pretty sure that it would be productive for that discussion to take place with a view to picking up where the previous committee was and, hopefully, agreeing to offer you that support. The previous committee was willing to approach the Scottish Government with a view to making this compulsory. What was unclear was what the Scottish Government has to do to make that effective. Is legislation involved? Is it just guidance? How strong does it have to be? I guess that it could be either or both of those things. Probably one for us to take away and pick up with the committee after today's meeting and following further conversations with the Government. As the committee will be aware, the Government has a range of tools with which to require participation or co-operation through guidance, legislation, incentives and funding arrangements to secure participation. It ought not to be beyond the realms of possibility that this could be resolved, given all the other challenges that have been overcome over the past 18 months. It is one that we would welcome a little bit of time and then report back to the committee on how best to take it forward. I think that it is something that we would want to build into our work programme to return to this, because it is something that clearly is a matter of concern and interest. Auditor General, is there a register of public bodies in Scotland that do as well as those that do not take part in the national fraud initiative? There is, convener, that we are very clear on which bodies are and are. It is the majority, I should say, that there are some local factors in terms of the size of some public bodies and the nature of some. We have had discussions with the committee previously about some of those public style bodies that are outside of the traditional identification criteria of what is not a public body. We are talking about a handful, but, nonetheless, we would welcome the committee's participation, interest and influence on that, and we will do likewise. I turn now to Sharon Dowie, who has a series of questions to ask. I would like to ask a couple of questions on the section 22 reports. I will not ask you which bodies might be subject to the section 22 reports this year, but can you give us an indication of how many section 22 reports you anticipate laying before Parliament and also if you think that there will be an increase in the number this year, and if so, is that directly related to the Covid-19 pandemic? When we produce a section 22 report, it is intended purposes for myself as the Auditor General to bring to the Parliament's awareness matters of public interest that have arisen from an annual audit of a public body, that the auditor has highlighted to me through their annual audit report that accompanies their audit opinion, their certificate on the financial statements. Historically, we have produced a varying number each year for the Auditor General to the committee depending on the circumstances that auditors have found and wished to highlight. There is no cap as it were on how many we produce across the 200 plus public bodies that we audit, but it is tended to be in the region of perhaps five to ten section 22 reports each year. Some of those section 22 reports have then become almost an annual feature given the progress, so the committee may recall that the Scottish Police Authority, for example, received seven or eight, as I recall, section 22 reports since it came into existence. Section 22 report can have a reputation as it being a what went wrong style report, and for some cases that is undeniable. There is an opportunity for me to bring to the Parliament's attention where there has been a disruption in financial sustainability management governance, and we will continue to do that, but it can also have a different flavour in that. I think that that is most evident through the annual section 22 report on the Scottish Government. Given the scale of public spending and the systemic importance of the Government, for the past seven or eight years now, my predecessor and I have produced an annual section 22 report on the Scottish Government, and I will continue to do that and make that commitment. I do not have a precise number that I am able to share today, Ms Dowie, but we can expect that event will be a marginal increase in the number that we prepared last year. Some of those, to answer your question directly, contain Covid-related factors that are in the public interest in reporting, and some of those are just local specific factors that are pertain to that body. Where there are more wider thematic issues such as digital and sponsorship, we will also comment on those factors, too. As I said, we will be bringing the first of those reports in October and a number thereafter through to the end of the year. You touched on it when you mentioned that it is known as a what went wrong report, so that is my next question. What are your views on publishing a section 22 report when the annual audit has picked up exceptional work that could then be used to highlight good practice across the public sector? I am very supportive of that. There is an important role for us not just on the what went wrong, not just on providing assurance. I would use the catch-all in the public interest. The public interest is also about sharing good practice, where there has been exceptional service delivery and where there has been real improvement in a public body. That is one of the features of I remember a conversation with Mr Coffey in that point. There is a point that is important to provide a sense of closure on a public body, particularly one that has been through challenge and has come out and delivered improved financial management service delivery, that we allow for those arrangements. Section 22 is one of the vehicles that we can do. All the annual audit reports are laid before the Parliament for those public bodies that they apply to. There is some thinking that we have engaged with the committee on, just that we can shine a light on those circumstances. Where there is a real exceptional level of public service performance and service delivery, section 22 comes into that