 Good morning, everyone, and welcome to the 15th meeting of the Local Government and Communities Committee. Can I remind everyone present that it's time to turn off mobile phones, and as members' papers are provided in digital format, you may see some of us using tablets during the meetings, so that's what we're doing. We've got apologies this morning from Alexander Stewart. Unfortunately, he can't be with us this morning and moved to agenda item 1, local government and Scotland financial overview 2015-16. The committee will take evidence on the Count's Commission report, Local Government and Scotland Financial Review 2015-16. I'm delighted to welcome this morning from the Count's Commission Ronnie Hine's deputy chair, Fraser McKinley, controller of audit, and Marcy McLaughlin from Audit Scotland, who is senior auditor. Can I invite the deputy chair to make a short opening statement? Thank you, convener. I did have some opening remarks prepared, but the committee will probably be pleased to hear that I'm not going to stick to those. I'll just make one or two brief observations and then devote time to the questions that you'll want to ask. At the risk of stating the obvious, local government finance is exceedingly complex, and I just say that because it's a cautionary note to everything that we've said in the report. The reason that we've departed from our previous practice, which the committee will know has been to produce an annual overview report that covers not just local government finance but other aspects of local government services governance and so on, is precisely because it's so complex and we thought that it would be better to try to devote some dedicated time and space to an exposition of some of the more obscure of you-like but important aspects of how local government is funded. That's why we've produced this report. The timing is no accident either. We think at this time of the year the value of a piece of work like that, to try to shed some light on some of these issues in the context of the annual debate about how local government is funded and how the money is spent, would be of greater use to the public and to the committee and other interested parties. With that said, we're really just here to try to answer any questions that the committee might have around the report, and we're more than happy to do that. Thank you very much. I appreciate that. We'll move to our first question from Graham Simpson. Thank you, convener. You say in your summary all councils face future funding gaps. I wonder if you could just explain what you mean by a funding gap. Okay. At a later section in the report you'll see that we try to set out the nature of the gaps that local government is likely to face in our view. I'll see one or two brief remarks and then Fraser or Marta might want to come in behind me. Clearly, as auditors, there's a limit to how much crystal ballgazing we can really undertake, but what we're doing here is making some assumptions partly based on what we've seen in the past but also based on current trends as to what is likely to happen in local government funding over the next two to three-year period. The reason that we say that there are likely to be funding gaps is A, because there have been, if you'd taken a similar standpoint two, three, five years ago, you'd have seen the same pattern emerging but not perhaps quite to the same extent. I would caution that the expression funding gaps might be interpreted by some as meaning there's some kind of black hole in local government finance. That's not what we're saying. What we're saying is that at this point in time for councils looking to a two-year horizon, they will not in every case have managed to anticipate how they will square off the budget as they have to do under statute. Reconcelling on the one hand the pressures that they have for service delivery and demand for services and, on the other hand, a light load reduction in the funding. We're using estimates and assumptions, as the report makes clear, to try to get a picture of that. The main point that we make there is that, even if nothing else were done, there's generally speaking good cover for the first couple of years anyway in terms of the reserves, but we obviously don't think that use of reserves is a sustainable way of closing off those gaps and reconciling the difference between the expenditure requirements and the funding on the other. However, in every case in recent years, when that's been the case, local government has then gone back to the drawing board. They've come up with further options for savings and we've willing to anticipate that's what will happen in the next few years. It's just that, at this point, we can't identify what those savings would be in every case. Okay, thank you. I don't know if it's freezing the mark on what tide there is, I think, to that. No, thank you, computer. Okay, get in. So, just for clarity, your definition of a funding gap is essentially the difference between forecasted income and the likely expenditure. Yes, yeah, okay. It might be useful to ask, sorry, that it's expenditure reduced for the approved savings in 1617. So, what we are saying is that the funding gap is the difference between what you will spend, assuming you make all your savings and your income, and within the model we've shown that is being funded from the general fund result. Okay, okay. So, when you say there's not a black hole, that sounds like a black hole to me. Well, that isn't. So, I say what we're saying is that, and we make the point elsewhere in the report that we strongly think that councils should take a long-term view on their financial planning, and we identify where that is happening and where it isn't happening. We recognise that that's more difficult when they've had to deal with one-year settlements, as they have done for the last couple of years, and there's no way of knowing at this point in time whether that's a pattern that will repeat itself for the years that lie ahead. But we think that they should plan for the long term, and one of the reasons why there is this difference between their expenditure and their income is projected is because we can't, in every instance, see how councils would square off those gaps on the assumptions that they would have to make. But what we do know is that in every case in the past, when that's been an issue, councils have done that, and you can see that from the performance on the outturn. We're saying at the beginning that they have mised the finance as well, even though, two to three years ago, they might have had funding gaps. They will turn to this and find other savings, so it's not a black hole. Okay. Okay, Mr Simpson. Finished yet? Thank you. Can I maybe ask a little bit about the start of this report? I think that the biggest piece of publicity around this report was when it was published. It wasn't as bad as people actually thought it was going to be. It shows quite shrewd financial planning by local authorities, robust reserves. It clearly shows significant challenges. That's within the report as well. But the bit that's attracted, if you like, some political attention has been the on-going debate of whether local government has been targeted more so or less so than the public sector more generally in Scotland. What this report seems to say fairly early on is that an 8.4 per cent real terms cut over the period that you look at, that it is buying large at a similar revenue cut to the Scottish budget at large. That will then be used by all political parties in this place and interpreted in various ways. But what would you say in relation to that? I'll ask Martin to give a detailed explanation of how we came up with those statistics. All I'd say is that we stand by the figures that are in there. It does depend on what question you think you're trying to answer. The question that we think we're trying to answer is whether, in terms of the flow of funds from the Westminster Government through the Scottish Government and eventually down to local government, in terms of that context, what is the comparison between the reductions that have been faced by the Scottish Government on the one hand and by local government on the other? We asked that question with an open mind, not quite knowing what the answer would be. The answer is what we say in the report, but explicitly, in coming to that conclusion, we've treated certain relevant flows of funds, including non-domestic rates, in a particular way. I'll ask Martin to explain more about that and why we've done it. That was very helpful, Mr Hynes, because I was going to specifically ask about non-domestic rates. You've saved me asking the question, but Mr McLaughlin, if you could see how those have been accounted for, that would be very helpful. Certainly. The easiest way of thinking of it is that we've looked at the totality of funding for local government against, if you like, the available Scottish Government budget, if you make the assumption that non-domestic rates will flow directly to local government. What we've found is that if you take the revenue grant funding, the non-domestic rates, capital grant funding, then you get the cut that we put in the report of 8.4 per cent. We've compared that to the revenue del and capital del elements of the Scottish Government budgets, the spending limits, as it were, where there's an 8.7 per cent reduction. Within that, as I said, we're looking at the total against the available, so we've excluded NDR from the Scottish Government side of it. What we do say in the report is that, if you look at the revenue funding, the Scottish Government provides guaranteed revenue funding, which is non-domestic rates and revenue grants. What we've said is that, in recent years, non-domestic rates are making up an increase in proportion of that total revenue funding. The figures that are available in Exhibit 2 and the paragraphs leading up to it can be used to demonstrate that, if you like, an increase in the non-domestic rates has offset some larger reductions in the revenue grant proportion of that funding, so it really depends on what you can pay on. We're claritying non-domestic rates because we're looking at some of that in relation to what we're looking at council tax matters here. The cash flow of non-domestic rates is retained by local authorities, but there's a revenue adjustment that takes into account what the Government calling a needs-based formula, so they do appear on the income side for councils but not in the revenue support side from government to local authorities. If you like, the revenue support side is calculated as a total revenue support and the grant is a balancing figure between the total and the non-domestic rates. If, for example, a council for whatever reason achieved an increase in non-domestic rates as to what was forecast over and above what was forecast, I apologise, then there would be a corresponding reduction in the revenue grant support so that the totality of revenue funding is made up of those two balancing figures. So, in essence, it is counted? It is counted. I'm not an accountant, I'm just looking for it. No, no, it is counted. It's a simplistic clarity, if you like. What we have not done when we've looked at the reduction in the Scottish Government budget is that we have not included non-domestic rates within that calculation. We have looked at the departmental expenditure limits, allowing both the capital and revenue side that have been set for the Scottish Government. Okay, it might be helpful for my benefit if not the rest of the committees if you may be sent the committee a note just outlining that in some more detail at a later date. Can I ask about other numbers that I'm wondering if it's included in that or not? And again, we want to understand better the figures but if you like, local authorities won't appreciate what we've seen. It's pleasantly surprised at those numbers given the heat around local authority budgets at the moment. So, the £250 million that comes from the Scottish Government into health board budgets but is transferred pretty much in its entirety to local authority social work services irrespective of the delivery model around that, is that included? No, we exclude that because it doesn't appear within the local government funding settlements and it doesn't appear within the portfolio that that's part of, it appears within the health budget. So, we've excluded that because it's not explicitly within the local government funding settlements. Where you will see it is you will see it recognised within councils accounts as a source of income. Okay, I think I understand why you've treated it that way because if it shows up in both the health budget and the local authority budget, it could be deemed to be double counting, I suppose, but in relation to this committee who are still doing more budget scrutiny in relation to local government and cost pressures and everything else, the Scottish Government has asserted in several occasions that the real fall is about, I think, 1 per cent they say in budgets if you include that £250 million. Now, the moneys definitely alleviate potential cost pressures within local authority statutory duties but it doesn't show up in their funding position. Would you consider doing a small piece of work just so we can either see whether the Scottish Government is accurate when it makes its assertions or what the real position is because it would be helpful to this committee to better understand that? Sorry, Mr McKinley. If I can come in there, convener, so you might remember that in our overview report that we presented to you earlier in the year, we had this very discussion because you might remember that there was indeed some disagreement between us and the Government about the numbers we came up with, so we didn't come up with the 1 per cent number, that was their number and we can see how they've come up with that, but for the reasons that Martin set out, that £250 million did officially go into the health budget and then beyond that, convener, I think there is a debate out there about exactly what then happened to that money and I think you heard some of that in the committee just a few weeks ago when you had what looked like a very interesting discussion with folk from local government. So we are trying to keep, and I take your point about simplicity and clarity, we are trying to get to that but it is very complicated and it is further complicated, I have to say, when when government say, well this money is kind of for local government but we're putting it into the health budget. So we're not including that for these numbers because in practical terms it wasn't, and as you well know at least half of that money are there about so it was taken up for the living wage element as well, so for those reasons we've excluded that from our calculations in terms of local government settlement. Would you consider doing a piece of work around that because we're all, we're here as committee members but we'll also sit as party members in plenty of the recessions of the chamber and we latch on to these numbers to make the most convenient use of our debate, during debates for whatever political party we happen to represent. It would be quite good to have clarity from a committee point of view on what the impact of those numbers have been. The commission has already produced a report on health and social care integration, which is the first of three reports we intend to produce there. The second one, which will be due in the next year to 18 months, will look at among other things what's happened with the new authorities, the integrated joint boards in the early stages of their development. Part of that will have to be what funding actually flowed to them from where and how was it used and how effectively was it used. So of necessity we will have to look at I think the questions that you're asking. At this stage all we've been able to say about the joint boards is that they also are complicated partly because of the governance that surrounds them, so compounding the complications that we've already described around local government finance, we have