 Gweinig ar y cwaith yn kindwyddwyr at y ganfynion gwag honno. Fe chych neneddynu ewed likesig a chwiach yn lovellach yn ei cychwyn ac theatersiaid. Ac yn cael grateful ni chi yn gweld pech cy Contractor a Ysgrif лай descenonon wrth y fferm dhalog. Maen nhw i��안 archwayniad gyda'u bridgefauPH theref ni? Ffann allt, yn susahon yn chat grainsol ni'n teblu'i athamog nhw'n cyhoedd lleib. Bydd�로 dden dualai ar gyfer y dyfosir am ddy parsleyddol ar ei ddeisgu am ddyfodol eitem ar y frif iawn. Gweithio eitem hy Listening Gwag ein dweith. Cymru. windicated there agreement. Our second item of business is to take evidence on the health, tobacco, nicotine etc. and care. Scotland bills financial memorandum from the Scottish Government bill team. I therefore like to welcome to the meeting Claire McDermott, Craig White and Dan Curran. Members have received copies of the briefing notes and all written evidence submitted so we will go straight to questions. The way we are working on the committee is that I will start with some opening questions and I will open it out to the rest of the committee. Felly, sef entities mae'r dæryffenuol ym magweithgau, cyfnodes o bwrdd cyr adults beep失 ar reactors, y mae'r ystafel yn mwrwg llanedd, ond mae'n gilyddai amwynd relantu F Alfred Fitch, wedi'r trafod elef, yn published operating. oedd iawn i gyd yn ddorol primarylliaid mae'r iawn yw'r pryd ar yllafodol. Mae'r iawn eich cyfrifesadau ar yr unrhyw gwaith, amlŷd a gweddodd, i'w prifesadau i'w prifesadau i'r prifesadau sy'narias yn ddodol ar gyfer ei hyfforddiol y maelodau erbyn yn cyfrifesadau sy'n riddym ni. Oedd gennym yn cael ei fod yn enwylol paif algwyrddau i'w prifesadau i'w prifesadau i'w prifesadau i'w prifesadau i'w prifesadau i'w prifesadau i'u prifesadau Felly, fel byrch, rwy'n grwyng original rydych chi'n gamechref, nol cles i Nor warfareganol hanfodol o'rgroans yn dweud wychluschio, ond rydych chi led yn rôl ams, ond ddweud yn syniad, ond rwy o'r lessons yn dweud sicrhau collon wedi h 같아su amddiannol. Da�, mae unrhyw fawr yndestatiad o'u llai fframe commanderol ouchfat, o edrych nifrwg Rwy'n oeddaeth y 40,000 oes yn rhaid i chi am y Rajdorffydd y cydnod i gael clywed, i gynghwyddoedd yn Gwladdg griad o Glasgow Clyde. Mae Gwladd Gwladd Gwladd yn gwybod, am bwysig i ddiogelwyd na fyddio'n i Daddy Seronau i ddiogelwydol yn cael gynghwyddon o gyfnodol. That does include providing cessation support, but it's difficult to disaggregate the figures in terms of additional costs to NHS boards, since they all operate entire grounds policies at the moment. They all have different levels of provision in place for promoting compliance with those policies currently. In paragraph 11, the Government is expected to incur costs in the region of £300,000 in relation to awareness-raising of smoke free areas in hospital grounds. The financial memorandum says that this is a subject to a fairly high degree of certainty based on recent campaigns. In fact, my health board area NHS A Shanann have expressed doubts as to whether some was sufficient in comparison to the previous high-profile media campaign. How does that confer in terms of the money that is spent on those campaigns? I am not sure where that confusion has come from. We had contacted NHS Health Scotland, who had been involved in preparing that green curtain campaign for NHS smoke free policies. The figure in the financial memorandum of £300,000 is based on that figure. In terms of the submission of NHS A Shanann, NHS A Shanann has expressed concerns that, because NHS A Shanann has bespoke signage already and that it intends to do something national, that will impact on its existing ability to deliver smoking cessation services. I take it that, if NHS A Shanann has bespoke signage already, is there an intention to effectively replace that, or would you be happy to allow it to retain it? The alternative is that there will be a financial impact on the health board. Lastly, if NHS A Shanann decides that it will have to have a national signage, would the Scottish Government pay for that? We have said that we would meet the cost for the statutory signage. The approach that the NHS boards have as an entire grounds policy and what we are proposing is a perimeter around hospital buildings, and there would need to be statutory signage that made people aware that it was an offence within that area rather than a policy. However, we would see that as complementing the signage that it already has in place. The wording for the signage would be a matter for regulation, but I think that it would be possible to work with health boards to make sure that the signage aligns. For example, a statutory signage says that it is a smoke-free grounds, but it is an offence to smoke within a certain perimeter, and that would allow the two sets of signage to work together. Part 2 of the bill is a duty of the candor, and the bill introduces a duty on organisations providing health and social care to ensure that when death or harm has resulted from an unintended or unexpected event, people are notified and apologies are made and actions are taken to keep people informed of the review of the events and of the fuller steps taken. What sort of events are we talking about here? I will take that question. The sorts of events that are likely to come within the scope of the duty of candor are unintended or unexpected incidents that result in death or significant harm. Significant harm in the bill, which, as you know, is being scrutinised by the Health and Sport Committee, includes definitions such as permanent lessening of bodily function or changes in the structure of a person's body. It would be significant and serious levels of harm that result from systems and process failures in the health and social care system. Negligence in effect? Negligence would be something that would be determined by a legal process. The duty of candor procedure as proposed is a procedure that would be applied on the basis of the incident having occurred. It may in some cases be an incident that is subject to future legal scrutiny and where there would be a claim made for negligence, but the duty of candor procedure itself is silent in relation to determining negligence. It is around the NVP regulations. I note that the FM estimates between £1 million to £1.5 million regulation costs, but COSLA estimates £2 million. Do you want to comment on where you perceive that £1 million to £1.5 million is proportionate and perhaps where you would feel that COSLA is overestimating, if that is what you consider? We have not yet had a breakdown from COSLA in terms of £2 million figures. To continue to work with them, I think that the financial memorandum highlights that it is quite difficult in the market evolving quite quickly, so COSLA is working to break down those figures and what is making up that £2 million figure. We remain open. Our figure is based on the best data that we have available to us on the number of additional retailers that they would be expected to manage for enforcement purposes, but we continue to work with COSLA to assess their figures. There is the possibility that, because there would perhaps be overlap between existing tobacco retailers who then stock NVP, that would be perhaps a double counting exercise rather than new money that would be required because those premises would already be subject to regulation. Glasgow has requested in their submission that, when the funding is allocated, rather than perhaps being subject to the traditional funding formula, it looks more specifically at the number of premises that each local authority would be expected to cover. Is that something that the Scottish Government is open to or would need to be determined with COSLA? It is something that we could consider. We have not set exactly what the enforcement requirements would be, because it might be a lower level of enforcement than is currently expected for tobacco, and that would be commensurate with the lower level of harm presented by NVPs. It would be a matter for the local authority funding distribution group to decide on how that money is distributed to local authorities, but it is certainly to approaches that we could put forward for consideration. A couple of points. I want to follow up what the convener was saying about the fact that the hospital grounds will effectively be split between one pit that has a statutory regulation and the other part that has just got the local regulation, is that correct? The suggestion is that, in itself, having that split is costing extra money, and the suggestion from one place would be that it would be simpler just to have the whole area banned. Can you explain why that is not the case? It was something that we considered when we consulted. We considered a number of approaches, including non-legislative measures, to support NHS boards to enforce their smoke free grounds policies, but, in part, we considered what legislation would be appropriate. We had to take into account the different sizes of hospital grounds across Scotland, so for some it might be a very short distance to walk to get outside the grounds, and for some it could be a matter of miles. We wanted to provide a proportionate, consistent approach across NHS boards. We think that a perimeter approach captures where the highest volume of traffic of people, so the ultimate aim is that people are not having to walk through clouds of smoke to get into hospital and that that provides an approach that captures where the main traffic people are around hospitals. Hospitals are quite varied. If I take Glasgow to the Royal, it is almost like one building, whereas Stobhill is spread out over umpteen buildings, but you are happy that the costs are going to cover both of those situations. I suppose that I am struggling to see what is new in here that should not be happening already and why there are any extra costs. It talks about unintended or unexpected events, but is that not what the NHS does all the time? You are right to highlight that some of the elements of the duty of candor procedure are part of good practice already, particularly within the NHS. We know from work that has been undertaken that there still is variation, particularly in relation to staff support, support for people affected by unintended events, resulting in death or harm, and training for staff. The resources outlined in the financial memorandum to the NHS have been focused mostly on training and support elements of the duty of candor procedure. In terms of disclosure and review and apology, there are some organisations that will come within the scope of the duty that are part of smaller organisations or some other health and social care providers who may not, either because of the frequency of such events being very rare, have not developed the procedures and approaches that encapsulate all of the elements, the disclosure, the review, the training and support that the bill outlines? Right. I can understand that, if a nurse is working in accident emergency, presumably either by her training or his training or by her experience, they will be dealing with us all the time. The even front line nurses, medical and care staff who are dealing with the difficult and traumatic events, having to deal with an episode of unintended or unexpected death or significant permanent physical injury is not that common. Some of the challenges that that presents to individual staff require specific training and support. Yes, staff are dealing with day-to-day, but we are talking about the sort of harm that results from systems and process failures that staff do not always feel confident to deal with. The next person to ask questions is Jackie Baillie, who I would like to welcome to the meeting and to the committee. It is her first committee meeting as a full member, and she is replaced by Malcolm Chisholm, who is a very diligent member of the committee. I invite Ms Baillie to declare an interest relevant to the remit of the committee. Nothing relevant to declare, but I hope to be just as diligent as Malcolm Chisholm, convener. Okay. Well, thank you. Coming here on time would be a good start. Oh, come on. Allowing for traffic from the west coast of Scotland to here is sometimes a challenge. The convener is not interested in excuses. I look forward to the Government improving the road network. Yes, trains indeed. Okay, then. Jackie, questions from yourself? Thank you very much, convener. I am really looking forward to being on this committee. I think—can I concentrate on the duty of Canada, because the Scottish Public Services Ombudsman indicated that they thought that there would be a rise in the number of complaints? Does it not follow that there is likely to be a rise in the number of negligence claims, something that the convener himself raised? Have you done any assessment as to what the value of those could potentially be? In terms of the Ombudsman's suggestion that there may be a potential rise in complaints, the feedback and dialogue with, if I take the NHS as an example, is often that when there have been these events and there is early disclosure, support, engagement and involvement of people affected and a commitment by the organisation to review and learn from what has happened in a way that actively involves people affected. A lot of the time, that does not then result in a complaint being made because people are satisfied that the organisation is taking things seriously, keeping them involved and letting them know the outcome of a review. That is reflected consistently in feedback that we receive around some of the work in handling adverse events. That is also something that we have had feedback on in relation to negligence claims. Many people embark upon a legal process because there is not dialogue with the organisation, they are not getting answers to the questions that are keeping them awake at night. When spoken to, they will say that they do not want that to happen to someone else and that is their primary motivating factor of engaging with the organisation. There is some international evidence that when healthcare systems implement new policies and procedures that support disclosure and apology, that claims can reduce. Therefore, those are elements that we would expect to be a positive impact to the duty of candor procedure, although it is something that will be monitored closely in the initial months and years of implementation in relation to claims and complaints. On the basis of that monitoring, will there be flexibility to respond should claims increase? In terms of claims, that would be something that the central legal office would have factored into their on-going planning. The director of the central legal office has discussed with the policy team the possible impact of the duty of candor being implemented, so it is part of their planning assumptions. There will be regular engagement and feedback around the early observations and if the procedure is implemented. There will be a need to consider other organisations, but I am thinking of smaller organisations that are not likely to have claims that often, given that the extreme nature of the events that come within the scope of the procedure. Some of the training and support resources that have been identified would be focused on helping those organisations to plan and think about the impact on the two issues that you have raised. Does the Government acknowledge that there is likely to be a short-term increase in the demand for enforcement? Yes. The Scottish Government provides £2.5 million a year to local authorities to enforce smoke-free legislation, which has been in place since 2006. That £2.5 million is on an annual basis. The estimate of 149 hospitals is really extending the smoke-free legislation modestly. Again, we have not had any breakdown costs from COSLA around what that might be, so that is part of our discussions with it. However, we would probably consider that alongside the funding that it has already received to implement smoke-free legislation. The Government views that there could be a short-term increase. Does the Government have a view on the likely size of that short-term increase or do you just acknowledge that it is likely to be an increase? We remain open-minded at the moment. As I say, we have not had any indication yet on a national basis from COSLA, although it does not cover all local authorities what that looks like in terms of a breakdown, so we would be open-minded to considering what it has put forward. You are open-minded to funding it, at least in the short term, if evidence is provided from COSLA and others. There appear to be no further questions from the committee. I am just wondering if there is any further points that the committee would like to make before we wind up the session. Thank you very much for answering your questions this morning. I will now call a recess to 11 o'clock. That would get everyone excited to enable our witnesses to be seated. I will now reconvene the session. Our next item of business is to take evidence on the Higher Education Governance Scotland Bill's financial memorandum from Universities Scotland, and this panel session will be followed by a subsequent one from the Scottish Government's bill team. I would like to welcome to the meeting Alasdair Sim, Professor Anton Muscatelli and Gary Coots. Members have received copies of all written evidence submitted along with a briefing note from the clerks. However, before we go to questions, I would like to ask Mr Sim to make a brief opening statement. We have substantive and evidenced reasons for being concerned about the prospect of ONS reclassification of universities as a result of this bill. Those concerns arise from our consideration of the relevant ONS guidance on reclassification and consideration of the bill alongside the cumulation of other controls on universities. We have reflected on the European system of accounts 2010 and ONS and Treasury guidance on its application. In brief summary, our reasons for concern are as follows. Government powers over an institution's constitution are an indicator of control that the European system of accounts regards as defining whether an institution should be classified in the public sector. The bill expressly gives ministers the power to amend universities' constitutions by altering a composition of their governing bodies. It changes universities' constitutions by giving ministers the power to determine the selection method and term of office of the chair of the governing body. It also expressly gives ministers the power to change universities' constitutions by changing the membership of their internal academic regulatory body, the academic board or senate. Treasury guidance on sector classification is clear that this is a risk even if ministers do not themselves appoint the members of a governing body. The very wide powers given to ministers by section 20 of the bill to amend primary legislation affecting universities' governance and therefore their constitution are also a risk