 I welcome everyone to the 11th meeting of the Public Audit Committee in 2024. The first item on our agenda is to agree or not to take agenda items 4 and 5 in private. Is the committee agreed? We are agreed. Thank you very much. Our second item this morning is further consideration of the Auditor General for Scotland report on decarbonising heat in homes. For this session, I am pleased to welcome the director general of net zero, Roy Brannan. Good morning. The director general this morning is joined by Kirsty Burge, who is the director of energy and climate change. Catherine Williams joins us too, who is the deputy director for heating buildings delivery and Sue Cairns, who is the deputy director for heating buildings policy of the Scottish government. We have some questions to put to you before I get to those. Director general, could I invite you to make a short opening statement? Good morning, convener, and good morning, committee. Thank you again for bringing us along today. As you say, I am joined by Kirsty, Sue and Catherine, who will hopefully be able to answer questions on policy, delivery and overall strategy. It is important to say that the Scottish government very much welcomes the findings of the decarbonising heat in homes report. Audit Scotland acknowledges the scale and complexity of the challenge that we face, but also recognises the positive steps that we have taken and the capacity that we have built to deliver against the ambitions of the heating buildings strategy. 2024 represents a significant year for heating buildings as we take forward our proposals for a heating buildings bill and associated regulation, following a recent consultation. In advancing this, we find the specific recommendations provided by Audit Scotland to be constructive and helpful. We have made progress already on our response to specific recommendations, such as programme governance, which is now well advanced. With work in many cases progressing in parallel with our engagement with Audit Scotland, which has been really positive. Nonetheless, we fully recognise the challenge inherent in decarbonising heat in our homes in a way that is fair, just, practical and affordable. As the report stresses, the Scottish Government cannot do this alone, and this is why we have placed such emphasis on activities that will integrate our input with that of others, such as the GreenHeat Finance Task Force, set up to explore ways to encourage private sector investment or work with local authorities to develop local heat and energy efficient strategies. Those activities provide important foundations that we will build upon in the years ahead. The report notes the urgency with which the next steps must be taken. We agree, but we would suggest that the actions that we have taken in recent years have put us in the best possible position to make further progress. As always, we will endeavour to answer the committee's questions and, if not, we will follow up in writing. Thank you, Mr Brannan. What I inferred from what you have just told us, but I want to check for the record, is do you accept the recommendations of the Audit Scotland report? We do, yes. You do? Thank you very much. I turn to one of the issues that, for us as elected members of the Scottish Parliament, is a particular concern. I wonder whether you can tell us why the Minister for Zero, Carbon Buildings, Active Travel and Tenants' Rights has proposed revised timelines for new regulations on heat in homes that are simply not compatible with the Scottish Government's existing 2030 targets? I will bring soon in the minute who has done most of the work on the policy development. It is worth putting into context where the minister's thinking has been on the development of the proposals to go out to consultation and then, based on the consultation responses, where that bill might take us as it enters its way into Parliament. The cost of living crisis, the price of energy, the scale of the challenge in terms of making sure that we have the right skills, the right supply chain and that we take everybody with us. Fair, affordable and feasible are the key elements of how the minister has determined what goes out to consultation. Depending on the feedback on that consultation, what then goes into the bill. Sue, do you want to say a bit more about that process over the last year? I am absolutely right in working towards the consultation for a heat in buildings bill. It became very clear that in order to try to devise regulation, which would be in line with a more than one million homes target in the next seven to six years when we were devising it last year, that would not be fair, feasible or affordable. We have to be really careful because this regulation is going to touch most people in their homes in Scotland as well as businesses. Therefore, we were looking very carefully at the regulations and decided to go along a longer time frame so that we have a smoother trajectory towards that target. I think that if you look at the number of homes that would touch, that is nearly half the homes in Scotland and we are at quite a low base at the moment and simply the trajectory would not have been fair to people in Scotland. I know that this is a slowing down compared to what we set out in the heat and building strategy in 2021. The Committee for Climate Change has talked about that as bold measures. We need to implement them as well, but they have welcomed them as bold measures. Here we are in 2024. The Scottish Government declared a climate emergency in 2019. I understand, Sue Kenes, that you are talking about the need to be careful and you are describing all this consultation. Why, in 2024, five years after a climate emergency has been declared, are we still out to consultation and talking about the need to take people with us? Why is it taking so long? I do not think that it has taken us that long. I think that the team has done a huge amount of work over the past few years, probably since 2015. We have consulted 23 times on different elements of the building blocks for this, whether it is social housing, new-build standards, the various funding schemes that are re-procuring Warm Home Scotland. This is a massive challenge that we face as a country and it requires all of us, not just the Government, not just the four individuals sitting here, but we need to bring society with us on that journey. I think that the building blocks that Sue, Kirsty and Catherine have put in place over that period of time have got us to this point now where we have received the feedback from the consultation, putting that in front of the minister, deciding what goes into the bill. That bill will give us the certainty that the industry and society are looking for what came out of the consultation. People just need to know what has been required of them by when. I think that we have done everything that we possibly could to this point to try and make sure that we remain on target for the 2030 targets in terms of climate change. Clearly, triple C's view is that that is no longer achievable. We have also looked at that over the course of last year and have been providing that advice to ministers and making sure that we respond to ministers in terms of further challenges. It has got to the point where, as you heard the cabinet secretary two weeks ago in the chamber say that she is now considering all options, including legislation. I am sure that in our own time she will update the Parliament accordingly. Director General, you have used the expression a couple of times there that this is the point that we have reached now. We are at this point now. Can I just remind you what this point now looks like? The target was out of 2.5 million households in Scotland by 2030, 1 million homes to be converted. As I read the Audit Scotland report, the figure is not 1 million out of 2.5 million. It is 26,000 out of 2.5 million. That is about 1 per cent. I will repeat myself, but this is an incredible challenge that we are on. 1 million homes by 2030, when I came into post, was always going to be a stretch. The targets that were set by Parliament of 75 per cent by 2030 were always stretching. The times model, which determined the envelopes for each of the different sectors, from that model you can determine how many homes you need to do by a certain point. 1 million homes by 2030 was always going to be stretching, particularly when you are requiring people to walk towards that in a cost-of-living crisis. There is a cost to the individual. We do the best to protect those who most need it, but that is a big challenge to go to 1 million homes. We are not alone in that. The UK Government has ambitions to do 600,000 homes by 2028. The last figure that was reported by the National Audit Office was about 55,000 of those homes done. It is a massive scale for the UK, not just for Scotland but for all of us in the UK. Let me turn to another aspect of this, which is drawn out in paragraph 47 of the report, where we are told that the heat and building strategy progress report shows a spend of £170 million. Have you undertaken an assessment of the effectiveness of that spend? I will bring Catherine in on what we have managed to achieve for 2022-23, because we are now monitoring on a yearly basis the inputs across all the schemes. That is the money that is apportioned in line with the strategy to deliver the outcomes that we are seeking and what is achieved from that. As well as the annual monitoring report, we have now published, starting this year with the consultation, the monitoring and evaluation framework, which looks across one vision to decarbonise our building stock by 2045, three outcomes, reduce the energy that we use, move to clean heating source and do it in a fair and transparent transition. That monitoring and evaluation framework, if you have had a chance to look at it, is pretty detailed. It gives by unit exactly what we will measure and publish that and make that transparent. That will be our ruler between now and 2045. Do you want to say a bit more about 2022-23? The specific outcomes of the domestic schemes are in the bullets there. What we have delivered for the domestic side does not represent the whole £170 million. That is the total of our capital spend, which includes spending on social housing, public sector and heat networks and a number of other schemes. Underneath each of those schemes, we have scheme-by-scheme-level outcomes and outputs. If I take, for example, our warmer homes Scotland scheme, which makes up a large proportion of those fuel pool households, we monitor bill-saving and sap rating improvements. Bill-saving on warmer homes Scotland is around £150 a year for an individual who benefits from that scheme. Each of those schemes has detailed assessments and aligns to the objectives that we are trying to achieve in the heat and building strategy. Building on progress. Last year, we saw 6,000 heat pumps installed in our properties. That needs to grow significantly. That is recognised not just in Scotland but elsewhere. That is a 113 per cent increase from 2020-23 and a 20 per cent increase from 2022-23. We are starting to see progress, but the thing that has come out most in the consultation is that people just want to know certainty. When will I be required to do this? By what time? How will you support me if I am one of the most vulnerable people in society? What wraparound will you put in that place? I just reflect again that 6,000 heat pumps out of 2.5 million households is way way less than 1 per cent, isn't it? I am going to bring in Colin Beattie. Colin Beattie, you can pick up on something that the convener is talking about in terms of the numbers of heat pumps installed. Do you monitor where the heat pumps have been de-installed? Let me tell you that I installed a ground-source heat pump. It was rubbish, cost a fortune and had to get rid of it. I know that many people have had the same experience and pallies because of the wrong type of property. Do you monitor that? Is my heat pump still in your list there someplace as being achieved? It is a good question, Mr Beattie. I do not know the answer to it. I will ask colleagues if they have. I guess that you have touched on an interesting point, which is the advice to householders as we go forward on this journey together is going to be so important. We need to get to the point where we have accredited installers through the MCS scheme that we have confidence in the suppliers so that we have products that are right and fit for purpose. I believe that that is now the case in the country, that we have good products that are being installed really well. I would point you to heat geeks as an organisation that is doing a great bit of work with OVO at the minute over energy, but also more generally about trying to grow the network of individuals that can install these and provide the right advice to the owner. I do not know your circumstances, but there does require quite a bit of calculation to get this right. In the early stages, there was probably quite a bit of individuals trying to put in heat pumps, perhaps not based on the engineering and science required to make them as efficient as possible. We are two and a half to five times more efficient than a gas boiler in producing heat if you get it right, if you do the calcs right, but that requires really good, solid advice, if you like, as we go forward. On the specific question on do we monitor extractions? My understanding is that the MCS data will just monitor installations. The 6,000 was for air source heat pumps only, so the ground source is, there is a separate figure, it is much lower for ground source heat pumps, but we do talk regularly to stakeholders across the country in different forums and understand cases like yours. I am not unaware of some of the challenges that people have at times, but I will reinforce the point that was made by Roy and the importance of advice. I think that that is an area that, as this market grows, we increasingly look to people to take that early action. We are supporting ensuring that there is an ecosystem that grows that provides that advice. You mentioned heat geeks, there are other organisations in Scotland providing independent and partial whole house assessment advice, and that is an area that we are very keen to see grow and looking at how we can support. We have consulted ourselves on a technical suitability assessment tool, which we hope to develop. We think that that will be really useful for people to really understand what their house is capable of in terms of heat or energy efficiency. I think that there are costly mistakes when you make a mistake with these. Let me move on to the key questions that I want to ask, which are really about governance. Governance has been an issue that this committee has looked at so often and seen so many occasions it has been deficient. Looking at the Art of General's report, there was a concern about governance arrangements that had not been finalised and so on. Yes, there are different programmes and risk management and all that, which is in place. You touched on the fact that you would improve governance. Maybe you would like to tell us a little bit more about that. Does it include all the issues that Art of General has raised? I will bring Kirstian, because last year, when I came to speak about governance, the overall climate change programme and how important it was for us to get that right. Heating buildings is one element of that. It is one of the seven sectors that