the complexities of the governance of those bodies and until that settles down we won't really know for sure how much money did flow into them and for work purpose that was used but we will certainly be looking at that as part of the next phase of that work. Okay I'll maybe move on a little bit. I just want to spice prepare a really helpful briefing in relation to getting briefed on some of these numbers. I've looked back a couple of those questions on the record as well before I bring my colleagues in. So can we ask how you account for the transfer of police and fire powers and associate funding in the year 2013 to make figures comparable between different years of whether its approach here, whether your approach here differs from that of the Scottish Government? Well up until the point where they were transferred from local government to central government, there were elements within the local government funding settlement that included police and fire grant, so our approach has always been to use draft budget documentation to remove the police and fire budget from that. We slightly altered our methodology this year because as well as the overall grant for those services within the funding settlements prior to 2013-14, there were elements of ring-fenced funding, commonly referred to as top-slicing for police and fire pension costs, to better create the distinction between the two funding flows. We've now removed that from our prior year figures. It differs slightly from some of the work that I've seen spiced out where they've taken the opposite approach and from 12-13 onwards they've added in the police and fire funding back in to compare it on that basis. Both are equally valid in my opinion but we tend to do it in the approach that we take so that it ties back directly to the settlement figures. So the key thing is you exclude the figures irrespective of where it appears in the budget line, so we're looking at comparable figures throughout the years. That's simply clear for me. I like that answer. The final point I wanted to ask was why the figure for the revenue reduction since 2010-11, which is deemed to be 6.8%, is different from that cited in the local government overview that was published in March 2016, which is down 11%. That wasn't my reading of those reports. That was information prepared for us, for this committee, but it's been pointed out that there's a difference there and an explanation around that would be quite helpful. For the reason that I just outlined, where we have made a further adjustment for, if you like, the ring-fenced funding primarily for police and fire pensions, so that is a net effect of reducing the 10-11. What we classify as local government funding 10-11 by approximately £300 million follows through to, if you're comparing the current year to 10-11, then obviously the corresponding percentage reductions reduced. Within the funding settlement, although they're comparable across years, there's elements of funding for ring-fenced national priorities or other ring-fenced reasons that go in there. Although we treat it as total local government funding, there are discrepancies to what's included each year. We felt this year in order to better separate the impact of police and fire being reclassified. We would go back and look again at our earlier figures and adjust for the top-slicing, as it were. I'm glad that you're on that. Thank you very much, convener, and welcome to the committee. Can I just clarify? You mentioned Mr McLaughlin the ring-fencing, so if the Government, in paragraph 15 of your report, you also talk about the funding to support implementation of national policies. Is that included in paragraph 14, 8.4 per cent? Anything that the Government gives to local government for their national purposes is included in that? Yes, that will be included in the totality of the funding. We have outlined in paragraph 16 of the report and in the footnotes to exhibit to some of the larger elements that perhaps don't appear in each year. I just couldn't believe this sitting if you could come back with a note. I don't know, Mr White, what you want to come in now. It did make me think about what is a national or local priority. We've got the £100 million attainment funds that are going to be raised each and every year. A national priority, locally raised, but education is a statutory duty of local authorities, so it's not always clear what's national or what's local. We've got city deals coming into the mix as well with our support from Westminster and Scottish Governments in relation to that. Some of that can be dealing with projects that local authorities may have commenced with anyway, therefore alleviating other financial pressures elsewhere. It's just that appeal again that it's becoming overly complicated to actually look at the financial position of local authorities. Governments by definition try to be as strong as possible for local authorities, and local authorities, by definition, try to make it look as bleak. The committee wants to look at the specific figures as best we can and you guys have a best place to do that job. Mr McKinley, please do answer if you want, but some information and writing would be helpful. Just to say that we absolutely agree with that. One of the reasons we wanted to do that report was to try to bring some clarity to it. I think that what we'll be doing now that this report is out and in the early months of next year is gathering people together. I think that we need to have a wider conversation about how best to present this stuff, because spies do it a bit differently, we do it a bit differently, well-respected organisations such as the Fraser of Allander are producing stuff as well, and in every report you find slightly different numbers. I think that what we can do with the Accounts Commission is to bring all those people together and have a conversation about how best we can present some of this very complex data in a way that is consistent and might help bring a bit of clarity. That's something that we can try and influence over the next few months. I was about to make the point that Fraser responded to, because all the advice that we've had internally in relation to the funding for local government vis-à-vis Scottish Government is that it suffered a disproportionate cut. I simply don't understand to this date even with any explanation, Martin, how you can include non-domestic rates on one side of the equation, but not the other. We'll leave that and revisit it. I think that it would be helpful for members and the public to have one set of data and figures that could be understood, because that is different from other sources, but you've addressed that. Can I move on to the question of fees and charges? They account now for quite a large proportion of local government's income—£7.8 billion. Have you done any investigations into the extent to which those have grown, where particular growth has been in different services, et cetera? The short answer is no. We haven't, as of yet. One of the reasons that we thought that this piece of work was worth doing in the separate way that I described earlier is because it allows an opportunity to peel the layers of the onion a little bit and fees and charges are, as you say, a significant component. The hypothesis, I suppose, might be that, in the light of other funding pressures that councils have increased fees and charges in order to avoid cutting services, but that's all that it is at this stage. We don't have the evidence to show that one way or the other, and because we don't, we're minded to do a dedicated piece of work as part of our performance audit programme or, indeed, to look in more detail at this particular, at an overview level, as early as next March, when we produce the overall report on local government, because we think that it is an interesting issue. If I can just take a slight aside, we know that south of the border, where the funding pressures of anything on councils are more extreme, there has been a significant increase in fees and charges there as a way of avoiding some of the worst cuts that they might be faced with. Now, there's no way of seeing at this stage whether that's happening to any extent north of the border, but we think that it's an interesting area to look at. We do know that our sister organisation in Wales has had a detailed look at how fees and charges in local government there have been treated, and there are many interesting questions, not just on the level of increase that has been won, but on the policies, strategies and so on that inform the fees and charges. We think that that's an area worth of investigation, but at this stage, all we can tell you is what we say in the report here, namely that they are a growing component, a significant component, but we don't have a breakdown. The other key thing that we say in the report is that the current way of accounting for fees and charges is less than wholly satisfactory, from our point of view. It's difficult to pull fees and charges of themselves out of the local authority accounts because other elements of funding are in there, which we probably would not regard as fees and charges, but they are accounted for in that fashion. We would like to see some changes to that going forward, because that would help with our work, and it would help the public to understand what is happening with fees and charges in that area. That's useful. I think that the worry for me is that, in many of us, that fees and charges are a flat tax, in a sense, and they are regressive. Moving on to one final question, convener. I think that I raised in an earlier session what your thoughts would be in relationship to the establishment of a fiscal framework for local government funding similar to that, which exists between the UK Government and Holyrood, to provide some certainty. You have identified a funding gap, and one of the problems with local government planning its finances is that it is never entirely sure what the consequences will be of actions that it takes at its hand vis-à-vis national policies that government may want to implement at another. That leads, in my view, to a degree of uncertainty going forward. Have you had any further thoughts on that question? As we said last time, Mr Wightman, clearly it's for the Scottish Government and the local government to decide whether it's a version of a fiscal framework. What we would say is that anything that helps clarity and the ability to long-term plan is a good thing. Whether that's a framework or a set of assumptions that could be set out or what that is, it should be up for debate. However, anything that helps—in this instance, councils, although we have to say the same thing about health boards and other parts of our work too—anything that helps that longer-term and more strategic financial planning has to be a good thing. While we absolutely recognise the challenge of doing it in a world in which we are having annual settlements, it makes it even more important that councils are able to plan for the medium and long-term plan. That's where we get to. Can we go back to fees and charges for a moment, please? The overall report seems to indicate—I think that you said at the beginning, Mr Hynes—that the state of financial health of councils is perhaps not as dire as might have been thought previously. However, if you're going to be looking into fees and charges, is that due to councils managing cuts? Looking at things such as the loss of staff and if you lose staff, obviously you have a big cost at the beginning and you may save further down the line. However, if you're losing staff, people are losing their services because a big part of what local government does is provide services through the people that it employs. Would that be part of that? Is it something that you would be looking at? As part of a review into fees and charges? As part of it, yes, and taking that across the whole state of council finances, if you like, because I presume that it has to fit in with that. If you're reviewing fees and charges, you would be fitting in as part of that whole picture. We haven't yet sat down and specified the piece of work that I described earlier, so I couldn't say for sure whether we would include workforce issues as part of it or not. What I would say is that they are both quite significant and largely distinct elements of what councils have to do, just to set their budget every year, but also to address the kind of reductions that they have had to make in recent years. The lion's share of the reductions that we see councils making do impact directly on the workforce that we have commented on in previous reports that we touched on here. Our line on that, if you like, is that we understand fully why that has to happen. Over 60 per cent of the costs of the whole Government are the costs of paying their staff, so there's no way of making those savings without, if you like, going to staff reductions. However, we would like to see a company that has a more consistent approach to what we call workforce planning. The concern might be that, if there isn't that consistent approach to workforce planning, which is a kind of parallel to what Fraser was saying about financial planning, taking a long-term view, you find yourself in a situation where the way that you now have to deliver services is because of the transformation programmes and the changes that you've had to make to address the funding, the way that you have to work might not fit your workforce. You might end up with square pegs and round holes, if you like, so taking a long-term view, planning for scenarios and adjusting your workforce down the way, because that's the way funding is going, is all very well, but you want to make sure that you're left with a workforce that's fit for purpose. Now, to the extent that that touches on fees and charges, I would agree with you, but I think that there is quite a separate sphere of the budget processing. We probably want to focus on those because they raise interesting questions on their own right. Well, if I could go back to the fees and charges briefly then, convener, and some of the questions that they might raise, would you envisage looking at the change in nature of local government around that, if you like, so that we've moved away, perhaps, from the universal approach of local government whereby you take your grant from government, you would draw in funding as you desire through your tax elements, and then you would be able to provide services universally, but now, if we look at fees and charges, what we perhaps find is, and taking the example of community alarms, that certain elements of the population are now paying rather than being a universal approach, or perhaps burial charges, anything of that nature, is that something that you would be considering as part of that report? Absolutely. I think that if we do it, we will want to look across the board at fees and charges because it covers a multitude of areas, and they're all very different. You've already given a couple of examples of that, so we would be interested in a range of questions, and I won't detain you with covering all of those, but one would be the policy or policies plural that the councils are employing there, because you could take one approach that says, needs must, we have to avoid the worst of the savings that are in front of us, so we will just increase fees across the board by the rate of inflation of some other figure, which is a valid approach, but I think that we would then ask questions about whether that sufficiently respects the differences between charges for one thing and fees for another. You could take a different approach, which would be far more forensic, and look at the different fees and charges on their own right and come up with individual policies around those, or you could have different points on that spectrum. Those are the kinds of questions that we'd be interested in, and at this point it's a bit of a gleam in our eye, but this report points out, I think, well enough, why we would want to look at that, because it's such a significant part of funding overall, and as other