 Fy hoffi chi'n ddeall llawer o'r 11 yma yn 2015 y Ffinans Cymru o'r Paisi Caerdydd Scottish Cymru. Rwy'n credu sy'n dechrau'i fawr i'n hynny i wneud o hyd yn hwnnw, oedden nhw, o'r teimlo i'r hunain, oedd, i'n teimlo i'r computationoedd, oedd, i'n Based on I therefore like to welcome to the committee, Eileen Hamilton, Eileen Stewart and Andrew Bruce. Good morning, Joe. Apologies for lateness. I'm afraid our previous guests were running very late, and so we were half an hour late in starting over that session. Members of copies have all written evidence received along with a paper by the clerks, so we shall go straight to questions from the committee. I don't believe any of you have been to the finance committee recently, so what I shall do is I shall start with a few questions and then we'll open up the session to colleagues round the table. The first question is, in terms of section 27 of the Social Work Scotland Act, there have been a number of concerns that have been raised by COSLA on some of the local authorities who have given evidence to the committee. They have suggested that the new funding formula to allocate S27 funds has not been finalised and therefore detailed information about allocation of local resources is not yet available. That creates a difficulty for stakeholders in trying to accurately determine what the ongoing financial impact of the bill on their organisations may be. How do we go forward with that difficulty? There is a review going on at the moment for the funding formula for section 27, and stakeholders will be aware of that. There is an advisory group informed to look at the funding mechanism, and I would say that the funding mechanism is not actually relating to the bill or a change to the model that was planned anyway. The funding technical advisory group has been established to oversee the work of developing a new community justice formula to replace the current model. The advisory group is due to report to the main funding group in October. Recommendations will then be made to joint Scottish Government and COSLA settlement and distribution group. If proposals are endorsed, we should see a new funding model being piloted in 2016-17. That will see a new model shadowing the old model. The new funding model will then go live in 2017-18. We have a financial memorandum. Although some of our witnesses have suggested—or some of the people given his evidence have suggested—that it might work well for them, there are others who have concerns about that particular area. It is difficult to quantify something that has not yet been deliberated upon. Is it not? What impact will be on stakeholders? That is a point that has been made by COSLA and individual by others. In terms of the section 27, it is around £95 million to £96 million per year. That is for criminal justice social work to carry out their core business, court reports, supervision and so on, but also non-core work, which is often very innovative, projects and very locally based. The purpose of the model, however, is to take a far broader view of funding and resourcing for improved outcomes for community justice, so that £100 million is part of the piece and part of the puzzle. In actual fact, through the review of section 27, it is our intention, through the shadowing arrangements next year, that local authorities will know far, far ahead than they ever have before what they are likely to get in terms of section 27, obviously subject to the comprehensive spending review and the on-going agreement with the settlement and distribution group. However, section 27 moneys are for criminal justice social work, but they are only part of the overall puzzle for community justice in Scotland. They are part of one of the partners, essentially. I will go through some of the evidence that we have received. I have to say that local authorities or councillors do not have any concerns whatsoever, but not everyone shares that view. COSLA has said, for example, that the potential for the new model to develop and strengthen partnerships with local statutory and third sector partners will be immensely rewarding in terms of positive outcomes, so they are very positive about it. However, they have concerns about transitional funding only being available for three years. Obviously, the word transitional means that it cannot go on forever, but what is the thinking behind that? They have concerns that, after those three years, they will be left holding a baby, so to speak. We have had discussions with COSLA about the transitional funding that was agreed with them. The purpose of the transitional funding is to build capacity and understanding within community justice partners and community planning partners as to their role under the new model. Therefore, there is work going ahead under the transition's workstream supported by the transitional funding to help to build that capability ahead of the new model. Yes, there is undoubtedly some stakeholders seeking for that funding to continue once the new model is going live. Our view on that is that the task of planning and reporting for community justice is not new, and it is a reframing of the existing approach to planning, which is already being undertaken by planning partners. Therefore, our view is that there is transition work going on, and there is transition funding being provided. Let's see what happens in the course of that. We have committed to work with COSLA together to identify any issues that arise during the transitional period. Let's see how the transitional plan works out and review the position at that point. Review the position? What does that mean? That means that there could be a possibility of additional funding at that point? That is possible. There may also be the consequence that it is felt that