 I welcome everyone to the 14th meeting of 2014 of the Public Audit Committee. We have apologies from James Dornan and David Dornas as substituting for James today. The first item—oh sorry, can we agree to take items 8 and 9 in private? Great. Thank you. Our next item on the agenda is an overview of local government in Scotland 2014. We have Douglas Sinclair, who is the chair of the Accounts Commission, Fraser McKinley, director and controller of Audit, and Gordon Smale, the senior manager of Audit Scotland. Bruce Crawford was just reminiscing with me, Douglas, about days gone by in COSLA. Welcome to the committee and it's good to see you haven't lost either your interest or influence in the public sector. Can I invite you to make an introductory? Thank you, convener. I've got a short opening statement. The Accounts Commission welcomes this opportunity to discuss the challenges facing local government with the committee. Scotland's councils provide important services, but they do so against a background of reducing budgets, of an agent population and rising demands and expectations from the people they serve. Our work shows that councils are coping well, but they face increasingly difficult choices about how to maximise the value they get from the money that's available. To help make those decisions they need to make better and more consistent use of options appraisal, carefully looking at how services are delivered and thinking openly of how services might be delivered in future. They need to ask the question, what works best and can we prove it? Many of the messages in this year's report are not new. I think the fact they are similar simply serves to underline their continuing importance. In particular, can I emphasise two areas? Firstly, the fundamental importance of good governance, the foundation of a successful council, with officers and councillors working well together in a way which engenders the public's trust and confidence in the council. Bad governance, on the other hand, is dysfunctional, time-consuming and expensive. Secondly, the statutory duty of best value remains paramount. We believe strongly that councils which place best value, which means continuous improvement in all their functions, at the centre of all they do, are best placed to deal with change. So while we recognise that the current context is very challenging, the commission is looking for councils to raise their ambition to up the pace of improvement. For our part, we are looking carefully at how the commission can provide further support through its audit work of local government. My colleagues and I would be very happy to answer questions. Thank you very much. I was interested in the comment that you made about councils that are working well. I suppose it depends on how you want to use words. From what I can see in my area, and also talking to people across Scotland, councils are working well given the circumstances under which they are operating. I suppose you could also say that councils are working as well as you could expect, given the very severe limitations on finance. The stories that we are hearing is that there are clear problems just now, but what is beginning to emerge are real fears about the next two years in particular. Can council services be sustained at the present level with the current financial settlement? In terms of councils working well, it is worth making the point that all councils are balancing their budgets as they are required to do. That is not necessarily the case in England. There is certainly some evidence coming through that they are finding that hard to do. It is true to say that money is tight and they are under a lot of pressure. I mentioned the point about an ageing population which creates more demands. I think that there is still the issue of maximising the value of the money that they spend £120 billion per year. That is why we have stressed the importance of looking at option appraisal. To date, councils have largely balanced their budgets by two things, by reducing their workforce and by increasing charges. We have said in the report that reducing the workforce is not a long-term sustainable solution. You cannot go on cutting the workforce, so they have to look to other ways of balancing the budget. We have encouraged them to look to new ways of delivering services, to have an open mind. The I-Bin principle, that is the way that we have always done, is not the way forward. They need to look at options appraisal to consider other better ways of providing services at the same quality, at reduced cost, at better quality or reduced cost. That takes quite a mind shift in local government because loyalties run deep and change in the way that they do things is never easy for councils to do. That is the agenda that they have to face up to. I am not disputing the fact that in the next few years resources will get even tighter. I think that that is even more an imperative to encourage them to look more critically at the money that they spend and whether they can say to the public that we are maximising every single public pound. If they do, as you suggest, could they sustain services at the present levels within the current financial situation? That is partly the issue of councils being much clearer about their priorities. One of the things that came through in their last report on Scotland's public finances is that there is not a huge amount of evidence to show that councils are focusing their budgets on their priorities. It is a case of rolling the budget forward from one year to another and making the necessary cuts to balance the budget. I think that there is a tendency in local government too quickly to run to cuts without examining is there a different way of providing that service at lesser cost. I think that there is a bit about councils also being clear about where they think they can provide maximum value, other things that only the council believes it should be providing or other organisations, other ways of delivering services that might prove more cost effective. I think that that is the kind of debate that we want to encourage councils to have. I have seen some evidence of councils starting to share services so that services are delivered across council boundaries and that seems to be working quite effectively. Indeed it is not just councils, we have seen examples of services shared for example with the NHS and with other agencies. Is it your view that given the size of this country with 32 councils, 32 chief execs, 32 bureaucracies that at some point there would need to be a reconfiguration of the local government structure? I think that I will duck that question, convener. I think that those are issues for government, not for the commission. I will go back to your point on shared services. I think that there is not a huge amount of evidence in the report that shared services, certainly on a big scale, have been particularly successful. There are only two examples, for example on shared services on road, stateside contracts and the two airshare councils. I think my sense is that councils have rushed to shared services without necessarily thinking of the steps before that. I remember when I worked in local government, a consultant talking about what he called the three Ss. The first thing was to simplify the process. You think that councils are different but they all undertake the same functions. Let's take something like the payment of an invoice. The cost of paying an invoice varies enormously from one council to another. Why? You need to get into that, that's part of the process of benchmarking. If you took two councils that were similar and said, right, let's have a look at the cost of paying an invoice, what they want to do first of all is to simplify that process and then standardise it between them. You only share if there is a business case so to do. I think that what councils need to do more and I think that's one of the benefits of the Solace-Coslaw benchmarking project and no doubt what you want to touch is that they now have the evidence to be able to drill down in family groups of council and consider why our costs are higher than a comparable council. That's a big agenda. That's another opportunity to save money to the public's benefit. I think that we would encourage councils to do more of the simplification and standardisation because there isn't a huge amount of evidence that shared services on a big scale have been successful. Indeed, there's been a huge amount of money spent on that. I think that that would be an interesting piece of work to quantify how much money has been spent on shared services initiatives that haven't come to fruition. Just a final question. You talk about key priorities for councillors in 2014, understanding the changing context and the crucial role of councillors. You talk about keeping up-to-date through training and development. Are councillors clear enough in the separation of roles? For example, it would be my understanding that councillors would set the policy agenda. They would set the priorities for the council. They would make the decisions about how budgets are spent. Would it be appropriate for councillors then to engage in telling officers when they come down the managerial level about which staff should be deployed and which locations? Is there sufficient guidance on that? Is it appropriate for councillors to get involved in that type of thing? Is there sufficient guidance so that councillors understand their roles? I think that the point that we made in the introduction is that the role of the councillor is at the beginning and the end of the process. As you said, to set the priorities, to allow management to manage the council, to deliver the priorities of the council and then to hold managers to account for their performance. That's the issue. I think that the issue is a big issue about training. We make the point in our own report that we are critical of councillors not taking up the training that is available. I think that we need to have a wider debate about the training of councillors. Why do I say that? Because most councillors are pretty good at providing induction training when new councillors start and then they provide a sweeter training thereafter. It's left very much the discretion of the individual councillor as to whether he or she takes up that training. Is that good enough? It means that you could become the chair of a committee without necessarily having the training to undertake that job. Funnily enough, I was speaking yesterday to a next councillor who had been appointed the vice chair of an education committee. I asked him what training he had. He said that he was given absolutely none. I think that there is a democratic deficit in relation to that. How can members hold officers to account successfully if they don't have the skills and training to do it? Way back in 2006, the Scottish Local Authorities Remuneration Committee recommended that there should be a national job prescription for councillors. That would be accompanied by the skills required to do the job, different skills for different jobs, different skills for committee chair, training needs analysis and a personal development plan. Some councils do that, but it's left very much to individual councillors to decide what training they need. I think that that's a very subjective judgment. It's a very difficult judgment for them to make. I think that the council as a corporate body needs to take a much better grip of that. I think that there needs to be a debate whether the training arrangements that we currently have are fit for purpose. I personally don't think they are. We're talking about a business costing £120 billion. You really need well-trained councillors to do that kind of job. They come with a huge amount of goodwill. They want to serve the constituents. They want to deliver good public services, but we need to ensure that they've got the skills to do their job. What kinds of councillors engage inappropriately in what are managerial decisions? I think that's inappropriate. I think that causes confusion as to respective roles within the council. The chief executive is the head of the paid service. You hold the chief executive for the management of the council staff and their performance. You have to be clear about that. Otherwise you end up into a council that becomes dysfunctional. You go back to the point of good governance that people need to operate and clearly defined and well understood roles. Is sanctions available if councillors behave inappropriately in that respect? I think that through the code of conduct for councillors that is in place and is placed by the standards commission, that has got specific references to this very issue and the point at which councillors have to be careful about going on beyond that boundary. I have to say of course that in practice it can be quite a grey area. There's that trade off between councillors understanding the business and being able to make decisions and excuse me, scrutinise performance. At the end of the day it's very important that as Mr Zinclair is saying there to make sure that people understand the respective roles and responsibilities, but I would stress that it can be quite a grey area and needs to be managed very carefully from both sides, from the councillor and from the officer point of view. I think that, just on the end of the day, that crucially depends on the quality of the relationship between the chief executive and the leader. So they understand the roles of the leader centres, they like the members, that's your job, this is the job of the chief executive. Thank you for that, Tavish Scott. Can I just continue that line of questioning? In your recommendations Mr Zinclair there isn't a specific suggestion around the kind of trading you've just described, which I took to be a recommendation or an inference that that needs to be done on a national scale, even in the sense of some guidance to councils. Do you think that is the case for the future? I think what I was trying to say is that we need to have a debate as to whether the current training arrangements are fit for purpose and perhaps revisit the recommendation of the Scottish Local Authorities Remuneration Committee as to the pluses and minuses of having a national job description for a councillor and how, what training councillors need. There's nothing in the code of conduct, for example, about councillor's requirement to take up training. It is left to their individual discretion. I pose the question, I admit to making a mistake, I added £100 million to the local authorities budget, it's £21 billion, rather than £21 billion. That's a piece of wishful thinking. But I think there is a debate about the skills that they need. Not least because public services are becoming ever more complex. It wasn't the days of the single council running everything. You now get allios, you now get health and social care partnerships, community planning partnerships, various trusts and outside bodies. It's becoming a much more complex business and different skills are required in different organisations. We don't have job descriptions for MSPs. Some may be tempted to say we should, but do you not think there would be some resistance in local government circles to those of us sitting in this room, for example, starting to lecture, particularly those of us who have former councillors in the past, of which a number of us have been, and I recall you saying this to me privately some many years ago, the danger of us starting to lecture from this place to local government about what they need to have in order to do their job properly. They might say the same review lot. You might end your fear to trade. Exactly. I think there needs to be a debate as to whether the present arrangements are fit for purpose. Thank you for that. Can I ask a convener on community planning? Paragraph 112, the report says community planning is at a crossroads. I took that to be quite a significant statement. Again, is the commission concerned about genuinely where this is going? I think we all have some deep concerns that community planning, which we have talked about for a long time, has yet to really deliver in a way in which we would show substantial change to local government? Well, as far as I mean, community