elements reduce, of necessity fees and charges go up as a proportion. I think that some of the committee would be interested in coming back to it. Certainly something that you can consider. Kenneth Gibson. Yeah, I would certainly endorse that, certainly be something that I'd be interested in. I'm sure we all would be. I think that what really hits you between the eyes is the fact that the service income fees and charges at £4.8 billion is significantly higher than housing and council tax income combined of £3.3 billion for local authorities, more than a quarter of the total, and we hear often that local government apparently only raises about 20 per cent less of its income. Graff seems to suggest that it's slightly more than 40 per cent when one includes fees and charges, but the question to move on from that was just about something else that you said, Mr Hynes. You talked about the in response to Elaine about uncertainty going forward, and in terms of paragraph 72 to 74, he emphasised the importance of good financial planning and management are required to ensure the impact of spending decisions is feel understood, and you say it's imperative that they have these long-term financial strategies, and the absence of indicative funding should not prevent councils projecting future income and spending, but you go on to point out the three councils, East Renfrewshire, Glasgow City Council and Highland, that do not have a financial strategy covering the medium or long-term. What's the potential impact of not having that financial strategy in place? Well, if you haven't looked far enough into the future to see what situation you might be faced with against the expectation or the assumption that you have to make about your funding and the demand for your services, then the risk, I think, is that when you come to the annual budget setting exercise, which is a highly pressured event, as MSPs will no doubt appreciate, that you might not make the optimal decisions or you might make decisions which, a year later, you would regret or seek to amend because of the events that have transpired. Now, we can't say that we've got evidence on an individual council basis of that kind of thing happening, it just seems to us to be a prima facie risk. We also think, and that's what's said in that section of the report, that the longer-term financial plans or strategies ideally should be aligned with a bigger plan or strategy for the council. Now, councils have those plans and strategies, they have them for the council itself, they have them as part of their membership of community planning, so if you like that bigger picture of the vision and the strategies is there, but what we find is that they're not always aligned or joined with the financial plans. Sometimes they're out of sync because they've been produced at different times and they expire at different times. Sometimes the connections that could be made there aren't made there because they're treated as separate exercises and that also seems to us to compound the risk that the savings that you have to make on an annual exercise through the budget will be the wrong ones or not the best ones because you haven't looked at them in the context of a financial plan that clearly marries up with your overall strategy. So those are the kinds of risks. And I wouldn't single out those three councils and say that they are more at risk in that regard, but we do think that it's fair to point out that some councils are able to look beyond a one-year horizon and there's no reason there for why all can't do it. It seemed to me, given what you're saying, that those three local authorities would be at greater risk. I mean surely if there's no financial plan as you've indicated then that could indeed mean greater pain than would otherwise be the case. It could mean you find yourself with a mismatch between the staff required and the resources available to pay them and indeed the service demands that are put on them. So surely we have to do more to encourage all local authorities to take forward medium and long-term financial planning. I read and that's very much the message that we've been communicating in this report and some of its predecessors as well. Thank you. Can I maybe just mop up a couple of things that I wanted to ask a bit before we close this session? Within the report there you talk about planned spending and underspends or overspends across various services within local authorities. One of the reasons I'm interested in that is that I asked a similar question during budget scrutiny and it was in relation to a reported unsignificance. The £160 million report underspend in relation to nursery provision for moneys provided to local authorities that the Government said hadn't been spent on that purpose. Now I think it's fair to say what one or two local authority representatives got a little bit prickly when I was asking about that, but the real reason for asking about it wasn't to say why haven't you spent that money. It was more the dynamic about if you're given moneys for one particular function at a local authority level, if you can do that efficiently, underspend on it and transfer that from one service to another, that is a good use of resources. I wouldn't be quibbling with that at all, I have to say. How should we read statistics on underspends or overspends within this report or is there a piece of work having to be done to actually follow the public pound through from if you like ring fence or otherwise revenue support from Scottish Government. Look at the outturn report at a local level and it seems to me to be if you don't hit it on the nose you might be worried that you'll get less money next time so therefore you hit it on the nose and that doesn't really encourage efficiencies necessarily in delivering the system so any comments to make on underspends at a departmental level from local authorities. Yeah, thanks, convener. I think there's two slightly different things at play there. One is and this would require a specific piece of work, I think, where money that some of the amounts of money we've referred to earlier that is given from Scottish Government to local Government for specific purposes and the extent to which that is then spent on that specific purpose and the extent to which that over or underspend is one thing. I think what this report focuses mainly on is if you like the more general overspend and underspend position and if it'd be helpful to the committee we can write to you with a bit more detail about some of the individual service areas that are obviously made up the likes of exhibit 5 where we talk about the overall underspend and overspends. It's a very complex picture and there are some patterns but there is also enormous variation across the country depending on which council you're in. I suppose our general observation is that the nature of the underspend or overspend is as important as the size of it and for us the thing that we're most interested in is the extent to which it's planned or unplanned so if at the end of the year you suddenly discover that you've underspent your budget by 10% we don't think that's a terribly good thing if that wasn't the plan because presumably that was money that had been earmarked to be spent on something equally at the last minute if you discover you're going to be overspent that's not great either. If you're planning to do those things as part of a longer term strategy then that's quite a different set of circumstances so you kind of need to get into a more qualitative assessment of the nature of those. I think what we're trying to do here was just give a sense of where councils are overall in terms of living within their means. I think that that's very helpful. I'm sure that Mr Gibson will also concur from his time chair in the finance committee as legislation goes through the Parliament that tussler negotiation between COSLA and Scottish Government over what should or should be a financial memorandum what those numbers would look like so we're at the finance committee the local government communities committees I'm quite interested to know actually what happens then in practice year two, year three and any work around that I think would be would be quite helpful. Another thing I wanted to come up with was that I was inspired by Divate Convener's question in relation to staffing. I met with striking workers from Glasgow City Councils ICT team in relation to a dispute over outsourcing and moving from employment from Glasgow City Council to a private company. I make no comment on the dispute but the point they were making is they would no longer be employed by Glasgow City Council if the plans go ahead. Would that then show up on figures in relation to staffing cuts because they would still be employed they would say potential with weaker terms and conditions and thereon hangs the dispute but across local authorities there could be examples of this where head count isn't going down but it is going down within directly employed public sector itself and allios would sit within that as well so any comments on that. Yes, I mean your reference to allios is opposite one of the issues that we have to contend with when we're trying to do analysis of workforce trends is what might at first appear to be a reduction in the workforce. It turns out to be just what you're describing it's a transfer rather than a reduction and ostensibly even the same number of staff could be employed but by a different employer and therefore no longer featuring in the employment records of a given council. So we always have to have an eye open for that and make some kind of adjustment and it goes back nicely to the opening discussion because it really depends what question it is you're trying to answer. If the simple question is how many people does the council employ then there's already made answer to that if the question is how many people are providing public services it's a different answer so you don't need to be clear what it is you're trying to demonstrate. Okay that's very helpful and the clerks team has helpedfully passed me or not to say that I should remind everyone that we'll be hearing on the 21st of December from the Cabinet Secretary and the Minister in relation to budget scrutiny and anything that you wanted to provide we've asked for some additional information here today if we did get it before then it would be helpful no pressure there in relation to that but the evidence session is pretty much concluded I'd like to maybe afford you the opportunity to add anything else to the record before we briefly suspend before we move to the next agenda item. Perhaps I've made just one point that hasn't come up in the discussion but we think might be quite significant in the context of the report the easiest way to look at it is in exhibit 4 where we try to demonstrate on a net expenditure basis i.e. we've knocked off the fees and charges that we talked about earlier we'll be trying to show a trend there of the impact of the reduction in funding or spending rather in this case it's expenditure over the five-year period and the simple point that would make is that as we said earlier there's a debate about how much of the funding available to Scottish government is then being dedicated to local government when you get past that stage into local government there's a debate about how best to spend that sum of money whatever it is including things like your council tax and clearly priorities come into that just as they do at the national level so what this is really showing is that in a very rough and ready sense there's priority being given to the preservation of some level of expenditure for both education and social care you can see that in the diagram but because overall funding is on a downward trend the impact of that on other services is tremendously significant and because they represent a smaller proportion of the spending in the first place any cut imposed upon them is a bigger issue for them now i wouldn't say more than that at this stage other than that if that's a five-year pattern that we're seeing and if you tried to anticipate that the next five years might look something like that it emphasizes the point that we keep making about the importance of scenario and long-term planning i think it would be better to get into that with one's eyes open to see how things might look for transportation or environmental services or leisure and cultural services at the end of that five-year period rather than to go through it and look back and say this is an interesting place that we find ourselves okay but that is it well i think yes i think let's apologize to witnesses for the next evidence session who will be waiting but i think it's important you're raising an important point you want to draw it to the committee's attention i think it's reasonable to ask a a brief hopefully follow-up question in relation to that year well it was but it was also about something that hadn't been mentioned either which affects that i would imagine and that that was the the debt um i haven't really discussed that in any depth at all and you did you've mentioned um the you've mentioned pfi and npd in the same sentences so i just wonder how how they actually do fit together but one thing i specifically wondered about was and i have to claim interest as a member of unite the union that they have been talking about the historic debt and how that affects local government finance i wondered if you just had any sort of opinion about that at all so the question's really about the the debts and how that squeezes the once we get to local government to your exhibit for how that then squeezes the services i'll take the second part if you like in our last phase or to handle the wider question about the the impact of indebtedness so you're absolutely right um if you're having to look at budget reductions then your room for manoeuvre is a key consideration and on the face of it there's less room for manoeuvre it's not to say there's none but there's less for things that look like fixed costs such as repayment of debt and the interest charges that go with them so we do have an exhibit in the report that shows the kind of impact of that and that would be a further squeeze if you like on those services that i've described earlier as being afforded relatively less protection if i can put it in those terms so you're absolutely right about that but the wider question about um the indebtedness itself and the affordability of the repayments i'll have last phase or to have a go at that nothing much to add um Ronny i don't think other than to say the commission have asked us to have a look at those issues specifically as part of the forward work programme probably getting into 2018 by the time we're looking to publish that report but we recognise that the kind of historical debt that PFIPPP and its predecessors have established is an increasingly important part of this story for exactly the reasons that you and Ronny have just described so we are going to be taking a look at that specifically thank you okay i think it's helpful and i think deputy convener i think part of the debt that it's a struggle for local authorities might even be pre dev pre devolution public debts sure that from from the treasury actually which might be a significant rates of interest compared to the current interest rates i think that might reflect some of the unite campaign which you may or may not be aware of might be quite good to to have a look at it i didn't have to declare an interest but i have met with them in the fact that i wanted to reinforce the point our deputy convener was making thank you very much for for your time this morning we've found that very very helpful and look forward to continuing this relationship going forward and we suspend briefly before we move to the next agenda item thank you okay good morning everyone and i should be following it welcome back i'm sure someone out there's following this online i'm sure we moved to agenda item two which is implications for scottish local government of the united kingdom leaving the european union and the committee is holding