equally has to have its own governance structure. My large point for those years that the convener mentioned, working on the policy and the strategy, Sue has had a programme board and all that in place. As we move towards strategy policy to delivery, Catherine's board has also been up and running. Recently, what we have finalised now, and we are happy enough to share it with Audit Scotland, and if the team might have done it already, or the committee, is a sponsorship group that sits above that, which will include me, the director and a number of other DDs that brings those two programme boards together under that one element. We are running in parallel with policy, bell and strategy, as well as delivery. Once we know what it is that we have to deliver, a clear plan, we will develop that plan for the end of 2024, set that out and then that governance structure will monitor progress against it. As well as those elements, we have also got connected to that governance structure engagement with enterprise agencies, with the local authorities, but also a strategic group, which is effectively a critical friend, to just keep a check on exactly how we are developing policy and strategy in the future. A couple of points. One is that our governance has been evolving as the programme evolved. Previously, there was more separation than there will be going forward in terms of the delivery schemes. They did their thing because we did not have regulations driving that, for example, and then we were working on policy development. In our new governance, which we are finalising in the next month or so, we are bringing those two things even more closely together. It was very positive that Audit Scotland recognised the progress that we have made on governance and programme management. I think that this is almost particularly strong in our work on heat buildings. I am pleased that Audit Scotland recognised that and that we are setting ourselves up for a real scale up in delivery. What is anything else to add on that? Roy has added that we have the strategic advisory group. We have the two programme boards that sit under the cross-cutting SRO board, which Roy and I are a member of. That board, that sponsor group board, feeds into the global climate emergency board. Obviously, heat buildings is one of the seven sectors that contribute towards the climate change plan. There is a direct line of sight into that and indeed into the cabinet sub-committee on climate change. The overall governance arrangements are not yet in place and are still evolving. Is that what I am getting from that? They are about 90 per cent there, if not more. We need a couple of non-executives on the strategic oversight board, but they are pretty much there. Just on two specifics, what progress have you got on the monitoring and evaluation framework for the heat buildings programme? I mentioned that. We have published it. It is now in that space that we are going. That is the things that we are going to start monitoring and evaluating and we will get into a rhythm of regular report as we go forward. It is a pretty detailed document. I would encourage you to have a look at it if you have not already because, as I say, it goes through the main mission, the three outcomes and then a series of sub-elements that we will measure, including things such as installations, contribution to energy efficiency, skills and fuel poverty. A number of enablers and a number of things that we will need to see happen, so an increase in the supply chain, an increase in qualified accredited individuals. All of that is laid out in the report, but I do not know if you want to say a little bit more about it. Most of it, Roy. We published it in draft in November, with a plan to have the first report from that by this October. The framework, as you said, will evolve as we make progress against our strategy, but the design of it, as Roy has laid out, was based on the design from the Climate Change Committee. We have consulted them, as well as the UK Government, in designing that framework. As Roy has said, it is about quantity, but it is also about quality, so that some of the softer things around some of the numbers that it will also be measuring us and we will use those to track progress. That will be the really important tool for the committee to see. Once we get the bill locked down, clear pathway towards what we are going to deliver by when, that will determine the amount of homes that we will do by certain milestones, and in the monitoring and valuation framework will be our tracking progress. What we do in five years, what do we say we do, are we on track or are we not on track? If I just come back to the national law office report on UK Government's position, similar place, it does not have the metrics to track progress at the minute. This is something that everybody wrestles with. I think that ours is in a pretty decent state. It will evolve over time. It is the starting point of something that will give us the guiding light of whether or not we are making progress or not. Just for clarity, the Scottish Government is developing a delivery plan for the heat and building strategy, and that is supposed to be by the end of 2024. Are we on track for that? Good answer. Just moving on to my last area. How are you ensuring that you have the staff and the skills needed to deliver the heat and buildings programme in the medium term? We hear all the time about huge shortages of people who are trained and skilled in this, and that is certainly borne out by what you hear in the market. What is happening? How are you addressing this? I will bring Kirsty and the team in on this. I will say a couple of things at the start. Internally, last year, I think that I mentioned this at the last committee that we talked about, the overall governance. As a Government executive, we worked through workforce planning to determine the right amount of workforce for the programmes that we had in front of us with the pipeline, with the budget available. That work is continuing. We are assessing it at ET on the executive team on Tuesday to look at workforce planning going forward. There is always a tension between how much money you have, how many people you have internally and what they should be deployed on. Ultimately, ministers will decide what the pipeline priorities are. At the present time, we were a DG that was intending to grow because of the key programmes of agriculture reform programme, heat and buildings programme and a couple of others. Kirsty's workforce planning last year determined how many people they were going to need. At that stage, based on a million homes, that was quite a steep trajectory. Clearly, we need to re-evaluate that based on what will be a different proposition in the bill and then determine what that will be. At the present time internally, we have enough people to run the programmes that we have in place. Externally, for what I have seen from Skills Development Scotland, they indicate that uptake in skills is matching demand at the present time. That is a reasonable place to be, but if we ratchet up demand, which we clearly are going to do, then we want to see the sector ramp up accordingly. As a number of schemes we have in place that support young apprentices, for instance, to get a boat on to their apprentices in heat and buildings installations at no cost. We have our mobile unit for heat installations, which is about to go up to Shetland at the end of the month to support those up in Shetland on how they undertake heat and buildings installation. We also have a scheme that supports installers to become accredited, so MCS accredited. We have a number of different elements in play to support the network to grow. There is a big prize at the end of this, as the Auditor General has said, £30 billion worth of investment plus that is going to be required. We want a large part of that to be recycled within Scotland, if at all possible. You have covered quite a lot in terms of the specifics of the support that we provide. I have come back to why putting regulations in place is so important. Currently, people are a bit unsure because they have watched what has happened in other parts of the UK in terms of political commitment to progress with this. Once you get the regulations in place in a suitable form, that sends a really clear signal to the market. Again, the Auditor General's report set that out, that that is really happening. At that point, we would expect a significant scale up. We have a number of measures in place in order to support that scale up. I think that we have covered most of it in terms of what we are doing, but you are absolutely right. If we do what we need to with devolved powers here in Scotland, and hopefully the UK Government will come in on the back of that, there is a range of asks of the UK Government as well, then we will need to scale up because demand will be much, much higher than it is now. To me, it seems that heat and buildings is one of the most complex areas because of the sheer variety of configurations of buildings and construction of buildings. There is no one-size-fits-all. Some of the solutions do not, to me, appear to be there yet. Blocks of flats and so on. It does not seem clear to me where that is going at this point. Are we satisfied that we have people who have the skills and the ability to understand these complex problems and come up with solutions? I will bring Sue in on the bill and how it deals with the variety of stock that we have. I think that 36 per cent of our total housing stock are tenements and flats. That is just a fact of Scotland's history. We have a large proportion that is 18 per cent that are pre-1919. There is a wide variety of stock. New build is covered. We have got the new build standard out as of three days away or so, 1 April. Any new build has to have a clean heating system installed going forward if it is through the planning process. For the existing stock, you are right, Mr Beatty. That is going to be the challenge. The regs need to be able to accommodate those who can easily walk towards it quickly and those who will be a little bit harder. The GreenHeat task force Part 2 report will look at how to immobilise finance into a wider global solution for some of those properties rather than individuals trying to do it themselves. The proposals that we have consulted on are based on exemptions, bayances and variations. We call them giving more flexibility to people according to their circumstances and properties according to their characteristics. Those will be built into the regulations, so it will not be just black and white that you have to do x by y. There will be discretion there, there will be flexibility. Tenements are 36 per cent of the housing stock. We have a challenge in common works for different owners. If you look at energy efficiency, for instance, as an issue of energy efficiency requirement, that will be part of the regulations on people living in tenements where it is technically feasible and cost effective. In parallel, there is work from the Scottish Law Commission, which is looking at a law reform project, which is looking to set up compulsory owners associations in order to carry out common work. It is a particular area in itself on the heating side. I do not know whether, Catherine, you want to come in to talk about some of the practical solutions around flats and tenements. There are certain technologies that do not exist, but we are seeing companies in the market and talking about working with stakeholders who are looking at options for flats or tenements or somewhere that is in between individual heat pumps being installed in your home and large-scale district heating. Large-scale district heating will probably be suitable for about 20 per cent of Scotland, particularly larger urban areas. We think that there are solutions where you could do flats or whole streets using different solutions, maybe smaller heat networks, different technologies that might be more suitable for rural communities. When we are thinking about the transition out to 2045, we will see the big diversity in the range of solutions that will develop and will be deployed. It will not just be individual heat pumps in individual homes. We know from the AGS report that around £1.8 billion of public funding has been committed, but of that £1.8 billion, my understanding is that £600 million of that is yet unallocated, and around half a billion of that is dedicated to supporting people in fuel poverty, which does not leave very much in terms of physical intervention. Of that £33 billion, I am guessing that less than £1 billion of public money is going into physical intervention to move homes towards the strategy. I guess that my overarching question is where the other £32 billion is going to come from. I have said it all along that this transition to net zero for us all is going to be a combination of public fund individuals and the private sector. Government cannot afford to do this in its entirety. We cannot afford to decarbonise two and a half million homes, nor is that right to do so. I think that the key element will be how we mobilise those funds to support this transition so that those funds equally see a greater return in their investment. That is the purpose of the green heat task force. Phrase 1 looked at, principally, what it means for individuals. Where can individuals go and get the support that they may need as the regulations stipulate that they need to do something by a certain date? The second part of the report will be how do you mobilise large capital, of which we hear regularly that there is a lot out there willing to invest in those types of transitions, not just in heat buildings but across the whole of net zero transition. How do we attract that and what is in it for them to make this journey happen? As the Auditor General said in his report, the Government cannot do this alone. It needs a multitude of different people to support it if we are going to get anywhere near it. Let's look at those individuals individually. The Government has an ambition, the Parliament has mandated it to do so, and there will be money by public funds allocated to try to deliver that. It will go as far as it can within the realms of public finance. I understand that. From an individual's point of view, from an individual household's point of view, there are two million homes operating on mains gas. Many of them in the sorts of environments already spoke about antiquated property, purely insulated property. I think that the last estimate was around 35 per cent of those who are living in fuel poverty as it is. What is in it for them, other than the Government with the carrot and stick approach and coming along with the stick only saying, we have changed the law, you must now convert to different type of energy? Why on earth would they or should they? That is the biggest question that the country faces. Do we believe in zero to mid-century or not? Do we believe in Scotland's contribution to the world's challenge on global emissions? Fundamentally, it is for all of us. Unless we take the pathways that are going to be determined by our contribution to that global challenge, none of us are going to get there. It is not so much that it is only stick. The upside of it is also cleaner, warmer homes, more efficient over time, lower energy bills for individuals and potentially the growth in those jobs and opportunities that will come about from the transition. I would not argue that