 Welcome to the second meeting in 2023 of the Scottish Commission of Public Audit. Two of our members, Sharon Dewey and Mark Russell, are attending remotely today. The first item on our agenda is to agree to take agenda items 3 and 4 in private, are we all agreed? The second item on our agenda is to take evidence and audit Scotland's budget proposal for 2024-25. Members can find a copy of the budget proposal along with a covering letter from the Auditor General in paper one of the meeting papers. Welcome to the meeting, Stephen Boyle, Auditor General for Scotland, Alan Alexander, chair of the board of Audit Scotland, Martin Walker, director of corporate support and Stuart Dennis, corporate finance manager at Audit Scotland. I would like to invite Professor Alexander and then the Auditor General to make short introductory statements. Good morning to you and to the members of the commission. As usual, we are very happy to talk you through the proposal and answer any questions that you have. As I don't need to remind you this year, Audit Scotland, the Auditor General on the Council Commission published their joint statement of purpose public audit in Scotland. This sets out our vision for public audit, our mission and the four outcome areas where we want to have a measurable impact by 2028. We have also published Audit Scotland's corporate plan for the period, which explains how the organisation will deliver on those ambitions. Public Audit Scotland and the corporate plan set the context for our operational and financial planning over the next five years, and thus the context and timeframe for the considerations today. Alongside public audit in Scotland and the corporate plan, we have also finalised a new partnership working framework between the Accounts Commission, the Auditor General and Audit Scotland. The budget supports the shared ambitions and operations of all three, and the Accounts Commission has had assurance from both the Audit Scotland budget setting process and from its interim chair sitting on the board during that period. While that proposal was approved for submission to you, over the year 2024-25, we will build on the huge amount of work already done in recent years. The commission's support has been invaluable in that, and we are very grateful for it. We will work to maintain and increase the impact of our work and its continuing relevance. All of us here today are well aware of the intense pressures on public services and finances and the external circumstances affecting us and the bodies that we audit. That has been at the centre of the governance of the budget process at Audit Scotland over the last five months. In that kind of environment, robust, independent, relevant public audit is crucial. If we are to achieve our ambitions, we have to continue to modernise the way we deliver audit and how we work while protecting the proven and resilient Scottish public audit model. The model has thus far protected Scotland from the significant problems in public audit elsewhere in the UK. That, of course, is reassuring to the public sector in general, but we cannot and will not be complacent. Over the next five years, we will build on and enhance the Scottish model and the quality assurance and scrutiny that it provides. That budget, as well as being the operational budget, is year one of that programme. With your permission, I will hand over now to Stephen Boyle as the accountable officer for Audit Scotland. Many thanks, Alan. Good morning, chair and commission members. Alan has set out the context for our budget proposal this morning, together with Audit Scotland's work over the coming years, namely to deliver public audit in Scotland and drive measurable change across our four intended outcomes. Over the past year, we have continued to deliver the annual audits of almost 300 public sector entities, as well as performance audits on matters of significant public interest. That has not been easy. I would like to take the opportunity to thank my colleagues in Audit Scotland, as well as those in the firms that both the Accounts Commission and I appoint to deliver public audit. Our draft budget proposal today supports the delivery of the work that we do in the on-going, challenging financial environment that all public bodies in Scotland operate in. The volatility and pressure that public finances face not only inform the work that we do, but also how we operate as an organisation. We will balance the on-going delivery of high-quality independent audit with an audit modernisation programme, ensuring that our audit approach remains fit for purpose in the years to come. Our resource requirement for 2024-2025 is £13.2 million, an increase of £1.03 million. That comprises three areas. The first is the increasing cost of delivering audits, both for us and the firms that we contract, together with increasing costs operating our business. That is where members can compare our requirement for 2024-2025 directly with 2023-2024. That amounts to a 4.7 per cent increase. The second area, accounting for a 1.9 per cent increase, is the biennial national fraud initiative. That is an added cost every two years and an extremely important exercise for us. As I am sure that the commission will be familiar, to date the NFI has achieved £158.5 million in outcomes for the Scottish public sector. The third area covers the fees for newly created public bodies that we cannot directly charge audit fees for, together with additional audit work needed for other bodies where we also are unable to charge a fee. For context, our budget has decreased in real terms by a fifth over the past decade, while the volume of work has increased. Our total proposed budget of £37.6 million equates to 0.06 per cent of Scotland's public sector spend of £59.6 billion. In 2023-2024, we faced a number of higher than expected costs. The largest was for our staff pay award, an area of focus across the Scottish public sector. Last year, we managed to absorb some of those costs, but our £24.5 budget proposal reflects a new pay cost baseline. We hope to agree a pay award for the £24.5 year with our colleagues earlier than we have done in previous years. The completion of our annual audit work against planned timescales is not yet as good as we would like it to be. Nonetheless, we are on track to meet our target timescale of returning to a 95 per cent delivery of annual audits by 2028. For context, around half of local governments' audits in Scotland were delivered to the planned deadline. Almost all will be done by the end of this month. Those audits will be, most therefore, a few months late, and, as Alan alluded to, not years late, as is the case in many public sector audits in England. In 24, 25 and in future years, we will continue that recovery progress. Our budget proposal aims to strike the robust balance between efficiencies and ensuring that we are delivering effective public audit. For example, through our estate strategy, we will start to see annual savings from April 2025. Lastly, I would like to quickly update you on our employer pension costs. Since submitting the draft proposal to the SCPA, we have received a draft actuarial valuation and indicative contribution rates about our membership of the local government pension scheme. It suggests that our rate will be lower than has been accounted for in our proposal and that the commission will be familiar with in previous years. Those are indicative and draft at the moment, but we expect to receive a decision from the pension scheme by late March 2024 and will of course engage further with the SCPA once we have clarity on the expected rates and resultant spend. Chair, members are very grateful for the opportunity to provide opening statements and look forward to answering your questions this morning. Before I open it to questions for members, perhaps I could say one thing. We are in a fairly challenging financial situation in the public sector, and I know that members will be keen to look fairly closely at the 8.4 per cent overall increase that Audit Scotland is proposing. I think that it would not be wrong to say that, in general, increases in the public sector are fairly limited at the moment, many think that they get an even increase or a non-increase that they have come out well. I think that all that should come out during questioning today, and hopefully we will get to the conclusion of that. Let me start with the first question, which is about the fact that we welcome the fact that you did not look for additional revenue funding in 2023-24 in the spring budget revision. Can you tell me what steps you took to identify the significant efficiency savings that have been used to alleviate, particularly, staff cost pressures and fund capital investments? That is particularly in view of the extent of the challenges and risks to the 2023-24 budget that you previously reported to the commission. I am very happy to start