 CYFORM Welcome, Members, from the Press and Public to the 14th meeting of the Public Audit Committee in 2015. First, I will ask the present to ensure that the electronic items are switched to flight mode, so that they do not affect the work of the committee. I recommend that colleagues refer you to agenda item number 1, which is the decision on taking business of private. The question is that we take agenda items number five and six I will agree to agenda item number two, which is section 23, report managing ICT contracts in central government and update. I welcome our panel witnesses this morning and I welcome Sarah Davidson, the director general of communities, Mike Nielsen, the director of digital and Maxine Reid, chief information officer and the Scottish Government. I understand that Sarah Davidson would like to make an opening statement. I welcome the opportunity to provide evidence on the Audit Scotland report managing ICT contracts in central government and update. The conveners have already introduced my colleagues and we hope to be able to assist you this morning in your consideration of the Auditor General's findings. I should say at the outset that the Scottish Government welcomes this report and accepts the recommendations in it that are addressed to us. I am here today to talk about the recommendations in the report that relate to the Scottish Government and not the specifics of individual cases, where there is a separate line of accountability. My comments are therefore going to relate primarily to the first two sections of the report on strategic oversight and on skills. These are complex and interrelated issues and on each, as the report indicates, our approach has been to put in new arrangements and then to review and improve upon them in the light of experience. Indeed, in the five months since the audit work was completed, we have made more progress in this process of continuous improvement and I want to update the committee on that in these brief remarks. Dealing first with the strategic oversight, I think that it is important to be clear what the assurance framework is intended to achieve and crucially what it cannot. Clearly the central government sector is taking forward a wide range of IT-dependent business change projects and the IT assurance framework cannot provide specific assurance on each project, rather it is intended to assure that appropriate assurance arrangements are in place and are being used for each project. There is a crucial point here, which is that responsibility for the effect of governance and delivery of individual projects lies with the senior responsible officer and the accountable officer and it is essential that the oversight arrangements do not in any way cut across the clarity of that responsibility. Nonetheless, we absolutely accept the leadership and support role in central government and wish to ensure that this adds the maximum possible value to our sector colleagues in their planning and delivery of programmes and projects. As the report confirms, we responded directly to the recommendations of the original report in 2012 to introduce new assurance and oversight arrangements and we have made significant improvements to those already in the light of experience, including creating the office of the chief information officer, reflecting the need to devote more resources to the implementation of the framework. At the heart of this development is a far more proactive and relationship based approach and feedback from colleagues suggests that this, along with the simplification of guidance, structured sharing of lessons learned and investment in networks has been welcomed. It is clearly important though that we continue to monitor the effectiveness of these enhanced arrangements and, as chair of the strategic corporate services board, I have asked the chief information officer to provide the board with an update report in the spring, including an assessment of the quality of relationships across the sector. This will be informed and supplemented by some random checking of individual projects that have not otherwise come to our attention via gateway reviews and will also conduct a gateway review of the framework itself in the course of next year. Two of the report dealt with digital skills, which, as the committee knows, is a big and complex issue with a range of players involved across all sectors. We know that a lack of relevant skills is a recurring issue for public bodies. It is also a major issue for Scotland's businesses and the market for these scarce skills is highly competitive. The digital skills investment plan, produced by Skills Development, Scotland is tackling this for Scotland as a whole, and key priorities include the establishment of a digital skills academy called Codes Clan to rapidly increase available skills and also a multi-channel marketing campaign to target school pupils among others. That is trying to create a more positive perception of technology as a career choice. Our work on public sector skills sits in this wider for Scotland context and we are taking a number of actions ourselves, including more creative approaches to recruitment in order to meet our own skills needs. In light of our work on public sector skills and the intelligence glean from our skills gap survey, we have established the central government digital transformation service, which was formally launched last month. That is intended to provide a source of digital skills to support ICT and digital projects, particularly in that crucial early scoping phase. Good progress has been made establishing this team. We have got 13 out of 25 posts already filled, there is a pipeline of work identified and we are just about to invoice for our first chargeable item of work. We agree with the Auditor General when she says that this is an ambitious bit of work, but we are not deterred by that. The central government sector has strongly welcomed this development and we will again want to keep a very close eye on the extent to which it meets needs as it grows. Finally, bringing those two strategic issues back together again, we have also revised our governance arrangements since the publication of the Auditor's report. The central government digital transformation and assurance board is now responsible both for strategic oversight of central government ICT programmes and also for the digital transformation service, and that brings together the oversight of both transformation and support. In other words, the assurance role of the information systems investment board, ISEB, which has referred to in the report, has now been invested in this new body. I hope that those comments serve to underscore the extent to which we are actively committed to this process of continuous improvement. I would like to assure the committee that we will continue to iterate in the light of feedback and, of course, including any advice that comes out of our discussion today. I will now open to questions from David Torrance. Good morning. Can I ask about the skill shortages? I know that the public sector and the private sector are struggling to get people into IT. Can you tell me about the progress that has been made by the digital transformation service? The digital transformation service is intended to address the skills gaps that we identified in the central government sector. In particular, it identifies the need for people with skills to support central government bodies in the initial scoping phase of projects. People are able to come in and help to analyse business plans and to ensure that people are putting the right skills in place at the early stage of a project. As I said a moment ago, we have already appointed 14 people to new roles. We are talking to bodies about 35 projects, which might be opportunities for our support. Along with that, we are developing case studies of the ways in which we have already supported bodies, so we can use that in order to explain the value that we think the service can add. We are developing the range of services that the service can offer, so initially we will be reviewing and developing an organisation's whole digital strategy, we will be developing and reviewing business cases for services, but also critically there will be access to actual bodies who can come into organisations and can help them either in a shorter or longer term to develop an individual project. Sometimes that will be in-house staff and sometimes a digital transformation service will be able to source contractors with particular skills where it can be applied to projects and programmes. As I said, it is early days, and one of the key things that we will have to help the service to do is to prioritise where it puts its resources, but so far we believe that this is the best possible answer to the gaps that have been identified and the difficulties that particular smaller bodies have in skilling up in order to deliver programmes and projects that may be outside their normal flow of work. I ask for just a bit more succinct answers on those questions. You tell me how many public bodies you are supporting just now. We are initially having discussions with about 35 opportunities. I am not certain whether that is within 35 bodies or some bodies would have more than one opportunity. Between 20 and 25 bodies. That kind of number. I am actually quite shocked. The pitch that you have given today, and I am wondering if perhaps you have read a different Audit Scotland report to the one that I have got. Can I just say that in response from Paul Gray in October 2012, he promised that we are working towards an action plan for central government ICT workforce to be available across the sector 2013, etc. That was to look at the skills gap survey. Auditor General's report this year, and I quote, Information Systems, ICIP, which was to oversee the implementation, did not have sufficient information, did not have the capacity to perform the role effectively, it did not receive all the ICT investment and assurance information required from central government. We should come along and give us a pitch here today as if there is nothing wrong. That was promised to this committee in October 2012. You did not get round to it until August 2014. Why did you encounter difficulties? Why did you not perform a skills gap until 2014, and it was promised in 2012? In your comments, there are two separate issues. One is about the skills and one is about assurance and oversight. As Mr Gray indicated when he came to the committee in 2012, we were already putting in place arrangements to look at both of those issues, but very much in the spirit of learning as we go. As I have acknowledged, we did not get the oversight and assurance perfect first time. Indeed, I think that Mr Gray said when he was with the committee that this was something that we were going to have to keep revisiting learning from feedback. While we put new oversight arrangements in place, including learning from the Audit Scotland checklist that was included in the 2012 report, we also, from the very outset, gathered feedback from bodies about the extent to which that was delivering what they needed and was clear and comprehensible to them. On the basis of that experience, after allowing a year or so to learn from that being deployed in practice, we revisited and improved the framework. I would not want to create the impression that nothing was happening during that time because it was, but we absolutely acknowledged that it was not perfect first time when we had to improve on it. I think that it was far from perfect. It took you two years to perform skills gap surfing. I was just going to come on to pick up the point about skills. Do you need the skills in order to do everything? Skills are not there. It cannot happen. Absolutely. We accepted the finding of the Auditor General in 2012 that skills were critical. We never did anything for two years. In the Audit Scotland recommendation of 2012, what they suggested that we should do, recommended that we should do, was undertake a strategic review of current ICT skills availability. Again, I think that Mr Gray said when he came to the committee in 2012 that we had already started work on that building, on the benchmarking work that we had already been doing in the context of shared services. Again, that was an iterative process. We looked at what information that gave us about existing skills, put that together with the information that we had through continuous professional development for the IT profession and concluded on the basis of that that the existing information that we had, although it told us quite a lot about our