planning has been around for a long time. The act was 2003 and to some extent the spirit was willing between 2003 and 2012. The execution wasn't desperately good and to some extent there was a bit of tread in water. The joint statement of ambition between the Government and COSLA has given an added spur to community planning. As you know, we did a first round of three audits and we are well through the next round of five audits with two more to report back to the commission. Then, along with the auditor general, we will take stock and make an overview report in terms of what we found. I don't want to prejudge that, but I think it's fair to say that we found lots of examples of very good partnership working. I think it's important to capture that partnership working. What we didn't find was necessarily an attribution between that partnership working and the community planning partnership. It was a lot of good stuff on the ground. I think it is important to capture that and to share it across the 32 councils so that they can learn from each other. I think that we also found that the community planning partnerships were clear, those who were most clear about where they could add most value. With a focus number of priorities, we were more likely to succeed than those who didn't have that sense of clarity of purpose and values. We also found that areas such as scrutiny and performance management and the use of resources are a long way to go. That assessment, have you looked to an extent at the merging of care for the elder or just care and social care departments? Not yet. The council commission has been given the responsibility to audit the incorporated bodies from April of next year. We're not quite sure the extent of that audit. The regulations are still going through Parliament. They've been defined as local government bodies and, as you know, the duty of best value applies to local government bodies. We're not yet clear as to whether the duty of best value would apply to the incorporated bodies of health and social care. The commission is trying to get itself up to scratch in relation to that. We had a very useful session last week with a Highland council in NHS Highland to find out why they went down the road of lead agency. We intend to have discussions with other councils and health boards who've chosen the incorporated body to learn from that. So it's working progress. On this final point, at 112, the commission's report rightly says that community planning and power phrase will only happen if sustained leadership is significantly stronger than we have seen today. Does that jar slightly with what I think are very fair findings about the political short termism of so much of what's going on at the moment? That's just the nature of the beast that is local government at the moment in the current context. It strikes me as difficult to achieve exactly what you're saying near sustained leadership while, at the same time, there's so many short term pressures. My last point, colleagues, is to add to that. I think it's a very fair point. Community planning, by definition, is a long term game to make major inroads in inequality. You're talking about work over a generation if not more than one. There is no doubt that the changes in leadership in councils have an impact on that. That's equally true of councils. I think that we are more and more convinced in the best value audits that we do of councils, the importance of an ingrained culture of continuous improvement that can withstand changes in leadership, be it officer level to be the chief executive or be the leader. I wanted to define more clearly what are the ingredients of a culture of continuous improvement that we would want all councils. Again, we come back to the issue of training both officers and members to make sure that that's embedded and can withstand change. If you can do that in a council, then hopefully you can transfer that to the community planning partnership. That's on the section you've got on procurement. Particularly at paragraph 59, the Commission planned to publish a report on procurement to the local government. Just a factual question, do you plan to look at hub cores and that structure? Because certainly I have had lots of representations from local government about what that is. Without getting into how it operates and so on and so forth strikes me as now a fundamentally important part of local government procurement. It certainly needs some scrutiny. Thank you, chair. The procurement report didn't look at that, Mr Scott, but certainly hub cores and indeed the role of the Scottish Futures just more widely is something that's very firmly on our radar. We'll be taking proposals to the Accounts Commission in order to general in the autumn of this year for the programme of work starting 2015 and beyond. We'll be building that into the consideration there. That whole commitment yet, but that whole process and that whole way of now funding capital projects is something that we are very interested in. Thank you. Colin Beattie. Just to sort of continue on that theme with a little twist, repeatedly throughout this report there's reference to leadership and often the inadequacies of leadership and it's repeated again and again and again. It's unclear sometimes whether you're talking about lack of leadership in terms of the officers or in terms of the members and we've talked about training, but we're talking about training more on a functional basis, for example, skilling somebody to be able to chair a committee or similar. Now, leadership is much more difficult to train somebody in and I just wonder how that can be addressed. I'm going to assume, and maybe you can confirm that, that we're talking about leadership of the council as a body as opposed to the members or the officers. You're absolutely right. It's the corporate leadership provided both by the politicians and by the officer cadre as well. I think you're right. There is a bit about what you call functional skills, understanding budgets, being able to challenge officers having those kinds of skills. There's also about behaviour. I think that's really important as well. The way that, if you take, for example, leadership in community planning, the leadership role lies with the council. But that's not about dictation. That's a leadership style which is about facilitation. That's something that people need to learn to do, so I think behaviours are just as important as knowledge. It's easy to give somebody technical skills. But again, I come back to the fact, repeatedly you're talking about leadership here, leadership skills. How do we train people in that? Leadership is much more difficult to train somebody in. A lot of people would say you've either got it or you don't. But you can give somebody all the tools and hopefully they would respond to that. Let me ponder on that as Fraser and Gordon, if they want to. I'll give you a chance to ponder, chair. I think that leadership development is key to this, Mr Beattie. What's really interesting is that we have seen, if you look at the officers for a second, a big change in the senior officer, particularly chief executive level, but very often knock-on effects there because a lot of them are vast majority these days tend to be internal appointments. There's been quite a lot of churn, and from what we know and what we can gather, there's likely to be even more of that as we get towards the end of this year. So I do think that there is something for the local government community to think about in terms of leadership development. The public sector in the past has had to go at some of this stuff. There was the Scottish Leadership Foundation that was set up, you'll remember, some time back. We have experience as a public sector of leadership development and it feels, so I think that your question is very timely. I think that that would be a helpful thing for probably not just local government but more widely to think about exactly, as you say, the leadership development activity as well as the kind of technical and more functional training and development. You see that being left internally to individual councils to develop? Is it something for COSLA to try and get some sort of uniform approach? Or is it something, I forbid it, to be imposed by the government? So I don't suppose that I would be encouraging any imposition by anyone. To be fair, there is quite a lot of activity and development activity now through the leadership forum, which is basically all chief execs from all parts of the public sector. They meet every year and there's activity that goes on there. That's not what you're going to be characterised as formal leadership development in that sense. But it is a sense, I think, that over the last few years the leadership of the public sector and public services in Scotland is probably as cohesive as I can remember it. But that's a slightly different thing particularly, as I say, when there is going to be churn, there is going to be more new people coming into those senior jobs. So my sense is that it would make sense to have that conversation not just 32 times at individual councils, but a wider conversation there about what does being a chief executive of a 21st century council look like now. There's maybe a bit in there about whether we do have enough resource in Scotland to do this. Fraser mentioned the Scottish Leadership Development Foundation, which no longer exists. I can remember the Scottish Local Authority Management Centre in Strathclyde, which provided high quality leadership development to aspiring chief executives, aspiring leaders, and that there may be, as part of looking at training in the round, we need to look as to whether there is enough resource capacity to deliver the kind of leaders of the future that you're talking about. Just to move on to something else. Allios. There's been discussion previously with Audit Scotland in connection with the auditing of Allios because, of course, there's a great deal of public funds go into that. It's never been quite clear as to how we're going to approach following the public pound and all these good things in terms of Allios because structurally they are a separate organisation and yet it's public money going in there, never increasing amount of public money. How are we going to deal with this? In October, I think of last year, the commission to report from Audit Scotland, which will come back to us in, I think, autumn time this year. We've asked the commission for a comprehensive report on Allios because we understand the public interest in them. We want to know the number of Allios, their size, their turnover, their status and form, and they take different forms as you alluded to. Some are trusts, some are charities, some are companies. The rationale for setting them up, why did the councils set them up? Was it to simply save money or was it to improve services in a way that, out with the council, was it a mixture of those? The representation of elected members on Allios and if they are on Allios what role did they play? The scrutiny of Allios by the council because you're absolutely right, it's still public money and the council is still responsible for the public money and the quality of the service provided by the Allios. We want to look at governance, we want to look at performance and once we've had that report, I think the commission will then decide what further work we would ask Audit Scotland to do. So that report's anticipated in autumn of this year? We've asked on the commission's behalf all the auditors of the 32 councils to carry out that bit of work to understand because I think part of the thing we've grappled with in the past is just trying to get to grips with the number and scale and the size of the issue in terms of Allios. So the auditors are at the moment, as part of this year's audit, gathering all of that information and data that will come into us centrally and will take a report to the commission which may well inform. I have to say inform, we're not just in local government but as this committee knows there are other Allios in other parts of the world. You've taken a lot of interest in colleges and the new arms line foundations for example and there are other examples in health so it's more prominent in councils particularly because the councils Allios tend to deliver services in a way that other Allios in other parts of the world don't really tend to deliver services directly but we're hoping that this work that we're doing on behalf of the commission may well have wider application as well. Just to move on, on page 27 paragraph 97 there's a reference to cash back reserves and on page 28 paragraph 105 there's mentioned that indebtedness has increased by 45%. It doesn't seem to make a lot of sense running up debt if you're going to have all these reserves. Do you have any comment on that? Yes, I'll take that one on. The reference we've been monitoring reserves, the commission is an interesting council reserves for a long time and this report has been monitoring the position over a long period of time. You're absolutely right to make the connections between the position on reserves and in fact we were here a fortnight ago talking about Scotland's public finances need for long-term financial planning. The point I'd like to make is that you've got to look at all these things. All these things are the components that will be fed into a long-term financial plan, the level of reserves, what you're going to do with them, how much is actually free as well in that sense of not allocated to particular issues for the future. I think it's about looking at everything in the round, very much encouraging a longer term approach to financial planning that looks across these individual components. On the reserves if I could just say one of the things we're very keen to do is to make sure that councils have a clear statement about what they're going to do reserves, why have they got them and what are they going to do with them? There are substantial amounts of money in overall terms in reserves at the moment, although the amount that's free for contingency is relatively small within that, so that's the position of reserves. It's also worth mentioning that the commission is doing some work in Treasury management and borrowing at the moment, which we'll be bringing in a report. I think it's due for publication in December this year, so we're looking at that component as well just to cover both sides. On page 12, paragraph 26, there's reference made it was sometime before the full impact of welfare reform was clear, and yet in the same paragraph you also say that welfare reform will take something like 1.6 billion out of the Scottish economy each year. That's a huge amount of money, it must have a massive impact. This is separate from the budget cuts that are coming down from Westminster which are obviously affecting the Scottish Government and by knock-on reducing the size of the cake for local government, this 1.6 billion is huge. I think it's just part of that context. The figure, of course, comes from a committee of the Parliament that's been looking at this and painting that context at the start of the report. It's obviously a very important and, as you say, a very large number and something that we need to flag and that's part of that overall context for local government. Is it an area in relation to local government or it's a local government that you're looking at, the impact of these cuts? Bound to have a knock-on effect in terms of you've already highlighted that councils at higher levels of deprivation are likely to be hard as hit. You're also saying that there'll be a substantial impact on local economies. That's got to have a knock-on effect on councils and their ability to generate services and so on to the public. It's bound to. It's very wide-ranging. It's about the ability to deliver services. It's about long-term financial planning but there's lots of associated issues around that in terms of what that means for local people in terms of the services. They need the advice, they need to deal with a different financial context within the household so that there's a whole range of issues that are encompassed of this which have a very direct impact on a whole number of aspects of local government. That particular