on that, and I will perhaps bring Martin and Stuart in to support my response, chair. You are right that our budget proposal last year was not followed up with any supplementary requests to the commission, and we are pleased to get to that outcome. I think that when we gave evidence to the SCPA on our 2023-24 budget proposal, we spoke in terms of significant risks, most notably in terms of the pay award, that our pay assumptions were considerably lower in percentage terms than we eventually settled on in terms of the actual pay award. Where we got to was around a 6 per cent pay award for our colleagues. That was not a flat 6 per cent for everybody through negotiation with our trade union partners. There was somewhat referred to as bottom loading, so more generous pay awards for colleagues at earlier stages of their career or lower-paid roles within Audit Scotland. In terms of balancing the budget, we are always mindful of our costs as a public body chair, so that we are rightly living up to the standards that we expect of other public bodies in terms of managing our budget. Part of the factors that we use to respond to that, some are longer term, some are in the year, and I am sure that you want to talk about our estate strategy and our approach to managing over the course of evidence taking this morning. In terms of some of the examples, we did employ what we call a vacancy factor arrangement within the organisation, so that it builds in an assumption around turnover levels and how quickly we can fill posts within the organisation. That was perhaps our most significant approach to managing our cost approach. We are also looking closely at our wider delivery arrangements and other efficiencies. How we are delivering our audits is also changing, so some of our expectations around travel and subsistence that we would have recognised being quite a significant cost in previous years were also low and expected, so we were able to reapply some of that cost over the course of the year. Those are some high-level examples, but maybe Martin might want to come in with some follow-up specifics or, indeed, Stuart Martin. Thank you, Stephen. As Stephen said, we focus very closely on our productivity and our efficiency. We are very mindful of every payment that goes into public audit that is not going into other public services. Given the nature of what we work and the work that we do, we are obviously very focused on that. The other thing that is probably worth reminding members is that any of the unused budget in-year is return to the Scottish Consolidated Fund. Over the course of recent years, that has been fairly routine and that we have been able to pay back into the SEF for any of the budget that is not used in-year. We are not in a position to keep reserves. It is an annual process for us, so we always return anything that is unused to the Scottish Consolidated Fund. You mentioned travel and travel costs have reduced over the years, but I am talking from memory here. You are talking about a 95,000 increase on travel costs this year? I am just checking from the appendix one-chair on a list, Stuart, to clarify. I think that our budget proposal for travel and subsistence costs for the forthcoming year is £402,000 compared to the budget of last year of £496,000, so I think that there is just a reduction of £94,000 in our travel and subsistence. I will hunt through for that later. The measures that you have taken in 23-24, are you applying the same measures to 24-25 in terms of cost management? At a high level, yes, absolutely right. One example that we have just spoken about in terms of travel and subsistence is a significant area of expenditure that we will always keep under close review. I think that it is likely to take us into particularly looking at how we are managing areas of expenditure. As the commission knows, most of our costs are staff costs, together with payments that we make to firms that we appoint. That accounts for 86 per cent of our total spend. I will pass on to Stuart to say a bit more about how we are managing our estate costs into the future. However, we are also looking at ways to ensure that, as an organisation, we remain fit for purpose but are managing other costs. We are embarking on an audit modernisation approach that will primarily look to secure the effectiveness of an audit that meets the respective quality standards, but will likely also induce us to ensure that we can demonstrate to the SEPA and public bodies that we are efficient. Those are the approaches. As we refer to in our submission, as we review our approach, we anticipate that that will further down the line bring changes to what we call our operating model, a new target operating model. The detail of that is something that we intend to develop over the course of 2024-25. I can stop for a moment here and maybe, particularly, the estate. Stuart can come and update the commission on where we have reached with that. Thank you, Stephen. Good morning, everybody. In respect to the estates, you will now see that the budget in respect of rent and rates is required to go up next year. That is an interim arrangement because we are in the middle of trying to reduce the size of our office in Edinburgh and we have expanded the office size in Glasgow, which meets our demand. What is happening is that the plan is that next year, potentially, we might have some savings in-year, depending on how quickly the work can be done in Edinburgh, but the Board of Approved Estates reduces the size of the Edinburgh office and increases in Glasgow because that is where the demand is. What we are looking at doing there is that over the long term, the duration of that, the net position is likely to bring in excess of £2 million worth of savings over a 10-year period. In respect of Edinburgh, by reducing the office by a third, the actual savings on that office alone over the duration of the extended lease will be in the region of £4 million, but it is not as much. It is a net position because we have had to increase our capacity in Glasgow because that is where the demand is. In the longer term, we are delivering significant savings in respect of our estate. On the back of travel and subsistence, to highlight, in 2019-20, we had a budget of £852,000. This year, we are asking for £402,000, so that has taken a significant impact on how we do all that and the approach that we take. That is the impact of that. We feel that that is a fair reflection now that we are out of the previous lockdowns. We feel that we are now into a more steady position in respect of travel and subsistence. On travel and subsistence, your proposed budget is £402,000. Your budget for last year was £496,000. Interestingly, there is no comparison to the actual for 23-24. What is the actual for 23-24? At the minute, we are within... You are still within that year, therefore you have not got a figure? I have not got a figure for the year, but year to date we are underspent in that area. Substantially? I am not substantially. No, I am not substantially. No, I am not substantially. No, I am not substantially. No, I am not substantially. No, I am not substantially. I think that just on the... So, the £402,000 is informed by the forecast that we get to the end of March. So, there is a degree of fluctuation, but I think that what we are confident on the £400,000 is reflective of what we are likely spending. I think that you can probably take confidence from the fact that Stewart is saying that it is not substantially underspent is that we are able to track what our progress will be in understanding of patterns. The one change that is also relevant for this budget is that this will be the first full year of the new appointment round of auditors as well. So, there is not a direct comparison with previous budget actual spends. This is informed by what we have been spending in the delivery of audits and then what we expect it will be in years to come. If it would be helpful, chair, I might be keen to bring Alan in just to give you a bit of some of the governance of our efficiency and how we are monitoring our programme of cost and savings. Thanks, Stephen. Chair, members, one of the constant refrains that I feed in to Audit Scotland is the need for us to be continuously an exemplar to the bodies we audit. The worst position that we could get ourselves into would be to be accused of saying, do what we say, not what we do. I would be very firm on that from the moment that I became chair. In this particular budget process, we have given the process challenge and governance over the past five months that I referred to in my introduction. So what I mean by that is that, on top of the continuous monthly meetings and more if necessary, that I have with the accountable officer and the chief operating officer, we have had a board seminar in which we looked at where we were going financially, both in terms of the year to which this