current skills, it did not tell us everything. Ultimately, through that and the assessment of a feasibility of a skills bank, what we concluded was that assessing our existing skills was not going to give us all the information that it required. That was when Skills Development Scotland commissioned the public sector-wide skills survey. You have had three years to assess your skills. You have responded directly to the report of 2012. That is not true. That is not true. What you said in your opening pitch, which was incredibly confident, was a positive perception of technology. I also sat on the education committee and yesterday we were taking evidence about, in the last two years, for national fours and fives, there has been a 29 per cent drop in presentations. If you are doing a skills survey and a positive perception, if they do not get their national fours and fives, they do not get their higher, they do not get their HND and they do not get their degree. You are sitting here with this big confident pitch that you have got. Things are getting almost a third fewer presentations for computing courses. You expect me to say, can you understand why I am a bit agast and shocked at this confident pitch? Also, if a 29 per cent fall in national fours and fives in the last two years was not bad enough, and it came from the learned societies, I certainly would not question them, you have also had 24,000 fewer places at FE colleges. That is not doing degrees at FE colleges, that is just HNCs and HNDs. I actually find it very difficult to believe anything that you have said this morning. If you are doing a skills gap survey, you have had three years to positively, a positive perception of technology, so tell me why there is such a fall in computing teachers and ITT teachers, 29 per cent fall in national fours and fives and 24,000 fewer places? I could go on, that is just a little snapshot. Why is all that happening and you have got a positive perception? You are, of course, absolutely correct about the complex interlinked nature of this. It is an illustration of the fact that we have to look at skills in the whole sector in a way that is separate from the need to get the whole system right. There is a lot of work going on at the moment through colleagues in Education Scotland and the Scottish funding council in addressing the types of issues that the Education Committee was looking at. I know that Education Scotland has a plan for digital education that looks at learning and teaching computer science, the curriculum and qualifications in computer science and teaching opportunities in relation to that. The point that I was making about perception of technology was to identify the fact that we recognise that there is a problem at the moment in the perception that young people have of careers and courses in information technology and computer science. One of the early actions that has been taken under the national skills improvement programme is to do a multi-channel marketing campaign aimed very much at young people who are thinking about career choices in order to change their perception of computer science as a school choice and, ultimately, a career choice. All of those things are part of the mix when we are thinking about skills for Scotland and public sector skills within it. I know that this area is a very difficult one. Finding the solutions is not easy, but it seems to me that there has been an undue delay between the original report in August 12 and now in terms of the superstructure. We have already considered the skills gap, but you have come before us today and you have said, right, that did not work, we are now going to change it. The information services investment board is now to be what dissolved. We have just heard that you were trying to sort out the roles of the chief information officer who was to support the ISIB, but we heard in the update report that the split of roles and responsibilities had not yet been finalised. That was paragraph 35, Exhibit 5 on page 15 of the report. Now you are telling us that you are going to change the structure again completely. I just do not understand why the system that you did set up, I understand why it was not given the information and Mary Scanlon has already alluded to that, but it still will not work if you have not got the skills there. I just do not understand why you have come before us and said, well, that did not work, we are going to have a completely new set up. This does not seem to me to give a solution. The proof of the pudding at the end of the day is what is happening in the cases, because it is the oversight and supervision of that at the highest level that tells us whether these problems are picked up and Tavish Scott will refer to this in detail later. If you go through NHS 24, the CAP Futures programme, the police programme and there are 200 programmes between one and five million out there and we do not know anything about them. The whole sector seems to be completely filled with overruns in terms of time and frankly, talking on the medical side now, IT that comes out the other end that is not fit for purpose. The clinicians on the front line are telling me that NHS clinicians are important. Can you tell us about the oversight arrangements and why it has been changed? What happened to the original one? Why did the ISIB not work? I would not want to overstate the changes in governance. The ISIB will continue to operate, but it will focus on the management of programmes within the core central government, which is itself commissioned and funded. The creation of the central government digital transformation insurance board is intended, in part, to address the issue that the Auditor General has identified of the importance of getting the balance right between the scrutiny function and the support function by bringing those together consciously in one place. It also recognises that there is a very close... Is it to deal with non-governmental programmes? No, it will deal with central government sector programmes. In other words, not the Scottish Government... Health boards, for example, or prison service. Yes, so non-departmental public bodies and associated bodies. Part of the value of bringing them together in this new form of governance is that there is a very close and symbiotic relationship between the oversight and the digital transformation service and those two things that will be governed together. We will be expecting the digital transformation service to be providing support to those bodies which are possibly less experienced in taking on projects or bigger and more complex projects. By bringing together the place where people ensure that everybody has the assurance mechanism in place and the bit of work that is supporting individual bodies to deliver programmes and projects, we would hope to get a far better governance process. It is also more efficient because otherwise you would have two separate bodies asking for exactly the same information from the same projects about what they are doing. That is the thinking behind that. Again, we will keep it under review, but it reflects the establishment of the digital transformation service that was not there previously. Is this new role going to be able to direct, for example, health boards? To give you a specific example, the fact that the most important patient services is contracted in a way in which it can go down for up to 24 hours in order to have a routine update, which is happening in Glasgow, and six other health boards have not actually gone through with it. That sort of issue is a matter of principle that the health service requires 24-7, 365 days a year, each clinical IT services should be up, and it is perfectly possible, I am sure, by IT advisers, to have contracts which actually make sure that that does happen. The banks would not go down for 24 hours without a major fine occurring, and yet the clinicians out there are faced with not having these services recently for up to 24 hours for a routine upgrade. Chair, I am sorry. It really staggers me that we have got a situation after about 12, 15 years into the digital revolution that we cannot get the basics of contracts right in the way that the banks have had now for some 10 years and would have been fined for. Are those principles going to be directed to the board? Can your new body actually direct the boards? Can they penalise them if they get these contracts wrong? I should be clear that the health sector is governed completely separately from the arrangements that I am talking about. Having said that, because this is all done on a sectoral basis, having said that, the principles that you were just sitting out there are absolutely the principles that I would expect this board to be applying to the central government sector. Of course, the public sector IT service as a whole is one that learns lessons from each other and we would expect to be learning good practice and also learning from poor practice. There is a wider information exchange, but it applies specifically to the central government sector. Can you then supply us with a list of the bodies that will be overseen by this new body and won't be? You have just told us that health won't be. Presumably, we have to get health in front of us to explain why NHS 24 has doubled its costs and we still don't have it two years after it was supposed to come in. I appreciate that that is for patient safety reasons, but nevertheless the contract has gone on. Every NHS contract, we have to now think who is going to central government to supervise that. Another different unit. Can you, of course, supply that information about the bodies? Colin Beattie, can I go back to the issue of the skills shortages and some of the challenges facing that? You mentioned in the report some of the challenges competing with the private sector. Is that ever something that we're ever going to reconcile with? As long as the private sector will want to pay this amount and be in the position where we're paying much more grade, can that ever be resolved? No matter how many strategies we put in place, no matter how we take this forward, where can we go with that? We're actually training those individuals to then go on to the private sector. How do we deal with that? You're absolutely right that the public sector is almost certainly never going to be able to compete on money with the private sector, but we do think that there are things that we can compete on the private sector with. Indeed, people who have joined us recently speak very favourably about the offer that we can make. For example, people who have come to join us often say that they're motivated by the ability to do what they see as making a difference. If all those people say, I'm quite keen to join the public sector, because I know that the private sector will often make much more money, but let's go and join the public sector. It's really not happening, is it? We're motivated by that. Part of what we have to do is both through our marketing but also through using word-of-mouth of the people who are working for us, communicate the message that there's a great job here. Can I just also, with respect then, as a member in our approach, we can take to this and say to the private sector, why don't we just look at all these strategies but look at a strategy of allowing the private sector to deliver some of these projects? The private sector makes it use the middleman in this and say, what's the point in having all these frameworks and all these civil servants are doing this? Why don't we just contract them? Actually, that's happening already anyway. So what's the point in having boards and strategies and development strategies? All of the various elements of what we discussed. If the private sector are clearly picking off the cream of the crop and to ensure that they can then have these individuals who are delivering these services, they'll spend a lot of money on this. You're right, there's a lot of skills and activities for which we would expect to go on using private sector resources either because it doesn't make economic sense for us to keep those people on our books or because we don't need them very often. I suppose I would say that whatever the private sector is doing for us, we retain the accountability for the delivery of the project and programme in good order so that we can never completely absolve ourselves of that. There will always be a spectrum of involvement of the public through to the private sector but it's getting that balance right and there are very good arguments for developing skills in-house as well because people who understand the nature