area is almost worth an order in itself. It's just going to say, Mr Beattie, that welfare reform is absolutely, again, one of the key things that we're keeping an eye on in terms of our programme development work. We did a piece of work for the commission, I think, last year where we undertook up a fairly brief but good study in terms of councils preparedness. To be honest, we've been off the view that we really just need to let councils concentrate on preparing for the welfare reforms and that's been the activity up until now. I think that as we go into the next year we will begin to see more fully the impact locally and what that means for council services and local communities and welfare reform and its impact will, again, be one of the discussions we'll be having with the commission in order to general when it comes to thinking about our forward work programme, absolutely. Just to pick up on that point, thanks on the level of indebtedness that was reported there and mentioned by Colin, isn't the case that the big increase in that is more down to the prudential borrowing code and the flexibility that that gives the councils on that? I see that as a positive move since that was introduced and it allows them to plan better, wiser and so on for the future. So, despite the alarming figure of it going up 45 per cent, isn't it a reflection of how well they're using the potential code to deliver other services? Indebtedness figure is made up of a number of things. What we wanted to do was give that sense of the overall exposure liability, whichever way we would like to go. It includes external borrowing but it also includes the liabilities that are built up through PPP and PFI and it becomes net because there are some elements of investment in there that bring that figure down a bit. It is a large figure. You're right, it's been done in the context of the application of the prudential code that oversees this and that's very much the focus of the piece of work I mentioned earlier that you'll see a report on or the commission will report on later this year. So, absolutely central to what we're looking at. We want to get underneath that because there's a wide variation across councils within that overall figure. Can I ask about the allios and you mentioned you're going to be doing some work on that. This committee has looked at that issue previously and I suspect that it's something that we would want to return to. One of the things that it has concerned us is that there's not always a clear understanding with those who are on the allios when it comes to governance. Do councillors understand that when they are appointed to an allio their legal responsibility is to the board of that allio and not to the council that appoints them? Do you have any concerns because I've certainly seen examples of councillors trying to have the council interfere in the work of allios to politicise it? Is it appropriate for councillors to demand that the councils that have set the allios up take certain courses of action if they don't like the decision of the allio? Should councillors be involved in that type of argument and debate out with the board of the allios? I think that those are the points you raise are some of the kind of things that we expect to come back from the auditors in the report that will come to the commission. It also touches the point on training. You're absolutely right that once you're appointed to the allio your responsibility is to further the interests of the allio. Related to that, and if we can separate the roles, we also need to look at the effectiveness of the council as a body scrutinising the performance of the allios as opposed to just allowing the allio to drift off and not scrutinise its performance. You're right that there can be conflict of interest issues for councillors on the allio, but again they need the training to understand where that conflict of interest arises and to do the proper thing and if necessary to seek advice as to what they should do. If the allio has been established, does the council which established the allios have any residual ability to interfere or influence the decision making process of that allio? If the allio was going belly up for example, the council has a responsibility in terms of following the public money that is invested in the allio, the quality of service being provided for example as a service failure by the allios, there has been one or two examples of that. The council has indeed not only the right, it has the duty to interfere in relation to that. In terms of the day-to-day management decisions, they shouldn't be involved. The commission published the first two reports on how councils work series convener were about roles and working relationships which touched on this issue, recognising that councillors have that dual role sometimes and then a specific one on arms length external organisations. Are you getting it right, we called it, which looked in more depth at if you are setting them up, how should you do that and then how should you run them and again we touched on it in there. We're thinking, the commission are probably going to ask us to revisit that roles and relationships one again, not just in terms of allios but the conversation we had earlier about the complex role of an elected member. So again, I think we can touch on that there but just to concur with what Douglas said there about the council still absolutely has a duty in terms of its governance and oversight of particularly the money that's giving to the allio but as an independent charity company whatever it is, clearly that board has responsibility for taking those decisions and it is inherently complex. I suppose to have done that, Gordon just reminded me, paragraph 57, the caveness, heat and power is a very good example of roles not being clear, of bad governance, of weak governance, of setting up an allio without equipping the allio with the necessary skills to undertake its job properly. My first question was really in the back of Colin Beattie, paragraph 26, the £1.6 billion that was mentioned. Can you confirm that that was not a figure that was arrived at through Audit Scotland or the Accounts Commission but it was a figure that was taken from a report from the welfare committee of the Scottish Parliament? Can I just go back to the behaviours and training? Yesterday in the education committee we were looking at the Accounts Commission report on schools and the various things but mainly focusing on attainment which is an incredible issue but as Fraser will know one of the, I suppose quite surprising conclusions I'm sorry I can't quote from it I didn't bring it with me today. It was your conclusion that councillors rarely challenged officials. I think that as far as this Parliament we don't want to be telling councillors what to do but there was, I don't want to use my words, I'd rather use yours but you implied that councillors were not always fully informed about issues relating to attainment and what they could be done in terms of, you know, reducing the attainment gap. So when it comes to training, is that something that you find, I think the word mushroom syndrome comes to mind, councillors being kept in the dark by officials in order that they come to the conclusion that the officials want and perhaps it's some of the officials don't really want awkward councillors asking awkward questions. Am I right? That was in the report but I think it was more diplomatically put than I've just done. I think democracy needs awkward councillors. I think what we tried to highlight in that report was the fact that inevitably parts of education are a national curriculum for excellence but the delivery of education, the accountability for education at local level lies with elected councils and it's important that they undertake that job. They need to get the information, they need to be set in targets to say well if our attainment isn't as good as a comparable council what are we doing about it and if they're not getting the information they're absolutely entitled to be robustly asking the officials for that information. That's part of the councillor's job. Is it your conclusion that all councillors are not getting sufficient information to make the decisions that we want in terms of attainment of pupils? I don't know if we had sufficient evidence to say that but we're setting out very clearly the important role, the key role that the public and parents rely on councillors to ensure that the local delivery of education is as good as it possibly can. That they are setting targets, they are benchmarking, also they need to benchmark the performance of their schools with comparable schools. One of the things we did find is that the gap between the best performing schools in one council area and another is actually I think a fair number of councils, probably almost half of the councils actually the gap is getting bigger. Now councils need to be on top of that and to say what are we doing about that, they need to challenge officers to make sure that the attainment performance is improving. I think to some extent there's a superficial argument often applies there, if you talk about best attaining schools. I could look at my own constituency and it depends what your YASDAQ is. I have many parents who send their children to Gryff High which is one of the best performing schools in Scotland if you look at exam results and just a few miles along the road we have Linwood High where the exam results are not so good but that actually doesn't measure the quality or the effectiveness of those two schools or the teaching staff because there are other factors such as deprivation, parental support, the ability and resources of parents to bring in tutors to support their children. There are all sorts of issues and I think it would be dreadful if we said that you have within the one area schools of high attainment and schools of low attainment and the ones of low attainment need to look at the high attainment because it's not as easy as that. I'm not suggesting for one minute it is easy, it's very complex. I think what we did find in the report that the councils that had made the most improvement had done four things. They had invested in the quality of leadership in the schools, they had invested in the quality of their teaching staff, they had invested in improving their relationships with parents and parents involvement in schools and they had also introduced systems of tracking and monitoring the development and attainment of individual pupils. You're also right to make the point that the commissioners report stressed also the importance of achievement as well and the need for indicators for achievement as well as attainment. I'm still on behaviours and training, this is my final question. Really in your key messages I suppose paragraph 6 and also paragraph 74 you particularly talk about that needs to be a balance between councillor's council responsibilities and their wider political activities and I think in terms of paragraph 74 I'm not pointing a finger at any political party but you do mention that. I think all of us from the little I know, I know that there are issues there but you do mention something that it's affected decision making. Is that you also say behaviour in the council chamber regularly disrespectful, necessary for councillors to be reminded of their requirements and various things. Why has this affected good decision making and be, is it something that could be remitted or at least helped, ameliorated by training? Because it would be a sad day given the challenges of councils that political tensions were affecting wider decision making. I might just take your second point. First I think yes it can be ameliorated by training. I think it's the councillor's understanding of the code of conduct which says they have a duty, I'll just quote from this, a duty to maintain, strengthen public trust and confidence in the integrity of the council and councillors in conducting public business, that's part of their duty. It's also part of their best value duty that they have to honour the trust given to them by the electorate through property and propriety. We all accept that political tensions and differences are part of the DNA of local government, that's what local government is about. It's an issue of when they're taken to an extreme, when the only news coming out of the council is about squabbles, it's not about services, it's about fighting, it's not about front-line services, it's a question of extreme. If it's taken to that extreme the danger is that the council is not demonstrating good governance or good leadership and it's the commission's duty to point that out. I know that it is one of your key messages. I'll just move on to my final question and that is when in your opening remarks Mr Sinclair you mentioned the financial challenges and that's not new and you mentioned the ageing population and that's not new. I've got a lot more grey hair than I had 15 years ago. What you mentioned isn't new but you said that cutting staff is not sustainable in the longer term but are the legal obligations of councils, many of them brought forward by this Parliament, sustainable in the long term? I would just give you examples of free personal care for the elderly because I know that the lead agency in the Highland is different but I know that there are difficulties there providing respite care, home care etc. Is there enough negotiating, balancing or understanding between passing laws in this Parliament and placing legal obligations on councils and funding them sufficiently to carry out these legal obligations? These are really issues for the Government and for the body's representative, the COSLA representative, local government when new bills come forward that COSLA will make the case to say the resource implications of this are X and they hope that the Government will provide X in the settlement to make that, to make it, to make the thing work so local government has to live with the consequences of Government legislation but I do understand the point that... They are big challenges, ageing population, elderly people's needs are more expensive than people who are not elderly by definition. There's no ring fencing which we all agree with then the legal obligations and priorities have to come first. Bruce Crawford. I would just want to look at a couple of areas of maximising resources, reserves and assets and also learning from experience elsewhere. The context is obviously that the whole public sector is under significant ongoing sustained pressure because of where we are with resources between 2007-08 and 2012-13. Resources in the Scottish Government, cash terms in control increased by 6.4 and local government by 8.9 but obviously they both face different challenges. So how we, and particularly around issues that Mary raised about issues to do with the elderly etc. So how we maximise resources for local government is going to be hugely important. So I was really quite surprised when I read the report of paragraph 95 to find in the circumstances that we have sustained pressure on resources that actually the overall level of reserves has increased to be £174 million now to £1.86 billion, now we all know where reserves are there. But you would have imagined in times of financial challenge that actually reserves increasing seems to me to be going against a grain about how we might best use the money rather than the opposite way around. Because that's a huge amount of money, £1.86 billion. Absolutely and as I said earlier we've been certainly looking at that over the course of the years and the trend has been for increasing reserves. And the ones we're talking about here are the ones that are not the products we're accounting. This actually represents cash that's potentially available. I think it's always important to keep in mind that of that there's a relatively small element of that which is £312 million across all councils that is not get some intention for the future. I want to come back to that specific sum. I think the position the commission has taken is the right one over the years which is not to specify how much should be held in reserve but to monitor it. And I think the principal thing as I said earlier as well is about reserves policies that