an evidence session on the implications for scottish local government of the united kingdom leaving the european union today's session um it says here it will take place in a round table format no it won't so we won't do that but we've got a number of witnesses attending first of all can i put in the apology of david iser research associate phraser valand an institute university of strachwyd who was hoping to come along today but is unable to make it but i can welcome councillor david aniel present of cozzler good morning i'm savage savage solace scotland and chief executive Aberdeenshire council helan martin assistant secretary scottish trade union congress professor james mitchell co director academy of government university of edinburgh and stewart black highlands and islands european partnership and director of development infrastructure highland council thank you everyone for coming along this morning for what will be a a short inquiry into what the implications may be in relation to brexit for scottish and the uk local government can i maybe open up just by looking at one of the most striking aspects of funding towards local government is as you'd expect politician of always quite often drawn to the public pound and they want to see what the financial position is and and i see that in relation to european structural funds that i do understand have been guaranteed by the uk government anything committed up until 2020 will be will be met by them that's my understanding someone might want to clarify that but that's our understanding but the local authorities are roughly delivering about 30% of of those funds and that for the time period 2014 through to 2020 that would be roughly 30% depending of what is or isn't committed of about 900 million pounds so a huge chunk of cash trickling through local authorities in my own local authority glasgo city councils the the most significant delivery agent of that so as a constituency MSP i would have concerns for what could happen post 2020 but anything around what witnesses considered to be the reassurances and the process pre 2020 would be would be very welcome given the fact there's a bit 450 million pounds still to be to be allocated in that process that might be a good starting point just kind of following the moneys and any reassurances or concerns there are for either pre 2020 or what happens after 2020 council rio is a very good question especially following the session that you have just had in terms of long term planning financial planning for local authorities the only place where we currently have certainty for funding is european money the settlements that we are currently getting for the scotish government are on a year to year basis you cannot really do serious long-term financial planning what we have been assured of so far is that the programmes up until 2020 will be funded and if my understandings right is what it's called plus two so you have two years after the end of that programme to continue the spend that's reassuring what's not reassuring about that is we should be starting the planning for after that right now we should be in that process and there is absolutely no certainty for that and that is a problem for us okay that's it any other witnesses want to put up on that that theme in relation to structural funds mr salvage reinforced that point convener i think that many organizations are already well involved with the schemes and funding arrangements that are already available and inevitably as councilor neal has said we'll be looking forward to the next term and the next program in terms of a medium term plan for their businesses and their organizations their communities and so that level of uncertainty even looking forward to two to three four years time now is impacting people's confidence and short in terms of being able to plan and look ahead and i think that may impact some of the existing commitments in terms of programmes and delivery as well so there's double whammy potentially as well okay anyone want to add to that mr black yes thank you i think the other point that came up in the previous session was around the decrease in spending which isn't protected by scottish government so match funding becomes a real challenge for example if you look at employability programmes which are a major feature of some of the EU schemes at the moment then the council has to provide 50 percent or thereby match funding for those programmes and that figure can vary and as local government spending is reducing in those areas at a higher rate match funding becomes a challenge so i think that that's another issue that's worth considering okay i'm going to follow up on that but Professor Mitchell or Helen Martin don't want to add anything to that in terms of the long-term planning council you were talking about had the Brexit vote went went the other way had it been a vote to remain would local authorities in all honesty be planning now for spends in 2021 2021 2022 and doing the work around that in fact is there work on going on the assumption that there should be no detriment and are local authorities gearing up what potential applications would have looked like is that work still on going short answer is yes the erdf by and large is for infrastructure projects it's long-term planning involved in that the european social fund is for employability things of that nature and again those tend to be fairly long-term so yes there is forward planning for that eittrace on that show yeah i think to know is of course the european union is always forward planning and so it's would be planning now it started to plan now for the post 2020 and local authorities here over decades now membership have been very much involved in those discussions from the outset which is the key to understanding you and to be successful in you so there is that process the point now is of course that the local authority scotland will not be involved obviously in the next round and so the the way in which i think local authorities will have to engage is not with EU but with UK government Scottish government so it's a different ballgame and in that respect well i mean we really don't know where we are and i think local authorities can be criticized for that until we have a clearer idea from UK government as to what's happening what picks it actually means it's very difficult to engage that's very helpful yes thank you and i also sit on the joint programme monitoring committee for the european structural funds which looks at the funds across scotland and it's interesting that there's a mid-term review about to come or a review of the programme's implementation obviously it was meant to be 2014 to 20 and we're some way into that but there's a mid-term review process and i actually raised at the committee what is being done to look at the post 2020 scenario because it is a really important matter for communities who are used to receiving funding such as leader for example community economic development funding to have some idea of what might come after the the brexit situation okay in the normal circumstances local authorities council and they'll would be having direct discussions at a european level now as to what those structural funds would look like going forward post 2020 or not in normal circumstances but normally would that have been happening and have you already been excluded from that process normally it would be starting just now have we been excluded from the process i'll tell you next week when the process does actually actually start but but what what we're clear about is that we need to be engaged in long-term discussions with both the UK and the Scottish government yeah and that was good i was going to ask a little bit more about that in a second but i'm just trying to suppose what i'm trying to get my head around would be if local government was still involved in those discussions because article 50 has not not not been used yet it's not been commenced i mean i'm starting to tease out what that spending might look like post 2020 would then almost create an expectation for what you would be expecting from a UK or a Scottish government going forward once we're no longer in the european union so would you be keen to still be involved in those discussions at a european level i suppose is what i'm asking i would suspect yes part of the reason i suspect that is if you look at the media where we had filled harming the chancellor saying recently this might take longer than two years there might be a transition i don't think anybody really knows what's going to happen so we will hedge our bets yes mr savage i think he's back to a point from a previous session as well which is about scenarios and what we have is if we look at city region deals as an illustration of this one is economic strategies in different parts of the country which are covering five 10 15 year periods and so local authorities are looking forward to that extent what we have is an ambiguity now in terms of what the funding opportunities is going to be and therefore potentially a hesitance in terms of actually quite which conversations they have with who in order to be able to do those strategies so the long-term intention is there but quite where to put one's efforts into the conversations and discussions of things the point in question here and it could be folly to invest all of your time and effort into one route with that uncertainty you said convener in terms of quite when and how an exit may happen as well so it is those different scenarios we are now working through to try to actually work out what's the best route forward to secure long-term funding okay professor mitchell i think one has to consider this not only from the point of view of the uk and local authorities here but also from our current EU partners i mean the fact of the matter is the expectation is that the article 50 will be invoked early next year that the UK will leave that does not create conditions for local authorities here to have much impact on those negotiations we have to be very clear and honest about that we are marginalised as it were and there may well be the opportunities to take part initially but i don't think we'll have a voice that's going to be listened to very intently and that's not a criticism of local authorities at all but they are in a weak position consider it from the point of view of any other member state why would you want to listen to uk local authorities post 2020 and i suppose spending so much time energy and effort in an area that the ultimately local authorities know is not going to hold the levers of spending spend power and influence so it's then where you direct your efforts that brings us back to the uk and the scotish governments has has causula what kind of formal efforts have causula made to contact and enter into a process with both the scotish and the uk governments i think it would be fair to say that the level of engagement that causula is having along with our other local government associations in the uk with the uk government has been excellent the level of engagement that we've had with the scotish government has been a meeting okay do you want to maybe expand on that any because i suppose the scotish government would say i don't think the scotish government would describe its level of communication with the uk government is excellent so i'm quite surprised to see a a difference there in the level of engagement you've had maybe expand on that through the secretary of state for scotland i mean we are getting access to to several servants we're getting meetings arranged with the brexit secretary as i say the four local government associations are working together the english local government association in particular doing a substantial body of work which which they are sharing with with the other four including ourselves so we are getting a good level of engagement with the uk government okay and in terms of the one meeting that you've had with the scotish government are you able to give any details in relation to that we met with mike russell and dallister allen that was meant to be an initial meeting we offered to supply information to do what we could to assist the scotish government causula i actually shared the view of the scotish government during the referendum it was unanimous the view of causula that we should remain however the vote went the other way so we offered to share the knowledge and expertise that existed within local government there is a considerable degree of knowledge does exist and i would say more so than actually exists within the scotish government and other than that one meeting it took place i don't think there's been any engagement at all and i apologize we seem to be having a kind of one-on-one dialogue i want to mop this up and i'll allow you guys in in a second i think there's maybe a purpose in the role this committee could have i suspect what you're saying is you want to be of assistance to the scotish government taking a coordinated approach in relation to bricks it but it's direct bricks negotiation certainly as they affect local government you want to be working in a coordinated fashion with the scotish government in relation to that yes we want to be working with both the scotish and the UK government when powers get repatriated to the UK where these powers end up is going to be important subsidiarity is important and getting the powers to the most appropriate place is very important if it ends up in an inappropriate place they won't necessarily function as well as they should for communities okay that that's helpful i'll wait at Elaine Smith in for a supplementary first and then i will take you in Graham Simpson okay it's convenable actually um i suppose it just goes a wee bit further on what the convener's been exploring with COSLA in in section 15 of the COSLA report you have specifically said that the appropriate mechanisms should be put in place at political and officer level so that local government is embedded in the scotish government and UK government negotiation structures you're going to say that the same approach has already been confirmed by the UK government for reserved areas for scotish local government so is what exactly are you asking of the scotish government is it exactly the same as what has happened with the reserved areas is that what you want to see we do want to be embedded in the process we don't want to be merely a consultee we don't want to be lumped in with others we not only deliver a lot of these programmes we are part of the formal governance of scotland we should be embedded in the process can we clarify you're embedded in it with the there is as far as the reserved issues with from what you're seeing here in paragraph 15 that you are embedded but that's not what's happened in scotland that's not what's happened in scotland so far so far okay thank you very much could i ask professor mitchell something on what you said or do you want to move on well i just want to check because i have a bids for some words for greeam Simpson and kenny gibson if it's on this specific point i think we should stick to this and then move on greeam is it on this at this point yeah yeah very much so i'm really interested in what you're saying there councillor anale what have you discussed with the UK government in these various conversations you've had with them well we've talked about the repatriation of powers we've talked about the continuation of european funding we're looking at how how we influence changes that are going to take place i'm an example in things that would be getting repatriated and this is only two examples stay to aid the role that local government is going to play in that procurement future procurement the role that local government and localism is going to be able to to play play in that we want to be in there at the the start of this to shape how those processes actually deliver for our communities and we need to be embedded in the process to do that not just merely a consultee right you've actually mentioned all the areas that i would be hoping to ask you all about that's good that's good so just just to be clear