of our business and are trying to achieve and the inherent public value nature are always going to be really useful to the scoping and delivery of projects and students getting a balance. Why don't we just have the overview and say that we want to manage this but allow the private sector to train the individuals allow them to put the students through the college places and let them pay for it instead of the Government saying that we want to manage all that. Is that something that civil servants want to do on a regular basis? What is saying to the private sector? Why don't you do that? You can train it but we will have a strategic overview of it because what you appear to be doing from this is you want both to be able to manage it and to carry out all the training. We clearly can't do that. You are not able to do it, you have proved that already. Certainly in the current market what you are describing would be prohibited from a cost point of view and the value, the gap between the costs that we pay to bring contractors or consultants in to pay our own staff to grow and train them even if ultimately they then go and work in another part of Scotland which is a double-edged sword. There's value in us offering skills to business in Scotland as well which we've developed. At the moment that's what is going to make more economic sense, it's the balance. I'll bring Colin Beattie in. Thank you very much. I'm a wee bit confused. In my previous life I did have high-level oversight of our IT divisions and there seems a lot of complexity in the way this has been set up. Maybe you can just clarify these relationships to me. We've got the digital transformation service which has been set up and presumably that's overseen by the digital transformation board. How exactly does that relate to gatework review, ICT assurance framework, ICT technical assurance, officer of the chief information officer, information systems investment board. It seems very complex and complexity usually slows everything down to be frank. How is this going to work efficiently? How is it going to deliver better? I'm going to ask Mike Nielsen to come in a moment to some of the detail of it. The one thing I would say is that we recognise that communication engagement with bodies about the respective roles of the different parts of oversight is absolutely fundamental to this. There's clear reasoning behind the different parts of the architecture of governance and also the support roles, whether it's the chief information officer or the digital transformation service. It's absolutely critical that they understand clearly what their roles are and that the people who they're supporting understand it too. Mike Nielsen might want to add something on the theory behind the governance changes. Three core tasks. One is the digital transformation service. Two is the oversight of the whole central government sector. And the third is the effective management of projects within the Scottish Government. What we have decided to do is rather than having the ISIB covering both Scottish Government and Central Government to restrict their role to what it was historically which is just the oversight and management of Scottish Government projects and to have the digital transformation and assurance board covering the digital transformation service so support and the overall assurance process. Below that board we have got the assurance framework for the Central Government sector and that is managed by the office of the chief information officer. So it is full of acronyms but I think it is a clear line where you have got the chief information officer's office managing the assurance framework and reporting to the digital transformation service and assurance board. I have to say, just at the back of an envelope here I have countered up eight different bodies within the Government that are dealing with various aspects and I have to tell you, if somebody came to me with this sort of structure they would soon be told where to go. It cannot be efficient, it cannot be. I will look forward with interest to see how it develops but I just don't see this. Coming back to the constraints on public sector pay scales and so forth, are we still largely plugging gaps with short-term contracts? Part of what we are trying to do through the digital transformation service is to move away from that. There are still skills that we don't immediately have in-house and we are using short-term contracts for that but we are increasingly both through knowledge transfer and also through growing our own trying to shift that balance so that we have stronger, more robust in-house skills. What sort of percentage of short-term contracts and agency staff filling gaps? What sort of percentage is that at all? It's hard to make a generalisation about that. I think it's fair to say that we have got a smaller proportion of permanent staff than we would wish. It will tend to be between a third and two thirds as a permanent or fixed-term staff but we'd have to give you that information. That's quite a wide margin. If you can follow up and provide that information to the committee. I think what I'm trying to get at is that there is a premium for bringing in people in short-term and on agency and as my colleague here knows in the health service it's quite expensive bringing in agency nurses and so on. You pay way over the odds. Are you paying way over the odds here? Is it a question that the public sector pay scales may be constraining but we're actually paying more out the back door by bringing in people in on these contracts and agency work? You're absolutely right in identifying the balance that we're trying to strike. So wherever possible we would try and go to the market quickly to find people who we could bring in on our own terms and conditions and sometimes that's not successful and sometimes it's not as successful as it is between the importance of providing the resources to a programme and project in a timely way while at the same time not paying more than we have to do that. Over time we're trying to shift the balance on the way that I was describing but you're absolutely correct that there will still be time so we're having to plug gaps at greater cost. If we put aside the public sector pay scales and simply look at the costs if you paid for example private sector salaries costs of short-term contracts and agencies which is cheaper? The bundle costs which is cheaper? You're right, one of the things that constrains us is that there are frameworks that we have to operate in in relation to what we can pay through the civil service. Put these aside. Which is cheaper? If I may come at it from the point of view of what we're trying to do is to get the best overall value from money we do need to operate within a consistent framework of civil service pay and the approach we've been taking with digital transformation service is an example of trying to provide the overall offer to potential employees in a way that is enough to bring them in and we are having some success in that. There are some areas where we are having more difficulty recruiting and we're looking at what more we can do in those areas. I think what we would recognise is, and I think we come back to what the convener was saying, that we're never going to want to have everybody in-house partly because it's not value for money to have a lot of specialists so there is always going to be a balance between permanent staff and contractors and contracts with external companies. That's perfectly understood but it's very simple. Is it cheaper to pay private sector salaries or to pay for short-term contracts and agency staff? You mean to pay the equivalent of private sector salaries? I'm not saying you can, I'm just saying would it be. I don't know the answer to that. For some roles I think where we are is to be paying permanent staff for a higher proportion of people because we need that a stronger core but we need to look at the extent to which we'll be using a number of these for the long term. A number of people we won't have in for three months or six months or whatever so I think it does depend upon the overall it depends upon what exactly the role is. If you looked at your budget for short-term contracts and agency staff you know how much that's costing you. You know how much the private sector salaries are. Leaving aside the fact that there'll always be a certain proportion as you say you bring in for specialist contracts and so forth, that's always going to be a proportion although it should be a relatively small proportion. Would it pay more? Would it be less cost to pay private sector salary equivalent rather than agency fees and short-term contracts? Sitting here I don't know the answer to your question but I know that that's not an avenue that's open to us but in looking at the responses that we get to the recruitment exercises that we've done one of the things that we are testing always is the extent to which we can push the boundaries on the existing civil service pay scales to try and take account of the market and the particular skills that are out there to do that. I would have thought you have heard all these figures and you would have made proposals which would have presumably saved the Government money. We do have discussions within Government about pay supplements for example that can be played and we do pay supplements to existing civil service rates in order to bring people in and that recognises that that starts to address that balance between what you pay when you're paying add-ons to agencies and contractors and what you pay in-house and that's incredibly flexible and it's an issue that we know about. We could ask them to come back with more information on that. We can get this more information and we can follow up with the clerk on that. Tavish Scott. Can I just ask about the external companies that were mentioned in the evidence just now in the current financial year how many contracts do exist with external companies providing ICT services? To bodies right across the central Government sector? I don't have that figure to hand to you but we can certainly follow up with that. Any idea of the value of it as a proportion of the total spend on ICT? Not off the top of our heads. A happy default. The example I've got obviously is the CAP Futures programme where the Auditor General points out that an IT delivery partner is being used for that. Is that common? Yes. I'm trying to get some understanding of the numbers involved. This is the Audit Committee so we're quite good on numbers. Need numbers to understand what's going on. Can you provide us at some stage with how many contracts are being provided by an IT delivery partner? Absolutely. Are those IT delivery partners part of a list that are used on a regular basis? We've got a number of Scottish and UK frameworks which are used and which have those lists to give you that information. We'd get all the numbers of that and how much the trends and how much it's gone up or down over the last three years to understand all that. To try and understand the context of the questions my colleagues have been asking about skills. In other words, if you're using more and more IT delivery partners it's the need to worry about skills because you're hiring in more external help to deliver these contracts. That would be my presumption I think as Mike Nilsam was saying a moment ago we want to have a balance between bringing in at greater cost as we were just discussing the skills which either we cannot source into the core government staff or which it wouldn't make economic sense for us to hold permanently and we will always need to do that but what we would like to do is to reduce that as far as possible and have it sitting alongside a bank of core skills which in fact we are using all the time deploying in different places across the central government sector as a college and experience and of course what we would hope is that as the digital transformation service and the core staff of individual bodies become more expert, the need to be bringing in more of that external resource becomes less but it will always be a balance. Sure, I understand that that's very fair. In the current financial year is the government on budget or over budget in terms of spend on ICT? Again, when you say government there you mean the whole of the core wouldn't hold this figure? For Scottish government we are on budget we have not we don't have at we don't look at the budget from the point of view of IT spending in individual organisations aggregated we look at it from the point of view of the total spend of an organisation being managed