are absolutely clear as to why that money is there and what it's going to be used for. Because I don't think even with all councils now having policies as to just how transparent they are about why the reserves are there and what they're going to do with them. I think that there needs to be more detail about how they've been built up and what the components of that are. And even where we use this phrase earmarked, what exactly are the earmarked for and then to get some sense to come back after having made those decisions and made those things public. What has changed in the ear? Why have they got smaller or bigger? One thing I would add of course is that this is the first time in a whole number of years that we've been looking at this where the amount of available reserves has actually fallen. There's an exhibit later on the report that shows that. And that perhaps suggests among all the other things, borrowing and all the other components of financial management that councils are starting to use these to support expenditure. And I think we say in the report as well, it's a really important point with reserves and we talk about training for elected members and finances must be one of the things that must be at the front of the list to get a full understanding because councils finances are complex. But the point I'm trying to get to is that the reserves are there and they can only be used once. They're not there to sustain services year in and year out. So I think it's important things about transparency and accountability there. I think it's very briefly and I think it's also worth saying that councils would probably argue that some of that money that's been put into reserves is designed to save money in the longer term. So I think they're coming into a period that has been tough and it's going to continue to be tough. Some councils expecting it to be even tougher than it has been in the next couple of years. So I guess they would argue and we mentioned some of the things in 96 that those reserves can be used for like change programmes, voluntary early release programmes, those kinds of things which have a cost up front but then we'll save you money later on. Now as Gordon says, we still think there can be more transparency and better reporting and monitoring of all of that but it's not the case. I don't think that they are necessarily just sitting on a big pile of cash. They are in many places looking to use it for something which, if it works, should release some savings into the future. This surprises me though as why some of that hasn't been used already to make the changes that need to be made already. Given the scale of the challenge that's still to come and we saw that from the Auditor General's report a couple of weeks ago in terms of overall expenditure available to Scotland, projections are something between £3-4 billion, further reductions in expenditure. So you would think that that money should be dropping already to make the changes that are required to get the reshaping that needs to be done. That frustrates me to see that that's actually increasing but I'm not getting the sense that actually we're getting to the really bottom of what all that money is about and how can we get there a bit quicker to make sure it's used properly. That's a frustration you hear. I can understand that. There's no doubt that it feels counterintuitive that as money's going down the reserves are going up. For sure in a sense you might have thought that we might have been putting money away when we had more money to put away if you know what I mean. I suppose that there's also a thing about the financial pressures really focusing some minds and people beginning to take some more difficult decisions about transformation. I think as you say, and we will continue to monitor it and we can again, this will form part of our programme development thinking. If we do want to get under the skin of this a bit more, as you say, what continues to happen. If it continues to rise then I think that's absolutely right. You'd want to ask some serious questions about that. I'd certainly like to have seen some of this used and spent the same measures earlier. That's the point I'm really trying to get at. 312 pounds of free reserves. What an unusual concept, free reserves. That was happening in central government. Central government would be getting a kick in for not using all its money properly. So why is that free reserve pot there and why is it not being allocated to the front line properly as part of a properly managed process? I think firstly it's gone down a bit from the previous year, but I think the point is that it represents a relatively small, I think the figure of calculation is about six days of expenditure for councils just to put it into context. I think the notion of having money available to deal with things that are unforeseen is prudent. I can think of things for example if you get a worse winter than perhaps we've had in the last couple of years that money is available for things like that. That's one that your normal reserve pots about. This is a free reserve. We use the word free, I think I'd rather use one. Un earmarked. Un earmarked. I think we better think that it's a contingency to have money available for the things that may come up with the aspects of weather flooding, severe winters and that type of thing. I think from our point of view as auditors I think it's reassuring that there's a level of contingency there without trying to specify what that means. That might be, but I think it's right in a big complicated business to councils that there's money available for the unforeseen. That's part of overall financial planning. £1.86 billion. No, the £312 billion. I think the point is well made and one of the interesting things about this is that instinctively I think for most members of the public a reserve is the rainy day thing. It's for the unexpected stuff and that's kind of what you would expect. There's no doubt that the use of reserves on this development of un earmarked reserves is a relatively recent phenomenon and that's why the commission I've been reporting regularly on much more transparency and better reporting on that because it is an unusual thing for most people to get their heads around and as you say Mr Crawford better understanding what they're actually using it for. I mean I think if you were if you were sitting just with the £312 million I think most people would kind of get that that it's a pot just in case but as you say that's on top of the significant amount of money that's all also there so. Slightly related to the issue of maximising usage of resources we had a discussion earlier about indebtedness but we've also got a circumstance in terms of an increase as described on page just give me a second. 35 under assets that actually councils assets are increasing now to 38 billion pounds. That's again a hick of a money that's sitting in asset use and I guess the general question is are councils making the best use of the assets that they have. I'm not suggesting that we should be selling off the family silver but are they making the best use of that asset base because you would have thought that that could be a potential generator of additional income if we could get better flexibility into the system. I think there's various pieces of work that have been done in recent years of the commissions. I started at Scotland to do looking at asset management plans so there's a whole range of issues there of resources and not just about the money it's about people and the property that's available as well. I was just going to go on and say I think we had a conversation earlier this morning about community planning for example and I think that statements by Government and COSLA about making better use of the overall resource in the area is part of that picture about making better use of the buildings that are available for whether it's to do with the space that councils have or the space that colleges have for example but looking at the resources available in a geographic area as part of community planning. It's part of the solution to that but it's certainly the point you make a point well made about making better use of what's available for service delivery at this point. Part of the long term, we focus this morning on long term financial planning at a couple of points. From our point of view it's about the totality of the resource that's available. We're looking for longer term planning that looks at the use of resources in terms of the finances available, the people that are available and the assets that are available and in the better running councils are the ones that have got a better grip of this. These strategies are interconnected so that the implications of finance for example on new building and assets is closely linked so that's when it's working that it's best. I think it's fair to say that not all councils are where we want them to be, the report we did on road maintenance. I think I'm right in saying that there's still a fair number of councils that don't have road asset management plans. Douglas, you'll know I've come from a background where T side contracts have operated for a while and a amount of savings because of the scale of activity that can be achieved. They're just astonished that there's not more local authorities following the same sort of model. I want to go in a slightly different area if anybody else is wanting to come in a supplementary... Tavish Scott briefly but we'll need to curtail this debate because we've got a very full agenda but Tavish Scott... Just on Bruce Crawford's line of questioning there, do all 32 local authorities have a long term financial plan that takes into account the reserves that you've been describing to Mr Crawford? To let you know, the Scotland's public finances report that we brought to the committee two weeks ago was very much making that point. There's a small number of councils look to that longer term by which we mean over five years. There's more medium term planning done between two and five years but in terms of that longer term plan that looks at how reserves are going to be applied and in fact connecting it earlier to the conversation about the implications of things like the aging population. What does that mean in our area in terms of the demographic profile? That's not something that's particularly well embedded. Very fair point Gordon. Out of the 32, how many do you have long term financial plans? Do we know? That's a small number I would... five, eight, something along these lines. So that's the challenge? Yeah. Okay, thank you. One other area, convener. Learning from others. Now local government in Scotland is under challenge. You know that since 2010 in real terms in England the reduction has been 14% and local government spending in Scotland is 3%. They're obviously going through a challenge which is much more extreme than here in Scotland. So there must be opportunities to learn from the way they are tackling the scale of their difficulty that can be applied here. And is there any of that actual cross-border discussion going on about where we can get better understanding of how they are dealing with that significant problem? I think the short answer is not enough. Yeah. So there's a wonderful phrase in the Welsh report recently on public services that good practice is a bad traveller. And I think that's very true. I think the commission could be doing more along with other scrutiny bodies of highlighting examples of good practice perhaps in a yearly digest. Because back to the point in allios, I think there are some examples in England of where allows have been actually used to improve services. You with me? And I think we need to try and capture that as well and share that practice within Scottish local government. It's back to this whole leadership issue. Yep. Why are we not getting people out there trying to find out? Even from individual authorities about what the experience is. It didn't help by the UK Government abolishing the Orate Commission. Fair point. Thank you, convener. Oh, thank you, convener. Can I just return to this issue about the increase in net indebtedness by 45% of the last nine years? So going up from £9.1 billion by an additional £4.2 billion, that's almost £1.5 billion each year being added on. Whose job is it at a national level to monitor and to... Who's accountable for that rise and keeping an eye on it at a national level? Or is it just individual local authorities? It's with individual local authorities as part of the credential code that we mentioned earlier. So there's a series of indicators in there that in terms of financial sustainability and the like, that councils are required to have a policy for this that sets out how they will monitor and look at what's affordable to them and sustainable in the longer term. But it's very much a local decision based on the local financial position and that regime has been in since about 2004. You said earlier, Mr Spill, that part of that increase has been due to the increase in use of PPP and PAP. In fact, I'm almost surprised by this Government to speak so strongly against PAPs and PPPs, how much they use them, but how much of this increase of £4.2 billion has been due to the use of private finance or revenue finance resources? I don't have that information to hand. This was just again a bit of contextual information here, but we can supply that to you if you find that helpful. I think it would be helpful, yes. The Government, one of the actions that John Swinney has taken, which I think we've all approved of, is the idea of setting a 5% cap on revenue finance capital expenditure, but the difficulty with that cap is that it doesn't include a lot, it doesn't include everything, and in fact it specifically excludes local government revenue financed expenditure. Is that something that we'd be of concern to you at all? I think we're talking today about local government, so we're looking at the local government borrowing. We're certainly doing some work carried on on behalf of the Oxford General, looking at financial reporting in the round and particularly looking at the implications for financial reporting of the new taxes that will come into play from April next year, but it's certainly something that we want to develop as part of that work, looking at how all aspects of finances are reported and to do transparency around about that, and as part of that work, we're looking at that very question about the cap that's been applied in that central government context. I was just going to say that in terms of this, in the context of this report, I think there are a couple of really interesting things about this number, clearly the number in itself going up a lot. I think there's something about the complexity of some of those arrangements, again coming back to the elected members in particular, being able to fully understand what it is they're signing up to. The other thing that's really important in this context is the recurring impact on revenue budgets, so do councils fully understand the impact of taking on more borrowing for annual running costs and the extent to which that's going to obviously be spent on financing the loan rather than delivering front-line services? I guess that would be our specific interest in this report, Mr McIntosh, while looking, as we say, to understand more of it under the skin of this issue in the report that we're doing for the Accounts Commission towards the end of the year. Be fair to say that you'd agree that there should be a greater level of scrutiny, perhaps at a national level of this figure, or accountability, maybe, in a better word. I'll let the chair take that one before I speak. I think we're about to say that. I think we're about to say that. I think we're about to say that. I think we're about to say that. A local government's accountability is to the public, to the people of Scotland. Do you think that the end of the finance comes from central government, and do you not think that there should be a level of accountability for that finance? This is revenue finance, I'll have to put it that way. That leads me on very nicely, actually, because you talk about governance quite a lot and political tensions. There's not much about local democracy. In recent years, we've