factor. Treasury guidance is explicit that even if powers to control an institution's strategy or constitution are not exercised, the fact of the existence of the controls is what will be taken into account in a reclassification decision. Governmental control of pay rates is regarded as an indicator of public sector status and the bill expressly provides for us in relation to chairs of university governing bodies. The ONS, applying the European standards, will take a view on the overall level of control exerted by government on universities, applying the European system of accounts test of whether government is able to determine the general policy of institutions as well as the specific indicators of control. The new powers proposed in the bill would have to be looked at alongside significant existing government controls and influence on universities' strategy and operations. Cumulatively, that creates a very significant risk of ONS reclassification. Controls apart from the bill that should be taken into account include detailed ministerial guidance on the priorities for use of public funding by university sector, detailed outcome agreements between the Scottish funding council and individual institutions to give effect to this, which effectively determine institutions' strategy in relation to recruitment and teaching of publicly funded students, publicly funded engagement in the industry and public funding of research, adherence to the higher education governance code as a condition of public funding and financial controls exercised through the Scottish funding council. Those include influence on pay through requiring institutions to have regard to public sector pay policy, the requirement for institutions to seek permission to borrow money about thresholds that are established by the funding council and requirements of funding council permission before granting security over land or property or offering guarantees or indemnities above certain thresholds. Professor Muscatelli and Mr Coots can set out the impact that ONS reclassification would have on their institutions. All universities are concerned about this and its impact on entrepreneurial activities, business relationships, capacity to invest and capacity to attract philanthropic support. We have had some discussion with the Scottish Government, but, given the uncertainties, we have not been put in a position that gives us confidence that the issue has been properly investigated. Given the risks to the sector, we feel that university leaders need to have absolute certainty that the bill will not lead to university's ONS reclassification. Thank you very much for that opening statement. Obviously, with the bill team falling on from your own evidence session, a lot of your concerns that you have expressed will be put directly to the bill team. I would hope that at the end of this morning we would have some answers one way or the other. Obviously, in this session, we want to put some questions to yourself. It seems to be that much of your concern, the overwhelming amount of your concern is on the issues that you have just raised with regard to the potential for reclassification. Can you ask what legal advice you have received on this, or have you been in contact directly with the Office of National Statistics as an organisation? We have sought our own legal advice on this, and our legal advisers have also worked with colleges on ONS reclassification issues. They are really closely engaged with the issues, and the advice that we have had from our legal advisers is that the bill, when looked at in cumulation with existing indicators of government control, creates a significantly increased risk of ONS reclassification. My second part of the question was whether you have been in touch with the Office of National Statistics directly. We have not been in touch with the Office of National Statistics directly, not least because we are trying to manage the risk here. I think that if we were in touch with them directly, I have some concern that we would catalyse the risk that we are trying to avoid. I think that the very fact that we are discussing this in the public domain, I think that it is not as if it is going to be a secret to them that this is obviously a concern. I mean that the concerns that you have raised have actually been raised with us from a number of educational institutions, as you would imagine. So, I just find it a little bit odd that you have not contacted them, because I do not think that it would be a bolt out of the blue. It is like, oh, we are not actually thinking of classifying them, reclassifying them now that the universities have actually contacted them directly. Maybe we will just do that. To me, that seems a rather weak response. I can see your point on that. I think that the responsibility here lies with Government to be able to give us the firm assurance that this issue has been dealt with with the proper due diligence. At the moment, we simply do not have that assurance. I really feel that strongly that that is where the responsibility lies. I can categorically assure you that those questions will be put directly to the Scottish Government bill team, and we will not admit our responsibilities in this regard. Can we add to that a little bit? The Office of National Statistics has, in practice, over a wide range of issues, made it clear that they would make the determination once they have seen what has actually happened on the ground, and giving advice in advance is not something that has happened. I think that that has happened with Aberdeen Relief Road, and other proposals that have taken place. It has proved very difficult to get definitive advice from them, and because they are completely independent, their analysis can change. What might be available today might not be the case in the future. It is not an organisation that people have had much success in getting clarity of advice on what approach they will take until the decision has been made. If that is the case, what category of assurances could the Scottish Government give you that it would not impact on reclassification if you are saying that you cannot find out whether an organisation has reclassified until after legislation has been passed? I think that that is exactly the risk that I am highlighting, that I am not sure that we would be able to get that sort of guarantee. The question therefore remains, is it worth the risk for what the bill is trying to achieve to put it in to create that risk? Our job is to look at the financial aspects, not necessarily the policy objectives. Professor Muscatelli. To follow up on that point, which I think is a very important point, as Mr Sim highlighted, there are the sections of the bill that perhaps bring the greatest risks, which are around section 8 and section 20, and section 13, which was mentioned, are actually not central to the review of higher education, which was seen as being implemented as part of government policy here. To my mind, again, it is about minimising the risk and seeing whether we can improve the bill through this dialogue. Mr Coots is absolutely right that there are no guarantees here, but it is whether we can ensure that we do not crystallise that risk. You say that we should improve the bill. Do you want the bill to be improved, or would you prefer the bill not to proceed to full stop? If you are asking me, convener, my view about this is that I do not think that there is a clear mandate for this bill, because not only the Government but other stakeholders in Parliament have said that there are issues that the bill should confront. From my point of view, I think that there are different views across my stakeholders in the university, so I think that we have to recognise that. There are things that can be improved, so that would be my personal position. Let's move on a wee bit. You have obviously said that the Government has provided no explanation of why it considers additional ministerial powers desirable, and then you go on to say that the detailed assumptions contain the financial memorandum are not the subject of consultation. What kind of discussions did you have with the Scottish Government, specifically on the financial memorandum? The financial memorandum is none whatsoever. The consultation on the legislative proposals asked in very general terms what costs and savings there might be, but on the specific figures that were presented in the financial memorandum, they were not subject to consultation. I think that we could have helped to refine those, so I regret that. If I may pick up on Anton's point about ways forward, I think that the ministerial powers in this bill that are causing this concern also were not the subject of consultation. They weren't included in there. The discussions that we have had with Scottish Government officials, I think, lead us to think that they were trying to solve a technical problem of how to enable continual evolution of the membership governing bodies in ways that do not require constant primary legislation. However, what has happened is that they have, to some extent inadvertently, come into territory where they really have created this risk of O&S reclassification. We are very anxious to find a way forward that takes those ministerial powers out and reframes the way that we can deal with those issues, because I just do not think that the due diligence has been done on managing that risk. Since the financial memorandum was published, have you had any discussions with the Scottish Government or has it been built since then? Yes, we have. Particularly orally and in writing raised our concerns about the O&S reclassification issue. At the moment, we are waiting for a substantive response to that. That is fine. I will not press that further. I was going to, but if you have not got a substantive response, I will not. One of the other issues that have been raised by yourselves and, obviously, committee members may want to ask questions about from other submissions simply because you are the umbrella organisation, one of the things that has been raised is by a number of others. Including yourself is the possible loss of charitable status. You have not really mentioned that in your brief. Is that now because you accept that there would not be a loss in charitable status? Because Oskar seems to have, and his evidence to the lead committee made it clear that, in their view, that would not be an issue. Yes, we will be protected on Oskar's advice. Oskar's position in brief summary would be the bill in itself probably does not lead to a risk of reclassification for charitable purposes, but if ministers use their powers to amend the membership of governing bodies or to amend the membership of academic boards or to make the very general changes legislation that section 20 allows them to do, that could lead to a situation where Oskar had to re-examine whether universities were meeting the charity test in relation to ministerial directions. I am taking that at face value. Oskar recognises that the bill is pertinent to the ONS reclassification point, which is that the bill gives ministers power to alter the constitution of universities, and that is one of the risk factors in relation to ONS reclassification. That is an important point that you have made there. What Oskar has said, and I quote, we do not see anything to prevent any conflicts of interest arising from charity trustees nominated under the provisions of the bill being dealt with in a way that enables the trustees to meet their duties, and we do not see the provision for charity trustees to be nominated in terms of the bill being incompatible with good practice. In a sense, I am taking that as face value, that is their view. I think that there are issues that will arise for people who have been nominated by interest groups on to governing bodies as to how do you reconcile your mandate from that interest group with your overall duty to the good governance of the institution and whether there are situations where you are going to have to absent yourself from the business, because your mandate from the interest group may be different from your duty to the overall institution. I am not saying that that is unmanagable, but it will create difficulties for individuals in certain situations. I do not want to delve too much deeper into that, because a lot of colleagues now want to ask questions, so I will touch on one further point. You have said that, as every member of the committee can confirm, university chairs have much more demanding portfolios that can be addressed in six days per annum. The time commitment is at least one day a week, and in recent years it has been greater than that. You say, regrettably, that it appears for the financial memorandum that the Scottish Government does not understand the significance of this role and the time required to fulfil it. In terms of the actual financial memorandum that was published in the UNS, you obviously have significant concerns about that. What can a financial impact do you think that that underestimation, as you put it, will have on the universities? If you were to take the Scottish Government's model figure for remuneration per day, it shows a rate of £512 per day as remuneration for chairs of their modelling figure. Then you apply that to a medium for the number of days a chair would be typically working on university business of about 40 days. You would end up with a figure of around £368,000 expenditure on remunerating chairs across the sector. I think that our concern is not necessarily first and foremost with the amount of expenditure across the sector. I think that our concern really is again on due diligence. If the developers of this bill conceive the chair's role as simply being chairing a meeting six times a year, in our view, they have failed to understand what the actual role of a chair of a governing body is. Obviously, Mr Coots has given a significantly greater contribution than that to his role. That obviously raises concerns about other aspects of the bill, but it is not understood, as he suggests. There would also be an issue around the roles that other people on courts would be playing as well. People who chair finance and general purposes committees or audit committees also have a significant responsibility. As soon as you start paying or remunerating certain members that rank brings in at a daily rate for the work that they are doing, it brings in to question as to find other people who are also contributing a lot of their skills and time and for very important functions of the institutions, not all to be remunerated. It looks as though it is very much like the NDPB model of remuneration, which would be a big change for the sector. Of course, that would increase costs as well. In terms of the financial memorandum that has been published, taking away the O&S thing for the moment, do you feel that, in any way, it represents the financial impact of the legislation? Are you happy with some of it, not all of it, or are you not happy with any of it? My view is that the biggest risk financially without a doubt is the O&S one. The rest is really of an order of magnitude, which is more around, as has been pointed out, how it is designed to ensure that the governing body is effective. Mr Coots pointed out that the costs of membership are more like in line with what you would find on a health board or on a non-departmental public body would probably give you closer to an estimate of what it would be. Financially, the biggest risk is without a doubt O&S, because, as I am happy to outline, that is how universities operate quite substantially on using their operating services to make substantial capital commitments. That is the key area, I think, of concern. My real concern with financial memorandum is that it is a concern that may be illustrative of the quality of thinking that is going into this work. For instance, they are projecting a cost of £1,000 for the electoral process for a chair of court. When I look at the evidence that has been submitted by universities, I have run electoral processes, for instance, for alumni members of governing bodies. They are saying that they are on a proper electoral process. You are talking about £21,000 to £30,000. In a sense, it is not the big money that is a concern. If the assumptions in the financial memorandum are so at variance with what institutions are saying the actual costs would be, it just gives me concern about the quality of thinking that has gone into the issues behind the bill, including the UNS classification issue. It would also be our requirement to change our articles association to meet the new terms. The last time that we did that, we got to consult with about 17 different organisations, all of whom have a view on our articles. We have the legal fees association. It is a huge complication, and it is the opportunity cost rather than the real cost, which is significant. A number of pieces of evidence have suggested that, but I have not asked you questions. I would like to try to leave some questions for colleagues around the table who may wish to explore some of those areas. The first one to ask questions will be Gavin to be followed by Jackie. Good morning. Mr Sim, you said that you have taken legal advice as University of Scotland. With lawyers having looked at it and presumably examining treasury guidance and ONS publications and so on, if I heard you right, the legal view was that the bill would significantly increase the risk of reclassification by the UNS. In terms of dealing with the Scottish Government—obviously, we can put questions to them, but you said that you have had no substantive response. When was the UNS issue first formally raised with the Scottish Government, either in a meeting or in correspondence from your knowledge? I raised this very shortly after the bill was published. In email correspondence with officials on 17 June, I said, look, this is a significant issue and we really need to be sure that you have bottomed this out. Having not had assurances that that was the case, I then wrote to officials on 13 August setting out a series of questions about the bill generally and the advice that it has taken on the bill and asking for a range of assurances. I know that they are working on it, but we are still to see a written response to that. When I put questions to them, I can say without any doubt that you raised it with them late June in a meeting. I raised it in late June in correspondence. I also discussed it in a meeting in late June with them. You then wrote formally to officials on 13 August, and that letter has not had a formal reply yet. What I have not been able to find is anything in writing of what the Scottish Government's official view is. Again, I will ask them, of course, but is it clear to you what their official line on this is? Are they saying that there is something to review? Are they saying that there is nothing to review? Is there any indication of what their broad line might be? The sort of