bid would refer and what we saw coming down the track over the next four years beyond that. We then followed that up with two full board meetings on the budget proposals as they were developed. One in September, another in November, and that latter one we proceeded with by an informal smaller group meeting of the people that we see around this table, me and the chief operating officer, just to make sure that there was nothing in the budget proposal that we could see as being, well, frankly, indefensible. We found some of that early on. We didn't find any later on. We are fairly confident that this has been a well-governed process and we would hope that it sets us on a good footing to move into the period when the audit modernisation process will come back to you in budget years later. I would like to move on now to invite Daniel Johnson. Thank you. I mean, just picking up on that, and I just really want to re-emphasise the point that convener made in that looking at the coming financial year, the public sector financial settlements are likely to be extremely challenging. Against that context, 8.4 per cent will, I think, be difficult by way of comparison to justify in comparison to other public sector bodies. In terms of the point that was just made about essentially living by the guidance that you were providing to those public sector bodies, is that not inviting at least that challenge by making that statement? I think that without context I would expect significant pushback and challenge, but I think that the context explains the rationale for why our proposal is, as it is before you today. One is around national fraud initiative and that accounts for 1.9 per cent of the 8.4. We think that that is an essential mechanism to both support financial control and use of public money, but it is a bi-annual process that means that it is not a direct comparison with the previous year's budget. On top of that, we are also not comparing like for like because there is a change in the number of bodies that we are auditing as well. As the Scottish Government has created new bodies, and indeed we expect next year, as the Parliament creates new bodies with additional commissioners, we have to respond to that in public audit context. Environmental Standards Scotland, Consumer Scotland are not fee-charging bodies. Similarly, as our audit work on the European Agricultural Fund ends, part of that work will become part of the Scottish Government audit, which is similarly a non-chargable audit for us to Mr Johnson. Those two elements account for 3.7 per cent of our budget proposal change. If we strip those out, we are requesting a 4.7 per cent increase to our budget. How many additional public bodies are you going to have to be auditing in the coming financial year compared to the current? I will give you the detail, and I will turn to colleagues to make sure that I get that list correct. I mentioned two of them, in fact two plus the additional work on the European Agricultural Fund, which will be absorbed as part of our audit of the Scottish Government consolidated accounts, but I will turn to Martin, who can answer it. Those are the complete list, but if there are any others, Mr Johnson, we can come back to you. In that context, what is incumbent on us is to understand the robustness of the figures that you have come back with. In particular, how you have sought to find efficiency savings to contain your budget request within the challenging physical envelope that we find ourselves. In terms of appendix 3, where you set out your efficiency savings, can we confirm that all those efficiency savings have been applied to the breakdown of your budget in appendix 1? Can I then ask—looking at appendix 1, if I look at especially the total other operating expenditure—we are seeing a figure of £5.3 million, as compared to £3.9 million in 2021-22. That is a 37 per cent increase in non-people costs. Is that correct? In terms of your arithmetic, yes, that is correct. I can develop that for me as you wish. What has also happened in the intervening period is that we have tendered for the provision of external audit services for the audit of public bodies. That has resulted in—as we anticipated, it would, to be absolutely clear—increasing costs from audit firms that we appoint for the delivery of audit work. We are looking at the cost across the UK context that audit costs are going up, and that is captured in the change in the numbers that you see before you. I am happy to go through different lines and capture some of those costs, if that would be helpful. There are very few lines that are going down, and that is obviously to be expected in an inflationary environment that we will see increases. However, if I was looking at a budget proposal where I felt that an organisation was absolutely looking rigorously at every possible, I would hope to see a few more lines that might be flat or decreasing, especially for non-people costs. For example, your stationery and printing budget, given that you were able to operate almost half of your proposed budget in 2021-22, I would wonder whether line items like that have been fully explored as to whether they could be reduced. I can give you the assurance that we exercise proper scrutiny of the submissions before you. There are some fluctuations that we are looking at. In the context that I agree with you absolutely is that we are in and have been in an inflationary environment, and that is feeding through to some of our own costs. Of those that are reducing, we have touched on travel and subsistence very clear from how we are delivering our audits. We are looking at a change from last year. In some ways, if I can maybe look, the table is not complete to give it that full trend analysis. In 2021-22, there were some real anomalies in that year, the height of the pandemic, and I think that, as Stewart mentioned, going back further might provide that assurance that we have real close scrutiny over some of the numbers that we are in. We are also operating in a cyclical environment, if you take some of our staff recruitment costs. You will see from the appendix that we were in the region of £235,000 and £240,000, of course, as we changed at the earlier part of this decade. People's working patterns changed. We had to bring additional people into the organisation. As we are moving into a more stable environment, we expect some of those costs to go down. I absolutely want to assure you, Mr Johnson, on the commission that we have gone through those costs, but I am equally happy to answer any specifics further, as you wish. I would just like to leave my fellow commission members. I am not going to go line by line through appendix 1, but my final question, looking at most of the line items, I understand what they are, but what is contained within other accommodation costs? Given that, again, it is seeing an increase of more than £100,000 from £445,000 to £592,000 in a single year, what is contained in that, given that it is not rent and rates and it is not travel and subsistence? I will ask Stewart to give you the detail on that, Stewart. What will be included in that is the service charges for the leases that we have, as well as cleaning utility charges that they have gone up significantly as part of the increase in utility bills. That is why it has gone up so much, is the service charge element, as well as cleaning and also the direct utility bills that we get, as well as the primary things that will be in there. I would also highlight that, under other, you will see that the actuals in N2223 are low, but then you have a high of 500. That is where our management contingency is, which is what we have every year because we cannot carry reserves, so we need some contingency there. Whilst we might not actually spend that under the actuals, which are shown in those two years, we do require that as part of our budget, and that is a significant sum. I will leave my questions there, convener. In paragraph 9, in page 6, Audit Scotland has reported that the recovery from the disruption to audit completion deadlines continues, while the focus remains on our key priorities of health, safety and wellbeing of colleagues and quality of audit. Can I ask if you could give us more detail and explain the status of the recovery to pre-pandemic audit reporting timelines and advise when you expect it to return to pre-pandemic service levels? Good morning, Ms Doe. I am happy to start now, and I might turn to Martin to develop my response. As I mentioned in my introductory remarks, we have not yet recovered our delivery deadlines across our audits. We do not particularly like to readily compare ourselves to other parts of the UK, recognising that there are particular challenges in the delivery of local audit in England. We want to deliver timely, effective, high-quality audits of Scottish public bodies as soon as possible after the end of the financial