seen the centralisation of the police service, the fire service, closure of local courts, closure of local police stations, regionalisation of the colleges, a marked tendency to centralisation generally of governance arrangements in Scotland. Do you think that that has an effect on local democracy and the effectiveness of local democracy? I think that those are not issues for the commission. They're not within the commission's remit. These are decisions for government to make. There may be an interesting academic study further down the line as to the impact of that generally on long-term and local democracy, but it's not a subject for the commission. Governance is of something of concern to you, but the actual decisions over which local councillors have influence, that's not a matter for the council commission. The issue of the single police force, COSLA, is the body that represented local government interests in relation to that, and it expresses that we were very clearly to government that it wasn't in favour of a single police force and that debate took place. I think that councils, as democratic bodies, make their views known. For example, the closure of local courts, I think that all councils put in representations in relation to that, and I think that's how democracy operates, and I think that's the way it works in Scotland. I think that on a more practical level, I think that one of the impacts that will be very interesting to see is played out through that community planning process, because it is now the case that if you take aside the voluntary sector and private sector interests on community planning partnerships, the councils are now the only public sector body that is local in that sense, as you say, called as a regional police fire, Scottish Enterprise, high at all, more national and regional bodies. It will be interesting to see how some of those tensions between local priorities and national priorities play out in that context, and that clearly is something that will be very interesting to see how it plays out. Tony. Thanks, convener. One of the things I remember even knocking over from my days as a councillor was the issue relating to equal pay and the pressures on equal pay. Notice 17, 18, 19, you point out that there are obviously still pressures there, and I see there's also a review, but it's really a case of what I'm trying to get here is are there some councils handling this better than others? Are we any real distance forward, because this has been going on for years and years and years, and obviously the further it goes on, the more pressure there's going to be on the local authority funding. I think that there's quite a significant amount of settlements that don't appear to have been dealt with yet, and also as you point out in paragraph 18, the unquantified workforce resources and associated cost issues. So how far are we down the road here of actually seeing a page in a future report saying that these have been dealt with, the resource issues have been dealt with, and this is where we are? I gave you that assurance. It's worth making a point, first of all, that equal pay is not just an issue in local governments, an issue in the national health service, and indeed, prospectively, an issue in allios as well. You're right that the sums are significant. The commission is having a discussion with the controller of what work we might do that would add value. I think there are two potential areas. One, the extent to which councils undertook the proper risk assessment in considering equal pay claims. For example, as you alluded to, the impact that that's had on HR staff in spending a huge amount of their time dealing with this particular issue as opposed to dealing with wider HR strategies in the council. And secondly, I think there's an important relationship between the huge amount of money that's been used up in settling equal pay claims and value for money, the balance between making these payments but also at the same time as a trade-off, modernising conditions of service in local government and reducing the cost there. You follow me? And I don't know the answer to that. I think there's an issue as to whether there would be a benefit to the public and indeed to councils in undertaking a study looking at those particular areas. Okay, very interesting timing. Profi, is it a brief? Well, there needs to be one brief question and then I'm moving on. Right, thanks for that. Could I ask you about the role of councillors, Mr Sinclair, you said in your presentation that we're placing more and more demands on our councillors and having been one for a number of years, I can sympathise. I see the demands placed in our local councillors going through the roof. Not only do they do more work but they serve bigger communities with a multi-member system and so on. Do you see... You've opened up a discussion about job descriptions there. Do you see that naturally leading us to a discussion about remuneration and time off? I don't personally think that councillors get enough time off to carry out their public duties and that partly explains why I think the kind of profile of the local councillor hasn't really changed. It's older people that are retired where it's people who work part-time and still do a full-time job somewhere else. Do you see a discussion going in that direction to begin to seriously address that? What you raise are not new issues. They've been around for a long time and I think they're valid points. I think if you're having that debate about job descriptions, about training, I think the issue of how you attract a wider pool of talent to serving councils, the issue of time off from employers, the issue of remuneration has to be part of that mix as well. Thank you very much for contributing to a very full discussion. I suspect that this is something which is going to become a bigger issue across Scottish public life as the impact of financial restraints kicks in. So thank you both for your individual contribution and also for the work that's been done by or at Scotland and the Accounts Commission. Right. We'll just change over. Do the members wish a break at this point? No? No, if not, we'll just press on. We have a section 23 report on self-directed support and this morning we have with us Caroline Gardner, the Auditor General for Scotland and she's accompanied by Fraser McKinley, director and controller of Audit, Claire Sweeney and Kathy McGregor. OK, welcome. Auditor General, would you like to make an open contribution? Thank you, convener. Morning. The report that we're bringing to the committee today looks at progress with implementing a policy called self-directed support. Self-directed support is a major change to the way that people with social care needs are supported in Scotland. It's vital services that help people with care needs such as older people and people with disabilities to live their lives as fully as they can. To make this new policy work, people who need support will work as equal partners with professionals to plan their care, which may be delivered through different or innovative services or services that are more tailored to their individual and specific needs. The Scottish Government and COSLA launched a 10-year strategy for self-directed support in 2010, and the Social Care Self-Directed Support Scotland Act was developed as part of that strategy. The Act places a duty on councils from April this year to offer people who are newly assessed as needing social care a wider range of options for choosing and controlling their support. People already receiving social care before April will be offered these options at the time their next needs are reviewed. People who are newly assessed as needing care are entitled, as of now, to access to the new way of planning and managing their support. The Scottish Government has allocated £42.2 million to help councils prepare for self-directed support, and the intention is that it will reshape the way that the total £2.8 billion every year is spent on those services by councils across Scotland. The report before you assesses readiness for the Act together with progress in implementing the self-directed support strategy three years on. Implementation is at a relatively early stage, and the report is intended to examine progress and help with implementation over the next few years. The report identifies risks, highlights examples of good practice and makes a series of recommendations for the Scottish Government and councils. The report is also very relevant to the new integrated health and social care partnerships, and NHS boards and councils do need to be clear about the implications of self-directed support before they put their new partnership arrangements in place locally. The report highlights that there's still a lot of work to do. Progress among councils varies, and some will have to move more quickly in the next few years to put in place the cultural and practical changes that are required. To do this, councils will need continued support from the Scottish Government, along with effective leadership from senior managers and councillors. We found that councils have adopted different methods for allocating what they spend on social care support to people with care needs. Exhibit 6 on page 33 of the report summarises each model together with the risks and advantages that each of them brings. There's also a series of broader financial risks that councils need to consider as they implement self-directed support and the new ways of allocating money that it brings with it. Again, Exhibit 7 on pages 36 and 37 provides more details. Councils need to manage these risks carefully so that they're both managing their budgets well and making sure that they don't unnecessarily limit people's choice and control over the support that they receive. Social care professionals have welcomed the self-directed support policy because it's got the potential to improve the quality of people's lives. Self-directed support will work best if a range of different services and support are available locally so that people get a choice about the support that they receive. We highlight in the report that councils now need to work more closely with people who need support and with their carers, with providers and with local communities to develop these choices. Convener, the report makes a number of recommendations to improve the implementation of self-directed support over the next few years as it comes fully into effect. We recommend that the Scottish Government should have a strategy to measure and report on progress and be able to demonstrate the effect on the lives of people with care needs. It should also continue to coordinate guidance and information to help councils with challenging areas and issues that they need to deal with as self-directed support is rolled out. The report also highlights issues for councils and NHS boards to consider as they establish their new partnership arrangements for health and social care integration under the Public Bodies Joint Working Scotland Act that also comes into effect this year. Convener, as always, my colleagues are happy to answer questions. Willie Coffey, do you want to come in because I was aware that you were going to tell the last line? Thanks for that. MC, on the transitional funding auditor general, the 42 million, is it still too early to give us an indication of whether there have been gains made in there? I know quite a lot that money has been allocated to providing the transition framework and so on to affect these changes, but how soon do you think we can expect it to be done there in savings? The 42 million runs over a four-year period, which actually ends this year in 2014-15. So, in many ways, it's not too soon to say what it's been spent on. We know that, for example, of the amount that's gone to councils, every council has used at least some of it to put in place a co-ordinated self-directed support, and most of their money has been put into new staff and staff training to develop it. What we don't know is what impact the Government has had on the difference that it makes to the lives of people with care needs, and that's really why the recommendation about moving on from the seven success factors which the Government has identified for this policy, which are good and clear, but moving on from there to the measures they will use to demonstrate the impact on people's lives is so important. It's what this policy is all about, and it's really about reshaping the way that whole 2.8 billion is managed and spent in future rather than about the way the 42 billion is managed to influence that, so I think that's a bigger question. Will you see the evidence of that gain take place next year, a year after? The Government is currently producing the measures that are intended to underpin those seven success factors that we set out in the report, and I think they're committed to starting to publish that information this year, so we'll start to get the information here. My expectation is that it will take a while for it to really be able to show the difference that's being made. I'll add to that, I think. I think just to also mention that the self-directed support options will be fully offered to people who are coming up for assessment, so we heard from our case study councils that it will take a little while to get everybody through that system as their care needs are reassessed, so it will take a little time for that to be offered to everybody with particular care needs in Scotland, so it will take time. The whole risk assessment thing, there are always full, in my opinion, of good recommendations for local authorities or whoever, and you've got some extensive advice at the back there on risk assessment, risk planning and mitigations one. Do you find that these risk assessments that you produce are shared and commonly held by the authorities that you're perhaps delivering the message to? Cos you always talk about planning and the need to plan and to be aware of risk. So do you find that your commentary at the back of a report like this is shared by the authorities that are charged with implementing these processes? I think, as always, it varies. We don't rely just on what's in the report. For most of our reports now, we also produce things like checklists for elected members, checklists for board members of NHS boards of the questions they should be asking in carrying out the role you were talking about with Douglas Sinclair earlier, and we know from the follow-up work that our auditors do that some health boards, some councils are great at picking those up and really working through what the implications are. Others perhaps don't give it as much attention. And it's one of the things that we're focusing on as we think about our new strategy for public audit is how we can really help to make a difference in that way in future. Ken Macintosh. Thank you. You make a number of comments in the report about the fact that moving to SDS is not about, as you say, it's not about preferring services more cheaply, but it is happening at a time of falling budgets. I think you've pointed out right in the beginning in paragraph 11 that council spending on social care services has decreased by 5% in real terms from £2.97 billion to £2.84, and that's just in three years. Have you been able to assess whether or not that is the perception or that is the concern that users and clients are feeling about the move to SDS? Is it creating anxiety? Is that colouring the perception of SDS or not? I'll ask Claire to come in in a moment and give you a bit more colour of that, but it's clearly one of the risks. I think the consensus from everybody involved in this is, in principle, this is a great policy. Giving people who need care more choice, more say in the sort of support they need and where it comes from can only be a good thing in helping them live lives that are as near to what we all expect as possible. But doing that is tougher at a time when money is tight and unlikely to continue so. I think his key is the way in which councils and their partners in the NHS talk to the people directly affected to the third sector and private organisations involved in delivering care services and the communities more widely about what this policy is about and involving them in actually