no additional funding is required. Scottish Government is keeping an open mind on that, and we would invite our stakeholders to keep an open mind and see what comes of the transition period. The difficulty that I have with the CFM is that you have put some solid figures in the financial memorandum, but then you get comments like Aberdeenshire that have said things like, it is difficult to make an accurate assessment prior to the operational impact of the allocated resources becoming apparent. Angus is saying that there is little to suggest on-going costs, I mean given due consideration. There continues to be some concern in terms of the local Government and how that is going to be rolled out, but the criminal justice voluntary sector forum to switch from local government for a minute has said, and I quote, that, in terms of sustainability of service, the uncertainty in terms of funding from their perspective creates a lack of confidence among sentences and other partners about the future availability of the service and therefore acts as a barrier to one partnership working and to increase the use of viable community alternatives to custody, and they go on to say that these financial costs may lead to the closure of some services. We work very closely with the third sector and with the forum in particular and its chair as we have gone through this entire model from pre-consultation right through. One of the things that they have raised, and they sit on the funding group that is looking at the section 27 funding and broader leverage, is their issue with the year-on-year funding that they tend to have, which is difficult, therefore, for people to look more strategically and a little longer term in terms of services. You could understand that. In terms of looking at the funding model, what we are also going to be looking at is whether we can start to have a longer vision around that. Obviously, it is still being discussed at this point in time, but we are starting to look to see whether we can give people some indication on a principled basis, not facts and figures, but on a principled basis for the longer-term funding. The other thing that we are doing is that we have heard from people about commissioning and how difficult that can be and how time-consuming that can be as well, multiple tenders and so on and so forth, particularly for those providers. One of the first things that community justice Scotland will do when it is established is to work with all partners and stakeholders, both purchasers and providers, in-house, third sector and others, including the private sector, to develop a strategic approach to commissioning, by which we mean what we are currently delivering, how well are those services performing in terms of an evaluation of that, including shared services. It is important to get those economies of scale in there. What are the needs going forward? Do we have the services that are actually going to deliver those needs? If not, what does the evidence say of the best services to give us those, and how are we finally going to deliver that? Will that lead to procurement exercises, or, indeed, a public social partnership approach and other more creative approaches? That is one of the first things. We have not got that at the moment for community justice, we have not got it for criminal justice social work. What we have also said is, because this is a local model, commissioning should be around local needs. If there is any procurement, it should take a lead authority or lead agency or use existing arrangements first and foremost. Before then, any commissioning or contracting were done through community justice Scotland. Speak to the specific concerns from our third sector colleagues around the short-term funding cycles. One of the outcomes of this review of section 27 funding, which you alluded to earlier on, is the potential for giving people three-year settlements. That will allow them to do that local planning on a far longer-term basis than is currently the situation. One can understand the concerns about getting this year-on-year settlement. There is a move within the work outside the bill that goes in parallel to improve the way in which we fund, the way in which we look at performance across the piece to move to that longer-term view, which I think will help to answer those concerns that you have received from the third sector. Thank you very much for that. In terms of the figures, on table A of the financial memorandum, you have got a number of cost categories and a number of estimates. What I found interesting was that, for example, in terms of the on-going annual running costs for community justice Scotland, it seems to be a very precise figure at £2.209 million, and the community justice authority 7's liability, we've got very precise figures, £248,094 to £744,284, so that's the minimum and maximum very precise. Obviously, I imagine that it will be something within them, but the rest of the figures, when I see rounded figures, they always look ballparked to me. Only late yesterday or the early today, we got a wee letter from Paul Wheelhouse, the minister basically commenting on the issue with relation to pension liability, which is the net-estimated shortfall of £2.5 million and then it talks about the estimate should perhaps be £4.5 million. It's quite a difference. I mean, that's a £2 million difference. Can you talk us through some of these rounded figures, so to speak? Sure. I'll try that one. Yes, I mean, there is a certain amount of rounding up going on with the figures just for neatness and ease of understanding, but I would have understood that if they would have all been rounded up, but some have been rounded up and some haven't. That's why I was asking specifically why that would be the