have you asked the Scottish government for meetings and been refused meetings no no we have not been refused meetings okay so the meeting that you had the the idea that the approach came from them no the approach came from as we offered to meet with and and assist as we could but there's been nothing since that why why has there been nothing since don't know but you haven't asked for a meeting we left it that we were available we were offered the knowledge that that we have and there's there's not really been any substantive contact since then i'm sure that the Scottish government would tell me that they are finding their their feet but we are offering to help to find find their feet can i just clarify something would you like a second meeting quick as soon as possible to discuss this further i'd be more than happy to meet okay so we're really debating about who picks up the phone to the other to the other person so let's and we'll ask about that as well i'm from what i'm saying it's a case there's been an initial meeting i suspect both parties thought there'd be more they haven't progressed so we should just make it happen by that i mean not this committee but causally should just seek to have a meeting as soon as possible and there's any issue with that this committee would be very interested in relation to that i just double check keep talking about repatriation consular anneal and subsidiarity i suppose subsidiarity from what would be my kind of thought because it's about whether the UK government passes down powers directly to local authorities then there's powers reserved at a UK level which they're via subsidiarity giving to a local at a local authority level or whether they pass to the Scottish Parliament and the Scottish government and they are passed down i'm just wondering if the type of conversation you're having with the UK government is slightly odd because we're talking about where power sits within the UK that's a tripartite discussion between UK government Scottish government and Scottish local authority so it seems odd to me that where power over fisheries or agriculture or whatever would sit the discussions that causala are having with the UK government they would sit in terms of sovereignty with a UK government who would pass them down to local government is that the ambition of causala or would you rather see them passed down to local government and the sovereignty sit at a Scottish level i'm just trying to wonder what the mission is what the outcome you're seeking is councillor Aileen relation to that i think the term that i used earlier was that it should rest at the most appropriate place some of that no doubt would be the UK level some would a dislike the word level the UK sphere at the Scottish sphere at the local government sphere these things are not mutually exclusive i would suspect that in the fullness of time all three spheres will will see some of these powers being devolved or repatriated into their sphere and what's important thereafter is that they don't operate in isolation we all have to operate in partnership and do it in such a way that we get maximum benefit for our communities but all the powers to one single place i don't think would would be sensible there are some that would be appropriate UK some Scotland some local government we do have the advantage of the four local government associations working together working jointly that gives us an end to the the UK government that we otherwise would not have have had and that that's a very useful conduit for us okay that that's interesting professor much what you want to add that really to i think the point i was going to mean has just been made at the end there and i was just to reiterate that i i i i i i i i i do do respect committee i think that the concept of solvent is not terribly helpful in this context in as much as it implies an ultimate resting place of power what we have into the public policy are different spheres engaged in the same policy areas to take the environment EU, UK Government, Scottish Government, local authorities, and many other bodies. It's a sharing, it's a partnership. I think that's one of the interesting things about the nature of policy in much of the area, much of the work that's done by the EU, not least because the EU itself is incapable, frankly, of delivering. Local authorities are the delivery agencies and have to be involved. I think that if we can try to conceive of the future as one around partnership, sharing, working together, rather than, and I'm very much in agreement with COSLA on this, it's not about levels, it's a kind of much more complex, if you like, as I tried to say in the paper, if you like, the metaphor of the marble crete rather than the layer cake really reflects the reality of policy making and policy implementation with respect to so much that the EU has been involved in. We now have a situation where the EU will no longer be involved, but there will still have to be partnership, sharing, engagement, and that includes setting agendas, putting ideas in for policy making right the way through to delivery, though delivery is almost inevitably and inevitably a local authority, almost it's the one of the few areas where there is a kind of a monopoly, if you like, in terms of a sphere having control. Okay, that's very helpful. Helen Markson. Yeah, I think this conversation is very interesting and it goes to one of our key concerns really in this process, which is around transparency and around how you hear the voices of communities and workers and other sort of civil society actors in general in the negotiations. We've had a slightly different experience from COSLA. We've had very supportive and open access with the Scottish Government, but very limited access with the UK Government. They haven't really been interested in meeting with us or really the TUC for that matter, but I think where we are at the minute is still in a process of kind of ad hoc meetings, where we do kind of meet up to discuss certain issues and take the temperature of where things are, but what we would be interested in going for it is really the creation of more formal structures and the more formal role for civil society to play in the negotiation process. So we would like to see that really at UK level and that Scottish Government level, because I think it is very important that we do have a discussion about how society is shaped, where power lies, how we deal with a lot of the very difficult issues that are going to arise because of Brexit, and I do think that there needs to be formal processes around that, and I think that there needs to be a role for civil society and actors like COSLA and local government within that. Okay, my deputy, I'm obviously welcome back on that, but I did promise to take a good point. Yeah, thanks very much. That's quite interesting that the different experiences between STC and COSLA, because I'm intrigued, I'm not supposed to call you David, I was told by, I've got to call you Councillor Anil, apparently, from everyone, so sorry, David. I should point out that it wasn't the Koreaner that said I must refer to you as Councillor Anil, but in paragraph 30 of your submission it says, as a recent controversy with TTIP shows, any trade agreement that touches upon local service provision requires to be negotiated with input and expertise of local government. This is not the case at the moment, and then previous to that in paragraph 14 you said, one of its key international agreements is a chart of local self-government, which are the UK and Scottish province of governments, are bound to implement, but have failed to do so, unlike most European countries. The current negotiation system to repatriate powers from the EU, thus represent or present an opportunity to finally address this. Why is it that you think that when the UK government, and certainly in terms of that paragraph 14, to elect electrics into the Scottish government, are never really being keen to speak to causal about such issues as TTIP, that they're suddenly very keen to speak to you whereas they haven't really been interested in negotiating with you on some of those key issues before? On the basis that President-elect Trump's probably going to kick TTIP into the dustbin, we all await to see what the outcome of that is going to actually be. In terms of the convention on local self-governance, we have discussed this with the Scottish government on many occasions. It's been an ask of local government. We are unique in Europe, within the UK and in Scotland, that we haven't signed up for that convention, or haven't implemented it. The argument that the Scottish government have always given us was that that would require independence under written constitution, which would embed local government within the constitution. Our argument was that if you put it into legislation that you signed up for that convention, it would require legislation to overturn that, and it would have to be an actual thought-out process to do that. However, the Government said that that could happen quite easily, and have just steadfastly refused to sign up for it. However, it remains an ask of local government. The point that I was asking was why suddenly the UK Government is really keen to talk to you when they haven't been over issues like TTIP in the charter of local self-government, and they're clearly not particularly interested in speaking to the STC. Why is it that they suddenly want to speak to COSLA? The Scottish Government doesn't seem to be having that great a time of it in time to negotiate with the UK Government at this point? I must admit that I wouldn't know why they're not keen in speaking to the STUC. I share the concerns that they ought to be doing that. Perhaps the fact that COSLA is approaching this with the other three local government associations, and the attitude that we're expressing is that we are where we are with Brexit. How do we make the best of this, getting into it almost with a positive light, despite the fact that COSLA was unanimously for remain? As I said, we are where we are. Perhaps that's making a difference. I suspect it's more to do with the fact that the four of us are working together. I'll leave it for just now, because I want to come in on a different topic later. Okay, Elaine Smith. Thanks, convener, but just on that final point, because it was something that I wanted to talk about later as well, Councillor Neil. You say that we are the only EU membership without the constitutional protection for local democracy, but would that be a reserved issue? Because you do go on later to say that the UK and Scotland, but is it the UK that would have to have taken the decision to implement that? Can we just clarify it? Or could Scotland do it separately? My understanding is that Scotland could do it separately. Okay, thanks. I would like both of them to do it. Yeah, but I think it was quite—it was important to clarify that, because I don't think that that was clear in the paper or from the discussion. But could I also ask Helen Martin? You mentioned the involvement of civic society, and obviously you specifically talked about the TUC not being engaged at UK level or the STUC, but what do you mean by wider civic society, and how would you envisage that happening? Are you talking about some kind of committee, or how would you envisage it? Yeah, well, I mean, I don't pretend that I've got a really worked up answer for this, but I do think that it's important that when we go through a negotiation process that there isn't just the UK Government sitting talking to countries in Europe and having a closed-door negotiation when we don't know the direction of travel, we don't know what's likely to happen, we don't know what's going to come out the other side. I would hope that we could have some sort of discussion, some sort of constitutional convention, if you will, about how it is that we bring these powers back to the UK, what the shape of our country looks like going forward, the shape of trade deals in other places, you know. And there is a role for different levels of society within that, so local government is one, trade unions are another, but there could equally be churches, community groups. I mean, there's a whole range of ways in which you can consult and engage people. But I do think that it is important that this process is transparent, and I also think that it's important that there is buy-in from communities and that there is an attempt to help people to understand the decisions that are being made in the direction of travel that we are going in. It is not good enough that it becomes a black box and then you're presented with a final answer. I just don't think that that's healthy, I don't think that it's democratic, and I don't think that it would lead the good outcomes. Well, if article 50 is going to be triggered at some point early in the new year, then is that something that you might suggest that the Scottish Government should be taking on board to lead the way in Scotland at the moment? Whether or not it's happening at a UK level, could it happen at a Scottish level in the meantime? Absolutely, because I would envisage actually, and it was remiss of me not to mention it before, that the Scottish Government should have a key role in this process too, and the other devolved Governments as well, because they are a key actor in our democracy, and that the Scottish Government's position should be informed by the views of Scottish people and different layers of government within Scotland and different civil society actors within Scotland, and that that should actually help the voices of Scottish people to be heard within this wider debate, and I think that that is important. I would like to come back to the constitutional question, because I think that perhaps using the term in different ways around the stable, if you mean constitutional entrenchment, that is the right embodied in a primary law that cannot be affected by just normal law, then clearly there's not anything that the Scottish Government can do, not indeed the Westminster Government can do without a formal written constitution. The Scottish Government could pass, the Scottish Parliament rather could pass a law, which gave local authorities a great deal of power, more power than it has at present. I would be an advocate of that, but it can't really entrench that. It has no entrenchment powers equally that the UK Parliament doesn't have entrenchment powers. I don't think that Brexit affects that in any way whatsoever. I must remember that formally the constitution is a reserved matter. Okay, thank you. Before we move on to the next question, any other witnesses want to add anything to that? Okay, Ruth Maguire. Thank you, convener. Good morning, everyone. We've been debating migration in the chamber this week, so I'd be quite interested to hear the panel's views on freedom of movement and how restriction or the ending of freedom of movement will impact on local government, specifically around skills shortages and how we might address that. I think that there has been a marked difference in attitude north and south of the border about free movement and about growing the population. Anyone who makes use of the hospitality industry will be very much aware of the number of people from out with the UK that work in that. Within our health services, the number of people from out with the UK is critical. Child care and an awful lot of care workers are people from out with the UK. If we lose the ability to have those people coming in to Scotland, that will be a real big problem for us. Industry seems to be making that point. In the east of Scotland, the fruit growing areas rely heavily on people from out with the UK coming in. That would be a real problem for the whole Scottish economy and the wider UK economy. If you look at population statistics for Highlands and Islands, most of the growth has been driven by migration and a lot of that has come from Eastern Europe. I have some figures for you. Around 23 per cent of businesses in the Highlands and Islands area have EU employees, so non-UK employees. If you look at Scotland as a whole