that should be the case anyway. Even if we had no green energy targets, even if we had no net zero ambitions, which would still be making our homes insulated, warm, cheaper to run anyway, surely that is something that the Government could have been doing over the last 15 years already? The work that has been done for many years in terms of warmer homes in Scotland and area-based schemes, which are there to support the most vulnerable in society, to take people out of fuel poverty, that is where the investment has helped. It is about £249 million since 2015, 35,000 households, on average about £7,000, to convert those properties into low energy loss, high efficient homes. I guess that we keep that support going. For ministers, the focus of the support going forward will be on those that most need it in terms of the transition. For the rest of us, that will be something that we will need to walk towards as the regulations stipulate, with sufficient time and safeguards to cater for those who are struggling to make that transition. I have two points to that. The report that we go back to the Audit Scotland report, which is the subject, was quite complementary. It said that we had made good progress—I should choose my words carefully—on energy efficiency, because there has been a big focus on that. The other point that I would make relates to Roy's first point, which is that buildings count for about 20 per cent of our emissions. We know globally in the UK and in Scotland that we need to reduce those emissions. It will happen at some point. Yes, the costs are challenging, but buildings will need to be decarbonised. Once that is done, the people who have undertaken those investments, their buildings will be more valuable. Those people will know that they will have to do that at this point. However, that is not to underestimate the costs that this has on the support people need. The £2.5 million occupied homes, which counts for 15 per cent of Scotland's greenhouse gas emissions—using that phraseology anyway—is actually not a lion's share of our emissions as a country. It sounds to me that we are asking those with the least to do the most in this scenario. Therefore, legislation will be forcing them to do so. Let me give you a practical example. I wonder if you could. Out there in the real world, people will be wanting to know what that means for me as a household. My flat in Grunach is in a Victorian tenement with six flats, most of them poorly insulated, none of them double glazed, all running on gas boilers to very extensive success, I should add. So, in that scenario, when the Government comes along and says, right, we've changed the law, you're all going to have to move to some new green energy system of which we don't know what that is yet. The first question that all my neighbours will ask me is, well, how much is that going to cost me because I don't have any money right now? I'll maybe bring Sue in in terms of walking through where the consultation on the bill is just now in terms of those steps because we laid that out pretty clearly on what has to happen to who by when and how do you get support from that. Sue, what is the Government going to do to support me in that scenario? I don't know the answer to that question yet. The heating building standard as proposed is two elements, so it's energy efficiency and the clean heat side. The clean heat side of the standard is for clean heatings and no polluting heating after 2045 and minimum energy efficiency standard for owner occupiers by 2033. So, when people, when the regulation comes into place, I think the first thing to say is the reason we have energy efficiency as part of the heating building standard is for fuel poverty mitigation. It's not for emissions reduction primarily. That's to help people obviously living in a warmer home that's easier to heat. As Roy set out, there is support already there in the Scottish Government, directs its support targeted to those who need it most, so if someone ringing up the helpline to look for advice and support would be directed if they were in vulnerable circumstances, they would be directed to the support that the Scottish Government can offer. The minimum energy efficiency standard by 2033, we're trying to make that as simple as possible, so there will be two ways to determine whether you've met the standard either by a fabric efficiency measure or the simpler method. I think that's a real personal view, is a list of measures which people will have to be able to look at and determine whether they've already got those things in their household, whether they're technically feasible for them to put in. We have kept those measures within a certain cost threshold so that the data tells us that in most cases this will be fairly cost effective to put in and will bring a benefit in the longer term obviously to people. I think that the support's there and what we're demanding from people, if it is a demand, we think is reasonable in terms of this simple list of measures. I think that that sounds helpful. I'm not entirely convinced that there's good public general awareness of the support that currently is available. As I said, when I chat to my neighbours, not one of them would know where to go to for support for insulation, for example. So there's a massive exercise to be undertaken there, but the big fundamental issue is that 2 million homes are still gas-main supplied, so what are we asking them to do to switch off that gas? I'm sure that the energy companies will have something to say about that, even the losing million customers. There's 81 per cent that are on gas at the minute and use gas for their heating and the rest are a variety of different other sources. You're right, you want to move to a model that reduces emissions and therefore uses a more efficient and less carbon intensive heating system in the future. By mid-century, 2045, is where we need to get to. If indeed heating will play its part of the seven sectors on our journey to net zero. I'll just say a couple of things. Audit Scotland reports set out this quite well. They set out the range of different solutions. The main solutions are basically going to be heat pumps and heat networks. There's a lot more around that. Nobody's going to be asked to switch off their gas before they have another heating system in place. The range of different technologies are the two main ones. In terms of people understanding what will happen in their areas, local authorities, and I'll hand over to Sue O'Caffen on this, are setting out their local heat and energy efficiency strategies that sets out what type of heating is most suitable for different parts of their local authority areas. That will get refined down to identifying heat network zones that are clearly suitable for investment in heat network. I don't know exactly where you live in Greenock, but it could be, for example, a heat network zone. I'm in central Glasgow. That's going to be the case. That's a combination of the approaches that will be taken in terms of technologies. There's more than just heat pumps and heat networks and the geographical map of what needs to happen there. That's covered most of the things that you were going to say, Sue. No, we're going round the circle and saying, because Catherine can come in in a minute. What's missing from this so far is to say when. When will you be required to act? I've already talked about energy efficiency in the 2033 for that, for owner occupiers, but for heat. It is 2045 unless you're asked to act by an earlier trigger. The trigger that we have in our consultation that we've consulted on is property purchase. We think that's a fair trigger because people are already looking for financial support, looking to do stuff when they move into their homes and they could possibly build that into planning for, say, a mortgage when they are looking to buy a home. That's the first trigger and that's what we've consulted on. If the regulations come into force before 2030, that will be the trigger that will apply. It will not stop you selling a home. The obligation will be on the purchaser of the property. There will be a grace period, so you won't move in and immediately have to rip out the heating that's there. You'll be given a grace period and we've consulted on that and suggested a period of two years. We'll be looking at the responses to the consultation to determine what we think should go into the bill, but we think there should be a good amount of time to let people think about how they can change their heating. Again, I have to say that exemptions will apply and flexibility so that if you're in a property where it's difficult to change heating, where if you're in a heat network zone, if the heat network is coming to your area, then you will not be asked to change your heating in the meantime. The average price of a property in the streets that I'm talking about is about £35,000. You're going to crash the property market in that area if you suddenly mandate people to put in five, ten thousand pound heating systems. There's a lot of work being done on the impacts on the property market. Obviously, we're looking at potential unintended consequences here, including on the housing market. Therefore, we are thinking that we will need to build in a degree of flexibility to that regulation. Just before Catherine wants to come in, on that point, the bill is in draft form, if you like, consulted on. Parliamentarians and Parliament will get the opportunity to consider whether or not those are fit, appropriate and right for your constituents going forward. That's the key safety net, effectively, that we have, over the last four or five years, consulted widely to take an excellent advice on all the ramifications and continue to do so. Put forward a proposal that meets the needs of us getting to net zero in this particular sector, but ultimately it will be for Parliament and society to determine whether or not that's something that we wish to do and at the pace that we need to do it. I'm going to now invite Willie Coffey to put some questions to you. Thank you very much again, convener, and good morning everybody. Just continuing the discussion about public participation in this, Roy, you said yourself that we need to bring society with us, we need to take everybody with us. The pace, the sea change isn't quite happening yet, let's be honest about that. Do you think that the subsidy schemes that are in place are enough to drive that and accelerate that forward, or do both Governments need to do more to assist with that? Heater Energy Scotland is a really, really good tool to support individuals if they are looking to do two things. One, to improve the efficiency of their home or to change their clean heating system. It walks you through that and gives you the calculator, tells you exactly what you would be available to receive in terms of grants and loans. But we have more to do in terms of that engagement. I don't think that in everybody's consciousness at the minute that this is something that we need to do. As well as the bill, we also published a strategy on communication, so how will we work together, not just the Government but with all the different stakeholders? It wasn't meant to be a public-facing document, it was more about how do we as a group of stakeholders and individuals in this market work together to mobilise society and individuals so that they are pointed in the right direction to get the best advice as we walk through this next year. I think that in terms of support for both funds, whether it's loans or grants, it's pretty significant at the minute, and Catherine could say a bit more about what an average household could receive through that process. We've allocated about £60 million of it this year, so again we target the biggest chunk of the money, the £300 million that's allocated this year towards warmer home Scotland and the area-based scheme, so those that most need it. The £64 million is really targeted towards us, the rest of us. We potentially would like to move towards a clean heating system and have a more efficient home. The figures speak for themselves, don't they? If we're doing £6,000 a year, we need to do £166,000 a year. What is it that's going to cause that massive acceleration from people to participate and engage with us? It's a trigger of something to make that change happen. The trigger is the regs. I think that you also asked who else we need support from in this. We need the UK Government to act in a number of areas, so the Scottish Government can only act with the powers that it has in terms of controlling pollution from individual homes. We're working with the UK Government and looking for the UK Government to take action on a number of fronts, so we have continuously called for a rebalancing on the electricity and gas price, for example. I think that that could help really significantly. We can't control the policy around the sale of gas boilers or requirements for manufacturers to have a certain proportion of heat pumps, so the UK Government is now going ahead with the clean-heat mechanism that requires that proportion, so that will be helpful as well. We will need the UK Government to set out more detail on its policies to phase out oil and gas heating systems. Do you think that councils could play a bigger role here? How are they getting on in terms of replacing their stock? Could the wider public engage with that? Because they'll get economies of scale with the units that they buy, can the wider public perhaps trap into that and get a cheaper price? The subsidy scheme is much appreciated as they're delivering the change that we're after. I can come in there a little bit. Maybe Sue could talk particularly about the social housing sector because we are targeting that as well with specific regulation and work really closely with them as stakeholders. Your point about could you get economies of scale by delivering this pace and potentially using a social housing landlord or a local authority to then roll out almost on the street by street? Absolutely, that would be a model that we'd really like to see. We also think that that's a model that would potentially work to bring in private finance and create an investable model. That's very much in the scope of what the GreenHeat Task Force Part 2 report has been looking at and looking at how we can develop those models. Social housing landlords already do this and we work in partnership with local authorities through the area-based schemes to support some private owners. It exists at a small scale in some ways and we want to look to grow that. There isn't a sort of oven-ready package exactly how we can do that but we're working through a number of different sort of prototypes and examples and looking at the barriers to deploy that and how we could overcome that and the interventions that we in Scottish Government could do to support that. Plus others wider in the market, how we could come together through people like SNP, Scottish National Investment Bank to support doing that in future over the long term. It's very much in our minds that sort of model. Do you know what to touch more specifically on social housing? Social housing are not included within the heat and buildings bill proposal so they're being dealt with separately according to a standard. The standard that the social housing sector works to at the moment is being reviewed and as a result of that we've had a consultation for a new net zero standard for social housing