case. Okay. I mean, yes, maybe we should have rounded up the 7's liability just for uniformity, but I can assure you the figures have been, where they've been rounded, they've been rounded up and not rounded down. With regard to the question you're asking about the pension and the discrepancy of £2 million, when the financial memorandum was drafted, we used the existing triennial valuation of pension liability dating from March 2014. We consulted with the UK Government's Actuary Department and they confirmed that that was the best estimate that we could use at that time, so that is what we did. Now, that triennial valuation was based on the community justice authorities remaining and employing authority for pension purposes. What we have here with the higher figure is a recalculation based on what is projected at 2017. Obviously, the next triennial valuation is due in 2017. We've asked for it to be done now. The key difference this time is that the community justice authorities are being treated as ceasing as at 31 March 2017. That has a considerable impact on the cessation value for the fund. Because of no longer employing authority, they can no longer contribute to the fund and therefore any shortfall has to be drawn from them at that point on 3 March 2017. If I can just put it in plain terms, once the community justice authorities are disbanded, there's no means of the pension fund being able to call on them again for any shortfall. Therefore, the actuaries are looking long term and as they do when it comes to long term forecasting, they are making quite a big provision for the risk attached to these pension figures. That explains the increase in the figure from £2.5 million to £4.5 million. I realise that it's a kind of guess. We were talking about a big difference. We were almost doubling of the initial estimate. The thing that's changed between when the financial memorandum was provided and submitted to the Parliament and now is the availability of this more accurate assessment. Indeed, the financial memorandum made the point that it was likely to be an underestimate and we'd be looking to update that at stage 1. We are in difficult territory with making these kind of estimates and the £4.5 million is the best that we've got now, but even that remains subject to some uncertainty from the actual point of disestablishment as well. I suppose that another point, if I may, is the point that you may convene around the roundings-ups. Some of these are round figures, but they are absolutely the accurate figures. For example... £1.6 million, that's obviously the £50,000 exactly. I realise that. That was the point that I was going to make. Okay, thank you for that. I'm now going to open up the session to colleagues around the table and the first person to ask questions will be joined to be followed by Gavin. Thanks, convener. I mean, we have touched on quite a lot of areas already. One of the points in the COSLA contribution that struck me was that they said that when the police and the fire went in from the eight bodies into one, that local authorities received funding to compensate them for the additional costs associated with carrying out their local scrutiny functions, so they're drawing a parallel there. I mean, it would have seemed to me that there might be extra work involved for local authorities in that realm. Is that the case? Yeah, the COSLA have mentioned this to us also, we are aware of this, but the reconfiguration of the police force is a very different change process to what is being envisaged for the community justice authorities. It is not a like-for-like comparison, and that would be a response to that. Because, I mean, it affects the voluntary sector, I guess, as well, that instead of relating to eight bodies, some of them, I don't know, NSPCC, for example, instead of relating to eight bodies, they're going to relate to 32 bodies, that surely has to do with resource implication somewhere. Yes, we are aware of this, and we have discussed it with the third sector, and we fully appreciate the point that they are putting across. As well as transition monies being made available to community planning partners, we are also making available £50,000 to the community justice, criminal justice voluntary sector forum, to assist them in the transitional period. As part of the overall transition work programme, we are bringing forward these very issues in the hopes that they will work together to identify a process that can streamline this so that they are not facing a burden of having to bid 32 times over. You're giving £1.6 million per annum transition funding to help to smooth the transition, but, as it stands, there's no additional money per annum for the community planning partnerships. Now, you've said you're in discussions with them, you'll follow progress and so on, and in response to the convener, you said that that could result in more funding, or equally it could not result in more funding. Is it therefore the Scottish Government's view, as we sit now, that you can't foresee any additional funding being required after the transitional period for local planning partnerships? Yes, that is our position at the moment, yes, but as I've said, we are working together with COSLA and we are monitoring the transition period and I think it's for everyone involved to keep an open mind and to review positions as necessary as we go forward. Okay, reading the COSLA submission, I mean, they're quite supportive of the proposal as a whole and you do appear to work with them on a number of areas, but they do sort of, they put forward the view anyway that little attempt has been made to capture resource implications of delivering the new structure locally. Is that a fair comment or is that something that the Government would dispute? I