in the tourism sector, statistics show that 24 per cent of employees in hotels and 30 per cent in restaurants are migrant workers. It is a huge impact on the tourism sector, and that is our biggest industry in Highlands and Islands. The care sector is another one that is going to be impacted. Some of our food and fish processing industries rely heavily on EU nationals, so it poses a number of challenges. There are also very high-skilled EU migrants working in life sciences businesses, such as LifeScan and Inverness, which is an R&D company. In my own department in the council, we lost a number of EU migrants following the referendum result, which said that they did not feel welcome when they left. It is going to have a big impact, and it is already having an impact. I think that this is an area where our members are feeling increasingly anxious. We have quite a high number of EU nationals in membership of trade unions, and we are seeing more and more requests from those nationals about how they secure their status going forward. Questions about whether they should be applying for citizenship at this point to make sure that they can maintain their ability to live and work here. We find that quite disturbing, because it shows that some of the reassurances that have been given by the Scottish Government in particular are not necessarily acting as genuine reassurances for workers, and that insecurity is maintaining within the population. In terms of local government, one of the key areas that is at risk is social care provision. There are a lot of foreign nationals working in social care generally, and it is particularly at risk of people potentially not being able to fill the roles if we do not have access to EU labour. In terms of migration, we are going to have to consider, as a society, if freedom of movement is removed, and we would hope that it is not, but if it is, what we do to help the industries that have just been mentioned. Right now, the points-based system offers no option for low-skilled migration, and that does not seem like a sustainable position going forward, given the needs of certain industries and the fact that it is very difficult to fill seasonal work in agriculture, for example. I think that we would need to have to reconsider how our immigration works to allow low-skilled workers through if we are going to have a complete sensation of free movement to people. I echo the points that my colleagues have made and added two extra points. The first point is to focus on higher education and some of the challenges that they may face in terms of being able to secure and attract international students and staff in terms of their long-term plans. I think that some of the concerns that they have expressed quite clearly about some of the inhibition may be there. I would also link the point of migration and immigration back through to the discussion on structural funds. My understanding is that a lot of the economic growth that we have had in recent years has been based on migration, immigration and other productivity increases. If we are going to restrict and inhibit the influx of population coming into Scotland, at the same time there are questions in terms of structural funds that are there to support youth employment employability and business support, the questioning comes about how we are going to support our existing workforce and community to be able to increase productivity to increase economic growth. It feels as though we could end up impacting on two sides of the agenda, which would have a negative economic impact. We really need to choose in terms of, do we want to sustain and increase migration, or do we want to sustain and increase investment into our existing communities to increase their productivity? I wonder whether we should put the migration issue into its broader context of citizenship rights. EU citizenship has been a developing concept and that covers the monopoly of rights, which includes removing the movement, which is vitally important for the reasons that have been articulated, but also access to services. There is another very important point and that is voting rights. EU citizens have right to vote local elections. Will that continue to be the case? I think it is best to try to broaden this out and to conceive of it in terms of the citizenship rights. Is it possible to conceive of changes and the loss of some rights that currently exist for citizens while others would be maintained? Some of these decisions are in the gift of this Parliament, can be decided by this Parliament, some by UK Parliament, but I do think it would be best to broaden this out. Freedom of movement is fundamental, but you cannot freedom of movement, but with very limited rights, the notion of a gas carbiter and so on and so forth, which EU has fought very hard against. I think it would be very worrying if we simply allowed migrant workers to come here, but to have limited citizenship rights. Thank you for those answers. First off, I want to say this, beyond sad to hear of people leaving because they do not feel welcome. Taking on board what you have said about citizenship rights, although I would like to ask Councillor O'Neill, if COSLA are planning that this is going ahead and involved, what planning have they done or have he done any work about, I suppose, thinking specifically about the care sector, where we know that there are lots of workers from elsewhere working with us, how those gaps might be plugged if those people left? There will be a lot of that working on the individual local authority level. The earlier session was talking about long-term financial planning and long-term workforce planning, but there will be a relatively early stage with that. It is like everyone else. We were taken by surprise with the result of the referendum. Remember the lesson that is don't have referendums? We might not get unity in that particular suggestion, but Mr Savage is a local authority detective. Skip on the very last point and come back to the point on the scenario, if I may. I certainly just illustrated being active involved in a conversation in my authority area in the north-east this week involving the local authorities, the chamber of commerce, the local college and the universities, in terms of how we develop clearer pathways to employment from a career point of view and into care, and also into early years in childcare. We are really clear understanding that there is a gap in provision, in terms of workforce there, and of every joint approach, in terms of looking about how we do it. It reinforces my early point that we can develop those scenarios, but we also need certainty in some of the funding, be it European, the UK or national, to be able to have confidence and assurance and then invest in implementing those changes from a joined up sector as well. I think just on this point, it is important to think about what the opportunity is as well here, because if we are leaving the European Union then we should be able to use procurement in a way to improve workforce standards, particularly in social care and drive up terms and conditions for staff, which I think should actually help attract people into the sector and keep a sustainable workforce, because at present the way social care functions is simply unacceptable and there needs to be a drive for the living wage and good quality terms and conditions, and perhaps there will be more tools to do that in the future. Okay, thank you. It is short black. Did you want to come in? I forgot your other existence, other Highland Islands European partnership, your director of development and infrastructure at Highland Council, so has your local authority at some of the planning work that I think was the guar quite appropriately asked about? I think that it is very similar to what Mr Savage was outlining. We have done some work with our community planning partners, which include NHS Highland and UHI, so we have looked at this. It is a real challenge. I think that other sectors that we have not mentioned construction is another one, so we also have a city region deal, as does Aberdeen and Aberdeenshire, with significant construction work and already works occurring on projects like the A9, so there is a big concern about this. I think that in terms of some of our remote communities, migrant labour has been really important to these communities and there is a dearth of young people, so it would be in many instances a requirement to attract young people from elsewhere in Scotland to go and live in those communities to sustain some of these facilities that have been talked about, and that again poses a challenge when we have a shifting demographic towards an older population. Okay, thank you. Rosalie Guard, do you want to come back? No, thank you for those answers. I did not know this, but the clerks will helpfully inform me that the European Committee is taking evidence tomorrow morning on the citizenship rights of European citizens within Scotland, looking at it in the round, Professor Mitchell, which I think is something that we would all welcome. I am just also wondering, because the more I hear the discussions going on, the more it seems frustrating would be the most mild way of putting it, that there are quite detailed discussions with COSLA and other local authority partners on the UK level with the UK Brexit Minister, but STUC is really not so much in the context of citizenship and rights in the Scottish Government all so not so much. Do we have to maybe reconfigure the debate a little bit? I do not hate the platitudes of Theresa May about a red, white and blue Brexit and all that, so when I talk about Team Scotland, I really do not mean that it is a platitude, I mean that it is a co-ordinated civic and governmental approach to what Brexit looks like in Scotland. Do we have to do more of that and reconfigure what we are approaching? What with COSLA and the other name check, do you have some interest in your thoughts in relation to that but also the other witnesses as well? I think that the concept of Team Scotland is a good one, but so is the concept of Team UK, a good one. That is where the primary negotiations are going to be taking place. I think that perhaps thinking about it a wee bit more, perhaps part of the reason also that we are having a better degree of success than the likes of the STUC, not only working with the other three associations, but we are working very closely with David Mundell and his office, and we are getting a very good service from there, and there might be some benefit in trying that route. The point that I was mentioning would not be COSLA going to David Mundell to get success, or STUC going to David Mundell to get success. I think that what I am talking about is a coordinated approach where all the civic and political representatives, where there is consensus, go forward together to put the strongest case that there can be for society in Scotland, Councillor Anil. I would be slightly worried about individual groups, including COSLA, being picked off one by one Councillor Anil by a UK Government where there is maybe not that much trust from much of civic Scotland or political Scotland. I will bring others in and we can come back to that at the end, Councillor Anil, about the idea of one group being picked off over another group. Helen Martin, what are your thoughts on that? The key here is that we want to get the best outcome for people in Scotland, and we want to get the best economic success that we can for our businesses, and we want to maintain people's rights. We would be interested in anything that helps us to do that. We would absolutely participate in any team-scotland approach that the Scottish Government was presenting. I say, Helen Martin, forget I said team-scotland. It sounds like a plan to do that. I know what you mean. A coordinated approach from Scotland, we would be more than happy to participate in that. We would hope that you would want to hear the voices of workers in any such approach, and we would be happy to supply that. I do not think that that would preclude any work that we were doing elsewhere. We would still make direct approaches to the UK Government, we would still work with the TUC, we would still want to do things with the Irish Congress of Trade Unions as well. We would continue our work in lots of different areas, because our main aim is to try and defend the rights of Scottish workers, and we will use whatever tool we can to do that. However, we would be more than happy to support the Scottish Government's work. Just about the questions and more about a more coordinated approach at a Scottish level, are there any other witnesses who have any reflections on that before we move to our next question? I will take you back in at the end, Councillor Ariel, Mr Savage. Just to observe, from a solace point of view, we have a good dialogue with the civil servants. They are very effective both on the UK and the Scottish level, and we are very keen for that to continue on. A coordinated approach would be very welcome. I think that another group that has been mentioned is the third sector, often, in terms of the European social fund in particular. It is voluntary organisations and social economy organisations that are delivering those projects on behalf of local government, so I think that that is an important grouping that we need to be considered, and they are represented on the programme management committee that I sit on, monitoring committee, sorry, and they are regularly looking for more input to this process. Okay, if there is no other reflection, I will give you the last word on this and move to the next question. I am also a trade unionist, a member of the community. Spheres of government do not have a monopoly on good ideas. Should we be engaging with others? Absolutely. Would it be a good idea to do it in a coordinated way? Absolutely. Okay. It is a good way to end that particular line of questioning, Mr Whiteman. Thank you, convener. I want to ask a question about EU legislation, but before I do that, I just wanted to have a point of clarification from Councillor Neil on the European Charter of Local Self-Government. Is there one question around implementing a provision of that, which is to recognise local government in the constitution and that there are issues around that, and that has been dealt with? When you talk about transposing, are you talking about incorporating it into Scots law such that that treaty becomes justiciable in Scotland? Yes. Okay, that is useful to clarify. On EU legislation, you make a number of points in the COSLA paper, and Professor Mitchell referred to those as well, around European legislation, which is now very extensive, of course, in regard to environmental protections, consumer protection, trading standards, how much noise lawnmowers make, et cetera. You are clearly concerned about them because they do provide a widely regarded, in broad terms, net benefit to consumers and society to have those standards. However, to the extent that EU legislation and the observance of it are a requirement of being a member of the single market, the extent to which we have access to or members of the single market will determine the extent to which we have flexibility about amending any EU legislation in those fields, will it not? Professor Mitchell, I saw Professor Mitchell nodding his head first. Yes. I think that one likely possible outcome of negotiations is that we will continue, if you like, to shadow EU regulations in law. That happens, norway does that. Much of norway, norwaygin law outside EU essentially follows EU law, not least because they want to sell their goods and services. If we are manufacturing goods and services, we want to sell it and the rest of the EU, we will have to abide by EU laws and regulations. There is also the other part that you mentioned, that some of those are very attractive. In terms of just following good practice, we will want to keep an eye on what is happening in the EU. One of the things that the EU has offered is one of those things that, in a sense, we take for granted that it is immeasurable, and that is, as a policy