conversations that we have had with Scottish Government officials, their initial line has been, well, we do not necessarily think that there is a problem here, because we are not taking direct ministerial control over appointments to governing body membership and we are not introducing new controls over borrowing, which is one of the factors that was considered in O&S's decisions on classification of further education colleges. My response to that, as I tried to set out at the beginning of a session, is actually if you look at the guidance and if you look at O&S practice, O&S looks much more widely at indicators of government control over strategy, indicators of government control over a constitution of organisations. My own view is that the due diligence has not been fully done and that it looked very narrowly at the issue, but if it were to step back and consider the guidance and O&S's practice, it would realise that it had to take a wider view of managing this risk. Let us say that the legal advice that you have been given turns out to be correct. The bill passes with no amendment and the O&S does reclassify, so let us just assume that that happens just for the sake of argument. What would be interesting in all panellys here, if it were to happen and reclassification did occur, what would be the main consequences for the sector and indeed for individual universities here today? In aggregate, we are concerned that institutions would not be able to borrow money to invest, that institutions would not be able to hold over reserves from one year to another so that they could actually invest in teaching and research, that we would lose philanthropic support because people do not really want to give their charitable donations to central government bodies, but I think that probably both Professor Moskatelli and Mr Coots have been considering the impact for their individual institutions and can really exemplify that in concrete detail. I am happy to say that my own university is about to embark on a very major capital programme, partly because some of you will know that we have just recently acquired land. We have grown by about 20 per cent in the last couple of years and we have a plan that our governing bodies approve, which will involve an investment of about £775 million over the next 10 years, so a significant capital programme in terms of its positive economic impact on Glasgow and indeed Scotland. That has to be financed, it has to be financed from our operating surpluses. This year, we were probably going to be running a surplus of the order of just over £20 million. We have cash reserves, which we've built up to try and obviously do this, which will be of the order of about £145 million by the end of this financial year. Again, all of those would not be used, but we couldn't carry these over, as Mr Sim has pointed out. The other area, which is important, is of course philanthropic income, because we need to fundraise. We have potentially plans to fundraise about £110 million over a period of time to try and help funders. Again, it's difficult to do that without being able to carry over money. Those are the financial dimensions of the impact on an institution like Glasgow, but you can multiply it many times if you were to look at similarly sized institutions. We already have some practical experience of impact, because our academic partners that deliver ITG for us are for other education colleges, so they experienced reclassification over a year ago, and that has already had a significant impact on them. They cannot retain reserves from one year to the next, and any reserve that is created has to go into an arms-length foundation. That arms-length foundation has begun their control, and while there is no experience directly as yet of those arms-length foundations doing other than returning resources when required for building projects or whatever else to the institutions that are generated, there is no guarantee of that at all. We are in the middle of looking at a procurement process for student residences, and the finance companies that are looking at it are wanting to see the strength of our covenant. If our reserves are put into arms-length covenants and are off our balance sheet, the cost of our borrowing is going to be significantly higher if we can borrow at all. If we are wanting to develop new courses and new partnerships with our communities and industry to develop what is required for the area that we serve, we need to be able to take risks. If you do not have some reserves, your ability to take reserves when you are working on annualised funding is much reduced. I think that there are very significant issues if we are not able to operate in the way that universities have traditionally operated. We have not had the same luxury of several hundred years' worth of history as Anton's organisation has, but we want to be able to develop a relationship with our alumni, with the businesses in the Highlands and Islands, and to develop the sorts of reserves that will allow us to become the powerhouse that will develop and support change within our region. We are very concerned that if we are classified as a public body, we will lose the opportunity to do that. Is that something that University of Scotland could do? I would certainly be interested to see the potential aggregate impact of what has happened. We have heard about Glasgow and Mr Cooch, but it would be quite interesting, from my point of view, to look across the entire sector if you ask each university what is the likely cumulative impact across the board, where it happened. Obviously, there are two issues there. Is that something that University of Scotland would be able to do, do you think? Yes, and if I could just give you a sense of that at the headline level. At the moment, from the latest available figures, the university's overall level of borrowing is around £530 million. The consequences of taking that on to a public balance sheet are quite concerning. I will not go into tax reform because I think that that is more linked to charity points, but if you look at the overall level of capital investment that universities are putting in each year, it is in the order of around £377 million. Again, if that is put at serious risk by our inability to borrow or by borrowing coming within tight government public spending controls, then our capacity to be doing that investment in providing the best possible facilities for students and the best possible facilities for research will be severely hampered in that. Speaking on to charitable status, the convener asked a number of questions, but just a question that was sparked by his questions, so I am grateful to him for that discussion just to spark the question. If I read the Oscar advice correctly, it didn't refer at all to the ONS issue. It was looking at charitable status entirely in its own right. That is just my reading of it. Obviously, Oscar could respond to that. My question would be this, and you may not know the answer. It looked at it in its own right, but just for the sake of argument, let's assume that the ONS reclassification did occur. Presumably, charitable status falls overnight because you couldn't have charitable status for a central government organisation. I am just wondering if you've looked into that question? I think that it would require a separate legislation. Essentially, what happened to the colleges was that they got brought into being classified as central government bodies with the impacts that Mr Coots has described, but the government specifically legislated to say that even though they do not meet the normal charity test because they are under substantial ministerial direction, we are creating a specific legislative exception for the colleges so that they can retain charitable status. In my view, if we were ONS reclassified with the grave impacts that we have described on that, government would need to legislate if we were to retain charitable status. Last issue then or last area is just—again, the question was raised slightly earlier, but we've had some, we've had one witness wrote to us and basically just said, kill the bill, but assuming that that doesn't happen, are there negotiations and discussions to happen and so on? Are there obvious things, from your point of view, that could be removed from the bill immediately that would, if not eliminate the risk, turn it into a minor risk instead of a significantly increased risk? Are there specific clauses that could come out quite easily? I think particularly looking again at section 8, which gives ministers the powers to change who's on the governing body of an institution, looking again at section 13, which gives ministers the power to actually change the internal structure of universities by changing who's on the academic board or senate, and looking at section 20, which gives ministers an extraordinary wide power to amend primary legislation. I think those are the ones that really raise the critical risk factors, and they're also new ones. They weren't in the consultation on the legislative proposals, so I think there's creative scope for a rethink about how to do things around those sections that take ministers out of the equation. Okay. I'm grateful. Thank you. Thank you. Thank you. Jackie to be followed by John. I think you're right to be cautious about the application of VISA 10, given that the Government's infrastructure projects have been caught up in that as well. I wonder whether I might tease out some of those financial aspects, because you talked in general terms, Mr Sim, about £530 million a year being borrowed by universities, typically what kind of projects are those, and what would a consequent delay in that money being available due to those projects? My colleagues talk about the impact on specific institutions, which will illustrate a more concrete level, but, typically, as you look across universities, what's being done with that borrowing? Well, we've got a great deal of estate that's not really fit for purpose. I think just under half of our estate is in what's called conditions C and D, where either it's in need of immediate replacement or it's really falling apart, it seems, and we'll need that very soon. Often that's 1960s, 1970s estate that's also hideously carbon inefficient, so there's a lot of work going on to renew the estate, make it fit for purpose with students, make it fit for purpose in carbon reduction terms. Obviously, on the research side, endlessly, as innovation goes forward, you need to make sure you've got the facilities and the equipment that are there to keep Scotland right at the cutting edge of research. When you start falling back in that competition, it's hard work to to make up lost ground. Also, looking more widely at our economic impact, if we're going to be competitive in making sure that Scotland is a place that's attracting international talent, both at its student and academic level, we just need to be able to say, look, we've got the facilities that can compete with countries that have got much higher levels of investment, and that's hard work. If I could add one of the important things here is the economic leverage effect, because one interesting thing is that if you go back, say, 10, 15 years, there were, of course, many more capital grants that were given through funding council, through other agencies, because of spending cuts that these have had to be reduced. In many respects, we've been able to do things that have helped to set that, because universities, as has been pointed out, are very major economic engines in the economy, and we are able to invest for the long term in a way that it's very difficult to do with public money because of the constraints on public budgets. It's a huge impact, and I'll just give an example of the project that Alastair mentioned. In preparation of our major infrastructure development, we're currently installing a combined heat and power system across our campus in Glasgow. That's a £14 million, £16 million project. It will reduce our running costs of the order probably of £2 million, £3 million a year in terms of energy costs. It will reduce our carbon footprint by 20 per cent. It's something that has had huge positive impact and has been well received. Those are the sort of things that are important. Apart from the cutting-edge research, which is, of course, hugely important, we've won a major quantum technology hub, £29 million. That's required. Several million of investment to set that up, one of the four quantum tech hubs in the UK. Those are the sort of projects that can only be done over the long term. They can't be done on a short-term basis year by year. The vast majority of our estate is owned by our academic partners rather than by us directly. We're in a very different position from the others. However, the issues are in relation to being able to make investment. We want to provide the absolute state-of-the-art research facilities. We need to increase the amount of research that's taking place in the Highlands and Islands. We're in the process of developing quite a lot of those facilities. We're relying on people at Highlands and Islands Enterprise and Direct Grants to be able to do that in the future. When we know that the public settlement is going to be tight and we want to be more sustaining ourselves, we want to develop partnerships, develop capital reserves and be able to make those sorts of investments ourselves. We want to have exactly the same sort of opportunities as Glasgow and Edinburgh have had because of their history in the future. If we don't have the opportunity to maintain reserves, that will be gone for us. I'm picking up from your direct impact on capital and an indirect impact on revenue, too, which would be equally concerning. I noted that Mr Coot's earlier answer said that ONS does not give advice in advance, but I understand that the Scottish Government is currently in dialogue with ONS about new models for infrastructure projects. Therefore, I would have thought that this is maybe something that we should seek assurances that the Scottish Government is in dialogue about the implications of that for ESA 10. In seeking legal opinion, are you aware of any other European institutions, universities, colleges or whatever, that have similar governance arrangements with their own countries that might point away through the difficulties of ESA 10? Not in detail. I could just answer that at an aggregate level. One of the reasons why universities across Europe tend not to be doing as well as UK universities, for instance, in international league tables is that, quite often, they are a subject to quite a narrow range of controls by their national or regional governments. In fact, they often control whether they can acquire and dispose of property and controls over senior appointments. Anton may be no more than me, but it is not untypical for delegations to be coming to University of Scotland to actually learn about how we manage a system of autonomy that is both respectful of universities' contribution to the public good while also creating that space of autonomy where we can act entrepreneurially in a way that is in the public interest. We are in a happier space than many European partners and competitors in that. They have certainly looked to the UK as an example of how do you carve out a kind of space of responsible autonomy where you have the entrepreneurial capacity to act in the public good? I certainly know that from Europe, where in some European countries, universities are very firmly in the public sector, these capital investments have to be carved out from public spending, and that takes a country like Italy, where a campus, if it has to be renovated, it needs to be central government, it has to budget for this within the public spend. If I can answer the front aspect of that question, when colleges were reclassified, they were not just reclassified here, it also happened in England and Wales. I gather that the Welsh legislation is interesting because they introduced elements that allowed greater student and staff representation on the governing bodies, but while allowing the colleges to be reclassified back into non-profit independent organisations. So there are models there that could be looked at to avoid that level of control, while at the same time exercising the concerns that stakeholders have about how governing bodies should be composed? My final question is that it strikes me that nobody has asked on this unless the Government has for a view on this. Would that be something that you would regard as helpful? I think that if we are looking for assurances from Government, we need to be clear that there are reasoned assurances. Given that the Government can control on this, I think that that, to my mind, would mean assurances that they agreed with ONS. To carry on that theme, I saw in the Universities Scotland submission that says that the ONS programme already includes an intention to review the classification of higher education institutions. Leaving aside that legislation, is there already a question on that point? I think that comes back to what I said at the beginning about the accumulation of risk. If you look at the existing control regime where, for instance, there are some controls over borrowing, where we are working to quite a tight financial memorandum from the funding council, and where we have an outcome agreements framework where what is delivered by universities is actually quite clearly a negotiation with a Government agency, you are already in the territory where you are starting to look at ONS over your shoulder. When you add to that the risks that this bill poses, I think it puts you in a position that really gives you quite substantive worry. I think that the ONS exercise that we described has been stimulated by something different. It has been stimulated by how do you classify universities in England given that they are increasingly reliant on fee income? Nonetheless, I think that if you look at what has happened, for instance, the way that the ONS looked at further education colleges that were catalyzed by looking at six-form colleges, we cannot be confident that they are going to approach that exercise narrowly. I think that previous experience would indicate that they would not. Could you put figures on that? I am an accountant so I quite like numbers. Is the risk already 75 per cent and this bill will take it up to 76 or is the risk 50 and this will take it up to 75? Can you give any indication? I probably find it more intuitively easy to put it in red amber green terms. I would say that if you are looking at the impact of ONS reclassification, you would put it very much at the top end of red risk. I would say that if you are looking at the likelihood of ONS reclassification, I would say that it is hovering on that amber to red border. Already? Well, no, with the bill. Without the bill? Without the bill, I would put it lower amber, probably. Right, so we are moving around within