think it's probably a mixed comment and it may be a comment to us, but it may also be a comment to the local partners as well. In fact, we've funded a post within COSLA to lead the transition workstream and one of the things that transition workstream within this work will do is to manage that change process and to understand how partners are progressing on the ground and whether or not additional resource will be required. We've had some local authorities who have said that the partners together would absorb that because it's about them coming together to say how can we improve outcomes, rather than putting it all on the head of this person over here, for example. We've had other partners who have said that we're going to absorb the costs, we don't see any additional costs for us at all, so it is a very mixed picture, so through that transition workstream we will get a clearer understanding. There are reports on the transitional funding, so for that for this year, the reports are due in May of 2016. What did you do with the funding? How is the change progressing? What are your next steps? We're also expecting the transition plans for 2016-17 to come in in January of next year and they will set out again how we use the funding and how is the change progressing and what about the future arrangements? What will be your local arrangements? We'd expect within that for them to say how are they going to resource those local arrangements as well. The provision of that £1.6 million transition funding was the direct result of the consultation that we had with the range of partners over that period. They made the case to us that it would be useful to resource that period and we were able to make that case to ministers for that three-year period as well. Indeed, COSLA made that point and we're quite positive about it in their submission. In their view, the successful delivery of the performance framework is likely to cost each community planning partnership £100,000 per annum. They give a bit of breakdown in terms of the number of staff that they thought would be required, but what's your response to that statement by them that it's going to cost £100,000 per annum? I think we'd probably welcome a bit more information around that as well and just looking at one of the other submissions that you received from Perth and Kinross, they put a £45,000 figure on it. As Ali mentioned, we're in touch with other local authorities who think they can absorb it all together. I'll probably go back to some of the other comments that you made about the purpose of transition and the arrangements that we've put in place to monitor that is that we can be open-minded at the end of that period to make sure that we're understanding it properly because what we wouldn't want to do is find ourselves in a situation where we are under-resourcing it in a way that prevents the new model from achieving its potential. I think that the initial reaction to that is 100,000 seems on the high side for what we envisage to be the sorts of activities that may or may not be taken on. Indeed, there does seem to be a spectrum within local authorities around what, if any, they might need in addition to that. The Government view is that some local authorities have said to you specifically that we can absorb all of that cost, so that the net cost, as we know, but to be fair, some have said to you in your view that there will be a cost, but your view is that 100,000 is on the high side. That's right, and I think that we probably have a responsibility to be sceptical about that and look at what's going on to make sure that we are resourcing it appropriately. Looking at the way that the model is intended to work, where it's putting responsibility on the local partners to work together, it's not unreasonable for us to be able to expect that sort of partnership working to be done as part of everyday work and the course of the way that the health board works with criminal justice and so on. Yes, it is our responsibility to identify what, if any, additional is to that, and the transition period allows us to do that. That may be more a question for the minister, as opposed to the bill team, but let's assume that this transition continues and you engage with COSLA and so on, but you then reach the view, as a team, that some additional funding is required here. Is there a commitment from Government to your knowledge that that funding will definitely flow if it can be demonstrated that it's required? I think that the commitment that the minister has given in conversations with people who we've spoken to around it will be absolutely open-minded about that, and I suppose I'll go back to the comment that if this becomes one of the things on which the ability for the new model to achieve everything wants to become a key issue, then clearly we'd need to think very hard about making sure that we are supporting it to achieve everything that we would expect it to achieve. Okay, I won't ask you to go further because obviously that is a one for the minister to answer more directly, should it be put. Okay, in terms of the, you've outlined, as the convener said, in a reasonably detailed way the setup costs and the annual running costs of community justice Scotland. In terms of the annual running costs, £2.2 million are thereabouts. How does that compare broadly to the annual running costs for the totality of the eight community justice authorities? I think that you've said it's difficult to do a direct comparison, but you must be able to do a ballpark comparison. This isn't completely £2.2 million of additional spend. There must be some saving. Have you done any analysis on that? Basically the cost of the present model is around £2.74 million, and as you've said, we need to be slightly cautious