effectively. Not on ICT, just on generally. On the for individual bodies for the accountability of individual bodies that would be an issue for them. So the government in that sense the Scottish government, your core staff don't routinely monitor IT spend across all the NGOs and all the other agencies that are part of government in the round. Not in flight as it were in the year to enable us to answer at any point in time whether across all IT spend it's on budget or not. You'll be able to look across that. But as a routine I'm sorry I'm not being very clear my questions as a routine matter of policy and of financial assessment at the end of a financial year are we as a government are you as a government assessing what has happened in that financial year in terms of IT spend across the whole of the public sector that ultimately we're all responsible for. We collect data on the trends in public sector IT spend and provide. You collect data on the IT to see trends. Does that mean you look at whether they're over budget or not? I mean for example if Shuff and Health Board spend £10 million on a new computer system and it's 50% over budget does that ping up in your system? Do you have any way of assessing what's going on across the whole because you're not just responsible after are you just for IT spend in this core Scottish government this is the whole of the public sector talking about here right? Well it depends of what angle but what the general report is talking about is the central core government so that wouldn't for example pick up the NHS sector and my own accountability is for I see to spend within core Scottish Scottish government. So in the words no one's looking at I take a point you're looking at trends but we've got no idea of how much money's being spent well we do have an idea of how much money's being spent but no one has a looks at whether it's over or under budget as a routine matter of financial assessment across the whole of the public sector. Not I think from the particular perspective that you described although of course sponsorship teams who are responsible for a relationship with individual public bodies would absolutely take an interest in the spend of individual bodies in the same way that colleagues in the health service would take an interest in the spend of individual health bodies. That's fine, that's okay. Richard Simpson has a very short supplementary and then I'll tell you more. I'm concerned about all these projects that there are not the ones in core government. Can we get a list of this? Does anyone compile that? There are 200 between 1 and 5 million according to the auditor. I would like to know where they are what the original cost was what the out turn was where they over budget and who scrutinised that from government as opposed to who looks at it from the individual board. So you take the NHS 24 that's obviously it's been brokerage they've been given extra money they've got to repay it it's their responsibility within their overall budget to manage it but we know it's doubled in cost so looking at all these things would be helpful and just one very brief comment you might want to look at the Edinburgh council model as an SNP Labour run council who were having real problems with their ICT not dissimilar to what we're talking about today and they brought a consultant in on a contract over three or four years and in the last three months they announced they were saving I think it was 35, 45 million over the next five years very successful so you might want to talk to them about how they did that because they were clearly councillor oversight and the thing has worked extremely well in making sure the contracts for that council are actually cost effective and it's going to save them a lot of money so there's something happening there that's worth looking at I'm certainly following up on that so I mean hopefully if they agree to provide that information on those all the projects thank you good morning can you tell me how widespread you actually advertise and promote the vacancies that exist absolutely and we as part of what I was saying about our increasingly thoughtful approach to recruitment we are advertising our posts in the places where we think that people are going to be looking for them so we've been using social media a lot and advertising in IT journals and so on and that's something that we continually keep under review from our last advertising campaign that I think you want to add to Micah but the way we've done that but it's that if you follow the Giscots on Twitter or similar things then you'll see these popping up quite a lot and we've done so on in order to try and convey to people what's involved in working in government so try to get better at that all the time the reason I oppose the question is obviously when the economy crashed and there were many people were paid off and laid off from their companies and also there were many people were paid off from their IT positions as a result and also the economy has improved somewhat since then but I'm quite sure that there may be a number of people who who have IT qualifications they've maybe managed to get back into employment but they're not doing what they've done beforehand so they may well be in an underemployed situation and I can't get my head around why if there are vacancies and opportunities within the Scottish Government I can't understand why they don't see this as potential series as positive opportunities there's a possibility that the money might not be as good as what they're earning now but also there's a possibility that the money might and the other elements to a salary might actually be better than what they're getting at the moment so I can't understand that You're right to point to the broader package of benefits and again that's something which we've been trying to explain in more detail through our most recent recruitment approaches so giving, identifying both the type of work that people would be doing point of view but also from the public service point of view, identifying the benefits of working for the Scottish Government as an organisation as an employer and I think it's very important as well as formal advertising to recognise how influential our own existing staff can be as advocates for working in Government I've been really struck in the last few months meeting people who exactly the way you've described had exited private sector jobs either by choice or not by choice who've come to work in Government and to say unprompted that they are getting both better technical skills than they had access to elsewhere and also being able to be involved at scale in projects so those involved in doing things on a Scotland-wide basis that they very often wouldn't get from the private sector so we need to really understand those motivating factors and to keep building on them and learning from the people who've come to work for us about why they came and certainly if any member of the committee or anyone else who's got suggestions for how we can do that better we'd be delighted to hear that I mean I would suggest it's probably not just a matter of understanding it better but it's about actually promoting it better to tell the wider world about the opportunities that are there and I mean hundreds of people will graduate every single year from universities in Scotland and elsewhere in the UK and also there will be many people who might actually want to come to Scotland to work and see the opportunities and get involved in these opportunities and there's certainly a role to have a better promotion of what's actually going on and one of the things we've been developing within Government has been our own modern apprentice ICT stream and in order to ensure that we are attracting people into that we've been working with the modern apprenticeship promotion programmes and that's proving very successful so I agree all opportunities like that to identify our target interest groups and to persuade them to come and work for us so it's in terms of one final question in terms of any further information that you do provide to the committee can you provide us with after today's discussion and I assume myself and colleagues will will certainly be having a review of what's been discussed here today can you provide the committee with some further action points that you will be looking at so that we can understand a bit more in terms of what you do intend doing to have a wider promotion of the vacancies so that we'll be happy to do that Thank you very much and good morning you spoke very early on a lot about assurance and Colin Beatty has looked at the structure and I have to say that I tend to share his concern about that management tree but if I could just think of it in the context of individual projects assurance means a lot of things but at the very least it must mean you're knowing who's responsible for a project whether that project is properly defined whether that's being properly managed and whether the money is being played to the right people at the right time for the right work now if I go back up my list who's responsible for a project will in your terms be the accountable officer I suspect that causes no problem at the very bottom of my list whether the money goes to the right places is essentially auditing and I'm not worried about that at the moment in the context of whether the project is properly defined is one of the things that you spoke about in the context of scoping whether the project is properly being properly managed is the thing I'd really like to pursue can I say from a background in engineering one of the issues that we learned a long time ago but occasionally forget is that if you want to build a building it's very straightforward as long as you put together a decent set of drawings and then never change them and we're sitting in a building where people forgot that for me that most of what I'm seeing in ICT projects overrunning is probably because people change it as they go along now my first question therefore is that perception correct please over the run of projects which we've been doing within government for a while many of them have overrun many of them have been late is it generally speaking and inevitably that changes the cost or other other factors I don't think I feel confident to generalise in response to that but I know you're going to be speaking to my colleagues later who have been involved in the ICT futures project and clearly the changes with their control that were made to that were a very significant factor in the experience of that project I suppose the other thing which I would say is that increasingly as the report notes agile project management techniques are being applied to projects designed to be iterative and therefore to enable a project to be taken forward while the requirements are still being identified but to do so in a way that is managed and controlled and one of the things which we have identified and indeed the Auditor General has identified in both reports is the need to ensure that people who are adopting an agile form of project management really understand how that works and have the skills necessary to do that properly and in a controlled manner so that whether you're doing something in a traditional Prince II methodology or with an agile methodology the correct cost and time control is being applied to it OK then can I pick up on agile and I'm guessing what you mean in there but I can see the concept is it possible to cost those honestly if you really don't know where you're going to finish but you know what you're trying to do and the development of anything is it actually possible to cost it from the beginning in any reasonable way we would be expecting that particularly within the digital transformation service but also within my own wider team we are building up through our knowledge of projects working through agile the expertise to make as good an estimate as needs to be made of the outset of those projects because it is never going to be sensible or appropriate for the public sector to embark on projects where there's no idea what the cost envelope is we have to be able to make sensible predictions of costs so that we can plan for projects and have them signed off properly but it's a different process clearly from the traditional one OK in which case you've just used a word envelope which we never hear sorry I entirely understand what you're saying costs are somewhere between here and there and I honestly don't know where I hope it's on the low end of course do we ever say that in public I don't think we do we come up with a number which may