shaping it. We've got some examples in the report of where that's been done really well and also where it's been done less well at least initially. Those suspicions have really picked up this sort of overshadowed the potential of the policy. That's not to say the financial challenges aren't real, they are and they'll continue to do so with both the financial constraints we expect to see for the foreseeable future and the growing numbers of older people in particular who need care but involving people both at the individual level and at community level in understanding this and helping to shape it we think is key. Do you want to add to that, Claire? I think just two things to mention. There's a conversation with the local community about the services that they want to see that need to be in place locally but also what came through very strongly to us in carrying out this work and talking to people involved in delivering frontline services. It was a real passion for the increased focus around the quality of the conversation with the individual about what their needs were. We've highlighted in the report that there are different points during that process where the money might be talked about. We saw that happening very differently across Scotland for the example, the case study areas we looked at. So for some areas the money was not discussed until much later into the conversation about people's needs and for some areas that happened much earlier and exactly as we've just said it's really about what comes first what the focus is, the principle of this policy is about the focus being on assessing the needs and then working out different ways of best achieving those needs that suit the person. So a lot of real enthusiasm for people involved in delivering services but also for people receiving them for the potential that this policy has. Just on another issue that you raised which is about monitoring the success of the policy from paragraphs 36 onwards in the Exhibit 4 about the measures of success. What I see though that we're not at a national level we don't seem to be measuring the percentage of take-up of SDS or any milestones in terms of percentage take-up along the way over the time of the journey. Is that right? The measures that we'll let them assess progress against what are called success factors in Exhibit 4 and that's the work that's underway now and they intend to publish it from 2014 onwards. Our recommendation is really making the same point that it has to be the right success factor that the policy does deliver a better quality of life for individuals. How you measure that needs some careful thought and to be able to demonstrate that the policy is doing that that it's doing it in ways that are manageable within the resources available and are leading to new more flexible services that better meet people's needs. Is that the work that's not yet complete? We think it's key and this year is the time we're told that it's underway. I'm trying to find the figure. The number of people who've actually taken up direct payment is very small, isn't it? Are you surprised how small it is? In some ways I am. I think it's important that we distinguish between direct payments and the wider objectives of the self-directed support policy. Direct payments have been in place for more than 10 years now. They've been around for a long time and I think it is surprising that, as we say in the report, only 5,400 people received direct payments in 2012-13. That's less than 5% of the people receiving social care and only about 2% of the money that's spent on social care. So it is a very small proportion. We say in the report that there aren't figures available for how many people are receiving what we describe as option 2 flexibility about the services that you receive, that you put around to meet your needs but where the council continues to manage the budget. There's no indication of how many people are receiving that. Again, that seems like a very important measure for understanding how well the policy is being rolled out and starting to understand the effect that it's having on people's lives. I think it's true to say that the self-directed support policy was a response to the recognition of the fact that direct payments were intended for them. So it's a way of giving more flexibility for how the money is used and giving people the option to get that flexibility without having to take the whole responsibility for managing the budget if they don't want to. Fraser, do you want to add to that? We don't know how many people have been asked, as it were, whether they want to move to SDS. We know that there's only 5% on direct payments but do we know how many people have been declined direct payments that have gone for council provision of services? I don't think in relation to just direct payments we do know that. Of course, self-directed support only came in as a requirement for new people, people newly assessed as requiring care from April this year. But that's the big unknown how many people may have been in that category previously and how many are still entirely new to this question of sitting down with a professional and talking through what they want their lives to look like and what would help them to achieve that. We came in early to look at self-directed support at this point in time to look at the readiness for the implications of the Act and what we saw when we carried out the work was that there were arrangements in place that council should be in a position to offer that to newly assessed people in line with the Act. The bigger issue I think is the whole-scale cultural change that this brings to delivering to others is very differently. Different ways of working with people to assess their needs and think about new options that have not been tried before. So we saw some quite good examples of really innovative practice happening around it but it is the cultural change that will make this a success and that will take time. You're not expecting or would you wish to see milestones, numbers of people at the moment just the new applicants but would you expect the Government to figure for the number of existing service users to be offered SDS? The agreement between the Government and COSLA has been that this is a long-term policy and that the 10 years from 2010 to 2020 is the sort of window for getting it fully embedded with the sorts of cultural changes that Claire's been talking about. The councils that we talked to in doing the audit work I think pretty uniformly told us they expect to have got through people who are currently receiving care in the more traditional way and given them a choice of the newer way, self-directed support within the next three or four years and I think it might be helpful to make that expectation clearer if it's the shared agreement between COSLA and Scottish Government there will be challenges in doing that because of the potential knock-on effect on the existing services and the need to manage budgets in ways that are not fully understood at this stage because it does depend on the references and needs. Thank you very much. I thought the point in fact you answered my question in response to Karen McIntosh but self-directed support is not new, it's been in for, it was passed in the act in 2001 and the regulations came through and direct payments in 2003 so this is 11 years old and we're now four years into a 10 years strategy but in my experience anyone who applied for direct payments over the last 11 years was mainly because they were dissatisfied with the council services so it wasn't a sort of positive move it was a move because they did not get the home care time that was in accordance with the assessment but I think that also led to accusations that councils wanted to retain their monopoly provision but on that point if we look at 5,400 people receiving direct payments out of 152,000 receiving social care services I think my first question is why are only 3% of people receiving home care when your first paragraph on page 5 SDS is based on fairness respect, equality, dignity and autonomy for all every party is in support of this but if you when I look at exhibit 7 I do actually have some understanding for local councils and why it is difficult for them to employing home care staff obviously they want to make sure that these home care staff have the hours of work they don't want to be making them redundant and I do notice there are a number of significant financial risks councils need to address when implementing SDS do you think first of all why are only after 11 years of legislation why do we only have 3% of people receiving in control of their own home care and support and are these financial risks facing councils that you've outlined on one, two pages do you think that this report and do you think that the financial risks are probably not going to lead to a significantly higher increase I'm just saying will they be an obstacle to more people taking up self directed support over the next six years of this strategy I'll take the first question and then ask colleagues to pick up the second one you're absolutely right that direct payments aren't new at all they've been around for more than 10 years and take up has been low I think that's because it was really about saying in social work services we'll carry on providing services we've always done but if you would like to take your share of the money you can spend it as you will what's different about self directed support is to say for all of that social care the starting point should be the needs and preferences of the individual putting them in the driving seat so it rather than being a sort of opt out as I think you've rightly described it from the mainstream services and inverted commas it turns that on its head when you're needing care in the driving seat it doesn't say to everybody you must take a budget and manage it that's one of the options available there's also the second option which is to say we'll assess a budget and we'll manage it on your behalf in conversation with you or you can carry on as before if that suits you tapping into the traditional services that we've offered so my expectation is that it will lead to much greater take up because it really changes the starting point and works it on from there now doing that has to be a good thing in terms of giving more choice to people and reflecting the fact we're all different and different things matter to us but as you rightly say it does bring some real challenges and risks that councils need to manage to be able to do that in a way that protects individuals and also keeps their services and their budgets sustainable I'll maybe ask Fraser to pick up that second part of it and colleagues to chip in if that would help as we try to set out self-directed support the thing that took me a while to get my head around is it's not really a choice of taking self-directed support or not self-directed support is a completely different way of providing services and in a sense the bit at the top of that exhibit one is almost a more important bit of the process I think that's where the really significant cultural change comes because as you say some of the other by the time you get to the bottom half of that picture with the different ways of delivering it most of those are kind of in place with the exception of option 2 which is a bit newer but actually it's that whole process of discussion and starting with the user that's the really big change and in that context as you've rightly pointed out exhibit 7 we've tried to point out some of the things that councils and others need to think about in delivering this but the starting point has to be the presence of the service user and everything follows from that so there's that kind of pretty fundamental mindset shift I think that's the important thing here Act of 2001 but I do seem to remember that it was either a council had a duty to provide or it was individuals had a right to ask but I can't quite remember the balance but I do appreciate this has gone further but you know there was a lot of work on direct payments and 11 years later we've got 3% I think that is pretty disappointing and just my final point is really one of your key recommendations the Scottish Government should engage and maintain contact with COSLA director of social work to coordinate guidance and information to support this and also have a strategy to measure and report I'm just wondering why that's a recommendation to expect them to do that anyway We would and as this committee has focused in on the past the strategy for measuring isn't always robust enough to really demonstrate that the policy is having the impact on people's lives that it was intended to that's almost always because that's a difficult thing to do but for something as fundamental as this that can have such a significant effect on the lives of vulnerable people in society we think it's key that it moves beyond those general and laudable success factors on to really how it will be possible for the Government to demonstrate that it is giving people much more choice over the services and having an effect on their ability to live the sorts of lives that we would all hope to do Key, thank you Tavish Scott I just wanted to pick up the evidence that the Accounts Commission gave us this morning about leadership and the understandable things that Douglas Sinclair said about corporate responsibilities of all senior elected members and senior council officials and then your paragraph 26 now if I read paragraph 26 right it says that only 9 councils out of 32 across Scotland are providing detailed updates to their elected members over the past couple of years through committee papers is that not a damning indictment of exactly what Douglas Sinclair was telling us earlier on? Certainly for a policy that is this fundamental to a social care to the provision of social care and the way it's thought about I think we would expect all councils to be keeping at all councils offices to be fully engaged with councillors about the way it's being planned and delivered locally, the progress that's being made with that and the results that's having. Now we say that there's a lot for councils in general to do, it's also true that some are doing better than others around it but I think this is a great example of the sorts of policies you'd expect that sort of continuing discussion between members and officers and the other 23 who are not currently providing information to their elected members will be, what will make them do it? This report is a contribution to it and the local auditors that the commission appoints to all 32 councils will be keeping an eye on this because of both its impact on people's lives but also the financial risks that it brings with it. Fraser, do you want to pick that up as a control result? Just to agree with all of that and also to say that we are and as Claire said earlier looking at this relatively early in the formal implementation of the policy and therefore without prejudging any decisions that the Auditor General and the Commission might want to make it would be surprising if we didn't want to return to this at some point in the next few years. Although it was Mary Scanlon rightly said before he's into a 10-year strategy and 23 councils aren't considering this on a regular basis, there's something way wrong there isn't it? And as you say that is given the fundamental nature of this change we would expect that to be better on that issue. Fraser, on that point is it not the case that one thing that councilors are getting a lot of information about is the integration of social care from their own council side and NHS. Don't you think that ranks higher in the context of priorities that elected members are having to deal with at the moment than this particular subject? I guess I'm not really in a position to say whether it ranks higher or not I guess it's a more immediate and obvious issue for them to grapple with. There's a decision for them to make about what kind of model of health and social care into. I think what we would like to see very quickly is once they've agreed on a governance model around health and social care then actually getting into what does that mean in the context of things like self-threatened support. How is that going