amber, broadly. Obviously, the impact would be, I put red on with you. We have had some touch on the financial concerns already, and I just wanted to ask a little bit more about them. The fear seems to be—well, there are a number of issues, especially from the chair's paper. The operating surpluses, the colleges have found a way around that, it appears. I am on a charity where a pair of charities and one of them holds funds and feeds in the main charity once in a while. That is quite a model that is quite kind of normal. That would not be a serious problem, would it? I think that it would be a serious problem. I think that it is not necessarily a problem today. If you have trustees on the charitable body that are completely in tune with the way that they were set up, they will be established forever. The new charities, the Alrads, Llems and Foundations have the powers to appoint their own trustees, and over generations they will change. I do fear that their powers are to support educational activity, not necessarily within the institutions that put the money into the alf. There is no tie-up there. Certainly, if I was lending people money on the basis that they had access to resources through the alfs, I certainly would not take that covenant as being particularly strong. Is that a discussion that you have had with banks? Not directly myself, but we have had recent experience where the strength of our covenant in relation to the procurement of the student residences that we are in the process of doing just now is that the ability of the university to hold reserves to make sure that the revenue payments were covered was absolutely essential to be able to do that. If that money was then held in an alf, we would not be able to give them that assurance unless the separate trust made that commitment at the same time. I believe that they might be able to do that, but that would not be guaranteed. I do not want to get into too much detail. I will just come back to you in a minute, Professor Muscatelli. My point is that I am just asking if there might be ways around some of those things. I think that there might be ways around that. They would not be as safe, they would not be as secure, they would not be as clear-cut. I suppose that my argument would be the same. Why increase the risk if it is not essential to achieve the purposes of the bill? Professor Muscatelli? Just two points. At the moment, we fundraise through trust, which is a separate charity, but because there is control, it is consolidated into our account. Anything that you create has to be arm's length, otherwise you do not get around to your own problem. From my point of view, and this is, I suppose, the point that I made about improving the legislation, the declared intent of the legislation is to create transparency and accountability. I do not think that taking reserves out of an organisation and putting it into another one, which does not have that same transparency and accountability, is a solution to that first problem, if that is the problem that we are trying to solve. To me, that is the issue, because if you start, for instance, putting lots of staff and student representatives onto the ALF, then arguably you could end up exercising control and then you consolidate it back into the organisation. These are the complex issues that you generate by trying to actually create different structures. Yes, of course there might be a solution, none of us, I do not think, have the full picture here, but it is about managing that risk, really. You have brought up something that I was going to bring up later. Obviously, this committee is looking at the finances, but you have mentioned specifically democratic accountability and transparency. One of my questions here is, are your concerns about the finances real concerns or are they a smokescreen because the universities do not want democracy and transparency, which seems to be the argument. Today's herald letter from Dr Ian Banks, UCU Glasgow president talking about the difficulty faced by staff and students wishing to influence a governance structure that is too often focused on business rather than education or research. That is the counterargument to all this. It is pure, obviously, that the education committee is going to look at the substance of that, but I am trying to be convinced that you really have financial concerns and it is not just a smokescreen. I can assure you personally that I have financial concerns. I can recognise the different stakeholders who have different positions than they do, and that is why the bill has been published and has been brought forward. I think that many of those stakeholders who have expressed concerns about transparency and accountability would agree with the point that we are making. Let me take a particular example. Suppose that an institution ends up running a deficit because of unexpected circumstances, such as a cut in their research take. Clearly, staff and students would like a smooth glide path to that, and it is something that we can provide through the fact that we have the ability to carry deficits forward to use our cash reserves. On that point, I suspect—I cannot guarantee it, I cannot read in the mind of other stakeholders—on the issue of the finances in O&S reclassification, there would be quite a lot of agreement across the sector. Just to reiterate, this relates to sections of the bill that were not in that original review of higher education governance. It is additional parts of the bill, which, quite honestly, I do not think that any of us expected. I think that this is an important question. I honestly believe that if the financial consequences of the bill were not there, we would be able to work with Government and make sure that the issues that they have addressed in the bill in relation to transparency and representation on university governing bodies, we would be able to have a good discussion about that. We already moved a very long way in the introduction of the code of good governance for university courts. That is already having a significant impact on the make-up of the courts. It has not had its first review yet. We agreed with Government that that would be reviewed to see how its impact was. It has not had its first formal review yet, and I believe that there is an awful lot that we can do to make sure that we can meet those needs, to make those demands, to make sure that our institutions have evolved and are fit for purpose today. I also have to say that the sort of concern that Mr Manx and others have raised, I would ask, does the bill actually address those? I think that if we are putting a huge amount of risk into our institutions because of the financial consequences, I do not believe that the other provisions within the bill actually address the concerns that people have raised sufficiently to make sure that they achieve what they want. I think that what we need is a better dialogue between Government and ourselves to try to make sure that we can get institutions and governance arrangements fit for the future. Very briefly, I would say that the problems that we have raised with this committee are very real concerns. I think that the real concerns are capable of creative resolution. If you look again at the powers in the bill that are given to ministers and look at alternative ways of doing things, I think that the ons risk can be managed downwards. I would just like to be confident that that will be the case. I think that this committee has issues with the ons in totally separate spheres. I think that there is a whole question in there that we probably need to look at separately. I take your point on that. You are not really arguing that ministers control the universities by putting in a structure as to how the governing bodies are being elected, because that happens in the commercial sector and happens all over the place. Theoretically, Government can interfere in anything, so there is never total freedom from the risk of Government control. I think that what I try to argue at Beanie is that you really have to look at this in the round of accumulation of Government controls. Obviously, we have quite an intensity of relationship with Government in terms of specifying what our outputs are and being accountable for those outputs. However, when you look at ons risk factors, and you look at risk factors about that cumulative pattern of influence or control, and when you look at ons risk factors specifically about whether Government has the capacity to amend the constitution of an institution, you get into this territory where you do start to be seriously concerned that the risk of ons classification has been heightened just simply by objectively looking at the guidance and considering the way that ons has behaved in relation to other sectors. Thank you convener. Mr Coots has spoken about the experience and the college sector of the restructuring there and its impact on financial arrangements. Is it fair to say, Mr Coots, that not all of those issues that were of concern in the college sector have in fact been resolved at this moment in time? Certainly, I have been made aware of some quite technical details that have had fundamental issues and problems for colleges. For example, if a college is running its own company on training, which colleges do now, and these are multi-million-pound businesses in some instances, whether they have their own insurance scheme, for example, or they have to use a Government insurance scheme, that can have severe repercussions. My understanding is that some of those issues have not yet been resolved. Is that your experience, Mr Coots, or do you think that most of those questions have been settled? There are a number of workarounds being achieved, but with a huge amount of effort and a huge amount of time being invested in looking at the way that we manage that part of our business rather than looking at what our primary purpose is and making sure that we are getting good quality education available for as wide a group as possible. Certainly, if you look at the University of the Islands and Islands as the regional strategic body for the colleges that operate in our area, and we are now in the position that if one of our institutions runs into a financial difficulty in year, then we would have to either keep a top slice from all of the institutions to be able to cover that during the year, which means that you either have a surplus that goes into an alf and takes it away immediately from the primary purpose of what you are there for, or you do not take the top slice, you give it to the colleges and one of them could end up running a deficit that they are not allowed to do. There are significant risks around the college sector, which I do not think that we have fully experienced this yet because it is very early days in the new regime. I just think that it would be crazy to introduce that risk into the university sector if there is not overwhelming value being added by the legislation that would counteract that. From what you are describing, there has been an opportunity cost to the sector to undertake this work and create new structures that do not sound particularly efficient to me. Additionally, you are saying that there are future risks or potential problems that have not yet transpired but that are potentially there for the future. I assure you that when the chairs of the individual colleges and their principals meet with us together, as we do regularly, we spend about 80 per cent of our time looking at governance and management issues, rather than looking at education, which is a real tragedy and an awful lot of that is created by the complexity that has been introduced around ONS, as well as other aspects. I can ask you, the convener has quite well made a point about whether the chancellor himself speaks to the bill team around their negotiations, discussions or lack of them with ONS. A number of members have raised the issue over what has happened in terms of the review of the capital programme and its reclassification. As a result of the European Account System ruling, the ONS is finding after that. It seems to me that this shows that there is not a laissez-faire approach from either European or ONS level on these matters. Do you have any information there for us? Given the light of that very problematic experience to the Scottish Government with real impacts on capital funding arrangements, has there been any work undertaken by the Scottish Government or any reconsideration of the issue in the light of that experience? Is that something that you are aware of that has been taken into consideration, or has there been a lack of dialogue again from the Scottish Government on that issue? I am not aware of the reconsideration of the issue, but I think that what has happened with the Evergreen Western peripheral route has, in our minds, heightened the risk. As you say, you are seeing quite an activist ONS that is taking a close look at whether things are tipping over between private and public centre classification. At the same time, you have seen that the ONS is taking a very close interest in housing associations in England, not on the basis that ministers were taking direct power to appoint members of housing association boards, but on the basis that ministers are exerting influence over housing associations by making a policy priority that they dispose of their stock. In my mind, the risks around ONS issues have been heightened by recent ONS decisions. I personally do not feel confident that this bill has been considered properly in the context of what are really quite heightened risks. You would hope that heightened risks have been taken into consideration, or you expect that they should be so, but you have no reassurance from the Scottish Government that they actually have. To be fair to people that I talk about in the Scottish Government, they will say that they have reached their view on ONS issues, but I simply think that, given that it is necessary to take a wide view on the guidance and on the ONS practice, I simply think that they have not opened up that view wide enough to take a holistic view of the risks that they dispose of. Why were those issues not foreseen in terms of the process that was undertaken during that review process? Was it an issue simply that those issues were not expected to be problematic, they were not anticipated? Or was it that you believed that the review saw that its objectives, its intentions could be achieved without creating this kind of problem? I think that the latter, whether one is fully in accord with what was recommended in Ferdinand von Prydyn, because you agree or not, did not really conceive that Government would be taking extensive new powers over universities as much more about a kind of internal reform of university governance. I think that the idea that ministers would take powers that could enable them by regulation to alter competition with governing bodies or academic boards is something that does not sit comfortably with Ferdinand's review. If you look at Ferdinand's own evidence to the education committee, while he is obviously supportive of the broad principles of what the bill is trying to achieve, even he is expressing concern about the means by which this bill is setting out to achieve them, with particular regard to the new powers that were given to ministers. Even the chair of the review has concerns over the impact of the bill and the way that it is being pursued. That is very helpful to know. I want to ask some questions on a few areas. First is around—he was yourself, Mr Simpson, who said that the costs around the appointment of a chair, you felt, had been significantly underestimated, and you used the comparison of election of alumni members to the court. I note in the financial memorandum that it says, although costs will depend upon nature and size of the electorate, it considers that the maximum cost of this election would be broadly equivalent to the cost of electing a rector within the ancient universities. Now, I do not get to vote on who the rector is at Aberdeen University, but I do get to vote on who the alumni members of the court are, because the vote is carried out across all the alumni. You are surely not suggesting that the appointment of the chair or the electorate for that would be thrown open to the alumni of the university, such as myself, who do not really have much of an interest in who chairs the court or the university, which I graduated from over a decade ago. No, but I think—I will let Anton talk about costs of rector election, but I think essentially to have a proper due process. This, for instance, has been managed through Electoral Reform Society, so you have a proper due process, and you would need a proper due process if you were to have an election by students and staff. That is still a wide constituency, and other categories of elected members are specified in section 4 of the bill. We are just seeing the evidenced experience of institutions running— It is not going to touch the cost of an alumni election. I do not—I think that it depends how it is organised. I think that if you are going to do it properly, you have to actually get it professionally organised, and I think that it has got a cost. I mean, you know, we are talking about—I am just citing what institutions have said, and those costs of £21,000 to £30,000 at least give you a ballpark. It is far removed from a projection of £1,000 that is in table 1 of the financial memorandum. Professor Muscatelli, do you have anything wrong? I am afraid that I do not have estimates at hand. I think that with electronic voting methods, if the constituency were to be staff and students, there would be larger set-up costs. I would not imagine that the running costs would be particularly high, because most of us have very effective HR systems that allow us to know exactly who would be on the electoral roll. There would be set-up costs, which would probably be in the ballpark of five-figure sums, but, after that, you would presumably be able to run them quite effectively. I do not think that that is the significant cost. There was a point made about the difficulties that we faced by those members who were from a nominating body and the potential for them to represent that nominating body as members of the court or of the board. That happens already for many people who are appointed to charitable trusts and boards already. I served as an appointed member from Aberdeen City Council on a number of charities where there are very explicit rules around which hat you are wearing when you are sat around the table. Presumably, that is not going to change as a result of that legislation. I think that what you say about explicit rules but what hat you are wearing is actually really, really important and certainly something that we would want to clarify during the passage of this bill. I think that there is a difference between what already exists across many institutions, which is being a