year. As I mentioned, in our audit of local government bodies, almost all will be completed by the end of this month, which represents a delay against the completion deadline of the end of September. The deadlines have changed, I should say, over the course of the pandemic. For some period of time, we were operating until the end of October for councils and for NHS bodies. We are now back at the end of June deadline, whereas over the course of Covid, we were operating until August and then July. On where we are in the specifics of progress, I will finish by saying that we are making progress, especially just having seen some of the more recent detail. This is the first year of the current five-year audit appointment round. That typically brings in some additional time for auditors, as they get to know their new audited bodies and vice versa. For that, we are a good bit further forward in terms of where we were last year. Similarly, we have set the deadline of 2020, which is the duration of the appointment round, to fully recover. We expect to meet that and hopefully outperform that deadline. We will continue to report progress. We have effective governance around it, so Allen may want to say more on it, too, through our quarterly performance reporting arrangements that track the progress that we are making. Martin may want to come in further, too, but I will go to Martin first. There are a few things at play here. As the Auditor General mentioned, a range of factors that have contributed to the impact of timeliness. It is not where we would like it to be, we would like to be ahead of where we are at the moment. However, as the Auditor General said, there are very clear indications that, when you look at the deadlines, bound in mind that they shifted, our timeliness has actually improved this year compared to last. The response will be taking a risk-based approach. Indeed, the earlier conversation that we had about resources available to us, one way to get the audits back on track, would be to come to the commission and say, can we have more resources to get more auditors to close that gap? Very clearly, as the conversation earlier on has highlighted, we did not think that that was a reasonable position to take. It is about bringing the deadlines or bringing the timeliness of the delivery back on track within the existing resource envelope that we have. As that closed the play on Thursday, all of the health audits were complete. 68% of the local government audits were complete. In the world of central government, we expect 99% to be done by the statutory deadline of the first of this month, and we also expect that all of the further education colleges will be complete by its statutory deadline, which is the 30th of the 4th, 24th. The other thing that might be of interest as well is that we have done some analysis as to what it is that is leading to the delays in delivery. That is telling us that around about a half is actually due to issues within the audited bodies themselves in terms of the production of the accounts to the appropriate standard and so on. About 25% is down to delays in the audit process, so that is the delays that are down to us. Another 20% is to do with other factors, so the timing of pension fund valuations, the impact from previous years and so on. We have had a careful look to have a look at what it is that is within our control to be able to make the improvements that we want to make on timeliness, but also to be mindful of some other factors that are outwith our control. Overall, timeliness is going in the right direction, certainly. As the Auditor General said, what we think we have taken is a very practical and reasonable approach to bringing in the deadlines back on track. You said that in your comment earlier on. Is there any key areas that are still to be audited that are behind schedule that you are concerned about? There is nothing that I am concerned about in that we are aware of the delivery of audits across the piece. We are in regular dialogue with auditors working for Audit Scotland and those that we appoint from the firm so that we have a clear understanding of when audits will be forecast. I will bring Alan in a second so that he can say a bit more about how we are exercising effective governance. One comment that I would make before doing so, and Martin referred to this, is that there are statutory deadlines in place here. I know that you must be familiar with some of the audited bodies who have struggled to meet the statutory deadline. Sometimes those are accompanied by statutory reports from me to the Public Audit Committee. For those audits that I appoint the auditors for, in the event that those will not meet the statutory deadline, I will write to the Public Audit Committee before the end of this month to let them know where the deadline will not be met. I expect that that will be a very small number this year and the audited bodies that you will be familiar with from previous years. Alan, anything that you want to add? Let me just say something about the way that the board approaches this. I mentioned in my opening statement the corporate plan that is supported by a business plan, and both are supported by a suite of reports that come to every board meeting. I think that it is fair to say that the board gives us much scrutiny to performance as it does to expenditure over the year. Behind that, the board has taken a very significant view that when push comes to shove, timetable of audit can be negotiable, quality of audit can't. Those are the kind of bounding factors that are around coming back to the kind of timetables that we hope to get to by 2028. The information that comes to the board demonstrates, and is now demonstrating in more granular detail than it did even six months ago, is that the reasons for delay, as Martin has just highlighted, vary, and quite a lot of it is outwith the control of Audit Scotland. I think that the other thing is that delays vary when the board has asked for the detail on how long delays are to be part of the report to it, because there is a distinction to be made, as I am sure that the commission will accept, between an audit that picking a figure out of the air is three months late and an audit that is three weeks late. The reasons are likely to be different, but I just want to assure the commission that budget and audit quality are jobs one and two for the board. I think that we now are in a position that the board gets a greater degree of granularity in both of those than it did before. Also, before they come to the board, they have been crawled over in great detail by the Audit Committee at each of its meetings. I was going to ask about the new bodies to be audited in 24-25, but that has now been covered by Daniel Johnson, so just back over to you now, chair, thanks. Thank you. On the back of Sharon Dowie's comments, how has the delayed audits impacted on cash flow and the changed deadlines, how does that impact on cash flow? Who does that place you? Stuart McMillan can give you the detail in this chair, but my, if I go out in a limit, not terribly. The answer is that we will still be billing for those bodies that we are able to charge a fee for in line with our cyclical approach. The challenge that you might recall we had right at the start of Covid was that it had a very significant bearing on our work in progress and income recognition that meant that we were not able to bank, as it were, the work that we would normally do to align our income and expenditure and that left us with a technical accounting gap that we received the support of the SCPA for a budget revision at that stage. Cash flow terms are different, but Stuart McMillan can clarify. Thank you. That's right. In respect to cash flow, it's not a great impact. What we have is we operate on an instalment basis, so we will invoice on three instalments, so local government, central government and NHS. We invoice usually in January, May and September, so we might not have finished the audits, but we've invoist for the work. From a cash flow perspective, we've got the cash in. As Stephen said, it's more a case of when we can recognise the income in the accounts, because if we haven't finished the work yet, we can only recognise what we've done. From a cash flow perspective, it's not a huge impact. So you have a system for work in progress? Yes. To say more, yes, we absolutely, it's a key factor in how we account and prepare our accounts, and our external auditors quite rightly recognise that as an area of audit risk for them, and it's of significant focus during the audit that they are satisfied that the numbers we are reporting as progress on individual audits bearing in mind that the audit year is not the same as our financial year, so there's a cut-off point for our balance sheet date, but that's subject to external audit each year, so they're satisfied with the numbers. So are all the