to work? What are the opportunities to make that better? In an ideal world you would hope that in a sense the conversation might be another way around it that they were thinking about the implications of self-threatened support as they were making the decision. I think we haven't done the work really to say the extent to which that's happened or not but there's clearly a very close connection between those things and again we'll be keeping a very close eye on how the different models of health and social care integration are impacting on their ability to deliver this new policy change. I agree with that and I don't think it's possible to separate out the integration of health and social care and self-directed support the way you do one will affect the way you do the other. There are questions in the report about the way in which people may have more choice over the way their health support is planned and funded to give them a pot or a package of care that hangs together so I wouldn't prioritise and there's one being more important I think this is not quite as wide reaching initially as the integration of health and social care but I think they should be being discussed together. In terms of just making sure this does change over the next year then there might be some point of the committee asking COSLA is this being dealt with at council level based on your paragraph 26 there's an awful lot more to do quickly to ensure senior elected members know what's going on, would that be fair? I think keeping oversight of what's happening locally and looking at the way the different models of integration are working and what opportunities they throw up as well as what problems they may entail for the well worth. Thank you Colin Beattie. Thank you convener. Page 7.2 there where there's comment made that councils have adopted methods of allocating the money. That sort of raises to me the thought that someone moving from one council area to another might receive a very different service and I wonder is that the point that's being made here? The primary point we're making although that is a risk and I'll ask the team to come in on that in a moment the point we're making refers to the different methods for allocating budgets to individuals that we set out at 6 on page 33 of the report and there are two mainstream approaches that we've seen in the work here. The one is really a point space system that starts off by assessing somebody's needs and assigning them a score depending on the sort of intensity of their needs that score translates into a budget which can then be used to buy different forms of care and support to reflect their choices. The other approach is to start off by assessing their needs and allocating a budget that is aligned to what the traditional form of services would have looked like. Now in terms of both sort of fairness and equity and managing the risk on the budget overall they've both got pros and cons that we've tried to set out here but that they do need to make sure they're flexible enough to respond to both the growing number of people who are likely to need social care in future and to changes in the form of services that may well be needed as people choose new forms of care and move away perhaps from some of the traditional things like day centres that have often been the focus of social care in the past so that's really what we were focusing on rather than the risks of people moving between areas which also need to be considered. So is it only those two methods that you've mentioned that you're actually referring to or are others? I'll ask the team to come in. We found one more which is in the exhibit as well in Perth and Kinross Council. The solution led model that we mentioned in exhibit 5 that we saw in Perth and Kinross was slightly different to the other two that the Auditor-General has described and I suppose one way of articulating that is it's much more of a bottom-up approach so the conversation with the person about their needs comes first and the discussion about the resources needed to fit around that package of care in its broader sense comes much later in the conversation the focus really is on building building it up from the bottom from thinking about what's needed to finance as you go through. The advantage to that is that it puts a lot of trust in front-line social workers to have that conversation and be aware of what the options are and what some of the affordability issues might be around that. One of the risks and we highlight that in the report is the need for really good controls in a financial sense around that. So we've got an example in the report that says a little bit more about what's happened in Perth and Kinross and the stages of the move into this approach was weekly financial management meetings constant discussions between social workers and finance teams to keep a very, very close eye on what the implications for resources were from giving front-line social workers much more responsibility for having those discussions with individuals. In essence it is what the self-directed support policy is trying to achieve is that close connection between building a very individualised package of care or support or services for a person but there are risks around that and we only saw that happening in Perth and Kinross and didn't see that elsewhere in Scotland. Are you satisfied that, given the different systems that it's adequately transparent that people can clearly see how the allocation is done I think that's very important. That is one of the issues we've tried to draw out in the report on the need for that clarity about that discussion In a sense, self-directed support brings that because it is about an individualised package it is about more clarity about the care you could get what the options are and how much that might cost to provide so self-directed support to go to it. Put together surely is the critical thing and the transparency in that process is very important for confidence. Absolutely and our self-directed support is rolled out more broadly across Scotland we would certainly see that that would start to become an advantage of the policy being rolled out so it's not happening for everybody yet but absolutely that should be happening as part of the discussions that people are having about their care. Just looking at page 12 paragraph 18 this question of the 5% I notice that it says that 5% of eligible social care users and then it says that for 2.4% of the council's social care spending that would imply to me and tell me if I'm wrong here that those who have taken this up are perhaps those with less profound needs than others since they're absorbing far less than their proportionate share of the budget. That's our assumption we don't know whether it's the case or not because of the information that's available and not available at the moment and clearly that in itself implications of self-directed support is rolled out across all everybody who gets social care over the next three or four years understanding as each person's needs are assessed both new users and people already in the system what their relative needs are and what the impact of that is on the overall budget and the overall shape of services is key to the roll out of this and it's why we've focused on both the need to be really clear about people's needs but also to manage those risks in ways that are mean the budget won't be bust and that people are treated fairly over time. Is there a kind of source of any projections as to what the take up will be? There's absolutely something that we saw as a risk when we carried out the work we certainly saw some of the areas that were slightly slower off the mark if you like one of the issues was about uncertainty about what options people might choose this is a big change so there was a lack of clarity about how many people would opt for the services that they were getting anyway and how many would choose something different and what we saw was quite a lot of work going into support front line social work staff to have those conversations with people we've not yet mentioned that there are quite a number of examples in the report that I think try to bring to life what self-directed support will look like for people who need care and support services and we found where we talked to staff who are involved that seeing those examples and sharing what's possible around self-directed support right through to the elected members actually brought it to life made people think that made people have a much better understanding about what was possible and what was achievable with self-directed support so I think that will just take time as that spreads and we heard from our case study councils that it wasn't necessarily something to expect people to make a single decision and then stick with that it might be a snowballing and realise more what's possible with some of the options of self-directed support so it's quite hard to make a prediction when people might come back in the review and change their mind and try something different and learn from other people they know and try other things Clearly it's early days and we've just got to wait and see how this develops Thank you This is an interesting time to go into this just so soon after the acts passed and certainly as a parliamentarian I'm finding this incredibly valuable because you've given us a good starting point a foundation so when we go back and later to look at this again we'll know where we came from so it's incredibly valuable from that point now the focus has been so far on what the councils are doing I want to flip that back now to what the government is doing because it's quite clear in terms of your under option 2 that you've described which is asking others to arrange the chosen support that they have and that there are issues as far as councils are concerned in terms of the guidance they've got to deliver and in paragraph 31 you describe how there is a risk that some councils be interpreting the rules and regulations so cautiously that they might limit the choice and control that people have over their own support and if we're going to move on from that low starting point and that's why the acts here are 3% that's going to be quite an important area and you're obviously asking the government to develop that guidance can you give us a flavour of what you think that guidance might look like to help them to help push this on a bit I think our view at this point is that the government has done a good job in consulting and involving the people affected by this in developing the guidance the effect of that was that it came out a bit later than some people might have liked but our sense is that it is robust and well worked through because of the time taken and that the £42 billion of transitional funding has been targeted well towards both councils and to the third and voluntary sector and carers to help them understand what it means for them as well and engage in that what we know though, or what we expect is that there will be some areas that are particularly tricky for individual councils or for all councils we were talking just now with Mr Beattie about the potential implications of the different ways of allocating resources now there will be some people who do that very well there will be opportunities I think to spread that good practice in line with the discussion you were having earlier with Douglas Sinclair about councils there will be some councils who are struggling with it either because they've got particular challenges in their area or because they haven't tapped into the networks of support and expertise that may exist elsewhere so we think there's that role first of all of simply monitoring progress and identifying where there might be room to spread expertise and experience and there may be areas also that needs to be refined or tightened or refreshed as the policy rolls out and people find new and better ways of delivering what this is all about were there any specific areas in there Cappy or Claire that you wanted to highlight on top of that yes I think because option 2 is so new it is expected to be something that you know as councils learn they will share the guidance will get better it's more of an evolutionary process the issues that were raised with us were some of the very practical things and contractual things around relationships with providers who might manage somebody's budget on their behalf or administer their budget on their behalf and that may involve not simply providing services and taking money out of the budget it may be using that budget to buy services from other providers and so there are various complex relationships involved in that and councils retain the responsibility for making sure that people get the right care and also for the good use of public money and so they need to keep an eye on how that works and make sure that everything works properly so until some of these things are tried it's hard for them to set out guidance that would be very clear for councils without perhaps limiting some of the options that people haven't yet thought about How soon do you think the Government need to produce this guidance to allow you things to move on It's likely to be a continuing process as Cathy said people are developing this in different ways in response to different local circumstances that's a good thing but keeping a close eye on it and looking at where there are particularly good examples that should be spread or particular problems that weren't foreseen being flexible in response to that to be really saying is this needs to be done a lot more time to see where councils are actually developing the best practice so the Government can use that then to provide the guidance to help others We tried to draw out what we saw was a lot of effort going in to have a community and sharing good practice and a real emphasis on partnership working between the Scottish Government the local authorities, the voluntary private sector and people who need care and support to try and work together to think about what was possible under self-directed support and where that might go in future it was a good strong partnership arrangement there was an issue about what guidance was coming out too late but actually that was sent out and draft and there was real consultation around what the implications might be behind that guidance so we saw that as a good thing Thank you very much It's convenient a couple of questions first things in relation to the case study on page 24 the second paragraph where you say there's been some tensions between the council and providers that feel that they were not fully involved in developing strategy and I'd like to know a wee bit more what were the actual problems that were found in this instance and have there been similar instances across councils across the country Let's look at the specifics of Edinburgh in a moment maybe kick off by saying that in a sense it's not surprising that those tensions would arise that what councils are required to do is to work with a change of private and voluntary sector providers as well as their own in-house services to talk about changes that might be quite far reaching in terms of the sort of services needed and the way they're provided and they are both trying to build the partnership that Claire's been talking about to do that and to have to recognise that some of those providers of services will be in competition with each other in due course so the tensions themselves aren't unexpected it does really place a premium on managing them well and being clear what's up for discussion and what's not. Claire or Kathy can you pick up the specifics from that case study? Yes, in this one we know that the council had developed a draft strategy and then shared that widely with providers and there was a lot of consultation at that point so it felt like a document that perhaps had not been developed in partnership at that point however that was a consultation draft and the engagement began from there so what we say in the case study was that it was supported to us about having felt that they hadn't had a say but there is a sort of process in that the final strategy is expected to take on board some of the comments the providers have raised since the draft one was issued. That's