category. That is good. We will change it to a what went right report. One other thing that I wanted to look at was a quick question in the plan performance audit reports. Obviously, there are quite a lot of problems with ferries that are still causing issues for residents that stay in the islands, or friends and family that want to visit them for the mainland, and with us being encouraged to have staycations that are causing problems for their local economy where people are trying to go on ferries. Could I ask about the scope of the current inquiry into the new ferries and when you plan to report on it? I know that you have put it down as March 2022, but it is just to see if you think that we will be on track to get a report then. That is also quite urgent. Thank you. I am happy to start that and I might draw in Mark's understanding of our arrangements 32. It is an area of huge public interest, the successful delivery of the ferries for the Clyde and the Hebrides. We understand absolutely the need for this important lifeline service provision for the communities, families and visitors that rely on them, but also the scale of public spending that has gone into the delivery of the ferries and the growth in public spending that has been required, coupled with the delay in the delivery of them. In shaping our work, we will be looking a bit of the history of how we got to where we are, what had been intended through the delivery of the contracts with the Yard and the arrangements that have subsequently followed. Members may recall that one of the predecessor committees in the last session of the Parliament, the Rural Economy Committee, also conducted its own investigation into the topic and made recommendations to Audit Scotland, suggesting that we also ought to look at it. We are aware of the detail of that. We are using that to shape our work. In terms of reporting timescales, we are on track. We do not intend to deviate from that timescale. If that changes for whatever circumstances, we will report back to the committee, but it is not our expectation that we will deviate from that at the moment. I will just check with anything that Mark wishes to add. No, nothing further to add. I was merely going to say that I spoke to members of the Audit team earlier in the week and we remain on track to publish it in March next year. I now turn to Willie Coffey, who has a series of questions. Thank you very much, convener. Good morning, Stephen. I was really pleased to hear that discussion just prior to this about the nature of Audit, and it is not just about identifying failure, it is about identifying successes as well. Sometimes over the years, convener, I felt that people are scared to come to this Audit committee. Surely not. It should not be like that. It is about identifying opportunities for improvement. That kind of agenda, that is very much my agenda with the Audit. I am really pleased that we will be able to shine that light on good performance in the public sector and hope that other parts of the public sector will embrace that. I am really looking forward to this session in that regard, convener. I wonder if I could just briefly nip back to Craig Hoy's question on following the pandemic pound. I wanted to ask you, as part of that work, will you also look at the systems that we used and deployed to distribute funds to the public sector, businesses, communities and individuals, and so on? My experience over the past 17-18 months from a local perspective has been very much frustration in the part of businesses, communities and the public sector in gaining access to some of the Covid funds and the schemes that were in place. Will you look at that to see if we got those systems right and hopefully we will not be adopting schemes like this in the near future, convener? It is important that we look at that to make sure that we got those processes correct. I am happy to say a wee bit more about our work in that area. As well as the report, the section 23 report that we will be producing in May of next year that will cover Covid-related spending across Scotland's public services, we will also be producing a briefing paper on some of the economic implications and the support that businesses have received later this year or maybe early into 2022 to support the section 23 that will follow thereafter. Like you, Mr Cofie, we have all been aware of some of the concerns that businesses have raised about the pace, the arrangements and the access to some of the much-needed financial support that came from the Scottish Government. We are looking at aspects of that during the course of that briefing paper. The wider judgments will come through the section 22 report and beyond, but in its general sense is that—maybe just to connect to your introductory remark—there is a need for innovation in public services. There is an audit dimension to that, too, in that we want to support assurance and accountability, but not in a way that strangles both innovation improvement that is so needed in our public services—the rapid digitalisation that will have to come. We will be commenting on all of those cross-cutting themes over the years ahead, but certainly the specifics will be doing both the briefing paper and the section 23 report, which will cover, I hope, the areas that you are interested in. I turn to the exciting topic of the Government's consolidated accounts. Some of the recommendations from our predecessor committee touched on themes about how we invest in support for private companies and providing whole sector public accounts. Those themes cropped up from time to time in the discussion about that. What do you see? Has the Government made any progress in addressing those issues and how do you see that work being taken forward? Members of the committee may recall that there was a—when your predecessor committee took evidence earlier this year from the Scottish Government on this topic—you heard again a strong commitment to the importance of a Scottish public sector accounts for Scotland, but reasonable evidence that the pandemic and its implications had interrupted the progress of producing a really necessary missing