bodies that are being audited done on the basis of three invoices a year? In mind, it's other than at further education, which get two invoices a year, but that's how we operate, is that they will get three, in principle, three invoices, an initial one, a second fee invoice, and then the final invoice. By that time, the first invoice that we issue will be on the expected fee. The auditor will then, as part of their planning process, have meetings with the audited body, and it might well be then that the actual expected fee that we have initially invoiced for, they might agree a higher fee because there might be more work and more risk. So, in that case, the next instalment, we will then do that based on the adjusted fee that's been agreed with the audited body. Okay, thank you. Can I bring Richard Leonard in at this point? Yeah, good morning everybody. I just wanted to really develop that point, because one of the things that stood out for me was Table 2, which is your budgeted expected income from various sources, various public bodies whom you charge fees for. If I read that table correctly, what it tells me is that the proposal is that the audit fees charged to colleges, further education colleges, will rise by 6%. The income generated from the fees charged to local government and the national health service bodies will increase by 8.7%. The expected fee income from central government bodies and Scottish Government departments and sponsored bodies is projected to decline by 1.3%. What's the strategy that lies behind that? Yeah, I'm glad you raised this, Mr Leonard. Actually, there is some important clarification that we can make, particularly with reference to our overall request. College is quite straightforward, that is 6%. Our overall fee increase for the 23, 24 audit year will be 6%. There is an alignment with our fee increases to our staff pay award, and that's why there is a mismatch to do with the overlap of our audit years and our financial years. Stewart can develop this following point to make sure that he gets the absolute clarity with which the commission needs on this point. I'm particularly picking up the point about why is central government out of line with the other sectors. Stewart? Thanks, Stephen. Yeah, this table 2 reflects the financial year income. As Stephen says, what we do is we charge for the audit year, and in here the Scottish Government figures, sponsored bodies, has actually gone down because that's where our E for audit used to be. So that was over half a million pounds, so we're no longer going to have that audit in 24, 25, and that's why that's come down in total. You'll see that the NHS and local authorities have gone a bit higher than the sick. We're increasing their fees by 6% for 23, 24 audits, but there is some expectation of catch-up that has been discussed earlier, and this is what we're hoping to do in the income budget is that we will be able to recognise a bit more of that income in respect of we will catch up in those sectors. So whilst we're not charging them anymore, what we're doing is we're completing more of the work in those sectors and able to recognise more of that income come the end of March 25, so we've budgeted that into our plans. Okay, but for us as a commission, it's useful to be able to compare one financial year with the next financial year, comparing apples with apples, so I don't know whether there's a better way you could present that information. I mean, so can I deduce from what you've told us then that the fees that you are charging to Scottish Government departments and sponsored bodies of the Scottish Government are also rising by 6%? For those bodies where we are able to charge a fee, and just to be absolutely clear, 6% is the fee increase for all audited bodies for that year in question. I take the point, and it's very fair that you make about it. The comparing contrast isn't as straightforward because of some of the variables that Stuart mentioned. We're accelerating the work as part of the catch-up of delivery progress, and there are new bodies thrown into the mix, together with the fact that the income that we had been receiving from the IFA, Agricultural Funds Audits, is also changing fundamentally as it moves out of our responsibility by the middle of next year. It's maybe one chair that we need to take away and just to see if there's anything that we can come back to the commission in writing just to give you that comparability that you're looking for. Thanks. I think that that would certainly be a useful thing to do. One of the other areas where I was struggling a little bit to make the comparisons and to understand the narrative that's in the submission to us is around the estate strategy. And it may be, I think that Stuart might have clarified this a little bit earlier on for me, but anyway, just so I'm clear about this, if I look at the overall figure for property, we're told that there's going to be an estimated financial saving in the region of £2.2 million over a 10-year period, that is, though. So it's what, £220,000 a year as an average. We're also told in paragraph 78 that the Glasgow accommodation cost rise is in the region of £298,000. Presumably, so I'm comparing apples with apples, that's a one-year figure versus the 10-year figure for the net saving. Again, it's helpful if the units are immediately comparable, and I'm not sure that one necessarily is. So could you perhaps develop that and explain to us what the increase costs are, what the decrease costs are, what the net position is over a one-year, three-year, 10-year period? Yes, certainly. I think that we'll do our best to cover all those points. If we don't have all of the detail to hand again, we may follow through in writing, just so that the commission is clearly cited. I'll maybe start, Mr Leonard, and then bring Stuart Martin might want to add as well. As Stuart has touched on already, I think that we've engaged with the commission in previous discussions on our budget proposal. We recognise that post Covid is that our estate wasn't right for how we would be delivering our work in the years to come, particularly the case with our Glasgow and Edinburgh offices. To summarise, Edinburgh is too big for our purposes, and Glasgow is not big enough. We were able in Glasgow to remain in the same location, which is in the centre of the city in Nelson Mandela Place, and to acquire a vacant unit in the same building on the same floor to meet the demands that we have of our colleagues. Our Glasgow office for many years has been too small, typically, over capacity. Resulting in circumstances of business inefficiency, colleagues finding themselves unable to have a desk when they needed it. It's not good enough for how we want it to operate. We also find that, as Stuart has again touched on, we are able to recruit more easily in Glasgow than we have in other parts of the country. The nature of our workforce is one that will go where the audits need to take place, but they also need to have a base. Glasgow is an investment for the future of where we expect to deliver our work and meet the needs of our people. Briefly, on our Edinburgh office, we found, through tracking some of the analysis that Martin and his team are doing about the usage of the office and the extent to which we found ourselves with considerable free space in that office. Allowing for changes in the lease arrangements that we have and exploration, we have taken the opportunity, with some of the anticipated support of the commission, to plan for changes to downsize some of the Edinburgh office. Looking in the round, as you mentioned, some of the figures will produce savings over the longer term as part of an estate strategy that comprises investment and reduction. Some of that investment is set out in the anticipated requirements for next year to allow for some of the changes that we are making in both Edinburgh and Glasgow. Probably enough for me, and I will bring Stuart in first of all and then Martin. I am happy to provide more information, as you can imagine. We have detailed breakdowns of how the savings and the additional costs have been collected and summarised in the report that you have seen before. I would say that what we are doing is recycling as much furniture and everything that we can as part of that. It is not like a new ask or anything that we are doing is in respect of what we are giving up in Edinburgh. The furniture that is spare will be moving across to Glasgow where we can. We are cutting down costs and re-using furniture that we require. There is a general uplift, as you are probably aware, in respect of utility charges and the impact that is having on service charges that we have for the landlords. That is why there is an increase of that scale for next year. The plan is that that will bottom out and start to reduce savings probably in next year, but it is difficult to put an actual date on it at this