this thing that had in the back of my mind anyway was the council coming along saying this is the service we want and the provider basically saying well actually there's a better way of doing this and this is where the problems were brought where the problems were starting is my assumption wrong? I think that made me feeling was in the early stages of development however the providers did report to us that they are feeling much more involved and that council is trying very hard to involve them and listen to them and take on board some of the new things that they bring to the table so it's a relatively positive example that we've included in the report. In paragraph 53 on developing the strategies in the areas but the thing that really I caught onto a little bit was really the last sentence the risk is also greater for specialised types of services which relatively few people need such as care of people with hunting and disease, neurological illnesses and acquired brain injuries obviously this is a bit of a sensitive area as well and we can't have people falling to the gap so what how do you find that councils are looking at these problems across the country and do we have a problem here that hasn't been identified apart from in your report or has it been identified out there and are actions in place to close these gaps? I think what we saw in our case study examples were some good examples of practices in remote and rural communities where some of the options just haven't been there historically and some quite innovative ways of thinking about right how do we best meet the needs of the local community so we've got some examples in the report about working with business and social enterprise communities to try and develop things that haven't been there before but in essence the question you've asked is getting at their planning and commissioning arrangements so that's absolutely something we've highlighted in previous reports on commissioning social care care for older people and I'm sure will be an issue that comes up again in terms of the new partnership arrangements between health and social care services about the need for local authorities, health boards voluntary, private sector to work together with people who need support to think about making sure that they get the support they need and that nobody does fall through those gaps that there is clarity that everybody does have access to the services that they require so if it comes down to the likes of signposting people when they're coming to the point where they have to decide which way they're going to go forward with self-directed support in the purest sense where they want to stay with the local authority are we clear that the local authorities in terms of signposting people to what the options are in terms of their own difficulties that these signposting arrangements are in place The stage we have looked at with this report means that we saw that in some places we didn't see that in all areas of Scotland is a big focus in terms of implementing self-directed support has been an acknowledgement that for some particular groups of people who are less familiar with a personalised service so for example traditionally older people have had less take up of some of these options that actually there is a job to be done about making sure that people are very very clear about what options are available to them and are able to take a full part in the open conversation about what options they might want to pursue in future I think highlighting what self-directed support actually means in practice has been a learning process throughout the system for the people who need to access support for their carers for the people providing it and for local authorities as well so I think that's just a journey that they're still on at the moment with the intention on the need to improve the information that people have in terms of what's possible I suppose it takes us back to one of the first questions that was asked to do people understand what self-directed support is OK, thank you OK, thank you and I thank the auditor general and her staff for their input to the meeting in this issue, thank you very much Item 4 section 22 report the 2012-13 audit Glasgow College committee members have written submission from Glasgow Kelvin College and the auditor general regarding the report do members have any comments on either of those submissions Mary Scanlon I was surprised that we have to wait three months, another three months for for them to complete the task and to looking at the remuneration committee of that board and I think it was also the point to make about restating their commitment to the high standards of corporate governance well, if they are adhering to the high standards of corporate governance you know why do we have to wait three months for a report all we want is an audit trail in a minute of what happened it just seems enough given that we wrote to them in May I think one of the issues is that we've got a new college looking back at the issues of a predecessor college and there is therefore not necessarily complete continuity I think the issue should be will we do the work thoroughly will we investigate it properly and obviously if we get a thorough report that will influence what we decide to do any other members of comments on either the submission from Glasi Kelvin or indeed from the auditor general who's given his information on the names of the members of the remuneration committee no Tally Scott When exactly will we see this back to us on the fair question Is it going to be October? It depends it could be October depending when we get the response from the college I think if members reflect we have a strange timetable for the next three to four months so it could well be after the October recess but it's depending on the college so agreed to note in the meantime Thank you Item 5 Section 23 report Scotland's colleges 2013 Members have a written submission from the Scottish Government about this any comments on the response from the Scottish Government Nope The AGS will be producing the annual report on Scotland's colleges in February 2015 so I think we could agree to note in return to it at that time Thank you Item 6 Section 23 report modern apprenticeships We have a written submission from skill development Scotland any comments on that Mary Scanlon Sorry to be the awkward one again I was actually a bit disappointed in the response that we got from skills development Scotland It was quite a significant part of the report about the modern apprenticeship programme and the priorities and aligning the modern apprenticeship with the priorities of government and it was a point that the cabinet secretary responded to very very well and and what it Scotland said there was insufficient information on the priorities and what we get from skills development Scotland is SDS's role in modern apprenticeships is primarily to administer the funding for training on behalf of the Government and ensure the Government's priorities are met I don't think that's enough and I certainly am not impressed they haven't given us any idea when this programme priority what they kept telling us was demand led they've given us no idea when this will be completed and I think we'd be failing on our duty on this committee if we didn't ask them for a bit more information rather than being fobbed off with a simple sentence like this I think that they should be doing what the Government expect them to do I think that they should be doing what Audit Scotland also expect them to do and I think that this one sentence is not good enough so I was disappointed in that Any other comments? Just ask a question Have they answered what we asked them? Not entirely for example we'd ask them about the objectives of the modern apprenticeship programme and the relative priority of each objective we haven't been given a great deal of information on what the priorities are and I think that would be helpful we'd need more clarification on that and the other issue about what work is SDS undertaken with the Scottish Government to develop outcome measures to assess the long-term benefits of modern apprenticeships that's been going on for some time but there's no indication of when that's going to be completed and that was asked in the letter as well I think it would be helpful if they would tell us when that could be completed I apologise for missing the first session on this I'm a bit off the pace on this one but if their role is just to administer a scheme then that raises a fundamental question about that could be done in a different way rather more effectively all the feedback I get from my part of the world is that they are a top down bureaucratic organisation who do not add value to a really good programme which is delivering as many modern apprenticeships as we want right across Scotland and I think there are better ways to do this but this is probably not the occasion in which to raise this but I'm with Mary I think the fairly woeful answer in response to that objective thing if they're just an administrator then frankly I think there's better ways to do this and achieve an awful lot more for public money in the ways in which we want to do that but I think that the first question did not answer the third one and that was significant in evidence who is responsible for acting on and reporting concerns about training provider performance I brought along the Odeck Witte report because on page 34 Audit Scotland said there's no equivalent independent reviews of the quality of training provided by private, well other providers including private training providers and apprenticeship assessments and I think they chose to bypass that as well so I'm not impressed at the... I don't think we've got the information that we asked for it certainly doesn't take us any further forward in terms of modern apprenticeships OK, could we agree to seek further information now some of it may well come from SDS, some of it we can write to the Accountable Officer and the Scottish Government we probably need more information on what the priorities are and clarification on that and if we could also ask when will the when will the work on developing the outcome measures on the long term benefits actually be completed and also the performance of the training provider performance OK I think we set this in context as well because it was one of the most positive reports we'd actually seen from the other general about the performance of Skills Development Scotland so as long as we're recognising the context we're simply writing asking for the clarification that there's no other comments that will be associated at this stage with that OK, great, thank you item 7 section 23 report managing early departures from the Scottish public sector you have written submissions from the Scottish Government on the general and Accounts Commission report any comments Ken Macintosh I had a number of observations to make here which I welcome clarification on the first would be about confidentiality clauses clearly there's a particular issue about the use of confidentiality clauses or the increase, the growing use of confidentiality clauses in recent years by this Government particularly in the NHS which the Cabinet Secretary has finally acted upon to stop the increased use however it only applies to the NHS but confidentiality clauses are used throughout the public sector there was compromise agreements just to give you some figures the police had about 203 compromise agreements that cost of more than £2 million since 2007 Scottish Government directorates the Scottish Government itself had 173 such arrangements at a cost of over £3.5 million local authorities had more than £10,000 at a cost of £32 million so I'd be interested to know whether the Government intend to apply the rules of confidentiality clauses to these bodies or simply to the NHS itself also the list of bodies at the back of this letter which are covered by the revised arrangements, they include for example the police authority and the Scottish Foreign Ministry they don't include Police Scotland itself they don't seem to include the universities who have been widespread users of these clauses and they don't include the Scottish Government directly itself either, the direct agencies and there's a final issue within the guidance itself which is about the difference between the voluntary resignation secured by a financial consideration and a settlement arrangement so I just page 3 paragraph 1 the proposed processes it follows if you just look at the bit that's in brackets and in italics so envy these materials may also be used to submit cases of a voluntary resignation secured by a financial consideration so you're paying somebody off to retire however the reporting arrangements do not apply to a voluntary resignation and even later on paragraph 7 page 4 it says that voluntary resignations that have a financial consideration must be approved but it doesn't look like and it's difficult to be clear from this it does not look as if they have to be reported by in the next paragraph it says the only should be reported to the Parliament as required so what I don't understand is settlement agreements now have to be reported to us voluntary resignations with a pay-off don't seem to be it strikes me that that's a bit odd to be mildly so I just like further clarification of all three points if that's possible you'll note on sorry just before on page 5 it does say the presumption against inclusion of confidentiality clauses settlement agreements also applies to other public bodies and to this end we will develop in consultation with public bodies a draft operational confidentiality clause which would be only inserted at the request of either party and then explicitly agreed with both parties the point is that the Cabinet Secretary issued guidance about this last year it wasn't followed every single compromise every single one I think maybe possibly with exception of one had a confidentiality clause included so clearly it takes quite robust interventions I would suggest if we're actually going to end this practice and this is not a new this is a growing practice this isn't something that's people talk about this as if it's been around historically for ages it's always been around but the point is the use of it is growing and growing remarkably in recent years and I think it'll take the explicit action to stop it we've seen it in the NHS now and there's been a petition of this Parliament which highlighted misuse but I think it'll take more than just suggesting there's a presumption against the inclusion of confidentiality clause that's not working so far I understand where Ken's coming from in some of this but there are some organisations out there the way they're incorporated the way they're organised such as universities where there is no mechanism for the Scottish Government to enforce that on the legislation because that's their different types of bodies they are not part of the public sector they don't consider themselves that so just in terms of context and in paragraph 7 understand where Ken's coming from but do we really want to know about voluntary resignations of an employee who are out with the schemes as a Parliament? I'm not sure I want to know that because it's just a normal voluntary process I would want to know about voluntary resignations with a payoff yeah but that's not what I was saying here because if an employee out with any existing scheme is in paragraph 7 must be approved by the head of department and the Scottish finance department I don't think we need to know about that as a Parliament I mean just further on here what the Government are saying that the number of settlement agreements entered into across the Scottish Government the Scottish Government will not disclose the terms of circumference that's fine but they'll only do the voluntary resignations with costs or as required as required by whom do we have to that's very familiar if you don't know what's going on I'll just stand up to ask but can we seek clarification on those points and then we can come back to committee with the response agreed? okay thank you for that and with that we come to private session item 8 committee moves into private will take a take a break for a few minutes