trade unionist elected by the staff who serves on the governing body and understanding that your role there is, as a governing body member, with the corporate responsibility for the good governance of the institution. I think that it is quite proper and the possibility that you are there in a sense like a 1970s public corporation where you are there because you have a mandate to pursue from your interest group and that is your only role on the board. As this bill goes through, I would be wanting to see the absolute clarity that if you are on the governing body because you have been nominated by an interest group, your responsibility is, as you have described it, the responsibility to the good governance and strategy of the institution, not a responsibility to the constituency that nominated you. I want to interrogate this point around the reclassification a little bit further. With forbearance, I mean that this might take a little bit of time for me to quote the relevant sections. I note in the University of Scotland submission that the state, the heightened risk comes from power to decide how long people should become chairs, power to decide how long people should serve as chairs, power to determine the renumeration of chairs, power to determine composition of institutions governing bodies, power to determine internal structure of institutions. Now, the Oscar submission, while, as Gavin Brown says, does not reference O&S reclassification, does nonetheless interrogate each of those areas in turn. It says on appointment of the chairing member. It does not give ministers the power of appointment or removal of a chairing member. Moreover, regulations cannot be made without consultation with the older university involved. On remuneration payable, it says, our view is that this would not in itself amount to an ability for ministers to exert control in a way that is central to the activities of the higher education institution. Again, ministers must consult with the older university involved before making regulations. On composition of the governing body, it says, these sections do not give ministers the power to appoint or nominate members to the governing body. This power lies with the various nominating bodies, nor do they give Scottish ministers the power to remove members of the governing body. In our view, therefore, they do not give ministers any power to control the higher education institution's activities. On composition of the academic board, it says, these sections do not give ministers the power to appoint members to the academic board, nor do they give Scottish ministers the power to remove members of the academic board. In our view, therefore, they do not give ministers any power to control the higher educational institution's activities. On each of those points, which O&S will give cognisance to, Oscar has given due cognisance and concluded that they do not amount to ministerial control. Presumably, O&S would be looking at that through the same lens. O&S will be looking at it through a different lens. O&S will be looking at it through the lens of the European system of accounts and the various guidance that exists on the interpretation of the European system of accounts. Certainly, if I look at the Treasury's guidance on the interpretation of the European system of accounts, it is absolutely explicit that power to change the constitution of a body is an indicator of ministerial control. As I set out at the beginning of this session, ministers are expressly taking the power to change the constitution of bodies. We are definitely in a position of heightened risk of O&S reclassification, especially when you look at it with the accumulation of existing controls that could be taken into account by O&S as indicators of government control. The current regulations or rules as they apply to universities in terms of composition, constitution etc. Were they a result of statute? There is a difference between being a result of statute and being a result of ministerial decision. Parliament has, at various stages over the centuries, taken powers to make legislation about the composition of university governing bodies. The ability of Parliament to do that is not something that would lead you to O&S reclassification, but what this bill does, which has not been done before in Scotland, is to give ministers the power directly to change who is on a university's governing body or to change who is a member of its internal structures, particularly the academic board. That is, in our mind, a marked departure from what Parliament has previously thought of as appropriate for ministers to do. Hypothetically, if that were to be that that could only happen through further primary legislation, that would give you comfort and that the bill could remain as it stands. That would be a different matter, I guess. Fugine? Thank you for all the information so far. It has been really interesting. I just have one very simple question on the back of all of that. Why do you think that this bill is in place or it is being proposed? What do you think the Government wants to see changed as a result of it? Well, I think that one can debate the merits of the bill, but I think that the Government has expressed an intention at various stages that there were elements of the recommendations that have on Pranginsky's review that, in the Government's view, could not simply be taken forward by the sector's own action but required legislation to make it happen. I think that the merits of that will obviously be debated through the bill's parliamentary process. I can understand the intention, but I think that the issues that we are dealing with with this committee are, in a sense, unintended impacts of that intention and unintended impacts, which we think really need to be intelligently managed. I agree with that. A central intent of the bill would not be modified, which is, if it is to apply the Von Pradinsky review of higher education, it would not be modified by addressing the issue of section 8 and section 20, because that goes beyond that original review. It is about potential future changes with coming back to the earlier question, which I think that if that were to be done by primary legislation and did not affect, did not introduce control, it would be less of a risk than doing it through regulation. I think that for very, very understandable reasons there has been an awful lot of pressure applied by staff and students around representation on courts and to ensure that they have proper engagement. We are looking at institutions that have been on-going for hundreds of years and they need to evolve. I think that there is a commitment to ensure that those constituencies have a voice on the governing bodies is something that there has been a lot of pressure for. I think that there is a commitment made to legislate for that, which I do not think that there is a requirement to make. We are seeing a bill that is to meet pressure from particular constituents rather than for the purposes that it stated. We can achieve what the concerns of trade unions and staff members and students in other ways in continuing to evolve the code of good practice. I think that that is where we should go. Do you think that it is a matter of trust or that the Government has been pushed to that? There were demonstrations out here from students and trade unions, and the universities did not seem to react to that. Is it fair that they would try and react to that? I think that universities have reacted to that. I think that the code of governance has gone an awful long way. If you look at the representation on our courts, if you look at the expansion of the people who sit on our courts, it has changed a lot. I would welcome having a full review of the way that the code has impacted on the way that the effectiveness of our courts is scheduled. Unfortunately, the bill has prevented us from progressing with that review. It would certainly, in my view, be sensible to have that review that we can take full account of before we make a judgment as to whether legislation is required to make it go further. From my personal perspective, I believe that we can achieve the intentions of governing it around the representation of courts without the need for legislation, which carries a huge amount of risk that could be very detrimental to the sector. It is also a very diverse sector, and you will appreciate that if you were to look at the governing bodies across the piece, you will see very different structures. If I were to tell you that, on my governing body or the governing body of my institution, we have six representatives of the academic staff, two staff representatives who are elected, who are invariably trade union representatives—well, trade union members who are put forward with trade unions because they will have the electorate that can get them elected. We have two student representatives, and we have a rector who currently is not attending meetings, but who may attend meetings if he or she wishes. It is a very different structure from another institution. I think that this is the issue. How can this diversity be managed in a sensible way to meet the aspirations of other stakeholders, which has already been mentioned by staff, students and trade unions, in a sensible way, which allows good governance to be exercised? That, to me, is the problem that this bill is trying to solve. If we could do that in a sensible way, as has been pointed out, I think that we will be in a good place. However, I am more worried about the financial consequences in the context of the committee's interests. Mr Coots appeared to indicate that the legislation in and of itself to amend the governing structures gave him concern. It seemed from Mr Sim's response to myself earlier that it was the power of regulation or the ability for secondary legislation to make amendments following that legislation that was the more pressing point of concern. I just want to get to the nub of this. Is it the view across the panel that there should be no legislation in relation to the composition of those bodies, or is it simply the fact that that legislation could be amended by secondary legislation that is the problem? Levels of concern. One is the concern about financial impact. I think that the concern about financial impact is the one that we have described. If the Scottish Government looks again at the ministerial powers and takes out ministers' power to amend the constitution of governing bodies and ministers' power by regulation to amend the composition of acemic boards, that is likely to manage the O&S risk back down. That is the specific issue that we have been dealing with in this committee. It is obviously the wider issue of genuine debate as to whether legislation has been necessary, given that the sector has already introduced a higher education governance code, given that every institution has got robust representation of students and staff on the governing body. That is a moot point that will be debated as the bill goes through the Parliament. That has concluded questions from the committee. Are there any final points that you want to make before we wind up this session? Thank you very much for responding to your questions. I will call a five-minute recess to 11.20 to give members a chance for a natural break and to replace their witnesses. We will now continue our consideration of the higher education governance Scotland bills financial memorandum and take evidence from the Scottish Government bill team. I therefore like to welcome to the committee Laura Duffy, Kerry Twyman and Stephen White. I offered the bill team the courtesy of a brief statement, as one had been asked for by previous witnesses that has been declined. We will go straight to questions from the committee. Of course, the opening questions will be from myself, and then I will open up the session to colleagues around the table. The first thing that I want to say is that this committee has seen dozens of financial memoranda over the years, but I have to say that it is the first time that 90 per cent of the discussion has been on what is not in the financial memorandum itself. That is obviously something that you are aware of from this morning's deliberations. Let us get straight to it. I am just wondering what due diligence was undertaken in putting together the financial memorandum to take into account the concern that has taken up most of the evidence that we received this morning in relation to the potential impact of the Office of National Statistics in relation to the bill. The consideration of risk attached to reclassification of Scottish universities by ONS was not a feature that we considered would be in the financial memorandum, but a walk back from that to when it was first considered as a substantial risk. It is not a risk that would appear in the memorandum because we had analysed it very carefully for literally a number of years. I think that back 18 months when the bill was in its genesis in terms of looking at what had come out of the 2012 review of higher education governance chaired by Professor von Prondinski, we started to look at what the code of conduct had achieved and what was the recommendations in that report which might form the basis of the bill. The issue of reclassification was factored into all of that thinking, through our analysis of the European system of accounts 2010 guidance on the indicators of control. The summation of that work with dialogue across government was that the indicators of control where the bill, its final plan content, would be compliant with those indicators of control therefore to go back to my initial point is why the financial memorandum does not feature analysis of that. Could you pull your mic a wee bit forward? It's just because you're quite quiet and it's just to make sure that we can all hear you effectively. Obviously, one of the things that's come out of this morning's evidence and is in there evidence that we should be well aware from University Scotland is that they said that they're asking how it would be ill-advised for the Government to press ahead with the proposed legislation without having first obtained a categorical assurance from the ONS that the new ministerial powers will not lead to universities being reclassified as central government. Has that taken place and have you had legal advice on that? I think about my interpretation that the ONS won't give categorical analysis or summation statements on the plans of this Government or any Government. They will look at what a Government has legislated for or provided for when it's in front of them and they will make their judgment. I mean, they're an active organisation. They take an interest in many areas of public policy and finance, but there's no point at which there's been a discussion where they have assessed and cleared, if you like, any content of the bill. That's not, in essence, as I understand it, the way that they work often, treasurially encourage Governments across the UK to have dialogue with them prior to that. Yes. I mean, to be fair, what you've actually said this morning was what came out of the evidence session this morning as well. It's almost like it has to wait until the dust is settled before you can actually see whether or not the ONS will have an impact. However, what Mr Coots, who's sitting behind, said in evidence, and I said this morning, said this morning was, it would therefore be, and I quote, crazy to take the risk of actually going ahead in terms of financial aspects under these circumstances. What's your response to that? What I can say is that it's been a thorough consideration of the risk with the emphasis squarely on the indicators of control. I've removed them from my folder, and I wouldn't read them all. I think there are eight principle indicators of control set out in the European guidance, and if you just pick the first one, it talks about an indicator of control being the rights to appoint V2 or remove key personnel. The bill is about the how, not the who. It's about process. It's not about people. Nothing in this bill requires higher education institutions to ask ministers for permission for anything. It's also important that there's been a lot of discussion of the secondary legislative powers, and I think that we've seen loud and clear what people have said today. However, the written evidence is that there's a lot of it, and it's very compelling, and we'll look at all that. However, the secondary legislation, in essence, was an attempt to future-proof the bill in order that you don't need primary legislation to do something again when modification would be a good alternative. It's not about ministerial control. There have been some assertions that almost ministers might find themselves on governing bodies. It's absolutely no intention in the Government's part to do that or have any direct involvement control on appointments. Again, it's about process. That type of direct appointment and V2 and so on removal of personnel runs through most of the first two or three of the indicators of control. It then goes on to talk about ownership of voting interests, rights to control through contractual agreements and so on, control in other areas. There's been a third examination of the indicators of control, both the Treasury extrapolation of the European guidance and the European guidance itself, and the conclusion of the Scottish Government is that the risk proposed by the bill does not advance beyond any risk that existed prior to that, which came out in the previous session as well. Just to go back a little bit about, I guess, whilst we have not been able to approach O&S directly on this, because that isn't the way it works, just to give a little bit more coverage around finances relationship with O&S probably over the last nine, 10, 11 months in light of the ongoing capital issues, which have been raised. We are very cognisant of reclassification issues across the board. It's something we're very aware of. It's a risk that was highlighted very, very early on in this process. We have been developing very close relationships with O&S because of the capital discussions, but wider, because there is a recognition that the Scottish Government needs to have wider skills and knowledge around O&S classification, and on the back of that, we've actually had a workshop done a few weeks ago with O&S going through all of these indicators and the various scenarios that would lead you to trigger an indicator, and whilst we didn't specifically talk about universities, Stephen and I both attended that workshop and asked questions that were specifically about this bill without putting that into specifics, because O&S don't like to answer specifics, and we did probe that further, and O&S are actually coming back tomorrow for another series of meetings with finance professionals in various policy areas, again teasing out these very issues so that we have that understanding, so whilst we can't go to them with a scenario and