present time. We are still in the legal process of the minute of variation for Edinburgh. It is the co-ordination of the whole project for both sites to be able to do that. However, as you would expect, there is more detail behind that and I am happy to share that with the commission, if they say so wish. Just a couple of other things to add. As Stuart said, we are very focused on ensuring that we recycle office furniture and that kind of stuff. The other thing that is really key is that the rental rates in Glasgow are substantially lower than they are in Edinburgh. By virtue, we have been able to close off part of the office and that has all been agreed with the landlord. As soon as that partition goes up, we start to reap the benefits of paying for a reduced floor space. That is what is then going into paying for the increase in capacity that we are looking to deliver in Glasgow. Stuart and I have a meeting with the project team on Thursday afternoon this week, both in terms of the designers and I believe that the invitation for the expressions of interest relating to the work went out last week, Stuart. Once we have the responses into that tender process, we have had the detailed planning discussions with the external folks, which will be much clearer in terms of what the timelines are going to be. I know from colleagues, particularly in the west, there is a huge appetite for accessing and using that space. We are able to use the space to a degree at the moment for meetings and so on. However, the next key stage for the Glasgow office will essentially be putting the cable in and getting the desks and so on across the excess stuff from Edinburgh through to Glasgow. I understand then that you are talking about a revenue to capital budget transfer during this financial year to help to meet the cost of that change. How will that be funded in future years? As I understand it, any savings that we get to are not really going to start to accrue until 2025, so it is not next year, it is the year after, is it not? Is my interpretation of that correct? Yes, you are correct in both those points. What happens between now and April 2025? The investment that is required, as Martin and Stuart are touching on, to make the offices suitable to be used. Quite rightly, as you would expect, we will reuse as much as we can, but there needs to be cabling put into the vacant suite in Glasgow partitions that are necessary. It is important that the commission hears more about some of the discussions that we have been having with the landlord through our agent. Whenever you return office suite, you always have dilapidations, so you have to return the building back to the condition that you acquired it. Any organisation should be allowing for that, as we have been doing through providing for what our dilapidations would be, but there is work that is required, not full-scale, but changes to the air and draw office. We are going from a footprint down to what we currently have, probably up to about 50-60 per cent of what we currently operate with partitions going up, making sure that we still have the necessary meeting space, kitchen facilities and so forth. Once those works are completed, we will start to see the savings that you referred to. If I have missed anything, Mr Stewart. My very last question is, so there will be net savings on estates by 2025? Over the course into the end of this decade and beyond, we expect to be in over £2 million over that 10-year period thereafter. I can bring Alan in. I think that he wants to reassure the committee, I am sure that there is some of the governance around us. It might be useful to the commission just for context. One of the things that I encouraged the board to do was to, as it were, to hasten slowly as far as the estates strategy was concerned. As we came out of the pandemic, there was an awful lot of loose talk around about the huge amount of money that could be saved because of working from home. We took the view that we needed to see how that was developing, engage with our staff and feed that in to the process. I remember having a conversation with Stephen when we were looking at the possibility of an immediate nearly £1 million saving, but that was making assumptions that office usage would continue at the kind of levels that we saw during the pandemic. The strategy that the board signed off on, and it took us six months to do that, was based on a realistic assessment of how our staff would behave, as well as the needs of the business. I would like to turn to the national fraud initiative. You have already touched on it. You have mentioned some of the savings that have been achieved over a period. However, to what extent are the benefits and outcomes of the NFI examined by you to ensure that we get value for money here, that the value of the savings generated continues to merit the time and effort that is invested into this, both in Scotland and UK-wide? I recall that there are a number of bodies that do not take part in that. I think that I remember housing associations and such like that do not participate. Whether any move has been made to try and bring them in, because, obviously, the more organisations that are part of this, the more effective and cost effective this will be. I mentioned the figure of £158.5 million as being the financial saving as a result of Scotland's participation in the national fraud initiative. That is significant. Over which period is that? That is going back to 2006-07. A number of years spanning three decades, but what is also true in addition to the financial saving is the importance of the deterrent effect that this exercise has, in that all public sector workers are aware of their participation through effective proper communication from their employer. The data matching goes wider into supplier records as well. The use of blue badge facilities and so forth is another common theme of where the national fraud initiative has had its successes over the period. As an exercise, it is delivering both financial savings and preventing future or potential fraud. In the round, in my view, it looks to enhance the control environment that public sector bodies are operating in. You mentioned earlier that the scope of the national fraud initiative has also been subject to review. I know that the Public Audit Committee has also taken a strong interest in the national fraud initiative in recent years and we have engaged with that committee on the scope. Encourage is the first phase of participation of additional bodies, whether it is registered social landlords, housing associations or other bodies that are aligned to the public sector to review their participation. That work is on-going and we have had communication and discussion with the Public Audit Committee. What is also true is that there are boundaries. Some bodies are not compelled to participate willingly, but they are small in number. It would take new legislation from a UK level to say about the scope of the exercise. I am still committed to it, chair. I think that it is the right thing to do. It gives assurance to the Parliament and the public that all efforts are being made to reduce opportunities for fraud within the public sector spending. Does the Scottish Government not have the power to add organisations to the list of those participating? I would need to refresh my memory, chair, about the specifics of the legislation. There are UK responsibilities and an extents Scottish, but I am not sure that I have that detail to hand and probably need to refer to previous correspondence. It would be interesting to know, because obviously it is in everybody's interest that we get the maximum out of that. It seems to me that there is a large part of the public sector that does not seem to be there. To reassure you, I would categorise those as aligned to the public sector, as opposed to the public sector bodies. All public sector bodies subject to by auditors appointed by myself or the council commission are included in the national fraud initiative. The bodies that are not are those that are recipients of public funding but are not part of the public administration of the Scottish public bodies. That is where it comes into, about the extent to which those bodies want to participate. We hope that the benefits are clear for those organisations, but there is no obligation upon them to do so. That is where you are into the territory of what legislation and the benefits of the Scottish or UK Government determining that further legislation is required. If you are content here, I may need to revisit previous correspondence and share that with the commission. I really appreciate it. Mark Ruskell in at this point. Thanks, chair. Good morning to the panel. Can I ask you just about the capital budget? The whole capital budget is going on the digital strategy in the next year. I take it that there are no other capital requirements for the next