be the mean or the median or sorry I don't know if that's the case and I understand it and that may be the reality pretty much in every project wouldn't it be wiser if we actually made sure the numbers we quoted had a spread rather than quoting a single figure because it might save us all a lot of grief I'm certainly all in favour of transparency and realism about the nature of projects Can I just finally make an observation and a question at the same time so we obviously three of you come with a significant experience in civil service I know Sarah, you were actually here at one point because you were a clerk in the Audit Committee and when I was in the first Audit Committee in 1999 so the three of you come with significant civil service experience and are respected within that area but does it raise the issue about would Google or Apple or Microsoft employ civil servants and I say that with respect and for the role that you're looking to carry out so is that one of the challenges that we face here should we be employing and I say it with, I just ask you to depart yourself from the count roles that you play in your own area but is that not what we should be looking at is that who I'm ambitious if the Government really want to run an ambitious ICT project do you know what I just have to pay for the Apple and Microsoft people or the world too so that's all they've ever done from the age of 16 and I say it with respect absolutely I think that for running any Government project a programme particularly the really big value ones of huge importance to the reputation of the organisation but also the quality of service delivery to the public which is of course what this is all about we would hope to have the very best people that we could find to run these projects and sometimes that will be people who are in house because they have skills as indeed Maxine has in her career in IT development but who have chosen to meet their career in Government for all sorts of different reasons and sometimes it will be sourcing the very best people from the Googles and the Apples and other places who either want to come to Government for a while for personal reasons who want to do this type of work or because to get their skills we have to pay them what the market demands so certainly we are ambitious and aspirational in this context and we want to be a world-class digital nation and that means having world-class skills I think what we've identified today is that we are constantly managing the tension between our financial accountabilities and our delivery accountabilities to try and get that balance right and recognising that there are times when you need a technical specialist that's what you have to apply but you recognise though that if this is a commercial enterprise that has been run like Google or whatever then the people who are at the very top who are managing that would be IT specialists that would be Microsoft all of these companies and given the money that's been spent here it's a significant investment that the Government are making so I'm not saying we're in the same league as Apple and everything else but it's significant sums of money so it's not something that could attract people from a significant players in the IT market It would be interesting to know how much time the most senior managers of Google and Microsoft and other organisations are spending actually on IT solutions I suspect that the leadership role and the governance role is the one which predominantly preoccupies them and certainly in the same way I am not personally dealing with IT solutions I think that there's clearly a leadership and management role in relation to all of this but I take very seriously my responsibility for making sure that those who are in technical positions have the skills that they need Thank you for your time thank you to the witnesses and to the committee for five minutes Okay, thank you colleagues we now move on to agenda item number two which is oral evidence on the EGS report entitled the 2013 report sorry, just to clarify it's agenda item number three and it's in respect of the Scottish Government's consolidated accounts the common agriculture policy futures programme just to clarify the committee has received written submissions from the Scottish Government and the European Commission and Connection which was contained in the papers for this meeting I welcome our panel of witnesses this morning Graham Dixon who is the director general of enterprise environment and innovation Jonathan Price the director of agriculture, food and rural communities and David Barnes the chief agriculture officer of the Scottish Government Mr Dixon has a short opening statement Thank you convener, I'll be brief I'm very grateful for your invitation to give evidence today because of the complexity of this programme and the way it is moving very quickly I think it's helpful to give you an oral update and progress rather than a written one I'm also conscious that it's quite a different membership of the committee from when we gave oral evidence last November so I hope that that will help us we will try to be concise because there's a lot of European jargon in this we will try to explain it and it may take a bit of time Can I just remind the committee that the new common agricultural policy that we're implementing is radically different to the existing policy The EU promised to simplify it but this will in fact be the most complex ever and as well as introducing a new to IT system this will involve us in a new way of calculating subsidies a range of new schemes and complex new rules on greening It's new for our farm businesses who are applying under the schemes and all of our staff who implement it and we've had to make all of these changes against a very tight and fixed timetable Hearing the evidence prior to this I can assure you that our information systems investment board considered the programme at an early stage it's been subject to gateway reviews and it has its own simple and I believe good governance structure now running it and it's also given the scale being fully within the site of our ministerial team and senior management since its early stages Since we last gave evidence we've made good progress we've met our deadlines and as I reported in June we received almost 21,000 applications for the single payment on time we've had excellent support from NFUS and our farmers and agents with some of the early teething problems we had in the application window We've got a clear plan in place for the remainder of the programme and it's being followed We also have an excellent and highly experienced team both in our IT side and in our business which David runs We also have a very good contractor in place who we're working with very collaboratively This programme is an absolute priority for me as accountable officer and it will remain so until it is completed Thank you Now to open to questions and Tavish Scott One of the futures programme Mr Dixon by just asking if the new programme and I take all your points about the complexity will deliver farm payments in the first two weeks of December as we all hope As I mentioned we have a very detailed plan to start payments as planned from December It's a very tight schedule and it depends on everything being delivered one thing after another bearing in mind that we kept applications open a month longer and it's the first time we're doing it We've got a lot of complex business processes to do in the coming three months We've got to calculate both new payments and the old system which tapers out but as I said we've got a dedicated team of staff who are doing their utmost to deliver this I was one of the people calling for it to be extended by one month on behalf of all the farmers I represent so I totally take that point Could you deal with the costs because the Auditor General reported to the committee that the original business case for the futures programme was 102.5 million and that had increased to 178 million as of March 2015 Those are the Auditor General's figures based on the audit of your programme What's the latest figure? The latest figure that we're working to is the business case of 178 million and that again referring back to questions in the previous evidence session contains an element of optimism bias so that is the outside of the envelope There is contingency or optimism built into that So your expectation is that the system will be delivered within that 178 million I have very much hope so Tell the committee when that date closes When is it judged that all those automated bank payments go to 22,000 farmers across Scotland or it rolls on from year to year because those payments happen on an annual basis The business case is over a five year period It's essentially in the end of March 2017 that the five year business case comes to an end Obviously the thing that we're focused on at the moment is getting the farm payments out starting in December but there is more functionality that will be required both in relation to some of the pillar 2 schemes and the livestock schemes that are also required for this year and we also have further mandatory requirements from Europe around a new land parcel information system and a scheme account and management scheme So that is all there There are then things that would be around business efficiency that we would hope to implement in that period up to March 2017 but obviously we will come to that once we've covered all the mandatory elements The other side to the cost within the cost within the £178 million was the figure that Audit Scotland put on the IT delivery partner which was again at March 2015, £60.4 million which had gone up from £28.8 million E, who is the IT if you'll forgive me who is the IT delivery partner and B, what has obviously changed between 28.8 and 60.4 The IT delivery partner and the principal one is CGI They're the company that Dr Simpson referred to earlier who just won the contract for the city of Edinburgh and I have to confess they're also the Parliament's IT supplier You're doing really well till you mention that I think maybe if you could bear with me just to take you back to the Auditor General's original report at the time the initial business case was done we did not know what we were going to deliver or to scope it and as she says in the report it's practically impossible to let a contract that has a fixed price in the outset in those circumstances cost increases the work develops and the scope becomes clearer and as I said when I gave evidence last November at our initial stage we got it wrong we took advice from procurement from other people who looked at similar systems but at that point a couple of years away from knowing what the new scheme would be we underestimated radically what it would cost to the IT part of it our next business case which we brought in I think in March last year we had a clearer idea and since then we have met a number of different cost pressures additional elements that we need to build like the land parcel implementation system which is an enormous database of 500 to 1000 fields effectively we've had to bring in as well so that's what's taking it up to the current figure and in your assessment therefore of that IT delivery partner they haven't overloaded the costs they can justify to you and therefore to the committee of parliament that those costs are justifiable we are as I said paying them on the basis of the work they deliver we agree work orders with them and we challenge anything about gold plating there have been a number of factors that have impacted on us as I said complexity is a big one and change market conditions have also come into it so we have rates in the contract that we will pay them and I think we are now paying for things like developers about 32 per cent above the original envisage contract rate with them and the third thing we've needed to do is to effectively put a surge capacity and at various points to meet first the opening of the new portal in January and then to meet the opening of the payment window which had to be the 15th of March we paid a lot of overtime we brought in additional staff and we will do the same in the run up to making payments Johnston Price mentioned 2017 is the period of the programme overall your letter to the committee of 22 June said that about 35 per cent of the submissions of the single application form to the government were made on paper as opposed to online I can't say I'm remotely I'm sure you're not remotely surprised by that as well given I've seen this stuff and the complexity of it is scary for anyone so that's not quite the way I'm