about making comparisons because it's not a life-or-like comparison here. Okay, I accept that entirely, but your view on the analysis you've done is that it's not costing us an extra £2.2 million a year, if anything, it's saving us half a million. Last area is the disestablishment of the community justice authorities. We've covered pension costs, so I'll skip that question. In terms of severance costs, there's quite a broad range, a range in between a quarter of a million and three quarters of a million in terms of the severance costs. Can you just outline why there's quite a big spread in terms of percentage terms, although cash terms aren't huge? When you're dealing with uncertainties, it's best to provide a range of figures. The upper range makes an assumption that all staff, all community justice authority staff remain in post as at 31 March 2017. The lower end assumes that a third remain in post as at 31 March 2017, and it's a simple arithmetical third, so that's how we've worked it out. Obviously, we don't know what the reality is going to be, and therefore, that's our best estimate at the present time and, as I say, giving a range of values in light of the uncertainty. Okay, I understand that. You have a normal turnover of staff, I guess, like any organisation. If somebody leaves one of those authorities now, then, is the position that they won't be replaced and, therefore, that brings down that figure, or will they be replaced and their redundancies lower because they've been there a shorter period of time? What's happening on the ground? Ground, then, clearly the CGA's know that there will be disestablishment and that the employment will come to an end at a certain date. So, as you can imagine, staff there are looking for other jobs and there will be other opportunities that come up as a result of this new model. So, I suppose, without going into details of each individual, we know that a number of people have left and moved on to different jobs, and then a decision is taken about replacing them, but where that decision has been to replace, they'd be put on a fixed term contract, so there would then be no severance liability at the end of it. So, I think already that upper figure probably has come down a little bit because some of the staff we calculated have moved on to other jobs as we go. Let's say for the sake of argument, I'll pluck a number out there, there are 10 people left employed by the CGA's come 2017. What happens then? Do they have to take compulsory redundancy? Well, there will be a severance package when clearly their employer is no longer there, so there will be a package afforded to them. So, what we'd hoped to get into position is that the only people who are left in that situation are those that want to be there effectively. So, they've made that decision. What we're trying to look to do over the period of the transition is to allow people to move on to other posts elsewhere in the sector or indeed a different sector altogether. In terms of taking your figure of 10, what that cost would then be, it will depend very much on their salary, their length of service and so on to calculate that. You haven't decided what the premises are yet, but has the decision been made, or at least are you publicly allowed to say, where is community justice Scotland going to be located? Have you chosen a town or city or a region, or could it literally be anywhere at this stage? It's not yet been chosen. We are working with the states and others around that, and we've also got to do the assessment. One of the key things that came back from the consultation was that it needs to be accessible by public transport. The other thing that came back was that there's community justice Scotland, so could people be home-based as well, so particularly people may be working in the hub on learning and development activities, where they'd be going out and about and speaking and delivering training to people on the ground anyway across Scotland. We've said that that makes sense, so we'd be encouraging that. Obviously, those sorts of policies would be up to the chief executive to set when they come in, but that's what we'd be encouraging, that people could be home-based, because it is community justice Scotland. However, we are undertaking a location assessment at the moment, working with our states' colleagues. I appear to be no further questions from committee, but I've got one or two just to round things up. In terms of the appointment of the community justice Scotland members, it says in Financial Memorandum that there will be no fewer than five and no more than eight non-executive members. It says that in paragraph 16, but in paragraph 24, I'll talk about the members' costs. Members at £14,904, two days per month for six months. I assume—well, that 14904 is very precise, so how many members are you going to have? Because it's been five and eight, I thought there would have been a ballpark figure there. The two days per month, I take that as for all the members, not each member, otherwise it would give them £1,250 a day, which seems to me quite extravagant. No, it's—it would be two days per month for each member. In terms of how many members—sorry, I'm just trying to— I, but the figure is very precise, as well as wondering. Yeah, five to eight. I mean, that's the range that we've set, and obviously the Scottish ministers will decide how many to appoint. And likewise, the appointments are likely to be staggered because they will serve three years, and obviously we don't want everyone beginning and ending at the same time. So, there is some uncertainty, as to exactly how many members there will be. I'm just trying to find very quickly— 24. It says members at £14,904. I'm just wondering if there's between five and eight members, how