transfer field, we learn and we get best policy. Some of it is not good policy, some of it we would want to change, but there is no doubt at all about that. I mean, in law, if this will come down to, and I think that that is the number of the question, if I am understanding it correctly, is the question of our relationship with the single market. I do tend to think that hard soft Brexit are overly simplified in the situation. But I do think that there is no doubt that, yeah, I find it very difficult to believe that we would not be continuing to follow EU rules. The one problem is, of course, we won't have a voice. We won't have a voice in any of that if we are outside it. We will have to follow it if we want to sell our goods and services, whether we are in the single market or not, frankly. Okay. Councillor Neill, do you want to add to that? I agree wholeheartedly with the professor. He has said it much more eloquently than I could. However, being a politician, I cannot help but have a sound bite. This must not become a race to the bottom. In being a politician, I want to resist the temptation of asking more about that. Mr White, when it's your turn to question it. Just briefly, yes. I mean, from a local government perspective, with the duties that local government has on trading standards, environmental and the rest of it, and with broader legislative requirements around, for example, procurement, is there a line to be drawn between those EU regulations and laws that are mandatory in terms of if you wish to have access and or membership of the single market and those which are not? I'm thinking, for example, of procurement. If we were, let's say, continued to be a member of the single market, would we be able to change our procurement legislation to, for example, try and enhance and support local economies more? Or would that be in breach? Because it's not about arguably selling things, or arguably it is, it's about buying things, so others are selling to us. Okay, who would like to respond to that question? I can tell you what local government's ambition would be, as to whether we can actually achieve it or not, I don't know. But localism should mean that, through procurement, we could do more in the way of local purchasing. Some of us sitting round about this table are old enough to remember the days of when the Clyde used to build the world's ships. It builds very few ships. Now, Calmax fleet buy-and-latch comes from abroad. Our fishery protection vessels come from abroad. Should we be able to do something about local procurement for our industries to help local business? We have an ambition at that, as the case, as to whether it can be achieved or not. I don't know. Okay, and of course, it's an opportunity, Professor Mitchell. Yeah, I mean, I think I want us to go back to the origins of the single market and the debates leading up to 1992. It was conceived of, and it continues to be conceived of, as trying to achieve a level playing field. And I think if you were to change that and to advantage the UK as perceived by EU 27, you would be in difficulty. In other words, if we thought we could amend the procurement regulations or any others in a way that might make it cheaper, easier to sell inside the single market, that would be objected to. I think one of the things that I find slightly odd about much of the debate post referendum on Brexit is the assumption in the UK that is a decision for us. This is a negotiation. EU 27 will all have, each individually, will have a vote and a say in this. And their interests will have to be taken into account. And I think it's important to try and understand how would they respond to a requirement or demand, a request, whatever, because it's really only a request, for giving the UK some advantage. It's just a non-starter. So I suspect we will be in a position where we will continue if we want to have access to that single market to follow current single market rules and regulations without the voice into the future. That would be my take on it. Ellen Martin, did you want to come in any of that? Yeah, I mean, I think this is really the crux of the debate. Like, what are we going to negotiate? How much wiggle room are we going to have for the UK community? And I think there is a real politic here. And there are moments when that'll work against us and you cite one, which is procurement, but there are equally times when it might potentially protect workers. And I'm thinking about, you know, all the workers' rights that come from Europe. I think questions of the status of the ECJ are very interesting, whether or not we'll have to abide by their rulings, what the mechanism will be for enforcement within the UK when we model and have our own court like FTA does? Will it be more like what Switzerland does? How will that work? And I think that that's very important and it's very important for us as trade genius because the ability to take cases to the ECJ and the fact that UK courts have to follow ECJ rulings is very, very important for defending workers' rights and keeping progress going. So questions of how that system actually works in practice are extremely important. And any other witnesses have a comment to make on that, Mr Savage? I think if I could, to observations, look into the whole legislative framework that we may have to work through to decide whether to stay or to change what we have, I think it's going to be a very complex task. And my thought would be one of thinking about the unintended consequences one have in terms of making sometimes simplistic choices about it. I use procurement to illustrate it. Many authorities have got a very strong focus in terms of wanting to procure those local businesses to stimulate their local economy. It's a well-worn path to go on. But at the same time as wanting to support those local businesses, we also want them to, by buying locally, to be successful nationally and internationally as well, which means that they have to compete in someone else's turf as well. So if we start closing down things too much, we potentially inhibit the ability for companies to grow as well. And that's what I think is a spectrum we have to work on. We use social clauses extensively to try to encourage businesses to look to invest in local supply chain, apprenticeship, et cetera. If you make an absolute whereby you will only buy from local companies, then my question is about how that starts to have an effect on the supply chain, which you may not intend to as well. We do want to encourage those companies to be able to be successful nationally and internationally, and not just at the width of local authority spending, but just in companies wanting to trade in their own rights in other markets as well. So I think some thoughts around where we wish to get to are very interesting. I'll make a final point, linking to state aid. If we start to intervene within legislation, where it starts to see the hand of the public sector to come in to determine it to date more in terms of how we expect companies to do business, that may also impact the extent to which private sector starts to expect the public sector to pick up the bill for investment in infrastructure and growth, rather than what state aid tries to encourage, which is more balanced economy whereby there's a balance of public and private investment going on as well. So part of the unintended consequence of choosing local could be a pressure on the public sector purse to have to pick up more of the tab compared to what we do at the moment. Professor Black? Yes, so it's actually the state aid point that I was going to raise. Just as highlighted in issues around, for example, very local transport services in parts of the remote parts of the islands or ferry services to the islands, things like community buyouts have also been affected by state aid. So there's a range of things that sit alongside procurement and state aid that I think need careful examination. Okay, thank you. Fault in that, Mr Waiter. Supplementary from Elaine Smith? Actually, convener, I think most of it's being covered because it was, I was actually going to ask about what opportunities there might be, specifically given that Councillor O'Neill had mentioned the use of local provisions. But could I just maybe ask Stuart Black what his view would be then on you mentioned ferries. So on an issue like CalMac, for example, the Scottish Government has made the point, it's been disputed in some ways, but they made the point that it was European legislation that was meaning that it had to be tendered. So would you see an advantage moving forward that that might be something that wouldn't have to be done in the future? Well, I guess that's for Government to decide in terms of the legislation going forward, but certainly state aid does tend to get involved in very micro things. I've got examples of small community organisations running cafes and restaurants and things like that where state aid can come into play. So I think there's a range of opportunities to look at some of these things and think, are they proportionate, can they be changed, is there scope for more flexibility around them, just as we would like to look at procurement? So I suppose the point I'm trying to make is that there might be opportunities rather than just disadvantages. That's something that has to be considered. Thank you very much, convener. First of all, I'd point out to Councillor Neill that the two new ferries being built by CalMac are being built in Port Glasgow, Ferguson Marine, 97 million pound investment, 125 jobs preserved, 101 new jobs and of course the 12.3 million pound Katrina went in service on 26 September. I think that what we need to talk about basically is can we ever cake and eat it? The answer is no. We can't possibly withdraw from a single market by expecting all the benefits of access to it. I think that's the whole point of the single market. At least two members of this committee are Brexiters. I'm not one of them, but there must be for local government some advantages I would have thought in terms of Brexit. I wonder if colleagues can specify this procurement. I was going to go on what colleagues have amply covered the issues. Helen Martin, for example, has talked about the potential to give real living wages. Procurement has been touched on, but another area in paragraph 43 talks about the possibility of greater investment being made in the rural and coastal communities, think these economic resilience in the face of uncertainties before us. Can people just talk about what possible advantages there could be? We're going forward in this regard. If we look to see whether we can take anything positive from—although my one person of view is overall—the UK voting to leave Scotland voting to stay, of course, creates more difficulties than it will resolve. So irrespective of where people stood on and whether remain, what are the opportunities that do present themselves just now that perhaps we haven't quite explored yet? There's an old term that used to be called a SWAT analysis, strength, weaknesses, opportunities and threats, and we should be engaging in that process right now. Have you engaged in that process? Well, yes. I don't think— Local government is in the process of doing that right now. Sorry, every threat is an opportunity, that's another. Slows are another one. At the end of the day, I want you to know where these specific opportunities lie. Everything is an opportunity. You can't have your cake and eat it, SWAT analysis, but I think the substance of the question was, can we identify some of those? The might not—the might went to a SWAT analysis and they don't fly, but what are the potential opportunities? Let's put it that way. Does anyone want to maybe have a go at that, Professor Mitchell? I think one of the areas that is worth looking at is certainly procurement, and when anyone who's done any work on that will be aware that there's a great deal of concern across public services, it's as a procurement rules, and some of that is because of the EU. I think it's possible to give a detailed answer on that at this stage, but I simply one of the areas I would begin to focus on. I think it's an area that you would have to be very careful in, as in all, and I think that, to Sam's point crucial, it's the unintended consequences of any proposal to alter current state of play. Also, with respect to that, I think one of the things to be constantly aware of is the view of EU 27, because it may well work to the advantage locally, whether that locally is local authority level or lower, or indeed Scottish level or UK level, but it may mean that it is difficult to access EU, so I think, again, the notion that we've left the EU is a misnomer. The EU is still there, it's still going to influence what we do, so take that into account as you move forward. A procurement to me is, given that there are so many concerns around procurement, an area that you need to go into in great detail. There will be other areas, but that's the one that jumps out at me, as there are nearly as many opportunities to grasp. Maybe slightly parochial, but I think that the opportunities may come forward on a sector by sector basis as well, and clearly that's going to be a different picture across different parts of the country. From a northeast point of view, looking at the fishing industry at the moment, cleaning negotiations are going on overnight in terms of current quotas, but clearly that sector and that community voted in particular pattern, as we understand it, in terms of their views, in terms of Brexit. They do envisage and see a more positive opportunity in terms of Brexit, in terms of that sector, in terms of what the quotas may be. In a broader sense, again, into the unintended consequences of huge dynamic yet to be worked through into how the market may change completely, but we do think from a business point of view it's going to be a sector by sector area by area point of view. My second point of one of the upside in opportunity is clearly stimulated a lot of thinking and consideration without being too simplistic about it, about what the different scenarios are, long-term plans are, that each air in each community needs to have and sharpen up at this point in time. I've thought of sitting with existing plans in terms of school roles, house building, what services provide in the future. Those who are now coming into sharp focus to us to get us to reappraise those of minister and what are different options may be as well. We may not have done that quite so diligently or as effectively without Brexit coming forward to actually stimulate that consideration now, so that it has to be an upside. I think it is right to think about the opportunities. From our point of view, this is an opportunity to reshape our economy, to think about how it is that we give workers better protections in the workplace, how it is that we maybe redesign workplace democracy to ensure that the workers' voices heard better and that we get better outcomes in businesses. We have to be alive to the fact that there are a lot of challenges here. The economic figures post-Brexit are not brilliant, but it looks like we are going to have some economic problems. There is a whole spectrum of analysis, and it is difficult to predict all the different scenarios that may play out. There is a clear direction of travel starting to form in terms of a low-tax, low-regulation economy, which seems to be what the UK Government's vision is. We would like to see the development of the UK economy in a different direction. There is an opportunity to have that to be to think about the sort of economy that we live in, the sort of rules that we put around business, but there is also a threat that we will move backwards from even where we are. I think that one example of something that has happened quite recently is strengthening of our twinning of relationships with different parts of the world. Augsburg in Germany, for example, is twins with Inverness, and we had a delegation across from Augsburg looking at ways that we could work together in the future. They were concerned about what would happen