sure then if you would describe it but do you envisage or does your business case envisage that 35 per cent number dropping and dropping significantly and if it does just remind me in lots of areas such as mine do you actually do it online in the first place? I will let Jonathan give you a briefing or David on some of the arrangements that we could in place for remote areas however the approach that we took was that we would have digital by encouraging people to do it and the new system it's a complex new system for anybody to fill in but it has a number of advantages for farmers and agents in that what they see is now pre-populated and it does checks as it goes through it to say by the time you come to submit the form this is compliant but to have the checks you need to have superfast broadband because otherwise there's some so slow it grinds to a stop and that was your problem out of the outset so it's chicken and egg on that one the question is you're building in the incentive so people will do it online down south they took a digital by default we did not do that it's a place to help farmers in remote areas and you want to hear from Jonathan, David I kind of know about that it's just that what I'm really after is the future policy going forward and whether it is reasonable to expect the number of applications to rise that are online as opposed to in paper when I know they can go into the local department office and all those things but that's not really the perfect scenario is it If I can answer the question in particularly first of all the question about the business case what does it assume the business case benefits are not dependent upon a significant shift a significant increase in that so in terms of the financial elements of that that's not a huge part of it we achieved almost exactly the same percentage this year a small increase in the percentage of online applications this year and that was of course in the face of some of the difficulties some of the teething issues that we had with the online system during the application window and we've got some very detailed data that show us those for example agents agents normally normally use the online system almost exclusively and very few paper applications we've got a significant chunk of agents that use paper and we're pretty confident that we'll get them back on to online next year and of course that doesn't answer your point about the availability of broadband but in general the agents will make sure they're covered okay and the final question if I may convene out was just on the just what I wanted to do on your thoughts on this the paper that we got from the European Commission which was even by the standards of the European Commission incompensible said on the financial section section which is obviously really important to you and also very important to individual crofters it said additional complexity is added by member states own supplementary rules and conditions which are added in order to tailor and target aid notably in fairness in rural development programmes so I appreciate what they're trying to suggest there do you think that's fair and is it the case that the Scottish Government have added additional complexity as the European Commission would appear to be suggesting given they were writing this letter to us as opposed to the audit committee of some other part of Europe yes the industry asked us for more complexity they asked us to have three different payment regions where we pay a fixed price per hectare different parts of the country which makes it and three livestock schemes so we have I think a sheep scheme a beef scheme and an island beef scheme which again are things which make it more difficult but they are targeted towards helping Scottish farmers and I think that's the difficult balance is that you could have a one size fits all policy but what fits in France would not fit in Scotland so the commission actually have a point on this one we have tried to make things as simple as possible but within the constraints of trying to target the four or five hundred million pounds best to our farming community okay thank you thank you it's absolutely on this point I'm just wondering if I can pick up and I'm hoping you're simply going to say yes once the scheme is set up presumably the pre-population then comes back next year the scheme doesn't change so unless a farmer makes a material change on their farm they don't have to do anything other than press return next year is that essentially where we're going more or less I would hope so provided the commission does not change the rules and we know from experience that there are always some little changes every year from the commission we are with Commissioner Hogan in place his focus is very much on simplification so that is intended to mean that we shouldn't have significant changes but sometimes even simplification is a change even to make it simpler so we may see some of that there are some things that we have to do so we have to make sure that we are clear that we have a geospatial application in place for all farmers by 2018 so that's an additional requirement but again that's intended to make it as easy as possible for farmers rather than make it harder for farmers but it certainly increases the complexity of that on the gate I'm looking at the Audit Scotland report on page 7 Paragas 14, 15 and 16 this £178 million according to what I can see isn't going to deliver the whole project there are items that have been taken out in order to enable the core or most urgent piece to be put in place is there a plan for the rest of it to be implemented at some point and if so do we have any guesstim at this to cost Are you referring to the section 22 report from the autumn 2014 that's correct there were some things that we essentially deferred rather than took out altogether and the specific things they mention are SMS text messages for alerting farmers to a change or something that they might need to do I think the big thing here was the mapping of registered land that was referred to Oh sorry do you mean the farmers able to submit their own updates to their land online yes and that is something that is in scope it is in scope within the current business case it's not yet delivered but it will be part of the new land parcel information system so which part of the items that were deferred are not covered by the £178 million more or less there's nothing that we've ruled out a scope we have deferred things because obviously we've been working hard to meet the statutory and regulatory deadlines to ensure that we get the main bulk of the payments out as early as we can but we've not ruled anything out as a result of reordering the order in which we brought functionality in when you say you haven't ruled it out does that mean it's actually within the £178 million budget the £178 million budget was drawn up in order to enable that kind of scope to be included what I couldn't give you a guarantee today is that the £178 million will pay for all of that functionality which again is why I was saying that we know what we absolutely have to do and then there are things that will improve our business efficiency in terms of the operations of the paying agency and the agricultural staff whether we can get all of that delivered within the £178 million is unclear at this point in time because we're working to get the most important elements in and we will likely have a future decision to take as to exactly what is most cost effective and what is good use of public money in terms of making further improvements and as I've said the business case runs to March 2017 but there will be continuing investments in the systems beyond that date as well so some things may be deferred beyond the existing five year programme The biggest part of it, the online mapping is part of a procurement for a new land parcel information system the other two elements which came up in our evidence last time around SMS messaging which is a nice to have and also the ability for our field inspectors to do livestock inspections on their laptops and again that was about we will look at that to see whether the business benefits from it meet the cost When will you know if there's any additional cost to this when will you anticipate having that information What I would say at the moment is that we are working to that £178 million business case and we are not intending to exceed that and it may be that certain elements we choose not to deliver if they don't provide a sufficient individual cost-benefit ratio There is a possibility of a further business case being brought forward to bring other elements into this so that the £178 million is not necessarily the end of the road I think what I'm saying is that we will take a cost-benefit view of all of the things that we intend to deliver within the £178 million if it turns out that £178 million will not be enough to do all of that These are things that we have within the business case things that are not absolutely essential to meet the European regulatory requirements and our compliance duties but things that we thought would be good to have in order to improve our efficiency We have been so focused on dealing with the regulatory requirements that we are not yet at the stage of doing a further analysis as to would we want to spend an extra £3 million, for example, on a particular piece of business efficiency and what do we think the cost-benefit is? We will come to that in time and we are I'm pretty confident that we can do everything we have to do within the current business case price You're talking about cost-benefit Again, looking at the report paragraph 5 on page 4 the Scottish Government estimates that there are costs of £50 million a year if the IT system fell to deliver £178 million so you've got a three and a half year payback crudely Is that a good investment? I'm not suggesting we don't take the European money but it does seem disproportionate, doesn't it? The fact of the matter is we have no choice we have to have a compliance system even if we still suffer disallowance but our intention is to ensure that we don't suffer disallowance Can I just say it's quite refreshing when someone comes in front of this committee and honestly says that in the initial stage you got it wrong and I thank you for that quite refreshing and I have to say quite unique instead of the jargonistic speeches that we often get. Can I first ask for a supplementary into the response you gave to Tavish Scott? You said that you will start the payments to farmers in December it's the word start that I was concerned about will all farmers be paid in December this year? We have got a pretty good record of getting last year it was about 90 just over 90 per cent of payments out in the first couple of days in December we there are various complex rules that we cannot pay or begin to pay farmers until inspections are through so that the people who are not being paid don't know that they're going to be inspected and do things to get out of it so we're never in a position of getting 100 per cent out but we endeavour to get those who are inspected and all the other payments out as soon as possible after that. Unlike Tavish I'm not a farmer so I'm not sure about these inspections what percentage of farmers can look forward to receiving payments in December and if not in December for whatever reason what is likely to be the extent of the delay a month, two months three months, whatever? At present we are our plan is to get as many out as we can in December and to a high percentage of it the cabinet secretary has already announced that we're likely to split payments as we've done in the first year of previous schemes happening across Europe so our aim and we won't know until... You mean they'll get their payments in instalments is that what you mean? Yes and so we will try to get the highest possible instalment to the highest number of people in December and then as quickly as possible thereafter in the year. I'm not familiar with rural issues so what's the highest number the highest payment to the highest number is that given that we're the audit committee can you give us an idea because I did meet Alan Bowie of the National Farmers Union at the weekend and he did say that farmers are worried and I think they are looking to this Parliament to find out when the payments that they so depend on will come in so can you be a bit more precise than the highest? I'm afraid I can't give you a precise figure today because that's something that David and his team will work through as we get closer and closer to it and we know how many people whose