which we think will allow them to build on their expertise. That they have on energy efficiency and add that also some planning to convert their properties to clean heat over the next two decades as well. So we've got over 100 responses to that consultation and we'll be considering that and produce the new net zero standard later in the year. It seems to be right. If you want to make the transition yourself now, you're kind of on your own. If you're on your own home you're kind of on your own. You don't really have the benefit of tapping into a mass supplier and getting economies of scale there. Potentially there is a route through the local authorities if they take the lead and I know one of the House of Commons committees was saying this just last month that there could and should be a greater role for the local authorities to drive this sea change transition that we're hoping for. The local authority energy efficiency schemes and the work that they're doing to categorise exactly what they've got in their area and what would benefit from networks and what would benefit from different types of solutions. We've worked with the local authorities to get them to produce local heat and energy efficiency strategies, so-called LHEs. They now have a statutory duty, as I'm sure you know, to produce these strategies. I think 11 of them were produced by the end of last year. We expect, we think probably about 22 will be published by the end of March, which is coming up very quickly. Of the 10 remaining, we think we'll probably see about another seven of them published over the summer and we're chasing up the final three. So by the summer we should hopefully get nearly all the local authorities having their own local heat and energy efficiency strategies and the point of them, you know, it looks at opportunities for heat supply, heat demand in their areas, and in particular that's the basis on which they will then designate heat network zones, which will be a very important step going forward. And Catherine George said a bit more about that. Yeah, and I think the LHEs are very much designed to think about delivery, to be the vehicle from which we can then start to work with local authorities to think about how you take those from sort of plans into delivery over coming years and decades. And you start to think about some of those larger scale schemes. We thought for it quite hard and been working with lots of different stakeholders to think about some of the barriers to doing that. And that is around, often, local authority capability and capacity. We have funded all of the local authorities to have LHEs officers to support the development of these out till 2027. We also provide strategic support through things like the heat network support unit, which help local authorities and others to develop feasibility studies. And we've recently expanded that to support more strategic planning linked to LHEs. So we sort of see that as the vein, particularly over the next few years, we'll really need to think about how we as Scottish Government can continue to sport in that way to allow local authorities to leverage the opportunities that are in those plans. So heat networks offers an enormous opportunity for local authorities to co-invest with private sector partners. So we've got a good example of the project in Midlothian, where the local authority is partnering with Vattenfall, a very well-known energy company heat network provider. With heat networks, you're investing in a large piece of kit, a bit like you do with electricity generation and electricity network. And that allows those who end up using that heat network to pay off the cost of these assets over a relatively long time. So I think that's quite a good example of projects. We've got it in Midlothian and we're seeing some things developing in other local authorities as well. Last question, convener. It's really on energy prices and it's probably beyond our control that the energy prices in the UK are the highest in Europe. But electricity itself is four times dearer than gas and people must know this. And we're asking them to make this transition to an energy system that's four times per unit more expensive than what they use at the moment. How on earth do we attempt to overcome that and take people with us on that journey? One of the asks of the UK Government is to shift the balance of levees from electricity to gas to free up the abundance of renewable energy that we've gone flowing into electricity to make it much more affordable. I think that's under consideration but that is one of the things that needs to happen pretty quick as well as the decision around hydrogen. So the longer it goes on, the potential therefore that hydrogen could play a part in the gas grid provides uncertainty in terms of what you want people to do. So at the minute they've said that they would make a decision by 2026 but again triple C and others, I think it was a triple C, but certainly NAO had said that that needs to be brought forward or considered to be brought forward to provide certainty for others in the system. And then indeed what happens with the gas grid thereafter? So as we transition off the gas grid you've still got an asset, a liability, who pays for that? How does that get compensated for as we go through to that final transition? And then the last thing is that clean heat market mechanism. So this was a proposal that if you manufacture a product, gas boiler, then you will equally manufacture a proportion of clean energy systems to drive the deployment and uptake. And again that rests with the UK Government. So we've got quite a lot of work underway with the teams just again trying to just make sure that these things happen as quickly as possible to support our ambitions, which are the same ambitions as UK Government effectively. We're all trying to get to the same place at the end of the day with this. Do you think that electricity pricing is effectively the key driver that will affect the transition that goes? At the minute yes, but you know more about the electricity market having come from the regulator. No, I think it's a really significant factor as you say. It means it's four times more expensive than gas. What I would point to is one of the points Roy made earlier is that heat pumps are becoming increasingly efficient and they have a much higher efficiency rating so that the amount of energy or heat you get out of your unit of energy is significantly higher for heat pumps. It's something like two and a half to five per cent, so that helps offset the running costs quite a bit. It is still the case that a heat pump is more expensive to buy and install than a gas boiler, so overall it is still slightly more expensive, but not quite as much as the four and a half. But back to your point on rebalancing gas and electricity prices, yes. That impacts not just homes, it impacts electricity use in other sectors, for example transport and industry. One statistic that might be helpful, but there's somebody, I can't remember who it was, who's done a calc recently based on average household, March 24 unit prices with a seasonal coefficient performance for the heat pump of three. That would be equivalent to cost parity with about 85 per cent of all gas boilers. If you can get them efficient, and it comes back to Mr Beattie's point, if the installation is right and you can get them working up at that point, you can get them working up at that point. Two and a half to three, then you can pretty much get cost parity with the gas boiler system. If indeed you've got all the other measures in place, so well insulated, zonal controls, 80 mil tanks in terms of insulation, all those kind of things that we are advocating that we need to see happen for EPCC level off good home energy efficiency as we go forward. Those are not overly complex things, so 270 mil of loft insulation, 80 mil tanks for your water, zonal controls, all those things should be manageable on most properties in the country. For a final suite of questions, I'm going to turn to Graeme Simpson. Graeme? Thanks a lot, convener. I think we've covered some really interesting ground, some excellent questions so far. I just want to pick up on some of the stuff that's been said already. We talk about setting a minimum energy efficiency standard for homes and I just wonder how you can actually measure that. If Jamie Greene mentions his flat, if I think about my house, nobody knows what I've got in my house. You don't know what insulation I've got. I don't even know what the thickness of the insulation is in my house, so how on earth can we measure all this? I'll bring Sue in terms of the complexities of EPC, but ultimately EPC is, we need to get to a point where we're using about 120 kilowatt per square metre per year, anything less than that, then we've got a well insulated home. You can do it by proxy, so you can look at the average house and you go, okay, if it's got that type of system and it's that floor area and it doesn't have all these other measures, what does that give you in terms of a rough approximation? There are also assessors that can do that for you, so particularly for our schemes on warm home Scotland and airbase schemes, we have assessors that go in basically to go EPC at the start, so what's your starting point EPC? EPC at the end, have you moved it by installing these types of measures? There are people well versed in trying to support individuals. Going back to the minimum energy efficiency standard, we have tried to remove that issue by having a list of measures so you can look at those measures in terms of insulation and draft proofing and so on. If you've got them, then fine. If you haven't got them and it's not technically feasible for you to put them in, that's also fine. I think that will make it easier. There is the alternative method to look at this fabric efficiency and that is linked to the EPC energy performance certificate. I know that most people here will know that we think that the energy performance certificate as it now stands is not fit for purpose. We have consulted on that last year and got quite a lot of responses and we'll be finalising what we're doing with that later on this year. The EPC as it stands is based on cost, so at the moment you could put in a gas boiler and increase the level of your energy performance certificate. Obviously that is not in alignment with net zero, so we've proposed to add in extra metrics to look at the fabric efficiency of the building and also in terms of emissions. That will help as well. You'll have two ways of looking at this EPC with its high levels of looking at the fabric efficiency or the list of measures. In addition to that, as I said before, we've also consulted on producing a technical suitability assessment tool, which I think will be more tailored to the individual house property, which I think will be very useful for people. The point that I'm getting at is that if you set in law regulations that say that you, your householder, need to do X, Y or Z, how on earth are you going to make me do anything to my house without coming into the house? Obviously we'll be thinking around the compliance and enforcement side of this, and that's something that we are looking at, and it's a very important part of this. It is the stick part, if you like, of regulation, and there's a lot of work to do on that, and it's certainly something that I know that the minister wants to see as a last resort and not something that would be in place in the early part of the regulation. Obviously we want to see, get people to understand the benefits of doing this before going right back to the enforcement side, but we are looking at that. Describe that in a bit more detail, please, the stick part. I think a lot of people, this will just pass them by. If this Parliament passes an act on heating buildings, all very interesting, but most people are just going to get on with their lives and they won't do anything, unless, and I don't like this, you force them to do something, but how are you going to force people to do things? I think that will be something for ministers to decide, so I don't think that will be for me to say here and now, and it will be consulted on. Members of the Scottish Parliament as well, I agree. The first trigger point is a point of purchase, if you like, in a grace period, so just as you go through that convincing process just now, those that are providing support to you legally will bring into your attention the fact that you are moving towards a property that either has compliance with the regulations or hasn't compliance with the regulations. So there are points in time where it will become a normalised piece of activity to go, I want to buy the deputy convener's property, he doesn't have anything in place in that respect, I will offer a lower price because I know I'll have to do that as we go forward into that grace period. So I think it will become a normalised piece of activity as we start to go through that cycle of properties in and out of the market. I think people, you would want to make your home more energy efficient, of course you wouldn't, you want to see your bills come down as a result of that. Do we need to create somewhere where people can go and get that impartial advice and actually maybe help in arranging work? I guess that's the biggest concern I've got because that's heat energy Scotland effectively, so not knowing and it's probably symptomatic of what we've built as a really good organisation with brilliant advice, great assessors, you will be talked through on the phone exactly what type of property you have, what would help you, all of that, but it's clear that we've got more work to do to make sure that everybody knows where that goes. We support, I think it was last year, 135,000 different kind of calls to the service that could triple, quadruple ten times that if we get the word out so that people can actually go and get the advice that's there, sitting there. No, and I think that the, mentioned it before, the idea of how do you get very specific advice for your own home and sort of whole building plans and things, and I think there is, there are organisations out there who do that in this sort of retro, what we'd call a retrofit coordinator role, and I think that is a very valuable skill set. And as we are thinking about the future of the skills and supply chain, actually that is a skill set that we need to think about how we grow, it exists in places and there are organisations thinking about how they can roll that out and invest in that on a nationwide basis. And again, we want to work with the Scottish Government to understand the different models to do that and how we can support organisations to develop that throughout Scotland as well. We want to move towards what is now recognised as the standard that we need past 2035, which basically means that you fabric first, you look at the building fabric first, you build tight and you ventilate right. Basically, if you get those three things simply happening more regularly in terms of installers and retrofit, then over the period that we will have properties that are no longer 18 per cent over 1990 and not fit for purpose in terms of energy efficiency. I was going to say that there are two steps that people need to take. One is just to know where to go for advice, and then the second step is that they get good advice once they go there. On the first one, we have recently scaled up our marketing and public awareness