get a direct answer, this is the more roundabout way in which they've been extremely helpful and given us a lot of time to give us these kind of assurances, which allow us to make these risk assessments, because I think effectively what we're being asked as is to do a risk assessment of there being an O&S reclassification trigger. I guess the point is, are we to stop a wider potential benefit because of a risk, or are we to do that assessment to find that risk as low and proceed with something that we think provides greater benefit, and that's the scenario here. We've decided that there's a low risk, that if there is a risk it's around factors that are already present in universities and that nothing that's being done here in our belief raises that risk to a higher level. If it even needs to be said that there's absolutely no intention in the Government's part that reclassification would be an outcome, something that would seek actively to avoid, we wouldn't want that as an outcome. I think that's probably understood, but just in case it needed to be said. Yeah, I think to be fair, everyone understood that, but I think it helps for you to say that as well. That's positive. In your view, is this reclassification issue a red herring? It's not for officials to agree or not with that proposition, but we've assessed risk very carefully and not just recently over a long term backwards. We've had dialogue with O&S and universities in this realm before that as well. As I say, it's inactive. It's not just shot up recently. We would always take seriously anything any stakeholder partner says and look at the evidence to this committee and the evidence to the Education and Culture Committee, but on balance the view of the Scottish Government is that no additional risk is proposed by this bill and that its provisions are compliant with the ESA European System of Accounts indicators of control. Okay, now you talked about a number of discussions, but what has come out of a lot of the evidence here is that there's a feeling that stakeholders and universities were not actively consulted in terms of the financial aspects of this. Numerous submissions have said the same thing, and I'll just quote University Scotland, which basically is the Committee of Scottish Chairs, which says, the detailed assumptions contained the financial memorandum were not the subject of consultation, and University Scotland said that the consultation document contains no detail on financial assumptions. Further to that, we heard this morning that there was a meeting with the chairs in June, and they wrote on 13 August to the Scottish Government and have received a response despite over a month having elapsed. I wonder if you can talk about that. Do you not think that it would have been a positive thing to have responded prior to this meeting to that letter and writing, not least to the advisory committee? We have noted that we have the letter and said that we would assemble the response as quickly as possible. It is quite a substantial piece of correspondence running into a number of items, which were complex and significantly serious issues are posed to the Government, so we have a variety of colleagues making sure that we get the correct answers back, so I can guarantee that our response will be returned to University Scotland. However, as I said, colleagues would probably concur from University Scotland that it was a substantial memo to us, but, of course, if it had been prior to today, that would have been absolutely ideal, but we are still working through the range of issues. If I could, on the financial memorandum, I think that there has been quite a lot of emphasis on the secondary legislation elements and almost their financial impact, linked to the overall reclassification risk. I think that the opinions and views shared through the evidence will be taken into consideration in looking at the way that they are currently framed. I think that that would be open to Government to do that, particularly to the benefit of sitting at the back and hearing the evidence from colleagues earlier. They are probably expressed in a new way to me than in prior dialogue, but the idea that risk could be addressed by looking at the content of those or the presence of those at all, that is something that we will take particular notes of. There was a point that consultation was not had on those items, those sections. I think that I said earlier that the views of colleagues were slightly surprising in the sense that they were largely intended as future proofing, and some of the sections might have been another bill that would have passed off without as much comment, but I can see the clear concerns and views of many who have submitted evidence. There was no intention, and certainly no intention, that there has been certain commentary about ministerial control. Again, I think that I said before that the idea of a minister sitting or a direct appointee of ministers sitting on any university governance structure is just not the objective at all. Let's look at some of the issues on the published memorandum. You have talked about discussions with partners and stakeholders for whom there may be modest financial implications to be absorbed in existing budgets. Taking on board the view that there has not been as much discussions as possible, you have also went on to say that there is no information readily available to calculate staff costs associated with the recruitment of a chair. You have went on to say that it is also anticipated that governing bodies will meet an average between four and six times an academic year. As you will probably be aware, those issues have been hotly disputed. There appears to be some concerns that the bill does not say that it would take into account what the true costs would be. For example, the University of Edinburgh has said that the bill's draft would involve significant compliance costs for university-estimated £79,500 of one-off costs and up to £125,000 a year, and annual recurring costs. It has been said by witnesses this morning that the financial memorandum does not seem to express any real understanding of what the role of a governing chair would be and that its role is much more substantive than that. I wonder if you can comment on those issues. I will probably start with the central one first than the central criticism. In looking at the remuneration issue for elected chairs, there would be elected chairs if the bill was enacted. We were examining the core of that job. The job is different in different HEIs and many days have been cited, 30 days, 50 days, 25 days and so on. We were looking at the core of that job so as not to overstretch the coverage of what would be statutory remuneration. I should say that by remuneration it would be allowances. It is not salary, wages or pay, but given what the evidence is presented and what colleagues have said earlier, I think that it is fair enough to say that perhaps that was pared back in its focus a little too much. I think that it would be our job to look at all the evidence and revisit some of those assumptions, particularly on the days spent by a chair doing their job. I think that we would concede that. In the issue of elections, the University of Dundee said that a recent election at the University of Dundee for the post of graduates assessor on court, which is outsourced to the electoral forms, cost £21,000, but you are basically suggesting that it would only cost £1,000, the election of a chair with a minimum of two candidates. I think that that is only a partial estimation. I think that maybe Laura will be able to amplify that, but that is around the expenses for the candidates. I think that the financial memorandum from right concedes that because the franchise for the election is not yet clarified, it is difficult to estimate exactly how much the election would cost. Obviously, there are lots of different ways to hold an election with a range of costs. I would also say that a lot of those expenses are, and this is a general point, they are already incurred by institutions. I suppose that what was particularly difficult in compiling the financial memorandum was the net additional cost over and above what is already spent on items like this. I am sorry, Laura, on to that. The cost of the election would be very dependent on the franchise. If you had a franchise that was simply the governing body, the cost would be almost negligible. If the franchise went beyond the institution, I think that something that was discussed earlier was if it included a lumini, you would have an electorate that was vastly greater than if it was kept to staff and students. As Stephen indicated, it was very difficult within a financial memorandum to quantify exactly what that would be with the bill as introduced, including regulation making power. It is very difficult to separate those additional costs for different institutions. However, in terms of general look at how it might be done, there are electronic based systems that can be purchased, which have a limited cost that will cover numbers that sit around staff and students that would not incur excessive costs. I think that I would also add to that that the estimations of costs are about compliance with the bill. Extending practice beyond legal compliance could result in lots of different costs depending on what you mean. For example, if a newspaper was to be used for an advert, you might use one newspaper and comply with the legal obligation in the bill. Another institution may decide to use four or five. The costs could be different depending on the approach that you take, which will not always be a lesser scope that could comply with the bill. It is not that there is a tariff of different approaches. However, the financial memorandum's estimates are not about underestimating anything or giving an impression that there are no costs. There was a central challenge in the additional costs and the evidence that has been gathered by the committee and by the submissions to the Education and Culture Committee will inform additional work on the financial memorandum. I am just going to open up the session to colleagues around the table on who he is sitting, but looking at the financial memorandum and the concerns that have been raised about the lack of consultation on it, given that, obviously, you may not have considered the ONS thing to be as big an issue as it has become if you were to redraft the financial memorandum. Is there anything else that you think should be in it that is not already in it? Given my own opinion based on all the work to date, the financial memorandum would not warrant inclusion of a treatment of the hypothetical cost of a risk. It is not an exact science, but that is what you are asking me now. That would be my summation today. Thank you for that. The first colleague to ask questions will be Jackie before by Gavin. Very much, convener. When were you aware of ESA 10 and its impact on classification? Myself and predecessors in higher education division would always have been aware that it was a determinant of classification of universities, but particularly in this project, it was, if you start off from 2012 when the review was published by Professor von Prindinski, and that became consideration of whether there would be legislation, and there was a code of conduct for a period after that. There would always have been knowledge that reclassification was an issue. In earnest, it was looked at in great detail after the consultation in the bill ended in January 2015, and then the period went through cabinet consideration and so on. It was looked at across Government in detail. In answer to your question, knowledge of its determinant role is there all the time, but specific reference to it in detail after the consultation closing when we were looking at all the views. That is helpful clarification, because the Scottish Government certainly did not think that there was a problem until they came up against reclassification for their infrastructure projects, so I would have been interested to know that you had some insight knowledge that the rest did not. At that point in January 2015, who did you talk to? Who have you taken advice from about reclassification? Can I just jump in? You mentioned around the capital classification. To be honest, our thoughts about this would have actually come before that. They would have been on the back of the college reclassification. As we have alluded to earlier, when the college reclassification was initially being looked at, which was actually back in 1112, universities were considered in the round in those discussions. In many respects, the issue of college and university reclassification was already on the table long before really the Aberdeen bypass problems were being looked at, so I would not have said that it followed after that reclassification. It was always something that we were aware of following on from the discussions around colleges. I was trying to impress that it is an evident piece of the way we work. It has always been there in universities, but when we were looking specifically at this bill, given the consultation on this bill, that was the point when you go through Cabinet process, you look in detail. As well, the consultation items are not exactly the same items in the bill, so it needed to look at specifically then, because two of the items in the consultation were not taken forward at all. Once we had the final short list, if you like, then that analysis was conducted in detail. Within Government, to answer a question, I think you asked as well, what is the full range of interest across Government, finance, legal, policy and so on? It is internal advice, you have not sought any external advice and all the advice therefore has been within Government. On this bill and its compliance with ESA 2010, and to go back to something I said earlier, it is not conventional that Governments would approach ONS on a regular basis to censor, to check things at their inception. I think that perhaps you are referring to dialogue on other infrastructural points, which are later down the line, but when this bill looked at on a case-by-case basis, the period of intense examination of its compliance was the first half of this year, after the January consultation ended. I hear, obviously, we have heard today about the exchange of letters, although I think that Universities Scotland is waiting for a response. If you have been looking at this in detail since January, surely you are in a position to respond to the kind of detailed letter that you receive from Universities Scotland? On the ONS in particular, and if I paraphrase it wrongly, I think that in the letter that they sent us, which does run to half a dozen pages, they are looking for a category guarantee that ONS would not seek to reclassify. That is only something that ONS can do, so on that point, oddly, at that point it would probably be easier to dispatch a quick answer to some of the other very detailed questions about the underpinning legal detail in other parts of the bill, which are making us have to go through it, obviously, with great care so that the answers are correct. On the ONS point, only ONS can reclassify. It will not give a category binary answer on provisions in any bill until they see how it finally is enacted. It is the case that the Scottish Government will consult ONS, not for a definitive view, because it will not give you that, but for advice, as you have been doing through the workshops, which seem to have only taken place recently. The workshop that took place in the middle of August took a long time to schedule. Obviously, the person who gave the workshop is the key ONS individual who provides advice to the committee who makes decisions, so his time is extremely limited. We began talking to them in May of June about setting this up and decided to keep it until after the summer holidays, which is why we went with mid-August. I think the point is reclassification risk is on our radar when we are looking at all policy decisions, legislative things of this nature, when we are looking at risks in the round, financial policy, stakeholder, reclassification is very firmly on that radar and is one of the things we are looking at. It has become normal course of business over the past few years. There has been no specific tailored dialogue with the ONS on the Higher Education Governance Bill. In the case-by-case basis, our deep analysis of the indicators of control suggested that it did not present a risk that would warrant that. I am not involved in the work on the infrastructure side, but whatever the dialogue consists of, I expect that it is a result of a process that has gone before that. It has reached that point. All risk assessment in that area is different. They are not all the same assessment. With due respect, when you are talking about a risk assessment that is based on how ESA-10 is applied, given that it is the same piece of statute that flows from that, I would have thought that there would be a heightened risk or at least a heightened awareness amongst the Scottish Government about the potential risks of ESA-10 and therefore early engagement with ONS for advice would have been something that I thought you would have done as good practice. I think that we are not making ourselves clear. The way that ONS works is that they do not have a facility for you to go to them for advice early on. In the workshop that came out, they are extremely busy. The formal channels do not work that way. I think that if we were to go to them with a request around a bit of legislation of this nature, hypothetically we know what the answer would be. What we did do was use our skills and experience and the knowledge within the Scottish Government to assess those risks. As I said, we used our wider understanding based on discussions with ONS around other reclassification to build into that assessment. I am keen to answer your question as fully as possible, obviously. There are two different assessments of risk. Again, my knowledge of the infrastructure side, I am not involved in that, but I would imagine that there are very specific points of yes or no, you can or you cannot do things. What is being assessed here by stakeholders who have a different view to Government's view is almost a less direct risk issue because it is about what would it mean if there was a process set in train that the chair of court was putting place a certain way or the composition of the governing body? It is not the same as a very detailed point of a financial instrument or a structure or a model, so they are different. However, what I would like to reinforce is the thorough look at risk and that Government takes the risk issues that are proposed by stakeholders very seriously. There is no blasé approach to that. We have looked at it in detail, and it is a considered opinion that there is compliance with the indicators of Government control, and that is our summation at the current