component of financial reporting in Scotland's public services. Audit Scotland, my predecessor and I have made the case many times that Scotland has an incomplete financial picture of all its assets, liabilities, revenue and expenditure, and it needs to have that in order to support parliamentary scrutiny and public understanding. Also touching on some of the decisions that Scotland as a country will want to make in the years to come, we have touched on in our paper some of the aspects of the longer term financial sustainability, the choices, the liabilities and opportunities that exist around areas of interest that the committee has touched on in previous years around private finance initiatives, pension arrangements for public services and none of that exists in one single source. So I am not trying to make the case for it again, Mr Coffey, but I hope that that helps. But there is a need for Government to pick up the pace and produce it. We are continuing to engage with it and, as ever, we have welcomed the committee's support in its legacy paper on the need for this to happen. We expect to see progress this year. Okay, thank you for that one. If I could turn to one of the comments that you made about monitoring performance, one of the key functions in Audit Scotland is to close the loop to make sure that your recommendations are carried out and implemented and we and the public can see the benefits of that. How do you envisage that work in D&T? Do you plan to do it by report by report or do you envisage us and the public to be able to gaze, to dip in, to see the performance of public bodies that you look at for themselves to ask questions and perhaps to monitor how they are performing or is it down to you and down to us to do that, do you think? I think that there is a range of factors to it. Most fundamentally, there is an illness on all public bodies that they themselves are clear and transparent about how they are effectively discharging their use of public funds. They will do that through a range of factors. The most traditional would be their own annual report and accounts that are subject to independently appointed auditors by myself and the Accounts Commission, and that they are transparent in their operations. They hold meetings in public that are subject to good governance, leadership and all the factors that you expect of a well-run public body that can show how it is spending money. As you say, we have produced reports on public bodies over many years. We have a range of tools at our disposal, as well as the report, briefing and evidence sessions that the committee chooses to hold with accountable officers. We also produce impact reports or follow-up reports in a period after the initial recommendations to assess what happened next. We will continue to do that, mark my wish to come in a moment to say a bit more about how we expect that to proceed. I think that the other thing that we touched on in passing this morning is about recommendations and the effectiveness of those recommendations that come from public audit. We are really committed to that. We would like to see that happen a bit more quickly. As I mentioned, we have heard of accountable officers making the commitment and acceptance of the recommendations, but that does not turn into a one-off event that can close the loop, as you suggest. There are options around that, whether that is on a report-by-report basis or whether that is across more thematic areas. I think that it will probably be about the horses for courses thing, if I am being honest, as recommendations change where reports are related. I think that it also plays into options for the committee, too, about where, if you are seeing recurring themes from audit reports, as predecessor committees have done, they have taken the opportunity to step back and say, is there a wider issue here that should be drawing evidence around tables, as it were, from a range of sources? We are keen to progress on all of those fronts, Mr Coffey, to ensure that that accountability loop and improvement are sustained. I will just invite Mark to say if there is anything else that he wishes to add. Thank you. Yes, absolutely. It is a really important bit of the system that we want to try and develop. As Stephen said, we monitor the impact of our reports in a variety of ways and report on that in a variety of ways. We are in the context of the predecessor committee's legacy report. We are looking again at how best we do that. I think that there is a really important conversation between the committee, with the Auditor General and Audit Scotland and the Government about how best to do that. It is complex. There are a range of different types of recommendations that we make. Some are very broad and strategic and will take a long time to implement. Others are much more specific and much more focused, so there is not one size fits all in terms of how we do it. We want to have a think about that in discussion with yourselves and also in discussion with the Government about how we can set up the most effective systems to it. However, as Stephen said, we are absolutely committed to it, so this is a key part of the system for accountability that we think we can enhance. Good. Thank you for that. Probably lastly, for me, if I can. Yes, of course. Stephen, you mentioned one of your key themes, the whole digital transformation issue that you came in at the end of your presentation on that. In many ways, the digital technology during the pandemic probably saved a lot of jobs and a lot of businesses in the way that it adapted quickly to use the technology. The capabilities of the technology were always there, but we did not perhaps embrace them and use them in those particular ways. I am interested in what your approach from an audit perspective will be to looking at those issues and what you hope to get out of that. Thank you for the question. I will say a word or two, and I will swiftly hand over to Mark. As well as our programme development responsibilities, he is very closely involved in our digital auditing arrangements, too. I echo your observation that the technologies existed, but we did not use