campaigns. You might have seen our knitted caterpillar, which is increasingly appearing in places over Scotland. However, it does not matter what the image is, it is just something that people are starting to recognise. People go to Home Energy Scotland, that is where they can get advice and they do get good advice when they get there. The consultation responses is anything to go by. We have got 1,700 responses, so it was a pretty big response to the consultation on something that, as you say, Mr Simpson, possibly is not in everybody's sight at the minute. It feels like it is decades away rather than near term, but that was quite a big response. A lot of great content there that will help to shape these next steps as we go through this year. There was mention of councils producing local heat strategies. What is the level of detail in those strategies? Are they setting out when they will do certain things? Presumably they will identify areas that they think are suitable for district heating. Do they set out timescales of when they could come in? I would see these LPs as the first cut of these strategies. They are initial documents where they have done detailed pieces of work, but they are not detailed delivery plans at this stage. They have published delivery plans alongside them, but they tend to be more in the sense of how you will develop feasibility studies and business cases, because often these will be indicative zones. You may need to do further work to understand the heat demand and the area and how that would work. They are not yet detailed. You will have a heat network zone by x date, but they are the steps that you need to take towards that. For example, if you looked at Glasgow's LPs, you would see a lot of detailed mapping, identification of zones, and one of their next steps is to look at how they are going to procure a joint venture partner to work with them. Their delivery plan focuses on that, because that is the way that they see that they can bring those heat network zones through over the coming decades. Who takes the lead? Would it be the council? Glasgow, for example, is very active and actively taking in the lead in that we would expect local authorities to take the lead, but they will have different skill sets and capabilities within them and may need more or less support. We already provide support through the heat network support unit and that supports a range of different councils. We would look to have a tailored offer to work with councils to understand their needs and grow and support them in different ways, potentially through region procurement models, bringing councils together. There is a very active group of councils in the north-west together who come together, for example, to work together to develop out some of these plans and think about them as their agenda. My final question, just sticking with heat networks, there's 34,000 homes currently, this according to the Auditor General, currently connected to heat networks. Most of them feel by gas at the moment. How are we going to move away from that on the current heat networks and on new heat networks to make sure that they are not fuelled by gas? I'll say a couple of things. Heat networks are quite neat in a way in that they are bits of kit where you can change the source of the heat, the source of the energy and you can add bits of kit. That simplifies it a lot, it's not easy to add a bit of kit when you're digging up a street. They are actually quite a flexible source, so it's quite possible to change out. If there is a requirement for decarbonising heat, you can change out the heat source in heat networks. The requirement, for example, we see heat network development quite often at the moment around new builds, the new build heat standard. If I take the short fire example that was mentioned, the joint venture with that and that's focused on a new build development, all new builds will need to require to have clean heating from building warrants issued from a couple of days time so that that will prevent new gas heat networks being developed. The focus will be in clean heating, which goes along lines to our heating building regulations and wider building standards and other regulations that sit alongside that that will support the transition to clean heat. Thank you very much indeed for your time this morning and I'm now going to suspend the committee meeting to allow for a change of witnesses. Can I welcome people back to the meeting of the Public Audit Committee this morning? The second public evidence session that we've got is on the Auditor General's section 22 report on the 2022-23 audit of the Scottish Prison Service. One dimension of that is consideration of the operation of the contract, which is run by GeoAmy. I'm pleased to welcome our witnesses this morning from GeoAmy. We're joined by David Jones, who's the managing director, James Huntley, who's commercial and finance director, and by Gavin Redmond, who's the accounts director of the Scottish Court, Custody and Prison Escorting Service. You're all very welcome. We've got some questions to put to you, but before we get to those, Mr Jones, could I invite you to make a short opening statement? Of course. Good morning. Thank you, convener and members of the committee for giving me the opportunity to address matters raised by the Auditor General in what I must say was a balanced and accurate section 22 report regarding GeoAmy's delivery of the SCC PERS contract. I'd also like to thank and acknowledge the chief inspector of prisons for her insightful remarks on the delivery of the services when she gave evidence two weeks ago in support of your work. The post pandemic period has been an incredibly difficult and challenging time for all criminal justice partners and for GeoAmy. Several factors have coalesced, which have impacted our ability to perform to the standards both we and the criminal justice partners expect. These factors were largely, but not all, outside of GeoAmy's control, which, as the Auditor General referenced in his report, relates to the changing conditions since contract award. This has resulted in GeoAmy being unable to insulate the partners as we would have wanted, from operational difficulties which have led to the well documented and much publicised impact on the criminal justice system in Scotland. We have clearly had issues and I want to take this opportunity to acknowledge and apologise fully for the role we have played in the disruption to the criminal justice system in Scotland. The SPS, Police Scotland, SCTS, the Crown, Members of the Judiciary, court users, victims, the NHS, those in our care who have had to endure delay and frustration. There is, after all, a human impact to every delay. That said, I am incredibly proud of the quite extraordinary work of my officers and management team in Scotland. They have done all they can every day to minimise disruption and delay as far as they were able, whilst caring for some of the most vulnerable people in our society. I sincerely hope all parties are now seeing the very early results of our efforts to improve the contract's performance as the effects of the work that we have done with the SPS and the multiagent liaison group start to yield positive results. I would like to put on record that I acknowledge the steps taken by the criminal justice partners in starting to address some of the inherent system-wide issues. Finally, convener, Members of the Committee, I wish to state GeoEmys' commitment and determination to playing our part in making the SCC PERS contract a success. The contract is difficult. It is challenging, but it is not impossible should all parties recognise that it will need a multiagency approach rather than stand-alone efforts of any individual organisation. Thank you, Mr Jones, for that very clear opening statement. I am going to turn straight away to the deputy convener, Jamie Greene, to ask the first questions. Jamie. Thank you, convener. Good morning, gentlemen. First of all, Mr Jones, I thank you for your frank opening statements. Not often we hear one of those in committees, but in saying that I want to ask you the following. You have just repeated the phrase that you treat the Auditor General's report as being balanced and accurate. In the very opening gambit of the report, it states the following, and I quote from the report, The on-going poor performance of the contract is resulting in delays and inefficiencies across the justice sector, impacting on policing, prison services and the courts. Is that a balanced and accurate description of your operating performance? Thank you, Mr Deputy Convener. I will bring Gavin in to this particular point in a minute. It is a fair and balanced accurate report on our operation and the performance of the services. I have got to, in turn, balance that out by saying that the Auditor General goes on in his report to say that a number of the causal factors relate to the changes in the operating environment since contracts award. These are factors that were never contemplated as we bid for the contract, as we modelled the contract and we put our solution in place, and it's given us a number of difficulties to adjust mid contract to effectively a new way of working. The Auditor General also talks quite extensively about the need for multi-agency working, the interdependencies across the system that's required for us to overcome the change in environment that we are dealing with today. I've got to say that the change in environment is not just internal to the contract operation. The change in environment is also the wider external factors that I talk about within my written evidence to the committee regarding the socio-economic factors that we've had to deal with since the pandemic has come to an end. It is a fact that there are fewer people looking for work. It is a fact that most organisations find it incredibly difficult to fill vacancies. Public and private sectors are exactly the same position across many sectors across the UK. It is right, but there are also other balancing factors that need to be considered. I would reiterate what Mr Jones has said. The Auditor General referenced the conditions that have changed in the contract, but he also referenced the fundamental point that the environment is quite different. The reasons for the GOM failures in service are twofold. One, we have a lack of operational officers to fulfil the task in the services, and the second is that change in operating environment. Post Covid-19, we are operating 38% more high-coat docks than we did prior to Covid. 44% more sovereign cases in Scotland. That has a huge impact on the GOM resource. When we shift out with the court setting, we are managing 35% more bedwatches, which is a different area of service that we facilitate. When we look at that in the round, it is a very different operation with a very different level of demand. Against the context that GOM has received £4 million of financial penalties due to its performance issues, it has been served with five improvement notices since 2021 on very specific issues. That is the backdrop that we are working against here. You have just responded by saying that the reasons for this are twofold. One is the one that you are leading on, selectively quoting from the Auditor General report, which is the changing operating environment that you work in. I do not underestimate how challenging that is for you, but the main driver to me seems to be staffing issues, and we are going to come on to that later in detail. As a company that operates in the service industry to the public sector organisations, you operate in other jurisdictions. It sounds to me a little bit like you have gone into the contract in Scotland with your eyes wide shut. Surely the sort of challenging changes of scenario in contract terms that you operate in would have been known to you at the time of entering into the contract. It sounds to me like everyone else has thought about your own today. Thank you for the question, Deputy convener. I have to refute that. The changes that we are seeing today in our operating environment are so fundamentally different. That there is no way they could have been contemplated by either the commissioning of the contract, the specification of the contract or indeed the running of the contract. Gavins just given some numbers there. 35% increase on bedwatch. That is huge. We are not talking within the margins here. We are not talking a 5% or 10% flex of the resource. We are talking a simultaneous increase of 35% of bedwatch, core business, high cores, 38%, Solomon Dury, 44%. These are substantial changes coupled with Mr Deputy convener. A situation that we have with non-core hospital appointments. 60% more people are involved than what they were prior to the pandemic in terms of the number of crews and people going to hospital. You could say with reflection on the benefit hindsight on that particular matter the prison population was always going to age. I am not quite sure if it was anticipated that it was also going to grow at the time of the commissioning of the contract. But you put all of these factors together at the same time it leads to an operating environment that could not have been contemplated and certainly not accommodated in any way by the contracted model that we went through. The contract said that you needed between 650 and 700 officers and at the lowest point you had 510. Of course that is going to put pressure on your ability to deliver services. That is not anyone else's fault but your own. You are right. I have opened up by saying that we have had difficulty recruiting people. There is no question. Gavi made it clear that there are two factors here. We have not had enough people to fulfil the demands of the services. That is a matter of fact. I put that in my written statement and I acknowledge that fully. So please don't think that I am trying to ignore that because I am not. But the factors surrounding that have been largely outside of our control. We have struggled to compete with an incredibly competitive employment market since the pandemic period has ended. We have had to effectively which is quite rare. We have had to compete with people, other agencies within our sector that have more attractive packages. They have greater career paths, more structured career paths than what we do, the larger organisations. So for the people, everybody wants to work in this sector. For the people that do want to work in this sector. If there is an alternative in the police, in the courts, in the prisons, service, immigration, I have got to say as well. That all pay considerably more than the prison escort contracts have ever done. They will go to them and we will struggle and that is the environment that we have found ourselves. Of course there will be a solution to that, to improve the package that you offer your staff. Retention will surely improve off the back of that, which might come at a cost to your margin of course. Do you get the impression that you have just met enough more you can chew with this contract here in Scotland? No, I would not say that. I will give you the reason why Deputy Comvina is leading up to the Covid period. Some marks 2020. We were getting there and there abouts with the performance of the contract. We had a difficult transition period, that is a period when we go live after mobilisation. It took some time to bed down the contract. I would put them down to typical teething issues. We were just adjusting to the workforce, adjusting