time. We have tried to make it clear that we have deemed that to be low risk. However, if, as a result of a wider UNS review of universities, there was any risk of reclassification, ministers have also made it clear that that is not a policy goal, so we would then work to ensure that universities were not reclassified and take what measures that took. Obviously, the precedent for that is what happened with the college reclassification down south in England and Wales, where UNS permitted them to review the control mechanisms to ensure that they remained outwith the boundary. We need to make that very clear. On the one hand, we did a full risk assessment looking at ESA 10 using our knowledge and discussions with UNS and deemed that there to be a very low risk that what was contained in this bill would lead UNS to come and look at universities and reclassify, but we were also very aware that, if that was to happen, and I stress that we deemed that to be an extremely low risk, we would then move to do whatever it took to ensure that universities remained outside that boundary. In the middle of that strategic take on it, there is some profitable ground for dialogue between Government and partners on the content of the secondary legislative provisions. I think that that has been reinforced again and again. Colleagues said that the bill would benefit from that and it would address issues of risk rather than a call for the bill not to be taken forward at all. I thought that we particularly took note of what Colleagues said on that point. Finally, convener, I think that that is very helpful and I appreciate the reassurance that ministers do not intend this. I do not think that anybody around this table is called for the bill to be scrapped, but I do think that listening mode and hearing what amendments could be made, certainly I think that I would encourage. You have done this on the basis of an internal risk assessment without any external advice and there is an opportunity cost if it is reclassified that I do not think that it would be appreciated by Government or by universities themselves. In the thorough risk assessment that you talk about, have you also assessed that opportunity cost if capital is counted against public borrowing, which it may indeed be if the classification goes against you? I suppose that the short answer to that is no because of the risk assessment led us not to do that work in the financial memorandum. However, we have all the figures put before us by our colleagues in the higher education sector who have shared in evidence their view of those opportunity costs, which we will examine very thoroughly. What you are saying is that if reclassification did actually happen, even though you think that it is extremely unlikely, you would be looking again at the bill's provisions to reverse some of the provisions in the bill to ensure that it was not reclassified? I think that all I am saying is that I cannot feel to have taken note of what colleagues have said today and highlighted that a dialogue and modification of some of the provisions might help risk rather than a removal of the bill, which has been some of the material that has been in the media and the press and so on. I think that all I am really saying is that we will look at what evidence has been given within Government and advice ministers on what that might mean and how it links to risk. I am not giving the figures credence that I have been by saying that. It is just that we have at our disposal these figures, we can review them, whether they are accurate or not, or whether we would agree with them. We have them to look at, but it does not change our essential summation that the risk is—it is not just very low, we do not think that there is a risk of a problem with compliance with the indicators of control and it does not advance any current risk in any substantive way at all. In going back to the original question, we are very aware of what the implications of reclassification of universities would mean. I work extremely closely with colleges, I am almost every day on the phone with FDs and SFCs. We are very aware of the long process colleges have gone through, which is by no means that an end has been difficult, and we are aware of the size of universities, the size of their reserves, the amount of borrowing, the capital project. We have been doing a lot of work with them on their 10-year capital planning, so very aware—I could not give you figures right now—but very aware of the extent of the financial implications that reclassification would mean, and that is something that we would absolutely want to avoid. From Stephen there, because I understood from your previous answers to Jackie that you were basically saying that we do not think that reclassification would happen, but if it did happen, we would be willing to look it up again to take that out, but when I asked that to Stephen, he said, no, so I just want you to clarify this key aspect. If reclassification, for whatever reason—I know that you are saying that it is low risk and you do not think that it is a likelihood—but if it did actually happen, would the Scottish Government then act to change provisions to ensure that it was not subsequently implemented? My opinion would be that the Scottish Government would not want to do anything that would hasten reclassification, but we do not think that that is a risk. I think that Kerry is only trying to make everyone aware that we take the issue extremely seriously and that that outcome would not be desired. The secondary legislative powers colleagues believe, because they have said that a discussion about them and potential modification may lower risk. I suppose that what I am saying is that the Government does not think that, effectively, risk needs to be lowered, but if it helps to build consensus and improve dialogue and relationships, then the Government would look at that. However, the reclassification event, should it happen, which we, as I said, do not think that it would, would not happen during the bill's passage? The bill would need to become an act and then there would be a long process of pouring through every element of it by O&S, and that is entirely theoretical. Yes, indeed. Okay. Garren, you basically said that O&S is pretty busy. This is not the way it works. They do not have a facility to give you a binding decision. In similar terms, has the Scottish Government written to the O&S and said that it can give us some guidance, some advice, and some thoughts on this potential bill? There is not a process to write to the O&S and ask for their advice on work that we are undertaking. The way the O&S works is that it decides to review a body for reclassification. Therefore, what will happen is that if a new body is coming into existence, or is the result of a merger, we will write to O&S and Treasury to let them know that this new body is being formed and our view on what its public status will be. That is when a new body is coming into existence. However, for a situation like this where it is a piece of legislation, there is no trigger activity that a new body is being formed that requires a reclassification, and there is no mechanism to go to O&S. It would be O&S's decision. They would write to O&S and say that they have decided, because of this piece of legislation, to undertake a review of the status of universities. At that point, they would come to O&S to discuss the issue. I accept that there is a convention and there might not be a trigger mechanism and so on, but why have you not just written to O&S? Given that we got burned over capital projects and we are keen to avoid that experience, they might write back and say that they are not going to tell you anything. However, what I find surprising is that you have not written to O&S and simply asked the question. That is tied up with the analysis of risk. There was no requirement to write to O&S, and I would also say that the heightening of the view of risk is relatively recent in terms of its coverage in the media and so on this bill specifically, because the provisions in the bill are all informed and inspired by what was in the review from 2012. Refined in the consultation which ran from late 2014 to 2015, much of what was in the consultation is intact in this bill. It is only in recent weeks that the reclassification risk by O&S has been very heavily covered in media and in dialogue. That does not mean that I am diminishing its importance, but the bill's content was not just devised in the recent past. Those concepts have been around for years and O&S was not cited. On O&S specifically, what my understanding is that it will not do is that you write to them and they will say yes or no. In fact, I think that they actually gave a response to the Scotsman. The Scotsman in the article about the financial impact of reclassification, which was at the end of August. The opinion was sought, and I think that the paraphrase is roughly said. We take note of this development, but we would give an opinion until we looked in detail at the provisions and their outcome and so on. That was then drawn in the press in a very limited way. I do understand that the will, perhaps through Treasury, to have something of a policy dialogue on request, but that would never lead to any kind of determination. To give you the authorising environment to proceed with—ultimately, at the start of a process, for example, things can change. You can have plans in a consultation. Two of the proposals go, there are four left, so it is a movable picture. They like to see the settled picture, as the convener said. They like to see the end point. I want to draw on this this year. Other than to say it in my humble opinion, it would be worth the Scottish Government writing to the UNS formally and just asking, can you tell us something? You cannot give us a full binding opinion, can you tell us something so that we do not get burned? I will leave it at that point. Listening to your evidence today, you have covered a full risk assessment. You have done a thorough consideration of the risk. You have done it over a long-term period. You have done a thorough analysis of the European system of accounts and so on. Over a period of years and specifically since January, a phenomenal amount of work by the sound of it. In the interests of transparency, can the committee please see some of that work? That is an issue that we probably need to provide ministers with advice on, depending on what form the work is in and so on. It is certainly something that we can go away and consider in that direct request. Of course we can, but we will work through what that collection is, what that work is in its constituent parts and get a reply to the committee. I will ask you to go further than you can go through a request. Can you ask the cabinet secretary formally, can the committee have access to this very detailed analysis, because it would furnish the debate and I think that it would help? You have made all the requests and recorded them. It was not in the financial memorandum, and you pointed that out. It also does not appear to be in the business and regulatory impact assessment. Can you explain why it did not appear in that document? I think that, roughly for the same reasons, it did not appear in the financial memorandum or assessment of risk. The summation of that was that it did not warrant inclusion in that document either. In terms of—you have done all this analysis—I mean, Jackie really put the question to you about what external advice you have taken and you said that you have not taken formal advice from the ONS. Have you taken any other external advice? Have you taken legal advice, for example? Have you spoken to experts in the field, as it were, or has it only been internal discussions? No external liaison on this issue. It is a sensitive issue as well, because the idea that we would have a wide consultation on that issue alone, when the issues were being unpacked in great detail internally, so no, we did not have our conduct external discussion and take expert advice from outwith Government. Of course it is a sensitive issue, but I just want to be clear that your decision that you have reached categorically and has stated with some strength is that there is no risk at all here, but just to be clear, you have not— I think that we have said that there is no risk. We have not ever said that there is no risk. No additional risk is what you said. It does not go beyond the current risk at all. No additional risk to that risk already identified. There is an acceptance within this field that there are certain facets of the structure of the university governance, world and financial arrangements legal and so on, that there exists a modicum of risk, modicum is a word I would choose, but this bill's provisions do not advance that existing base of risk. There is not no risk. I did not mean to say that, but no additional risk is what you said, and you did quite rightly say that that was low risk overall. You have reached that view and you did express it with some strength, but just to be clear, you have not taken any advice from any external source on this. No, no, okay. You are absolutely right. I am not miscoating by saying that it does not go beyond the current risk at all, not a millimetre or not a fraction. Our assessment is that any current level of risk is not advanced by the provisions in this bill. It is set against an analysis of the ESA 2010 system of accounts. Okay. I am just taking on one final point. I think that you have answered this in part already, but let us assume that you are wrong. Let us assume that, like AWPR, the Scottish Government got it wrong, or it got it differently from the ONS. Let us not call it getting wrong, but a different view that would have consequences, because certainly the Scottish Government in advance of that did not seem to think that it was a risk and did not seem to think that it was going to happen. We have been bitten here before, which is why I think that the committee is taking this so seriously. But if it does happen and if reclassification does occur, have you done any work at all on the financial consequences? You heard what universities had to say today, but has the Scottish Government done any of its own work so far on what the financial consequences could be if you get it wrong? No, because it remains in our assessment a hypothetical event, so no, there has not been any work done on that. In fact, it would be a very complex area. That is why I referred early respectfully to what has been offered through the evidence. We might not agree that there are any costs, but at least we would do the service to the stakeholders of having a look at what they have said and to look at those opportunity costs. As I said, perhaps we would not agree that there is a reality, but we will look through those. But no, no specific tailored work on costs of that sort. As we said before, we have a full understanding of the financial implications of reclassification, as raised in the session earlier, because we have been through the college reclassification. In almost every instance, the financial implications are the same. It is perhaps the size is magnified with universities, so whilst we have not looked at the specific numbers, I would say that we have a clear understanding of what those financial implications would be across the sector because of our experience looking at the college reclassification. I mean, the Government are well versed at doing work like that, but I suppose that in case it sounds as if there is any dismissiveness, that work not being done is all based on the detailed risk assessment, and that is the point, I think, that it hangs on. If we thought there had been a need to, we would have, but the risk assessment suggests otherwise. I have one very final question. As a pure matter of detail, you have written to on the 13th of August, you have not responded yet. It is six pages long the letter, but you have done all the work. You have done a huge amount of analysis here. Just roughly when should University of Scotland expect to reply to that letter? As soon as possible we are working on it now, and I would not expect that it would wait too much longer. On the specific ONS point, I think, I said to an earlier question that the answer to that would be quite short because my memory of the letter is that it is looking for an absolute guarantee that reclassification would not happen. The answer would be compiled out of the points about risk analysis and assessment that I have made today. However, the overall letter, as soon as we possibly can, when we are half-way through more than half-way, I expect to be working through it. However, there is no purposeful delay. We will get that letter to them as soon as we possibly can. Forgive me for pressing it, but are we talking days, weeks or months? Weeks in the most, certainly not months. You have made clear your view that ONS will not give you a categorical opinion about whether the provisions would lead to reclassification or not. I understand that, although I think that Mr Brown has made the point well, it is worth asking him directly for their advice anyway. However, given that the job of ONS will be to make interpretation relation to European provisions on this in terms of the European accounting system, would there be the potential for you to have dialogue at a European level or to approach those responses before running that system about their view on the provisions here and whether that would risk reclassification? In my view, we have all we need at our disposal through the ESA guidance and treasuries guidance on that and the chance to engage with treasuries who have experts whose full-time job it is to advise on those issues. I do not think that there is the need, in practical terms, to invite a European conversation. Theoretically, we could open up a dialogue with any interested party, but I think that we have at our disposal what we need to make it. We have already used it, but we have at our disposal in the written form—in fact, I have it here with me—the indicators of control. I am guessing that you have puzzled that you are not an external advice at all given the fact that you have acknowledged as a risk, even if it is a low risk. The fact that University of Scotland made clear that it has legal advice that says there is a significantly increased risk of reclassification would make it quite clear that external advice would be a sensible thing to proceed with. If University of Scotland wants to share that advice, we would probably consider it. However, in terms of our internal assessment of risk that we felt is adequate, I would wonder what external advice would offer that would be different. Risk assessment is not an exact science. I suppose that external advice might be open to opinion. We might find external advice that has a very negative opinion, but we might say what worth would be external advice that seems to be lacking in objectivity