year beyond the digital strategy. Is that right? Yes, that is correct, Mr Ruskell. Good morning. What if, maybe just to expand that further, we anticipate as an organisation investing in our IT infrastructure to support our audit arrangements, not so much in the year for our budget proposals on front of you, but in future years through our audit methodology programme, we record our audit work on an audit software. We use a product called Pentana at the moment, like many other of the UK audit organisations. Technology is changing, audit approaches are changing. We intend to take the next year, hopefully shorter indeed, just to review our requirements so that our audit approach remains fit for purpose in the short and medium term. That is likely to get us to a point of meeting to invest in our audit technology requirements, but in the round that is something that we will work on over the course of the coming financial year. Therefore, our capital requirements are set out in our proposal. In terms of forecasting what that future capital requirement is for the digital strategy, can you give us an indication of the scale of that right now, beyond 24 or 25? I can bring colleagues in, but what we want to do in the year ahead is to be clear on what our requirements are so that we settle on digital and working practices that will allow us to deliver robust, independent and effective public audit arrangements. There are options for us so that there are audit technology solutions available in the market, which we think will be a likely course of action, as opposed to developing an in-house solution. For efficiency, there is no huge value in us trying to source project management and digital skills to develop a solution, one that already exists. Perhaps we should not preempt where we will get to, because we will go through that process over the next few months of 2024 and beyond. I do not want to give a figure to Mr Ruskell or the commission this morning that says, and this is what it is likely to be. Rest assured that we will go through effective processes, project management and sizing the scope of the project, along with the necessary governance through our board during 2024. It is fair to point out that the board is convinced that there will be a need for what we call for shorthand audit modernisation in the period that is in 2020. However, it is also clear that, in the year to which the budget applies, we will want to see a robust business case for what we should do and what it is likely to cost. Clearly, that will have longer term than one-year implications, because if we go for something that is in the market rather than developing something in-house, there will be continuing fees for that. I do not think that we know at the moment exactly what the scope of that will be, but we will know that over the next six to nine months. If there is a point with that six to nine months where there is more clarity, then we would be interested in the details being shared with us as well. Can I move on and ask you about pay and the pay negotiations? Obviously, you are not able to discuss in any kind of detail where you are at at this point and what a potential pay award may be for the next year. I suppose that I could frame the question by asking you more about last year. As you said in the initial comments, you budgeted for a 3 per cent pay increase. You landed with a 6 per cent pay increase. I think that I was obviously extremely welcome for your staff and you already explained the element of bottom loading for those staff that are on lower salaries. Perhaps if I could ask you what you have learned from that process of pay negotiation last year and how that then feeds into your assessment of what a potential pay award may be for this year and critically, what you are budgeting for at this point and what you are therefore asking the SCPA to support you with. Many thanks. I am happy to start, Mr Ruskell and perhaps Martin. Deed Allen might want to say a bit more, both looking ahead and reflections on last year too. First thing I would say, we are really grateful for the effective relationship that we have with our trade union partners in arriving at terms and conditions settlement that we reached over the past few weeks. I would have wonderful reflection absolutely as we want to do this sooner. As a result of the timing of the completion, we were able to make sure that our colleagues received their pay award and the associated backdated pay at the end of November. We want to do it much sooner in 2024 so that we are not either in a process of long negotiations and that people get the pay award when they are due. That is very clearly our ambition for next year in a process that we have already started discussions with the trade union too. As I mentioned in one of my earlier answers, we knew that this was a risk when we put our budget proposal to the SCPA last year of 3 per cent and then eventually settling on 6 per cent. Through careful budget management vacancy factors looking at our spending profile, we were able to source or identify how we would pay for the pay awards during the course of the financial year. I mentioned and mentioned that that pay award has now been baselined and is part of our budget proposal to the SCPA this morning. Looking to next year, I am grateful for your recognition that, because we are in a process of negotiation and are not yet settled on that, I am not able to be absolutely specific about what our assumptions are around pay awards, but that they are very clearly referenced to public sector pay arrangements in Scotland. The commission, I am sure, recalls that Audit Scotland is not bound by the Scottish Government's public sector pay policy. We want to very clearly take cognisance of that and what the market expects and requires of us to remain competitive as an audit organisation delivering public audit. Those are all the factors that we are weighing up as part of our negotiations that we will have hopefully soon and hopefully fruitful early conclusion with our trade unions into the early part of 2024. I am optimistic, Mr Ruskell, but we will certainly remain in regular dialogue and discussion with the SCPA to keep you abreast of our progress, but I will turn to Martin first of all and then indeed Alan, if there is anything that you want to add. In terms of the negotiating process, it has been interesting over the course of the last couple of years because the national position that the PCS has taken has shifted a little bit where last year, for example, or the year that we are in now, there was a little bit more of local flexibility that was available than perhaps had been the case previously. I would describe the working relationship that we have with the union and particularly through our partnership forum and the pain reward negotiating meetings as extremely professional productive working relationship. I think that it is probably worth noting that, of course, when we are sat across the table in those negotiations, we are sat across the table from people who are very knowledgeable about Audit Scotland, knowledgeable about the accounts, knowledgeable about the finances and, therefore, they will approach it in that way. I think that that all helps to provide for that environment, which is, I think, reasonable and very professional and productive. At the beginning of the negotiations, the PCS branch will have a different view from us in terms of what is available, what is affordable and so on, as you might expect. However, I do think that it could be described as a very effective working relationship. Stephen mentioned the objective this year for the pay award to have both the negotiations and, hopefully, arrive at a conclusion a lot earlier than we have been in a position to do over the course of the last couple of years. Indeed, it is either Thursday this week or Tuesday next week when we have our first formal negotiating meeting for the year to come. We have a shared objective as far as we reasonably can to arrive at a conclusion to those negotiations in the early part of next year so that members of staff are not seeing the delay in terms of the award being arrived at and then in the pay packets for next year. Certainly, that is our objective. With the working relationship that we have with the union, I am quite optimistic that we should be in a position to do that next year. It was quite an important achievement to get the agreement that we got in October and November and to be able to pay that at the end of November, because, as it were, it cleared the decks and we could then talk very early about 2024-25. As Stephen has indicated, it would be imprudent at the moment to put any numbers on it, but we might put something of an indicative timetable on it as Martin has done. We hope that, by starting now, we will have concluded an agreement before the end of the current financial year. That would be a single