to the new ways of working, adjusting to the contract. But come to Q4 of 2019, so months 7, 8, 9 of the contract, we were approaching the service performance that was expected on the contract. Certainly for January, February, before we went into lockdown, we were at contracted levels of service. I think if we didn't have that experience, Deputy Comvina, I think the premise of your question would have more validity, but I think given that we operated in a period where the contract was not affected by these operating changes to the required level, means that we did not, by often more than we could do. Others can come in as lots of questions for you today. I spent two years on the criminal justice committee in the Scottish Parliament, and whilst the majority of stakeholders in the courts, in the prisons themselves, and we went as a committee to visit these places in person, spoke very highly of the individuals that worked in your organisation. I think that's important to put on the record, but had very little by way of positivity to say about the company in general. I go back to my first question, due to the very experienced organisation in the public sector, you have very large contracts and other jurisdictions. Why on earth did you go into a contract that was so tight that did not allow you the flexibility to change the contract terms or operating model as the environment that you worked in changed? Because clearly it has changed substantially in your view more than it should have, according to the contract you went into. You must employ some pretty decent solicitors to help with the contract wording, commercial negotiators. Why does the contract not allow for these substantial changes in the environment that you work in? I'll bring in James on this one, Deputy Convener. The contract does allow for a degree of change. For example, if the number of routes were to change by 10%, then we can sit down and we can renegotiate with the SPS the effects of that will be, up or down. There are certain change clauses within the contract, so High Court is a good example. If SCTS would not wish to open a new High Court, then we would enter a period of negotiation and see what that means. It gives us the opportunity to recruit accordingly and to understand what the effects of those changes would be to the operation. So there are change clauses within the contract. I think, however, the scale of the changes within a relatively short period of time lead not just myself, but as stated by the customer, SPS, and the Auditor General's report, a changed operating environment. I stick with that, Deputy Convener. There's no contract that could possibly have contemplated the scale of the changes that we're talking about. It seems a good unfortunate, perfect storm, which you find bizarre. Absolutely. I didn't want to use that term. Okay, thank you. We're going to move things along now and I'm going to invite Colin Beattie to put some questions to you. Sorry, Mr Huntley, I don't know whether you were preparing to answer one of those questions, but maybe in response to Mr Beattie's questions you can come in. Thank you. Thank you, convener. I'd like to explore a little bit about the original contract also. Do you know that Amy was the sole bidder? Is that unusual in these sort of circumstances? Are there other providers that were in the market that chose not to bid? Thank you, Mr Beattie. Do you know Amy was the sole final bidder? There were two other organisations that bid for this contract in the initial phase. It was a two-part procurement process that was the initial bid and then effectively they were the final submissions, all the best and final off the baffer. G.O.A.M. was the only organisation to submit a final bid. Is that unusual? I understand that Circo were the only bidder for the southern lot for the HMPP-S contracts in the south, for example. Out of the two contracts that have been procured since 2019, one contract has had two bidders, one contract has had a sole final bidder and the other one has had a sole final bidder. So two out of the three have had only one bidder. Were the other two who were initially interested, did they withdraw or were they eliminated on the basis of cost and ability to deliver? Maybe Gavin can come into that one. I'm not sure what decision making process either G4S or Circo undertook when they were evaluating whether they should bid, make a final bid for the SCC-PERS contract. From a G.O.A.M. perspective, we did have an extensive team of lawyers on this. We have extensive bid experience. Going into the SCC-PERS contract, we believed we had a compelling offer. We believed it was a strong solution that we put forward. We still believe, incidentally, that our solution will ultimately deliver the results that the criminal justice partners expect. I think it's fair, so we've been knocked off course a little bit by the events of 2020 and certainly 2021. But what happened within those other two organisations, what they saw, what their decision making process, I'm afraid Mr Beattie, I have absolutely no insight into at all. I'm conscious, Mr Beattie, of conflict of interest in my previous role, but I don't have any understanding of the commercial factors that resulted in those two organisations withdrawn at the final stage. I know it was very late in the day. So they actually withdrew? Yeah, they didn't submit a final bid. So they weren't actually eliminated as part of the sifting process? There would have been an economic and a technical evaluation of each bid and there was no elimination. That's public available information. When you put your bid in, was there any concerns at all about the affordability of the contract or your ability to deliver? No, there was no concern. We believed it was costed correctly. We believed the solution was a good one, compelling. There were concerns over the data. There were concerns over data. There were some gaps in the data where we had to make assumptions. One surprised us and that was the data regarding the times of non-court appointments was not available. So we had to make an assumption on that. There was a lack of data regarding a new element of the services for Generation 3 of the SCC PES contract, which was the two members of two officers for certain cases to be applied. Because it was a new part of the service, there was no retrospective data. So we had to effectively make an assumption on the number of officers that we would need for that part of the service. I think the good example that Mr Beattie was that we assumed based on the operations that we deliver on illogio restrictions that medical appointments would be one example would be scheduled for after the court arrived face. That was our assumption based on the fact that all parties are focused on delivering justice. What is the operational reality today is that 46% of medical appointments are scheduled before 10.30. What that means operationally is that the resources that are dedicated to taking people to court are realigned or reallocated, redeployed to those medical appointments. I would point this towards a very difficult strategic issue. Is the priority for the GOME resources the delivery of the court recovery plan? Or is it the medical requirements of the ageing and increasing prison population? That is a good example of that change in environment that the Auditor General referenced in his report. Looking at the detail of this, the contract started in January 2019. So you had a year or so before Covid presumably impacted to bed this in. How did that first year go? It was a difficult period mobilisation and transition period. It was difficult. This is a challenging contract Mr Beattie. It's a very challenging contract. The issues that we had were not unusual at all. We had issues surrounding training, using our new systems. People, our office community, getting their head around going from what was a G4S system to a GOME system. There was a bit of a backlog as a result of that, that we needed some capture for the data. Our systems found it difficult from a planning perspective to accommodate all the different elements of the service. So the other contract that we manage is very much more focused on court as opposed to the additional activities associated with non-court and bed watch. We overcame them, as I said earlier, going towards Q4 of 2019, so the October period, October November December period, and then certainly into the two months of 2020 before Covid. Things were, I wouldn't say, completely bedded down, but we were there or thereabouts with the contract performance and we were there or thereabouts with the results from the contract. And then obviously everything changed completely. So you have one other contract, if I'm definitely what you say correctly, down south of the border? We do, sir. And the main difference that you seem to be telling us is if we compare it, it's south of the border, it's court cases, court attendance, whereas the contract you took on here included hospital, funeral, all the things that go with that. That's correct, it's much broader. It's much broader in Scotland, it's much tighter. But presumably when the contract was being drawn up you took all that into account. Absolutely. At what point did you deduce that things were going badly? In other words, when did the impact of Covid hit initially and how did you respond to that? OK, so Covid affected, you know, our people were effectively regarded as essential workers, you know, our people didn't have time off. We, there was a number of adjustments to the operating model throughout Covid. We went prior to the Covid period purely physical justice, people were paid in court. Very quickly into the Covid we moved to virtual court hearings. So we moved from physical to virtual. We then, as the Covid, the pandemic was extended, we started to do more physical delivery so that at that point we were operating a dual approach to our services, both physical and virtual. And then as we came out of the pandemic and certainly into 2022, end of 2022, we would be effectively 100 per cent back to physical. But throughout that period of time, you know, our teams, my team of people here were as affected as everybody else around the effects of Covid. Thank you. I'm going to turn to Graham Simpson. Just before I do, could I reflect on something which Gavin Redmond mentioned, which was the unforecasted rise in the number of medical appointments and the strain that that puts on? I mean, and you also mentioned Mr Jones in the opening that you'd watched or read anyway the evidence given to this committee a couple of weeks ago by Her Majesty's Inspector of Prisons. And one of the things that she told us about were potential risks to human rights based challenges because of the denial of people's basic human rights, including things like access to medical services. Is that something you as a company have considered? I mean, for example, do you consider you as a corporation could be at risk as a co-nominee in any challenge that's made on a human rights basis? We have looked, of course. We don't believe so. I'll put that on record. We don't believe so. It's clearly an emotive issue. We understand that fully. We do accept that we need to do better with regards to ensuring transportation is available for people that need to go to hospital. I would point you, Mr Convener, to some of the recent improvements that have been made since the intervention and the recalibration of the contract Q3 last year. We've effectively moved our punctuality from low 60s per cent on non-court to low mid 80 per cent. I would say very clearly that even one appointment failure is one appointment failure too many. I concede that and accept that fully. But we are trying to address the operating environment changes that we've talked about extensively since I've opened up my evidence here with the needs to recruit more people. It's going to take us a little bit more time to get there. Whilst we have all these competing factors with a reduced officer availability, it's going to be some time before we're at the level that would be acceptable, i.e. we don't fail any of the hospital appointments. You appear to be conceding that there may be a human rights-based case, but your position is that, as a company, GOA me has no liability. Is that correct? I'm not quite sure if I'm conceding that. I said that we don't believe that there is a case to be had here. The reality is that we're not a state actor. We indemnify the SPS against a number of failings, but that's a monetary indemnification. The human rights and the obligation sits with the state actor, not with the private company. Okay, and we're not going to rehearse a court case here, so I'm going to move on and invite Graham Simpson to put some questions to you. Thanks very much, convener. Mr Jones, you say in your letter to the committee that GOA me is making a financial loss on the contract. How much of a loss are you making? I will be bringing in James for this one, Mr Simpson, if I may. In the five years we've operated the contract, we've made an operating loss of £7 million. How is that sustainable? It's not sustainable. James, would you like to? Yes, thank you. Mr Simpson, yes. As David said, the first five years of the contract is a loss of circa £7 million, a negative cash flow of £11 million, and as is referred to in the port, the SPS acknowledged that the contract wasn't financially sustainable, which is why we entered into negotiations to try and put it on a solid footing to give us the opportunity to deliver the service that we want to deliver. That has got to a better position. It is still a loss-making contract today, although substantially less. Obviously, we're only a few months into the new arrangements, but the run rate is more, circa £1 million per year. I say that, of course, like it's not a substantial amount of money. Of course, it is, but it's a much better position than we were in previously. It is a step forward, but it is a challenge. Of course, there's two elements to that for us. One is making sure that we are able to cover our cost base, pay our officers, cover our cost base, and secondly, to deliver the service aid to obviously meet our contractual obligations, but secondly, of course, to avoid any service penalties as well, which the deputy convener referred to in terms of the amount that we've incurred so far on the contract. No company can continue making those sort of losses? No, absolutely, which is why we had extensive discussions with the Scottish Prison Service in order to address the problems, but as I've already referred to with my colleagues on a number of occasions, the solutions don't sit with one organisation. Ourselfs, the SPS, Crown, SCTS, the police, we've all got to come together and come up with the right solutions. The starting point for us is to make sure that we deliver the service, at the same time that the background time improves on the contractual matters, but our approach to the company is that we deliver service and then, off the back of that, the contractual could perform better from a financial point of view. Unless we address some intrinsic issues, competing demands, the same resource being needed at the same time, where we're having to make a Gavin and his team having to make an impossible decision about, you know, if I haven't got all the staff, do I fail, a medical appointment, do I deliver late to a court? Unless we get those sorted, the rest certainly won't happen. Can you see yourself getting to a point