in a pro-opinion. In some ways, we have looked at it in great level of detail in our opinion that risk is not advanced. After the experience of western peripheral route, which Mr Bram referred to, I think that the Scottish Government might be wise to take a belt and brace as an approach to minimise any potential for risk in this area and to look at external advice. The question that I want to pursue now is clearly the understanding from the evidence earlier, the chair of the review himself has said that the intentions of his review can be achieved without entertaining this possibility of a risk of reclassification without proceeding with the provisions that should be put forward in the bar that stands. You have talked about the potential to, if the risk was realised, to go back to legislation and review it at that point. If the bill can be proceeded with, if the intentions review can be progressed without the risk being there at all, why would you make that take that action now, prior to a problem arising, rather than having to address events once legislation is in place and what could be a very difficult and troublesome process? There are quite a few layers in your question, and I will try and answer the whole question. I do not know exactly, because I have not read it yet, what Professor von Prindinski has said in his written submission to the Education and Culture Committee. Having been in his company a recent meeting, I know that he remains very, very supportive of the bill. I think that that is fair to say. Now, he might be making a more technical point and to link that to the point about secondary legislation. I think that if there was any idea that modificating—I am speaking of ministers, obviously, I am not a minister, I am an official—but if there was any modification to secondary legislative powers that would not harm the bill's overall policy intention, then the Scottish Government would be open to that conversation and if it and so doing minimise its risk or the perception of risk, that could be beneficial. On the question of when to do that, I think that the progress of the bill through parliamentary consideration would be the time to think about that, because I am perhaps taking wrongly from your question that you think that it might be left till after the bill was enacted. In the process of the bill's consideration, the Scottish Government would look at the issue of the scope of those secondary powers. I think that if reclassification took place at that point, legislative changes would be considered. I am heartened to hear that what you are saying is that these matters will be considered before in the process of the bill. You are open to that dialogue and that is helpful. It is not in my gift to say what would happen, but given what has been said today, given what has been said in evidence, given the emphasis that is placed on sections that are in secondary powers, section 8 and so on, it is entirely legitimate that everyone has joined up dialogue on that. My final question, convener, is if the worst happens and if this legislation goes through as a process at the moment and does lead to reclassification, I think that Kerry Tewin said that this has been a difficult process for colleges in terms of organising the workarounds for them in terms of the reclassification issue. Would universities be compensated for the undoubted extra burden that should be placed on them by having to deal with the issues that creating those workarounds would actually create? I think that what we have tried to make clear is that there is no expectation that if there was something that triggered a reclassification decision—and the way that it works is that a reclassification decision would be triggered—that reclassification is not immediate. In the case of the colleges in England and Wales, they were given a time period in which to review the control mechanisms and to make changes to keep them outside the boundaries. That is what we were saying. It is a very low risk and, as we have said, it is a risk that we do not believe is changed by this legislation. That is a key point. It is a risk that already exists because of the nature of universities and their interaction with the Scottish Government. If there was to be a reclassification decision triggered by an ONS review that could well be triggered by a review of universities down south, which is the most likely scenario, we would then ask for a period to review the entire structure around universities to potentially make changes that would keep them out with that boundary. A helpful procedural explanation, but I suppose that we would want to reinforce that our view of the risk is that it is very low. Obviously, in having a detailed conversation today, we know that there is an existing base of risk, but it itself is low. Some of the issues about reclassification have been raised in meetings 2012 and 2011. There is no work being taken forward. It is not as if we are dealing with a high-risk base already. Those risks are marginal and low. That is not my assessment of the cuff. It is just the experience of the last four, five or six years. Obviously, in the realm of higher education governance, I have heard the questions that there is a bigger world of reclassification issues, but they are not necessarily all the same, but they should be looked at and referenced to each other. The question that you asked about recompense is a few too many hypotheticals ahead in a sense that we do not think that there is a risk of reclassification spurred by the bill, so that is an issue that I take on board. I have not asked a question on it, but I do not think that that is a likely outcome given where we are today. John Trafford, Mark Ruskell. I am supposed to carry on the present theme. You have just said that there is very low risk fuel at the moment, leaving aside this bill of reclassification. The universities told us earlier on that they thought that we were in the amber area of risk. They said that from low amber, the bill would take us up to high amber or bright amber or something. I suppose that I would have preferred numbers myself, but we will go with the colours. Do you agree with the assessment of that? No, I respect the assessment, but I do not necessarily agree with it. I do agree with the colour that was used first, though, that the impact would obviously be red. That is not an impact that anyone wants to happen, but I think that the risk is excessive. If we must have colours, it is more of a green hue, but I would not be dismissive in others' view on that. We have to take seriously what people feel strongly about it, but they have expressed it today and in evidence. The greater risk, if there is a risk around reclassification and accepting that it is low, the greater risk would be in what is already the position rather than what the bill is doing. If it had to be undone or redone or reorganised, it would not be about the bill, it would be about the existing situation. I think that that is a fair point to make. The bill in itself does not add—I do not want to talk in absolutes about risk, but it does not add any risk or very negligible, but that is to be drawn in using words at all like that. It does not add risk. As for the substance of the risk, I would not want to overamplify that either. I cannot be complacent, but it is not as if it has been great. No one has raised in dialogue the existing risk in recent, not in this debate until now, until this point, in the past four to six weeks. As I said, there was no mention of O&S risk in the dialogue when the consultation was out when Professor von Prindinski's report and the very thorough review was conducted and a lot of those ideas were posited in that report. It is very heightened and has happened very recently. It has been suggested that we might go to some theoretical outside body to get a more definite ruling on reclassification and so on. I am just interested if such an organisation or body or individual exists, be that in Scotland or the UK. Assuming leaving a say to O&S, is there anybody that we could go to? We could go to six lawyers and get six opinions, I would imagine. I would agree with that completely. We have spent a lot of time over the last year or two within the Scottish Government working on reclassification issues. There have been off-the-cuff remarks made that they consider the Scottish Government to be now one of the leading experts on reclassification because of the time that senior finance colleagues have spent around this and ministers themselves. I do not know of any names that one would go to other than the Scottish Government finance and the SFT, who we have spoken to, that would potentially be more experienced in this matter other than the O&S and Eurostat themselves and potentially Treasury. I would agree with that assessment completely. The other suggestion has been that we are right to the O&S. Given that this is a sensitive issue, would writing to the O&S increase the risk of them doing an investigation or even reclassifying? If I think that I might have gone over the speed limit last night and I write to the police and say that I did 31 miles an hour, do you want to check on it? That might not be the best thing to do. I think that that is fair, but it is probably what has informed the work right back on this, because I have answered other questions about the internal versus the external nature of advice. If Governments of anywhere were to ask a body like that every time policy was taken forward, the answer might be along the lines of, I will need to think about it for a good while before I get back to you, and then a determination will not be forthcoming until you show me exactly what you want to do. I do not think that writing to the O&S as part of the development would be—obviously you can break convention—but it was not something that we thought was necessary, particularly based on the risk analysis that was a necessary action to take. Could it be a slight risk that it would damage our case? Yes, yes. It would certainly delay matters, because the way that they look at things is extremely excruciating and detailed. If we had written to them the way that the process is, we would not have received a response one way or the other, or we would have received a very on-stock response that said, we will not consider this until the legislation has gone through and the changes have been enacted, but, as you said, it would have raised a flag. That is helpful, thank you. I just wanted to add two other points to a different subject. Delegated powers has been mentioned, and I happen to be on the Delegated Powers Committee. Is it the fact that that is being raised by the universities? Is that something that maybe the Government would look at increasing the level of parliamentary input, so that maybe where there has been a negative procedure it might become an affirmative procedure, that kind of thing? Certainly yes to that, but I think that more fundamentally it would seem that the content of those secondary powers would be looked at in light of the evidence to both committees as well, and what has been said today, I cannot predict exactly what that would mean. Yes, certainly, if concerns have been raised, we will look thoroughly at the content, the impact, the intent. As I said, I would probably like to restate that the intent was to future-proof the legislation in some way, and certainly not being dismissive of people's views of risk, but good housekeeping. There is no intent to advance ministerial control with those secondary powers, but given that the issues that have been raised, then I am sure that the Government will look at them. I mean, it would certainly be perceived that if there was a negative procedure for some secondary powers, that would give the ministers a slightly more leeway than if it was an affirmative procedure. I think that I am right in saying that most of the, if not all of the, secondary powers which would give ministers the ability to change the legislation are all subject to the affirmative procedure. Thanks. It was said earlier on that it was not the Government's objective to, for example, appoint somebody, an individual to a university governing body. I wonder if you just clarify that. I mean, it wouldn't actually be possible for the Government to appoint somebody. I don't know on a point of law, but it would be completely undesirable. I mean, when the word objective might have suggested that there was some ambiguity, there is no ambiguity, the Government would not and never want to directly put someone on any governing structure in a university, including ministers. And I know that there's been some concerns or views expressed that, but that is not the tension and wouldn't be. So it's putting a process in place? It's just a process. It's the how, not the who, never the who. And it's not giving the Government the power to appoint an individual? No, in no way does the bill do that. In fact, nothing in the bill requires an HEI to ask Government permission for anything. Okay, thank you. Oscar made the point in his letter that there was a slight distinction between the four older universities and the more recent ones, in that part, one of the bill might become part of their constitution. Is that a concern or is that just technicality? I think Oscar go on to develop their argument that, although the constitutions would be altered by certain provisions in the bill, that it would not, in my word not theirs, jeopardise their charitable status, that's their conclusion on that. Okay, thank you. On my final point, I mean, the whole question of does the Government get involved in the process of governing bodies being appointed? Does that happen in other fields? Does Government get involved in the process of people being appointed? I wouldn't speak authoritatively than that, but they may do in public sector bodies, but universities are autonomous bodies, so they would never have any notion of being directly involved in the appointment process of individuals to governance structures. No, but actually putting the process in place, for example, with charities or outside organisations, it's maybe unfair to ask you. You said before that there's a precedence in the sense that the Government can call for proportion of a board to be of a certain nature and private companies even, so I think that there is precedent. We couldn't give you, we're not experts on the subjects, we couldn't give you examples, but there is definitely precedent. That's great. Thanks very much. Okay, thank you Mark. I only had one question, convener, and the deputy convener has asked it. So it wasn't about speeding, but no need, no need. Let's conclude questions from committee members. I've just got one or two e-points I want to raise just before we go, just because we haven't really touched on them and it's specific to the financial memorandum has published. It's in relation to a couple of pieces of evidence that have been received. The first one is from the Scotland Rural College, and basically what they've suggested in terms of the issue of estimated costs and savings in the FM and asking whether they're reasonable and accurate, they've said and I quote, the experience of SRUC in relation to changing articles of association indicates that the assumption in the FM of the timing cost required to amend HIE's governing instruments is not accurate and that significantly understates the resource requirement both to the Scottish Government and to the institutions involved. So how did you come to the assessment that you came of in terms of the costs of that? I think that Laura may have a perspective on this, but if I understand the question correctly, I'm not sure that the financial memorandum actually specifies an analysis of the costs of updating governing instruments in light of the bill's provisions, because updating governance as part of the compliance with the code of conduct and many other decisions that HIEs want to make is part of mainstream business. Any provisions that the bill would bring forward, should it be enacted, would be staggered in their implementation. All institutions are different. There are a lot of different numbers of staff, legal advisers, so it's really difficult to grasp on to any standard estimation of costs. If this is the item that they're homing in on, forgive me if I've misunderstood the question, it would be a long-term activity. There might be a spike if a new bill becomes an act, but we take what the SRUC says in their costs, but we found it very challenging to identify any standard costs in this area and to package them up, given the staggered nature of the time it would take to change ordinances and governing instruments after the bill became an act. However, if they're homing in on a slightly different issue, I apologise for giving the wrong answer. No, I think that your answer is fine. From another organisation, the Queen Margaret University, we have said that we would ask the committee to note that the process of securing privy counsel on the Scottish Government approval for a relatively straightforward amendment to the university's order of counsel to bring it into line with the Scottish Court is taking some 16 months. The process commenced in June 2014, and the amendment is due to commence in late September 2015. In terms of the changes that the bill would bring in, all sorts of legal advice would have to be sought administrative time, etc. What they're saying is that this has not been accounted for either in terms of the financial memorandum. No, and I think that I would point to the last answer that I made about the difficulty in isolating that for different organisations with different needs and adjustments to be made to get standard costs. What I would say is that in the consultation reform to the privy counsel process was an item. Ministers decided not to take that forward in the bill for many reasons, but I would probably cite deep complexity in the historical arrangements about how we've arrived at the current system, which has got some features that are regrettable about time taken and the detailed legal matters in the back and forth between legal advisers. As part of the announcement about the bill, ministers said that the privy counsel and a modernisation conversation about that would commence as a separate piece of work before any legislation was thought of in the future. Although it didn't directly relate to the issue of cost and time, there will be other activity to look at improving that to try and truncate those processes to save our institution's money in the long run. Okay, thanks very much. That's very helpful. Well, I'd like to thank you very much for your response to your questions. Is there any points that you would like to make further before we wind up? No? Nope? Okay, well thank you very much for that. This being the end of our public sessions, I'll just have a one minute, two minute recess to enable the official report of witnesses and members of the public to leave.