them. For good and for bad, I would say that perhaps we do not yet know the need for equalities impact assessment factors that we have touched on. Public worries will want to think carefully about how they use digital technologies in the years to come through their own digital strategies, assessing how well they have been used over the course of the pandemic, for all the good that it has brought about swiftness of access, sustainability of public services. We know and have heard examples of where a very quick shift to digital has excluded some access to services, whether it is through GP appointments and so forth. We are drawing in those factors. We are also using our own digital auditing strategy as to how we, as public auditors, are using technology to enhance our own assurance and reach into public services to provide that improvement and assurance focus to our work. I will certainly say that Mark will be better pleased just to give the committee a bit of flavour about how we are best doing that. I think that, just to restrate what Stephen says, what we have heard from public bodies is that the pace of change in terms of the use of digital technology has been extraordinary over the last 18 months. Anecdotally, we have heard people talking about things that we should have taken five years of having been in for five months, if not quicker than that. I absolutely recognise what you are saying, Mr Coffey, about the speed at which things have happened. I think that it is fair to say that our overarching observation was that, across the public sector, public bodies vary in the extent of their digital maturity and the extent of which they are using digital technology. There are some that are very much on the front for others, which are having to catch up very rapidly. Stephen mentioned earlier about digital exclusion, and that is an area that we are absolutely planning performance audit work in the medium term. We are having conversations and are thinking very hard about how best to do that. Again, we are conscious of the risks that the shift to greater use of digital technology is going to potentially exacerbate inequalities that have already existed and prove challenging to some people and to some communities in accessing public services. In terms of our future work, I think that you will see digital being a thread that runs through a variety of different types of performance audit work. I will go back to the justice system that we spoke about earlier on. In future performance audit work in that area, we may well be looking at the use of digital technology and digital courts, virtual courts and how that is being used, how effective that is for users of the court system and how effective it is in trying to manage the backlog in court cases that happens. There will be specific work, in particular on highlight potential work on digital exclusion, but it will also make an appearance in a number of different performance audits as a key thread in terms of how public services are being delivered. That is interesting. In the future, if the public sector businesses are otherwise choose to continue to embrace the digital solutions that were put in place during Covid, will you be looking to see if they are having those impacts on exclusion and so on? That is maybe not a typical audit perspective, but is that a key feature to make sure or to look to see if people are more excluded than they were perhaps before digital technology was embraced to the degree it was during Covid? Absolutely. It is one of the risks that we want to look at and want to assess to see to what extent for particular groups, particular communities that has been the case so very much. Going back to your earlier point about highlighting good practice, we are trying to capture examples of things that we are seeing over the past 18 months, where there has been really good, really progressive practice and trying to highlight that as well. That will be a strand of our digital work as well, so there will be both sides of that equation. That is great. Thank you very much. Did you want to come back in today? Thank you, convener. I agree with what Evan Mark said, Mr Coffey. I would add, of course, that it is a real honour on public bodies to where they have implemented technology at pace and changed the nature of service delivery and access arrangements. They will also want to review how well that has gone and make the necessary accelerations or adjustments in consultation with their service users and their governance arrangements. That is quite a substantial change in how we operate. There is a bunch of evidence for that. Will you look at how we did the work that we did? I think that we are very mindful of the scope of our work in the Parliament and that something would be happy to discuss with the parliamentary authorities if that was felt appropriate. Some of us are more concerned about whether people can access their GP and what their sense of that service is and has been and might be in the future. Craig Hoy wants to come in with a brief question related to that area. It is a little bit unrelated, but one thing that has not come up today is the Government's plan for the creation of a national care service. When we last talked, we discussed the role that Audra Scotland might have in relation to that. The First Minister called the proposed national care service this week perhaps the biggest public sector reform that this Parliament has ever undertaken. Given the scale and scope of the proposed national care service, which could touch adult social care, children's services, social work, drug and alcohol services, GP provision and the criminal justice system, what role do you see Audra Scotland having in relation to the development of that policy in the national care service so that we can achieve good outcomes? Don't in perhaps five or ten years time be producing what could be one of the largest, what went wrong reports in the history of the Parliament? We recognise the significance of the extent of public sector reform that the national care service is proposing. Clearly, the consultation is on-going at the moment and the timescale suggests that this