post-Brexit, as were we, and that was a good example of something that has happened because of the impact of the vote, and they were particularly looking at the health sector, life sciences and tourism as industries. We could develop stronger links between them. Just to say that it does not seem that there is a lot upside for local government specifically anyway. I know that everyone was looking for straws here and there, but in terms of local government, I did not hear much. Thank you. Graham Simpson. Just really following on from that, I do agree with you, Helen Martin, that we should be looking at the opportunities. We are engaged in a process here, and we have got to get the best out of it. I guess that my question is, what is the best for local government in Scotland out of this process? We have covered procurement, but is there anything else? Any other powers that you think could flow from Europe to Scottish local government that would be to our benefit? First of all, we need to see what will flow to the UK, and we do not know that. I think one of the great challenges with scenario planning is that we have no idea at this stage what is coming here. Any scenario planning at this stage should be done, but it is very difficult when we may plan for something that is not going to happen. It really does depend on the outcome. Up to the point, I understand why the UK Government is not willing to give a running commentary. You do not normally do that in negotiations. On the other hand, it would be good to have a sense of direction and a clear sense of what the UK Government wants. The problem is that the UK Government is internally divided on this, but until we have clarity on that, it is going to be very difficult. I do think that we need to do it. It will maybe become clearer towards the end of the next year, but until such time, I think that it is very difficult to look to the future in that way. I want to respond to that. Councillor O'Neill, do you want to add something? We need to keep to the front of our mind who we are trying to benefit here. What I do not think we are trying to benefit is the structure of local government, or the structure of the Scottish Government or the UK Government, is communities and individuals that we are trying to benefit. We need to make sure that whatever comes our way goes to the most appropriate place, where it can have the most positive impact for communities and for individuals, not structures. I think that a lot of the debates that we have had around Brexit and even before potentially were about taking back control and about people having the ability to influence decisions that affected them on a community level. Some of the reasons why my members who voted to leave did so was because they felt that decisions were taken all the way up here and they could not understand them, they could not see them come and they could not influence them. What I think is a potential opportunity is that we can have a discussion about how it is that we make communities feel like they can influence the decisions. Maybe reinvigorate local government and local democracy as part of this conversation as well. It is not necessarily a good outcome if we take back control but it sits at the UK Government or the Scottish Parliament and the community never sees it. There is an important part about democratisation and about hearing people's voices and giving people powers as a result of this change. I think that we are just at the start of the consideration to your question. From my experience, people are looking at what the macro position is in terms of the effect of anticipated effects in terms of migration and economic changes. The ambition for communities has not changed in the midst of this whole debate. We are still wanting to have strong, vibrant, economically sustainable, well looked after flows in communities across the whole country. The question is about what we need to have in place to achieve that has not changed either. Take the example in terms of care. I do not think that we have a list sitting here where those are the powers that local government wants or needs to have. The outcome we need to achieve is a well resourced supply chain and staffing cohort to be able to provide good care services for our communities in the way we need to. Quite how we do that is yet to be determined here. It also comes back to the start of the conversation in terms of making sure that we have a joint approach between all parts of the institutions and society to say how do we best pull this off between us? I do not think that there is until I sit in there yet in two to ask your question, so I understand it. Professor Mitchell, you are right. We do not have a clear picture yet on what the UK Government's ask is, but what I am asking is what you think it should be in terms of local government in Scotland. In as much as coming back to the idea of an approach that brings in local authorities, Scottish Government and various other organisations, I think that it is very important that there should be a clear consensus in Scotland that is articulated. I think that that is beginning to happen. Maybe it needs to be joined together more, but my sense is that there is probably more common ground on, for example, the single market here in Scotland than elsewhere. I think that that voice needs to be heard, loudly and clearly. I am going to say that I am unfortunate, but that does not capture my real feeling on this. It would be unfortunate if we cannot find a way of articulating that common voice, which seems to exist. I mean, from my point of view, I would have thought that local authorities are an ally for the Scottish Government in that, but in terms of that big wide debate on access to single market, that is a voice that needs to be heard. What will follow from that depends on what the UK Government thinks, but that is the voice that desperately needs to be heard loudly, clearly and as far as possible in a unified way. We certainly know from past experience that, and I am talking really even pre-evolution, that when Scotland can unite, its voice is more likely to be heard. That has been the history of Scottish politics over decades and centuries, and I think that it would be good if that was possible, especially given that it does sound as if there is not a great deal of difference on the broader picture, so I would hope that that could feed into it. I understand that that is what the Scottish Government is trying to do. The council that has been established looks to me to be an interesting example. It does not have local authority representation that may well be worth raising that. Could there be an additional member? That would be, I think, symbolically important, but it would lend weight to the Scottish Government's current position with regard to the matter. Mr Simpson? I believe that it is no one at this table's job to offer that, so we can ask the question. We will discuss that after this meeting, perhaps. Would you like to add anything substantive, Mr Simpson? He has just said yes. Excellent. He is on that Team Scotland approach to the air. That is what I would like to hear. Elaine Smith, you wanted to comment. Thanks, convener. It is back again to the Team Scotland approach and the co-ordinated approach, as the previous caller. I wish I never said to the Scotland now, Deputy Convener. First, before I ask what I want to ask about that, and it is relevant, I would like to make the point that my colleague made the point on the record that Scotland voted to remain was the quote, but I think that we have to be careful with that because yes, the majority of people who voted in Scotland voted to remain, but not the majority of the population of Scotland, and there has to be some recognition of that. Certainly, I do it from a perspective, as Kenny pointed out, that I was someone who voted to leave from a left exit point of view. I put that out there, obviously, and that was where I was coming from. The reason that I say that is that it wasn't just a Scotland-wide vote, it was a UK vote, so if we come back to the whole issue of Team Scotland and the co-ordinated approach, it cannot just be up to the Scottish Government. We have been discussing whether or not the Scottish Government has been engaging with COSLA and how it has been engaging with the STUC, but any Team Scotland approach would have to include the UK Government, our members of Parliament—not just the Scottish Government, but our members of Parliament, the Secretary of State for Scotland, the civil servants in Scotland that work for the UK Government and Civic Scotland. I think that I would just like some opinion as we approach maybe the end of this session on that, because we have, I think, a tendency—we're in the Scottish Parliament, we're in the Scottish Parliament Committee, we're having a tendency to say, oh, what's the Scottish Government doing and who are the Scottish Government engaging with? But if it's a whole co-ordinated approach, given that it was a UK vote, then I think a whole Scottish co-ordinated approach has to pull in much more than just the Scottish Government in Civic Scotland. I see Professor Mitchell nodding. Can I say yes, but one caveat to that, and I think all the favourite democracy participation and engagement bring people in. This is going to be a fast-moving two-year exercise. It's got to be able to respond quickly and to get out there. One of the costs, one of the realities is that when you have public engagement it slows the process down. I'm not against it, but we should be willing to acknowledge that. That's why I would suggest that it would be good to find consensus and, as broad a range of participants, and what I think is notable and why I've raised the possibility of COSLA's involvement is that sciences of COSLA, in terms of the policy areas, is very much in the same place as the Scottish Government, that's all. But I would be deeply concerned if we simply kept adding to the list and adding to the list and we slowed the process down. That's not to disagree with the fundamental point you're making, but we need to be in a position where we can respond quickly. We've got very little time. The process that we're told is going to start early next year is a two-year process. We've got to move fast. Any other thoughts or comments on that, Helen Martin? With fear of adding to the list, one of the things that the Scottish Government should think about is who are our allies in Europe and who might want to be responsive to the sorts of arguments and concerns that people in Scotland have within Europe. From the STUC's point of view, we've already met the STUC to discuss the idea that defending workers' rights in the UK is not a UK interest. It is a European worker interest and there must be ways in which we can break down issues like that at governmental level and there might be allies in different parts of Europe that could support our positions from within the EU bloc. In that way, it makes it less adversarial between the UK and the EU, and it helps that negotiation process. I would have thought that that is what the Scottish Government was embarking on when it said at the beginning of the summer that the First Minister herself was talking across Europe to different organisations, but I think that the thing is that that is all being pulled together. I am not suggesting that it was Helen Martin who suggested Civic Scotland now, what that would consist of. I do not know exactly, but perhaps what is needed is people getting together in Scotland to get the feedback from that to discuss it, and as Professor Mitchell says, that really needs to happen quickly, so somebody needs to take the lead on taking that forward. I would be interested to know how that would work and to make sure that we do not end up having a discussion that we should be having in private when we consider our evidence after this evidence session, but in relation to what a Scottish approach would be. It is not unreasonable to suggest that there may be a strong consensus in Scotland over what Scotland would like to see out of negotiations with EU 27 following Brexit and what that deal would look like, and that could be different from, say, David Mundell in the UK Government as it is trying to influence the terms of negotiation almost before the commence, so that then becomes difficult, of course, to have a team UK approach to walk up a distinct Scottish view as expressed in the referendum, so any comments or observations you can make about how we get that, what I would consider to be a unique Scottish approach to what will be UK negotiations and the structures around that would be very helpful. At the end of what we have all said is that it is not just about the structures but making sure that civic Scotland and the people that we represent and all of you represent get the best out of Brexit negotiations, so any additional reflections on that would be welcome before we tie up the end of this evidence section. Devolution has meant that we have four different systems in the UK. The Scottish Parliament is a very powerful, devolved Parliament. The Welsh Assembly is getting some additional powers, but it is a different set of competencies in the Northern Ireland Assembly, different again, and what remains in the UK. It is right and proper that we should be dealing with this both in a UK and a devolved sense. That is very helpful. Any other reflections before we can move towards the end of this evidence session, Professor Mitchell? One of the reasons that the Scottish Parliament was established was to be the voice of Scotland and to draw in from civic Scotland opinion. In a sense, I am tempted to throw this back at the Parliament, to you and other members of the Parliament, to find a way of doing that and to articulate that. We are not in a position to do that, but the Parliament is. Obviously, the Parliament, as a representative of democracy, has a role here, but it has to acknowledge. I think that the Parliament has had very good records since its establishment in drawing and voices, but perhaps I don't know if a committee of conveners could get together and find a forum. A means of drawing on that, you are looking at this, you mentioned another committee is looking tomorrow. I think that one of the dangers, and it is a danger I have often referred to with the parliaments, is that there is a lot of work that is done in silos, in committee silos, and somehow trying to bring that together and to articulate that common Scottish voice would be useful. Any additional comments? Helen Martin, would you like to add anything? I think that it is just good to remember that, yes, we want to pursue a Scottish coordinated approach, but that can be supported by other parts of the UK. The Northern Irish Assembly is an obvious ally, particularly on freedom of movement issues. The TUC is an obvious ally as well, particularly around workers rights. There are times when remembering other interests within the UK will make us stronger, and I think that it is important to do that. I think that that is very helpful. Stuart Black, do you want to add anything? Just a minor point about the regional dimension as well. Highlands and Islands is an area that has benefited over a long time from European funds. In an attempt to gain voices across the country, we would also need to make sure that we hear those voices from the north of Shetland, the west of Lewis and places further afield in the central belt. Mr Savage, you are welcome to take some additional. I think that we are moving towards the end of the evidence session. Perhaps there is some comfort that we can give Professor Mitchell and others that we are looking at various committees in the Scottish Parliament. Some of the things that we have not raised here will be dealt with at other committees, but I understand that we have tried to focus as much as possible on local government. We will take stock of the evidence that we have heard today and we will hope to have a coordinated approach across the parliamentary committees. Thank you everyone for giving evidence this morning. We now have previously agreed to move into private session.