achievement, because it has not happened in my time on the board to get to the point where people actually get their new pay and the April pay packet would be a major achievement. I am not promising that, but that is an expression of hope rather than of expectation, but that is what we are aiming for. Those are useful and full answers, so I will go back to you, convener. Just from what we have been talking about, I would like to pick up on one or two points. Back to pensions. You were saying that the indications were that there might be a lower expectation of what might be payable on pensions in the future, presumably because of bond yield changes and so on. I presume that counting for that will simply be a reduced contribution. That is our expectation, chair, that our employer contribution will be lower as a consequence of the factors that you mentioned. Those are bound by actuarial assumptions and so forth about what the pension scheme requires of employer members such as us to support its financial position. There has been a lot of volatility in pension valuations. What we have had is predictability, though, about our employer contributions and the approach and mechanism that we value in terms of our financial planning. The detail of that, we expect, will have clarity of in the early part of the new year, and it is our intention to remain in touch with the commission once we know more. There have been several references made to the audit modernisation project, which is part of your strategic improvement programme. The commission would be interested in learning more about that if there was anything that you could supply us that would give us a little bit of better and more in-depth information. I am very happy to come back to you in writing, as you wish, chair. At a high level, we expect and recognise that the public bodies, the Parliament and the public themselves, that Audit Scotland's work remains of a high quality, is delivered timely and adapts to changing circumstances. Our approach is currently evaluated through external quality assessment arrangements. We have had external quality approaches in place now for a number of years, firstly with the Institute of Chartered Accountants of Scotland, and now with the Institute of Chartered Accountants of England and Wales, who provide external assessment arrangements of us. We have invested in our internal quality approach through the establishment of a new business group, Innovation and Quality. We are on a much stronger base than we were three years ago. What we want to do now is to invest in the innovation approach, so that we remain nimble and deliver high-quality, relevant work. We are looking at our approach, and that is the fundamental part of that for our annual financial audit activity, chair. There are changing auditing standards, accounting standards are changing to expectations increasing. Those are the pillars of our approach. That is governed by a strategic improvement project board that oversees our work on audit methodology. As we touch on in our submission, it is our intention over the course of the early part of 2024 to do research into what systems might give us the necessary arrangements to embed a new audit methodology, and then how we take that forward through learning and development with our colleagues. We are very happy to come back to the commission in more detail, as you wish. That would be interesting. I consider the possibility—not today, but over the next six months—that we might devote one of our business planning days to looking at what is emerging from our development of our business case. That is big stuff. We are in a position where Audit Scotland will have to be at the same level of performance as the private sector audit companies. We will, at some point, probably in the first six months of 2024, will be in a position to do that at around-table discussion at our offices or here. I think that that is certainly worth considering, because, as you say, it seems to be an extremely important area that we need to explore. Just continuing on this, looking at the costs related to that, my understanding is that, in the budget figures for next year, there are 148,000 included for the initial stages of this. On page 12, paragraph 48, it says that, at this stage—I am talking about the budget here—it does not include the potential additional requirements to meet demand arising from the audit modernisation project. That would imply that the 25, 26 and 26 27 figures that you are showing do not reflect the potential costs for the modernisation project. Quite correct, convener. We have, hopefully, been clear in our submission that we will be reviewing our requirements, what the market has on offer and what that means for our delivery of our audit work, whether there are any implications for our operating model over the course of this year. Our projections for 25, 26 and 27 are the best information that we have available today to give you indicative figures, but we do not yet know what it means in terms of our technology investment that we discussed with Mr Ruskell a moment or two ago. As we know more—I think that the chair suggests that it is a good one—we are very keen to engage with the SCPA further as we work through 2024 and then compile our budget submission to the SCPA this time next year. That sounds like a good idea. I am looking at page 14, paragraph 59. This is in connection with the price reductions that were obtained from audit companies. It says here that the price reduction that was secured in the last two appointment runs were not sustainable. Presumably, we knew that they were not sustainable at the time. Why did they give them? Yes, we did know that they were not sustainable, but we were happy to receive them nonetheless. Effectively, the private firms at that point offered discounts on the rates that they submitted to acquire audit appointments from the Auditor General and the Accounts Commission. The cost of audit across the piece has increased in a commercial audit context, public sector audit. As I remember, discussion with the SCPA in previous meetings drawing your attention to the cost of local audit in England has increased by 150 per cent. There are certain factors that are relevant, but it does not mask overall that audit costs are increasing because of increased regulation, changes in technology, new auditing and new accounting standards. On that comment, we knew that the cost was going to increase, but when we were offered the discounts, we thought that it was the right thing to accept, going back six and eleven years ago. I think that it is worth adding to that. I chaired the working group that organised the process of the new audit appointments. At the beginning of that, we were aware that the prices that we had had before were unsustainable, but we were also aware that there was no guarantee that anybody was going to bid. I mention that because having the private firms involved gives us access to the kind of market intelligence that allows us to plan ahead and say, okay, we are realistic about that. I think that it is also worth underlining to the commission that the arrangement that Stephen alluded to earlier, whereby the fees that we pay to the external firms is pegged to increase in our staff costs. That is a very good deal for our public audit in Scotland, but given where we are, I would not want to forecast that we would be any more certain at the beginning of the process for the next quinquennium than we were at the back end in 2019. I move to page 15, paragraph 75. It is highlighted here that other operating costs are 9.3 per cent higher in the 24-25 budget compared to the approved 23-24 budget. Given that we do not have figures for actuals for 23-24, is there any comment on how we are performing in comparison to that budget? We can happily share that with the commission. As Stuart touched on, we have quarterly reporting that we provide to our executive team and our board that they are cited on progress. We can provide that to the commission, but our forecast informs our budget chair. The numbers that you have before you as part of the proposed budget will be made with reference to known changes but also the pattern of expenditure that we have in the current 23-24 year, and where that leads us to as the proposal that you have before you. We will follow that on writing to share with you our interim arrangements. That would be useful, because the actual figures against the proposed budget for 24-25 actually make more sense to us than looking at the budget for the previous year. The forecast will support that comparison. Can I ask any members of any other questions that they would like to ask? In that case, I will thank Stephen Boyle, Alan Alexander, Martin Walker and Stuart Dennis for attending today. I will move the meeting into private session. I will suspend for just a few minutes to allow a change of system for our remote people.