forms we've processed, how many we can be safe to pay and it's not a in order to reclaim the money from Europe we can't just make payments we have to do it in a way that complies with all the rules and ticks of the boxes. I do appreciate that given that we represent constituents and they're looking to us for uncertainty and what they've had for the past year is a huge amount of risk of uncertainty and I'm trying to do my best to bring forward an assurance but I don't think I'm getting it. I appreciate that and we and I don't know if you want to say more David at the point we will get there. Yes, all I wanted to add was that as Graham has said there are European rules that we have to abide by to make sure that we're not risking overpaying people the reason we're not in a position to give numbers is because every farmer's individual payment is different when we get to the end of this policy after the transition period that we'll go through to 2019 all farmers will be getting at that point all farmers will get the same amount of money per hectare and the arithmetic will be relatively straightforward however in 2015 what every farmer will get is a combination of some money on a flat rate basis like that but quite a lot of money based on what that farmer's individual track record is now what that means is if having processed x% of claims doesn't give us a fixed amount of assurance about how we're running up against the budget because because each individual farmer's payment is different so having treated a 100 hectare farm from one farm doesn't give us the same amount of budget certainty as a 100 hectare claim from another farm unfortunately I'll just on that point if I can ask my final question can I put it this way will all farmers get a payment in December whether that's the first instalment or the full payment will all farmers get something As I said we will try to get as much money as many people as we can and both the cabinet secretary and the deputy First Minister are meeting us regularly to talk about progress and as soon as we get to a point where we've got some certainty and we know what we can do with a reasonable amount of risk we are keeping the farming industry as up to date as we can in progress I think of Colin as far as I can on that one so I've got one additional question convener and you did mention to my colleague Colin Beattie about the complexity of the programme and about the changes made and I appreciate that you have three different schemes here but in 29 countries in Europe and four countries in the United Kingdom the complexity would be fairly similar did all of the well a question in two parts why were 50 changes made to the official guidance between the opening of the application window and its close so 50 changes were made in Scotland and my second part is the other countries in the United Kingdom did they also have a 74 per cent increase in their budget uses 102 to 178 so did the other countries in the UK have a number of changes and the same hike in the budget last David if we can address the changes in the scheme guidance we don't have and we haven't seen any official reporting of other schemes within the UK is in the public domain I think if they've gone up by 74 per cent we might have known about it I think that again as I said at the beginning when people started in this nobody knew the rural payments agency I think have spent about £154 million on their IT system that's in England that's in England so they're 154 and you're 178 I think theirs is just we believe on the IT component alone so there are and they took a completely different approach from we did I think the Welsh had have done more of an incremental approach across a number of years not sure where they've got to in Northern Ireland but I think across Europe and Jonathan meets the European Paying Agencies this has been a challenge in every country, in every member state delivering something new and so complex and if they all gone up by an average of 74 per cent we don't have the figures from other countries we don't know where they started and as I said in our case the cost of the English system given that we've got 10 times the population nearly is similar to the cost of the Scottish system is that correct? we may have 10 times the population but the system has to cover a scheme however many people apply for it and they have 4 times the number of claimants that we do the 50 changes between the opening of the application window and closing it's very important to emphasise that that doesn't mean that there were 50 changes to the rules that farmers had to comply with in flight as it were we changed the way in which the guidance was presented to farmers in January this year there were a number of changes to clarify the position in response to feedback from customers on the previous version of our guidance the feedback that we got was that the guidance was too disparate guidance on different schemes was in different places it was in different formats so we put a lot of effort into from January this year on the new portal putting all the guidance in one place putting it in a consistent format of course we got feedback all the time on that a lot of it very positive feedback nonetheless there were spelling mistakes there were things that weren't in the right place there were things that were expressed in a way which the writer thought was clear but the audience out there said to us that's not clear it needs clarifying so yes you should see this as a sense of continual improvement of the guidance which we're still going through now I'll just leave it there early on in your comments Mr Dixon I think you mentioned the complexity of this new scheme I think you mentioned in terms of IT of some of the 5,000 fields from memory 500,000 500,000 500,000 in terms of 2012 this Parliament passed the land registration act and in terms of the complexity of land registration in Scotland has the land registration system that we have currently working with too has that actually had an implication or an effect upon what you're trying to implement? No, I'm afraid it has to be a completely different system what we have to maintain for the European Commission is a record of every field piece of land that our farmers and agents claim for or have responsibility for and that may be separate from the cadastral map that registers of Scotland will hold that shows the holding of a farmer or a business so I'm afraid that has not helped to simplify it but the complication on top of it is as well as recording every single field boundary down to a very precise limit we're required from I think you said 2018 to bring in a number of different layers that sit on top of that showing biological features that farmers will need to maintain as well it's horrendously complex with the roll-out of the new land registration process will that make things easier for you in the future wearing mind obviously there may be other amendments on the commission on an annual basis The land registration is predominantly about title to the land and the system that we hold is all about what is actually on the land and the features are there the eligibility of the area within that field how much of it can be claimed against if it can't be foraged by livestock then you can't claim for that so we have to do very detailed mapping of individual features sometimes down to individual trees certainly down to hedges boundaries and relatively small water features which again will under most circumstances not be eligible so it really is a very different system to that that's used by Registers of Scotland It's very interesting this particular area is the one I'm interested in because it's about land use and mapping the precise use of the land and not just that's a field and it's so big, what are the trees what are the water features etc what protection is being put in place so it's all about outcomes and use which is fascinating but I'm really interested in the disallowed side and the inspection does the system now have you got the necessary system in place to do the inspections to do the verification visits and checks before the payments can be made because it seems the timescale on that is pretty tight The first set of inspections we had to do were under the new and they had to be done clearly while there was still evidence in the ground for inspectors to see so I think David's inspectors were out until 15th of July inspecting you probably don't want to know the detail of what they were inspecting but that worked and then the next set of inspections around the other parts of eligibility are coming up so we have the inspection software deployed now and being used by them Colin was asking about that earlier on so that's in place that the inspectors can go out with the information on their laptop or PC or tablet and they can check it against what they're seeing on the ground quite easily can they Yes, what they have is a downloadable system so they go out with GPS kit download in the office the relevant set of data for the farm that they're inspecting they go out and do the work they're not in real time connection with the system that may be one of the future things but when they're back in the office they do an upload so that's in place and that's happening so it's not going to cause any delay in these payments or the interim you're going to be able to complete those are you? We have a plan that it doesn't cause any delay in payments that plan includes if necessary going to a farm doing the initial stages of the inspection taking it to a certain point of completion but then if necessary going away in order to do the same on other farms and coming back to finish the first inspection at a later date clearly that's not the most efficient way to operate it's not the way that we normally do it for us to avoid that inefficiency we will do it but if necessary we will do it the first way I explained in order to make sure that inspections aren't an obstacle to payments being made So you're fairly confident that disallowances the government's not going to be targeted for significant disallowances I mean it's not a perfect system but I think the specific disallowance of course disallowance covers many many different things but the specific disallowance that was being linked to inspections was the greening inspections that Graham mentioned for example we had to check that there's a new greening rule that says some farmers have to grow three different crops now if you inspect too late and what you see is a plowed field and you can't prove what crop was there then the European Commission would say that's an inadequate inspection you will have some disallowance if you lie date was important to get the greening inspections done as it happened Europe in a spirit of helpfulness quite late in the day said actually we'll change the guidance on what evidence you can take into account so whereas initially we thought our inspectors had to see a field of barley to be able to say that field was barley late on the commission said actually crop residue would suffice so if there was barley stubble and bits of barley ear that had dropped off the trailer around the field late on in the day the commission said that will suffice as evidence that that field was barley it's an example of the moving goalpost that we've had to deal with all the way through I can see them having photographs with the day's newspaper in it and actually sending you I won't go on finally Nigel Doin a couple of questions if I might could I just go back to the basic idea of ICT systems you mentioned I think earlier on wage elasticity of 32% is that right rises in wages in costs of what I've got down here as 32% maybe you didn't maybe with the previous panel forgive me in which case that shows what happens over a long meeting but either way this is relevant to you nonetheless how on earth do you account for that kind of thing is it when you're managing these kind of programmes is there any possibility of getting those kind of numbers right are we asking you to do the impossible if I can clarify what I said for Mr Don's benefit the example we got from our principal contractor is that software developers are now commanding 32% higher rates than we had envisaged in the contract and it's very difficult when you're managing something to allow for that I think skills have been an issue for us in terms of the rates we are paying through our principal contract with CGI for their staff and the people they take on and it was also as the previous evidence we gave to the committee showed it was challenging and taking on the very senior people that we needed to lead the