would you be able to come up with a figure? I'll let that—surely it would be a figure—a ballpark figure for that one between— We've made a decision as to what—we've just, for example, maybe decided it was based on six members at two days per month. So, I can't find that right away. We can check that for you. Okay, and that's all the members— My understanding is that it's the upper end. It's the upper end we've used, but we'll check that and we'll come back to you. The other thing I was going to ask you is we've talked a lot about the £1.6 million per annum divided among 32 local authorities. I'm just wondering why it was decided to give 50,000 to each local authority, given that there's a difference in scale quite significantly between Orkney, Shetland and the Western Isles at one end and Glasgow and Edinburgh and the other. So, why was it decided to make it a straight 50,000 rather than have a balance between a set amount plus maybe a bit more, because one would have thought that the workload would be significantly higher in some areas rather than others? There were two different options put forward. One was the straight £50,000 split, among all. That was in recognition of the fact that, yes, there are different population sizes, but there are also in some of the smaller population sizes far larger geographic sizes, so that's a little bit of something that's roundabout. There's still very similar— Highlands get significantly more people and a lot more geographically spread than Clackmannanshire, for example. That's true, but we're still dealing with the same number of partners, so we're still dealing with a health board and a local authority in Police Scotland. So, the actual activity about building that capacity and capability at a partner level is similar. The other option was put forward and took into account size and workloads as well, so it was more of a range. Both options were put forward to the Joint Causeless and Scottish Government Settlement and Distribution group, and they made a recommendation that went up to Causal Leaders, and it was Causal Leaders who decided that it would be the £50,000 split. That's fine. Thank you. I'm not convinced of the logic of that, but never mind if that's what has been decided, I suppose. Just one final issue. Paragraphs 12 and 13 of the causal submission have said that, in a quote, the Bill on the Support and Documents pays little attention to resourcing the development of the new model locally, and then they go on to say that local partnerships will receive no additional funds and that doesn't seem to support the policy intention to shift to a local model. That's what I said. Why is that? Sorry, I didn't quite catch what you were saying. Paragraphs 12 and 13 of the Causal Submission have said that, in a quote, the Bill on the Support and Documents pays little attention to resourcing the development of the new model locally, and they go on to say that local partnerships will receive no additional funds, which doesn't seem to support the policy intention to shift to a local model. Effectively, what they're basically saying is that what you want to do with the Bill is not being effectively supported through the financial memorandum. I think that this is going back to the previous point that you were saying about transitional funding being continued into future years, and yes, we're aware that Causal do have concerns about resourcing local partnerships, which I think we've already said. We will keep on our review together with our stakeholders during the transition period, and also bearing in mind that there are other views which disagree with the Causal point of view. Sorry, was there some other aspect that you feel we haven't covered? No, that was it, basically. It's just their view that the... I mean, Causal I've made it quite clear, as both myself and indeed Gavin pointed out, that they are very supportive of what you're doing. I made an earlier quote exactly which said that, but they do have... I was just trying to cover those concerns that they said about, you know, it's one thing to be supportive of what you're doing, but is the funding going to be there to ensure that it's actually delivered on the ground is a key issue for us, I suppose. The global funding figure would go back to the section 27 money, where you start to communicate around that £100 million. So looking at that in the context of, you know, the £1.6 million we're giving here, where there's still a huge amount of money going out to support local authorities around that. Clearly, we and indeed colleagues at Causal want to make the absolute best use of that money, but as we spoke in previous round and tradition, we're absolutely open-minded around what additional might be required in the future, but we think it's best just to see what happens of this transitional period, see what the evidence shows us before finalising what the position should be. Yes, and I notice in paragraph 11 you've said there will be no overall reduction in the level of funds currently provided by the Scottish Government for community justice, so I do think that that's an important point. Okay, well thank you very much for your evidence today. I really appreciate you answering over our questions. Is there anything further you want to say before we wind up the session? I think we will come back to you on that calculation that you asked for about, you know, Shaul working out about how we got to precise figure and, you know, the numbers that that was calculated on to like that. Okay, that would be greatly appreciated. At the start of the meeting, the committee agreed to the next item in private, and therefore would like to close the public part of the meeting in just a couple of minutes to recess till our witnesses are public to leave.