where you say, we can't continue with this? I can't see that. There is a degree of confidence that we will get this contract back into a marginal profit situation this year. And we effectively have two years left of the contract. You say in your letter it's our firm belief that we can deliver prisoner escort services to a high standard. And you go on to say when the environment is supportive and system related issues are resolved. But based on what we've already heard and the fact that you're making these colossal losses, what are you basing on? Mr Simpson, we're basing that on the fact that our losses are less now than what they were. Our forecast is that they will improve further as this year goes on. The indications are that that will be the case. We are still paying substantial penalties because we haven't got enough staff to cover all the services. And as our staffing profile improves and the availability of officers are there to fulfil the demands of the criminal justice partners, the costs that we're currently incurring, which are effectively equivalent to the losses that we're making today, will disappear. And we're confident about that. Mr Simpson, if I may, sorry, to take a slight sidestep and provide the technical operational insight to that, this is not a technical issue for G.O.A.M.E. G.O.A.M.E. delivered these services to an exceptionally high standard, 98% of people in another jurisdiction that we operate within get to court on time. It is the same operating model, it is the same competency of people, the same fleet, the same systems. This is not a technical issue. When the big difference in the environment is that multi-agency approach that G.O.A.M.E. referenced in his submission. If I could just add one point as well, I'm falling off on the point from the Deputy Convener earlier in supporting Gavin's point when we talked about staffing being a key issue, which of course is a key issue, but to reference the other contract that we have, we've had staffing challenges there as well, not to the same extent I acknowledge, but we have been significantly below our operating model. At the same time, we've seen volumes, circa 120% above what we expect them to be, but service, with the exception of a couple of small periods of challenges, has been, as Gavin referred to, really strong. We know what we're doing. We have the competency, the skills, the systems to deliver this, but if we're being asked to deliver three tasks for the same person at the same time, that's an impossible situation for us to be in. That's a critical thing from our point of view. We've touched on staffing. That's clearly a key issue. We mentioned pay and the pay gap between what you pay and others. Is that something you're seeking to rectify? Do you think you have to increase your levels of pay? The accommodation that we reached last year with the SPS helped enormously. There is no question. Our low point was Q3 of 2023, and I think the chief inspector in their evidence referred to that particular period, and she actually used the term shocking. That was unquestionably the low point, and that coincided with staffing numbers reaching the end of the day. There were about 515 officers around about September of last year, so that would coincide with what the chief inspector had seen with regards to the level of services. Since the injection of the additional funds, all of which may add every single penny of those additional funds from Scottish Governments has flowed through to the officer community of GOA me, every penny, so if I can just make that clear. We have seen an uplift in our officer availability. We're now over 600, so from a lower of 515, in a relatively short period of time we're over 600. Our projections are that come Q3 this year. We will be there or thereabouts. Our target operator model round about the six, we'll be around about 650, 660 from a target operator model 670. We have just concluded the pay negotiations with the community union for a further uplift in officer pay from 1 May this year, which we expect to act as a further booster to our recruitment efforts and market attractiveness, which will sustain the increases on officers that we're recruiting into the business that will get us to the numbers that I've just shared with you for Q3 this year. What's the pay rise? 6% goes to £13.25 anew. Okay, so there'll still be quite a gap between what you pay and others? There's still a gap. What I would say, Mr Simpson, is that despite, and maybe Gavin will have a view on this one, despite the SPS, Police Scotland, all the members of the criminal justice system having more attractive pay-offers and larger packages than what GOA could offer to people. Not everybody wants to work in a prison wing. Not everybody wants to do that job. We did a survey in 2022 of our officer community and everybody that was asked, despite the challenges that we had, loved their job. They loved their job. There's an enormous amount of pride in supporting the criminal justice system across the GOA and the officer community. I take great heart with that. Okay. We had your opening statement, which was very, very honest, and we've apologised to everyone, but I just think it's probably worth reading out some of the evidence that we've had. I don't know if you've seen it. You have. So I was quite struck by a letter from Jennifer Harrowa, who is the Deputy Crown Agent, and she's describing a situation where, excuse me, my voice is really terrible. There were 16 family members or relatives in attendance for a murder case, which was due to call at 9.30am. The accused was not delivered until approximately 5pm. This had a significant personal impact upon them, and that's just one case. Then we look at video identification parades, people not turning up, and indeed the Chief Constable references that in her letter. So if we go back to that particular murder case, that sounds absolutely dreadful. Presumably it didn't even go ahead because the prisoner, the accused, was delivered so late, but you're keeping people who will be in an emotional state hanging around all day. That's just not acceptable, is it? As you referred to my statement, it was purposely worded to recognise the human impact of the delays that we have caused in the system. All I would ask and state for the committee's consideration is that those causes, yes, we've not had the number of people, but there's also an operating environment that we're having to deal with where there's conflicting requirements on our resources. If I can give you just insight into that, every single day we have to effectively collect between 300 and 500 people in a two-hour window to get to court. That's arrive at an establishment, go through the security protocols, ensure the processing of the individuals that we're collecting is correct, the formal transfer of responsibility to the legal custody is transferred from one agency to another. The vehicle departs and the individuals are effectively booked into the court process, all within effectively a 120-minute window. As Gavin has said, we have now got this conflicting demand where 45% of all hospital appointments are effectively being asked to be delivered at exactly the same time as all of that activity going on. Those 350 to 500 people are from all the courts, the police stations to all the courts across Scotland. It's an enormous undertaking and a very small window. Because we've not had enough resource, I'm afraid we've had some slippage in that that has led to these catastrophic delays. I'm pleased to say that there are no more. I'm not saying that we're perfect by any means from an arrival's perspective, but instances like that, I would say, are fortunately very rare. Gavin, do you have... Mr Simpson, I think it's important to recognise that example, which is horrific, frankly. I can give you assurances that my team and I are very much focused on the people element of that, the logistics and the complexity. We're not losing the people element attached to that. David referenced the length of delays and similarly I can give you assurances that delays of that magnitude are not as inherent as they once were. Similarly on Viper, we have gone from a situation where in November 2023 we were facilitating roughly about 40% of Viper's month to date, or quarter to date rather, in 2024 we were up to 96%. So the vast majority are now being facilitated. So we've got a long way to go. There's no question about that, but we are trending in the right direction. OK, I'm just going to ask about one more thing and again it's from your letter where you appear to be suggesting that part of the problem is that prisons don't have prisoners ready on time for you. So you're blaming the prisons in this section of your letter. Is that correct? That is correct. And it's part of the requirement as the Auditor General states for a multiagency approach to dealing with issues and resolving the problem. We experience delays in prisons daily. People are not ready when we require them to be ready. That's a matter of fact. Only a couple of weeks ago we recorded 60 hours of delays from prison establishments outside of our collection windows. It's not insignificant impact. Now I'm going to balance that completely and that is that there was a time when our punctuality was such that people in prisons were getting ready and our vehicles were not there. So we've got to build up a degree of dependability for the prisons, for them to have the confidence that when we say our vehicles are going to turn up. I've got to say that it's more and more the case now and there's a lag. So we are in discussions with the SPS about closing that gap. It's absolutely given the relatively small window that we have every single day to get all of these people to where they need to be. It's incredibly important for there to be no delays in the system. There's no space for it. The complex logistical challenge we undertake each day has to be accommodated and facilitated by the people that are responsible for having the prisoners responsible and that's both the police and the prison service. OK, thank you. Mr Jones, can I also ask you about another piece of correspondence? That's the letter that was sent by Cap Boyd of the Public and Commercial Services Union to the Cabinet Secretary for Justice back on the 14th of December. I'm going to go into a new area, one that we haven't covered, because I'm looking for your response to what's said in that letter. Largely, not only, but the bit I want to concentrate on is the element of communication. I'm looking at Mr Redmond perhaps here. One of the things that Cap Boyd says from the PCS on behalf of her members who are those who work in the court service is a criticism that there is a lack of communication, stroke, accurate communication. If custody hasn't arrived in the building, it is very difficult to find out where they are and an estimated time of arrival. She also says in this letter that GOA me will unilaterally put courts down when they do not have enough staff to cover them. This is usually done without consultation. How do you respond to those charges? I think that, Mr Convener, I acknowledge the sentiment and the emotion attached to the letter. For what it's worth, I think that a lot of what is covered in that letter I share the same sympathies with my own officers who have been put under an incredible amount of pressure and jures. I think that the dynamic nature of the operating environment that we discussed and the low number of vehicles and officers available to transport people we are in a horrible situation where the capacity of our fleet and our people doesn't meet the demand. It's creating this horrible log jam and that's making it difficult to predict when people arrive at court. I would absolutely agree with the correspondence on that. In terms of the unilateral decision to remove court documents, that would have to respectfully challenge that indirectly perhaps the lack of dealing with resource leads to business being delayed or having to be heard without doing the officers. But I think it's important to recognise the sentiment from that letter and as I shared, I have similar sympathies with my own people who have been put under incredible pressure and having to work longer. Is it up to the individual crews to phone ahead to the court to say we're going to be eight hours delayed or two hours delayed or we're not going to make it today at all or do you have some kind of central operational hub from which you make those calls? Yeah, a bit of both, Mr Convener. I think that in periods of difficulty and real stress, communication is often something that falls behind as people focus on the operational delivery. I would acknowledge the need to communicate better and that's something I would absolutely commit to going away and taking up with my management team. If we are delayed or we are not meeting expectations, Mr Convener, the least that we can do is front that up and communicate it and give some kind of idea as to when things will be back on track. I would accept that. OK, because you'll see, Mr Joseph, direct this to you as well, you'll see that this is fermenting a view certainly amongst the PCS members that GOA, we shouldn't be part of the equation at all. I understand that fully. On that particular point, if I can just expand on what Gavin said, Mr Convener, you're right, there should be a blend between people phoning. There's no excuse not to communicate, absolutely zero. That's just not right and I'm sure Gavin will deal with that one. Just to support that, we're making a further investment in our systems and upgrading what's called our micro-i system so that it will effectively automate messages around arrivals for all the members of the system. Hopefully that particular item will be supported by a level of automation going forward. In terms of... I can absolutely accept that members of the PCS, members of the criminal justice system will have a view that we shouldn't be part of the equation. What I would say in response to that is that we are the face of failure. It's a Geo-Amy officer that's turning up late. His badge is emblazoned on his uniform and all people see that the receivers of the service that this organisation is failing. What I would say and what we've put hopefully in both our written evidence and hopefully in our oral evidence today is to try to explain that things have changed to an extent where it's making it very difficult for us to perform to the required level. I think there's widespread recognition that it will need a multi-agency approach to fixing some of the inherent issues that we've talked about. The simultaneous priority of non-court appointments are exactly the same time as the peak activity in course. As an example, delays are mainly present, but also in police stations in terms of the collections. Those kinds of things need to be ironed out so that it gives us a fighting chance once we get somewhere close to our operating model, a number of available officers to perform to the required standard. I think once we get there, and it could not come a day too soon from my perspective, from our perspective, Mr Convener, for us to get to that position, I think that we can then start to work on our reputational issues across the criminal justice system, and they can actually start to see what we can do, as I've said, and as I think we've conveyed, we do this very, very well elsewhere. We've got the skills, technical competences and systems to do it here as well. Okay, just a couple of