programme that took us time more than money but it's a hot market and it's difficult to deal with that okay so it's difficult could I then just come back to this point about December payments I still don't think I understand why it's not possible to make a payment to every farmer is there not some minimum defensible payment that you could make Mr Price is nodding I'm not disputing that I'd love to understand why is there the case that there's a farmer out there whose his entitlement is so uncertain that it might be zero because surely that's the only circumstance under which you can't pay him the issue is that the European Commission regulations are very clear about what we have to have done before we can make a payment to an individual farmer and for a payment to an individual farmer we need to have completed all of the application processing all of the administrative checks that we do as well as the field the on-the-spot field inspections so under all of this there is no relaxation to enable us to make a payment to any farmer that's going to get a field inspection we cannot pay that farm until all those inspections are done and all of those processes have been completed you're quite right that there is a number that we have to try to calculate once we've done all the inspections before we know what the final payment to a farmer will be and that's why we're looking at the two-part payment essentially making a partial payment as early as we can but ultimately we need to have completed all of our administrative checks and all of the inspections in order to be able to make a payment to a farmer and my worry is coming back to the point of disallowance is that as Jonathan said if we don't comply by the rules then we get a blanket correction which at the end of the day everybody pays for but we nationally finish up paying for so it is actually not in our collective interest to fiddle the figures as it were for any individual however much we might like to and we have a in the current programme our disallowance has been about 1% which puts us well on the league table in Europe and it's about half the rate of the rest of the UK so I have the balances accountable getting that number as low as possible but also trying to get money out to people as quickly as possible and that's the judgment we'll take with our ministers when we have an idea of what the risk is I used the term fiddling the fiddles fiddling the figures merely is a way of saying we don't stick to the rules forgive me, that's judgment I thank the panel for the time this morning and can I just remind colleagues that we'll be discussing this item and agenda item number six in private I can just allow a bit of suspension to allow the witnesses to leave the table item number four which is consideration of the response from the Scottish Government to a letter from the committee regarding the AGS report on broadband and the members of any comments can I just ask colleagues for comments on some order order colleagues we're on agenda item number four so I'm asking for colleagues to comment on the letter that's been received can I just ask colleagues if there's any conversations that take place outside, please thank you okay, so we're going to have Combyty I've got to look through the responses and so on this is obviously a very important issue that's not going to go away and I think as far as it goes we've probably got as much as we can at this point I think there's been some quite good work done on this by the committee but I think we should probably note this response but I think we should also understand when would be the best time to come back on this because this is going to go on for probably several years and we need to be sure that the implementation is going well and that we're getting delivered for what is a lot of money that's going into it from the government that we're getting good value for that so we suggest that maybe we should at some point talk about it at Scotland we'll talk about it at Scotland a bit this later I can't remember now sorry, Combyty I thought there was a suspension there so my apologies discussing agriculture I just think what Mary and I really found out about community broadband Scotland on this is that their role is very limited because BT will not give clarity on which areas are going to be invested in and which are not and that rules and rules and rules so Colin's point is absolutely right it would be very helpful if Order Scotland would continue to look very closely at this because we can do what we can as individual representatives but what we can do is keeping Order Scotland pressure on this Thank you, Combyty again, I sit with colleagues but I'd like to add that it kind of struck me when I was reading this particular paper that there's probably a planning role in this as well that I think that Order Scotland might want to consider particularly when there are new facilities being built through a regeneration project or whatever and in terms of the linkage and the improved connectivity to those new facilities a constituence has contacted me regarding a new facility and there is no superfast broadband basically into that particular building so that's probably the planning locust in this issue as well to consider going forward Mary Scanlon? I read the Government's response and it was really probably as expected that they did respond to all the questions but it still remains that the uncertainty in the future and what have we Scotland I heard on Mal was that people's businesses were being affected it wasn't just keeping in touch with friends by email it's a huge tourism area within the islands and very difficult for them to promote tourism in a way that can be promoted elsewhere I think the most disappointing thing is that for all the work that was done within a group of islands and it took huge amounts of time BT could not come forward with any date or time of when they would be introducing a better superfast broadband and one chap that I asked a question after three years of meetings and ferries around the islands and said we will bring it in tomorrow and so I think that the Government has answered as best they can and I think that it's fine that they have taken some time to address the issues but I do agree with Colin we need a very watchful eye on this we just seem to be so hampered by BT's lack of certainty in the future and I still can't believe that we can't come forward with a better way of working with communities and bring forward some certainty so that as Stuart McMillan says there can be better planning for the future and that seems to be the best way forward Can I just make one point in terms of just a few observations before I bring Stuart McMillan in that I actually think that consumers losing in this whole debate in terms of feedback I received from constituents there's frustration and I think that Stuart McMillan makes a good point in terms of development where people are advised in the sales carbon don't worry about it, you're going to get broadband you're going to get super fast broadband what speed do you want it to be up to what ever you need it to be people get promised the earth and these sales carbons and I know then the providers have to pick up on that but I'm not convinced that given all this competition that's meant to be there and the market people keep getting, I mean I know where I live we get literature through every week or Virgin can do this for you Virgin will say well we don't provide a service in that area and in fact we're not interested in coming into that area because it's not economically feasible for us to come in so then we have the issue BT which is that we have gaps in various areas where people are advised they're too far away from the exchange they're told that it's in the pipeline but they've been told that for the last three, four years so I think given that these companies are seeking significant public subsidy I'm not convinced that we get the we get the payback from that that we do get for the investment that we make and I think the market actually dictates the pace as in the providers are doing that and I'm not convinced that the Government are able to or I think there needs to be a willingness to take it forward to make sure that the money that's going into this across the UK and its significant sums of money this is not I mean this is on a scale if we were investing this money in supermarkets so if we said to Tesco we're going to give you £100 million to give people free food then Tesco would be doing very well and this is the case here we're actually giving these providers money to provide an infrastructure and I'm not convinced that we'll get the back for what we should but I think we're moving away and I'm doing it as well in terms of the report there's quite a specific remit from the AGS I think commenting on it is only so far we can take the report so it should be more than that Thank you, it was a point of clarification that my comments were regarding about the planning system not about planning per se in terms of how things are it was mostly about the planning system and any potential planning gain for any developments I'm absolutely with you I think that there are two sides to this quite simply we need to keep an eye on this as an audit committee so that large sums of public money are being spent and we need to encourage the Auditor General to look at that on a regular basis I suspect annually but if somebody comes up with a number that says maybe but of course the other thing is we do just need to make sure that the infrastructure and capital investment committee or whoever it is in the next Parliament is looking at the policies behind this it's not our remit but it very firmly is there I mean you get things through the door telling you that this, that or the other supplier all do things I have tens of thousands of constituents that are too far away anyway nobody would ever pretend that we are going to get a pass broke Colin Beattie, then Richard Simpson No, I totally agree with what a lot has been said but coming back to what Stuart McMillan said in terms of the planning aspect and the regional plans that come in that a lot of them don't take in the infrastructure they just tell you where you're building effectively that really if business is still to be considered in areas of high development this is the sort of thing that we need to know and who's paying for it and all the rest of it perfect example is outside Edinburgh as soon as you pass Edinburgh airport you fall off a cliff in terms of broadband provision people look at cliffs and they've been screaming out for it it's killing business out there the whole lot and it's only a matter of minutes from Edinburgh so it's not just places like you know the islands and whatever and there's also the issue of making sure there's no more watch my language but no more mess-ups like there was in Edinburgh Aberdeenshire, something like that about state aid rules that there was going to be provision in terms of broadband and it all fell foul of that so what's happening from UK Government Scottish Government and the plans through BT planning system it all needs to be taken into consideration as I want to and family Richard Simpson I agree with again with much what has been said it seems to me that the promises that are made are not being fulfilled the broadband speeds are often fluctuate with the volume of users that are on you can get it very well at one point of the day another point of the day you actually get almost no service whatsoever so there's a capacity issue in there as well and it seems to me that if you look at Japan when they talk about super broadband super fast broadband they're talking about a gigabyte not 100 megabytes or as we're talking about as I gather about up to 84 megabytes I mean that's not super fast that's moderately decent with the amount of streaming and the demand for streaming amongst the next generation to talk about this is just not going to meet it so I think we should be asking the infrastructure committee not only that we'll keep a close eye on what's happening at the moment but it's actually our investment going to in any way future proof is it any way going to keep us competitive because if we don't have gigabyte speed and particularly for our businesses we're not going to actually succeed we're not going to be a successful country okay so we've agreed to note it but also I think we've suggested as well that we refer it to the infrastructure committee okay thank you can I then move on and as agreed move the committee into private session for the next items and I'll look for a very short suspension