will take a number of years to go through full consultation before the new arrangements are settled. We have some history, specifically with health and social care integration. We have produced a number of reports already that the predecessor committees have considered. We have commented quite clearly about the lack of pace with which health and social care integration had made in Scotland, the lack of changing outcomes that were necessary for users of health and social care in the country. I would say that there are parallels to our involvement in other areas of where there was significant public sector change, perhaps most notably recently with the introduction of new powers to Scotland following the Scotland Acts. Our engagement then led to the social security, Scotland's creation and adoption of new social security powers in a country that Audit Scotland was around that work in a quite a different way than perhaps a traditional audit voice had been heard. As you rightly say, Mr Hoy, we weren't keen in being in the place that we come along a number of years after the implementation of it. With questionable value, I would say that that is where the auditor would be. We would much rather be alongside the implementation and development of policy. It is mindful of the appropriate boundaries of it, but we can comment upon the progress of implementation. We are thinking very carefully about tracking the consultation and the responses. For us, it is one of the benefits of the agile programme that we do not have to wait six to twelve months to refine our programmes. We can do so quite quickly. I fully expect that, when we are next in front of the committee talking about our programme, once we are clear into 2022, we will have a comprehensive programme of work that will last a number of years and reporting steps therein on the new national care service as it progresses. Thank you. Coming towards the end of this session, you mentioned agility and new ways of working. You have explained in the written report about the move towards blogs and briefings. I suppose that my question is that Audit Scotland, in the last two decades, has built up a very powerful reputation for being authoritative, forensic and making recommendations that are clearly evident and sled. My first question is therefore, how are you going to safeguard that reputation in a world of blogs and briefings? Secondly, how do you see the mechanism working for referring that work to the committee just to reassure us that there will be ample opportunity for us to work with you and scrutinise things that you will uncover through those routes? I will maybe address the first part of your question, convener, and Mark. I invite him to talk about the referral arrangements and the specifics of the legislative powers around our work. Our thinking on the need for an agile programme had been in place before the pandemic, and we had moved in that direction over a number of years. Briefings and blogs had become a component of our outputs since probably the last five or six years that gave us the opportunity, both my predecessor and myself and colleagues through blogs, to comment on areas of public audit interest and performance, often to signal future audit work. For me, it is not an instead of, it is an addition to, if we can characterise it in those terms. In particular, our briefing papers, as we have done through the Covid tracker, perhaps the best example, as the pace of that money was being spent, we are not in a position to comment how well that money has been spent and has value for money being achieved. Some of those judgments can take a period of time to reach. They absolutely endorse the point that you make. They have to be evidence led, so it is a complementary range of outputs from our perspective, always rooted in robust evidence analysis and judgments that are formed thereafter. For me, that feels like the appropriate place for us to be. The alternative would be that the public auditor would have remained silent on many areas of public spending and interest for a period of huge increase in public spending and focus on public services. For me, that feels like the right place for us to be, that the additionality, as opposed to pushing out some of the robust performance auditing, as ever will keep that under review. That character again, the nature of this more flexible work programme, allows us to do those things and draw in events into our thinking, along with the risks and priorities. I may pause for a second to invite Mark, if he wishes, to say about the nature of how that flows through to the committee and the choices that the committee then has about how to use our work in any briefings that you wish to take on them. The way in which we envisage the process of working is that the Parliament's standing orders allow the Auditor General to refer material relating to audit work and to account to the committee. In discussion with the class, we propose that the Auditor General writes to you, convener, when we have published a new briefing or a new blog, and to highlight that that is now available in public domain. Should the committee decide to pursue that and to take evidence of it, we would of course be very happy to support that and provide any additional briefing that we can. I will go back to your comments about the evidence-led nature of our audit work and the reputation that was built up over the last 20 years. All the new materials that we exist within our existing quality control framework—we have a system by which facts are checked with audited bodies where appropriate and so on and so forth—we are very confident about that. That remains a very much an evidence-led approach to getting material out, but it allows us to do things more quickly and more sharply, as Stevens has described. On that note, I thank Stephen Boyle and Mark Roberts for your evidence this morning. It has been extremely illuminating and very helpful for us to understand your priorities and your work programme, which in turn will feed into hours. I thank you both for your time this morning and can I now close the public session and move to private session? Thank you.