quick questions for me then before I invite Willie Coffey to wind the session up. You mentioned in answer to questions that Graham Simpson put to you that from the first of May this year the new hourly rate of pay would be £13.25 an hour. At the point at which the chief inspector describes the situation as shocking, i.e. presumably prior to October 2023, these heroic front-line staff that had to work through the pandemic, back in 2020, what was the hourly rate of pay? I think it's 1076. Do you want to say that? So in 2020, the hourly rate was £9.85 in 2020. And then just to provide some context around our pay, as you can imagine, there's contractual terms around indexation each year. In the first four years to contract, we passed on more to our officers than we got in receipt from the customer in order to try and support the pay as much as we could. Obviously, we all know there's been a dramatic increase in the level of national minimum wage, Scottish real living wage. If we only paid per the contractual index, we'd actually be below the Scottish real living wage, which would not meet the Scottish prison services requirements. The rate would only be around about £11.84, which is why the recent injection has been so valuable. But there is still a significant gap between our pay and, for example, the prison service. The inspector of prison referred to the fact that we have challenges in retaining staff when the police Scotland and the prison service go through recruitment periods, so we're very aware of that. We referred to, in our written evidence, a gap of circa 40% in the pay between ourselves and the prison service. I actually want to take the opportunity to clarify the basis of that calculation. So we looked at the specification, the roles between a band C and a band D within the prison service. Obviously Gavin, having some hands-on operational experience, has well helped, discussed it with the SPS, in which we were talking with them over the last 18 months or so. Our general feeling, SPS, may have a different view, is that the role of our officers combines the kind of skill set of a C and a D. So we pitched it at that mid-range between the two bands. That 40% gap reflects a third-year pay rate for a blended C and D band, the exact number is 43, but we do want to be too explicit in our written evidence. OK, but you've said then that, back in 2020, the hourly rate of pay for your officers, and you've called them throughout officers, which certainly conveys a certain level of status to them, was less than £10 an hour. You might be surprised, but I'm not surprised, that people would leave in droves if they were given opportunities to find work which paid more than that, given the kind of job that this is. Presumably when you put in your tender document, you did it on a certain forecasted hourly rate of pay, which, at the time, I can only assume, was also less than £10 an hour. Correct. So the bid was based on the information that was the previous incumbent, what their rates were when the staff obviously then took the cost. Correct. We base it on that data. What I would say in terms of pay rate is that it's important to note that when we entered the pandemic, we had circa 700 officers, so we actually were above, unless they were our target operating body. We came out the back end with only less than 600, because obviously during the period, our officers have to go through quite a challenging six-week initial training course that involves control and restraint training, so obviously there's physical contact. Obviously during the period of the pandemic, with social distancing, that wasn't able to happen. So we recognise that challenge, but of course post the pandemic, two things happened. Three things happened. One, of course, we had the cost-living crisis, which everyone was impacted by, that's the first thing. Secondly, I think that the generally expected impact of the pandemic might have been some substantial unemployment, more availability of people in the employment market. In fact, exactly the opposite happened, and the number of vacancies outweighs the number of candidates. And of course, we've then seen this unprecedented increase in the level of the national minimum wage. So all those things have combined. So, as Dave's already expressed, we're exceptionally proud of the work that our officers do, and we recognise that the rate is not what it should be for the role that they do. The difficulty we have, as Mr Simpson referenced earlier, we've tried to do our best to get the rate we pay above what we get back in, but we can't bridge a gap of £5 million, £6 million, £7 million in the pay rate. That's not something that we're able to facilitate. I don't think anyone would expect us to either. Can I just add just a little? I'm very conscious of time. I really am. The seven nearly eight-year period that G4S had the stewardship of this contract, the pay rate over that period of time, I think, went up £0.08 in that seven-eight-year period. Without the injection of the money from the SGE last year, we've doubled that in the four years up to that point. So we've done our damnedest up until that point. Can I just ask you one quick question for which I hope to get a quick answer before I bring Willie Coffey in? I will do my best. So it has been a bone of contention certainly in the past that your rates of pay on your contract in England were more than your rates of pay on the contract in Scotland. That's correct, is it? It is correct. And what's the current position? The current position is there's parity. Okay, okay, that's fine. Willie Coffey. B, thanks. Good morning. I do need to... Both are out to ballot. So I may be giving you the impression that it's a done deal. They're out to ballot. Right, okay. Yes, yes. And they don't have a no strike clause, I take it, do they? They don't. No. And also in the part you've first referred to, it's at the average rate. There's a couple of different rates in England and Wales, so just to... Okay, okay. Well, if you want to furnish us with more details on that, that'd be helpful in writing afterwards. Willie Coffey. Right, thanks again. Just a few questions from me, but one, could I just go back to the contract for a wee second? David, you were telling us that some of the challenges you faced meant that you were taking 38 per cent more to the high court, 44 per cent more solemn cases and so on and so on. Were the numbers that you're dealing with not specified and agreed within the contract itself? Because it seems to me that if you're being asked to deliver more and more numbers without agreement, how can that be regarded as a contract failure? You're correct, Mr Coffey, that one of the difficulties with this contract is effectively its unkempt demand. There's no cap on demand. So, from a contractual perspective, that's correct. I think from an operational reality perspective, of course, it's impossible to operate a contract with an unlimited position like that. It was simply not contemplated in the negotiations that we had with the SPS, although not reflected in contracts, that we'd have a situation where the orders of magnitude that we've described this morning would change the operating environment to that extent. Nevertheless, your company was fined, we call them service credits, fined for not being able to deal with huge increases in numbers going to court. That is current in a nutshell. Are those numbers tailing off post-Covid? The penalty numbers or the volume, the penalty numbers? Both, really, the volume numbers. The penalties are tailing off the numbers going to court. There's been some recognition from all the parties that with the increase in the volume, the challenge that we have with staffing, that we're looking at the targets we have on delivery of taper up across a period. The tapering up of a commercial target or a contract target just means that we either hit or miss our contractual target. The most important thing is that we actually improve the underlying service to our partners, to SCTS in this case. The key thing for that is that we work together, work with our partners, work with the prison service, work with the other partners and actually make sure we get more than one in two people to court on time every single day. That's the most important thing so we can help be part of an efficient service. That's what we want to achieve. That's had a huge impact on you, these additional numbers. Any point that you try to vary the terms of the contract is quite clearly what you would have been asked to do exceeded by far and away what we might reasonably have expected you to do. We've been in, so I would say, from mid-22 right through to October of last year. We were in quite extensive and intensive discussions with the SPS and by proxy the criminal justice partners because of course the SPS represent the MALG partners around difficulties concerning the contract, its sustainability and what needs to be done to put it on some level where we can effectively see out the remaining term of this contract that we have a fighting chance to deliver the level of service that the criminal justice partners expect. Will that involve agreeing what the numbers may be with some variation above all that? Nothing said about it at all and you have to cope with that. That's correct, Mr Coffey. The term that's being used, the contract, has been recalibrated. We want a very practical example. We can't, there's no expectation or understanding that we're causing caught demand because that obviously depends on what's happening in one term in the new calibration is we have a cap on the bed watch obligation. So bed watch is a very labour intensive service that we provide. Our obligation is currently at 13. That'll cap to 14 when we get to our head count numbers. But why is that important? Previously the contract didn't have a cap on it. So if we were sat at 16 bed watches or it could be high, it could be 20. But in addition to having to man more or staff more bed watches we also have to keep aside extra staff to take care, because it goes from 16 to 17 to 18 and onwards, which therefore means that six to ten crews have been kept aside for that potential increase where they could be deployed on, let's say for example, a hospital appointment. Now we have that cap. We know that we don't have to keep those people on the substitutes bench to bring in if required. That in itself, one relatively small change has quite a material impact to the service. Cymru. The cap and demand that James has described for bed watches has been a fantastic help. There's no question about that. But there is no cap for any other area of service. I think that's a really important clarification. Within the negotiations we tried to get that cap for the reasons of reasonableness, as you would expect, so that we could meet expectations. That's the key piece to meet expectations. Those caps are not prominent in contracts as things tend to be. What would be very beneficial, we understand obviously, is that co-activity can't be capped because justice has to be served. With regards to the number of non-court appointments, if we could smooth the demand, that would be exceedingly beneficial. If you combine a really high level of non-court appointments, hospital appointments on a Monday, which is also our busiest day for moving individuals to court, we're just exacerbating the problems and if it's recognised that we can't cap, let's try and work together to smooth the demand, which means that we're delivering a better service for everybody. I think that I understand that. Just on financial support, we've mentioned a few times, David. It was £6.3 million given by the SPS between April 20 and June 20. Was that for furlough support or did that go to wages? It was wages. Efectively, the SPS were very keen, Mr Coffey, for us to ensure that we have the availability of our officer community when we came out the other side of the pandemic, whenever that was. Of course, at that time, nobody knew when that would be. Coupled with the fact that we were regarded as essential workers, people were still working. That level of support effectively bridged the gap between what our costs were and what revenue we received from undertaking what little services we did at that time. That's effective way on and off, isn't it? That's not sustainable, is it? We had a couple of different mechanisms in place but fundamentally it was to make sure that where the volume had dropped that we could still pay our direct officers and our first line managers to make sure that their costs are covered. The new calibration of the contract has different terms in, but on a comparable, similar basis. It means that where volume is moving but the contract is no longer a fracture of the environment. We're not penalised because of that. Did GOA me pitch in with any additional financial support for this, or was it just the Scottish Government? Yes, so directly in terms of the uplift that went through and the rates that we referred to in terms of increased subject about at the 1325, that money came directly from SG, and as David just voted, every single penny has gone to the officers and there are mechanisms in place for the SPS to have the data to support that and audit that as well. So specifically in regard to the labour rates we're talking about now, no, but we have made additional investments previously about pay rates above the indexation on the contract. We also invested in some additional layers of first line management, so not back office people, but actually on the ground in the complex to try and find more support to our operation, as well as, for example, we spoke about the challenges in the employment market, quite heavy investment in recruitment teams, but we're going to try and address the issues that we're having with staffing as well. Final sentence, perhaps, convener, just to give you an opportunity. David, can you tell us what your current level of performance actually is right now, and whether you can sit on that and having a more positive impact on service delivery within the justice system for us? Yes, there's no question that our service performance has improved over the last few months. And it improves in direct proportion to the number of officers that we've got available, so we expected that to happen. We are nowhere near what the base contract level performance needs to be. Our arrivals, early 70s, so it's going up 10%, we gave you some numbers before on the vipers, low 90s now, hospital appointments, low 80s, mid 80s, a long way to go on that one. Bedwatch is effectively 100%, because of what we just discussed. So there's been considerable movement, or tangible movement, on virtually every element of the service, apart from one that won't be felt as an improvement on service, and that's the arrivals for SCTS. I think it's fair to say that that's the last part of the service that is yet to receive a tangible improvement, and that's what Gavin is currently working on. Thank you so much for your responses to those questions. OK, thanks. We are right up against the clock, and I think we've broken any cap that we might have set ourselves. So I'm going to draw proceedings to a close there, but I thank you for your evidence this morning. It's been very helpful to us. David Jones, James Huntley and Gavin Redden, thank you for coming in and making yourself available for this session. We very much appreciate that, and I wish you well in the future, and I am going to move the meeting into private session.