 Hello. Welcome to the 27th meeting of the committee in 2018. I would like to remind members and the public to turn off their mobile phones. Any member using electronic devices to access committee papers during the meeting should please ensure that those are turned to silent. Our first item of business is an evidence session on the committee's inquiry on immigration with the Migration Advisory Committee's chair, Professor Alan Manning. Evidence today will be taken via video conference. Can I welcome Professor Manning to the meeting? Good morning, Professor Manning. Can you hear me? Good morning. I can hear you. Can you hear me? Yes, I can. Thank you very much. Could I start by maybe focusing on possibly one of the headlines of your inquiry with regard to migration. You propose to restrict what you call the low-skilled migration route, and EU citizens will in future apply through the tier 2 visa system. That would rule out 75 per cent of the EA migrants that we have at the moment. The salary threshold of £30,000 salary for migrants would severely restrict the number of people who are able to come to the UK and Scotland in particular. In terms of the £30,000 salary, I know that you are proposing to include 142 new medium-skilled jobs within that umbrella of the tier 2 visa. What percentage of those medium-skilled jobs in Scotland would meet the £30,000 salary threshold? Well, there are a number of questions in there. Would you like me to take that last one first? Yes, whichever you feel best. I think if we sort of take the first point, our proposal that you should look very carefully at whether there needs to be a lower-skilled migration route, I think it's a little bit misleading to think that that would mean that 75 per cent of the existing migrants would not be eligible to be here because the existing stock would remain. So this would be, really, should be seen as a proposal which would be restricting the future flow rather than influencing the current stock. Even in the absence of an explicit lower-skilled work route, there actually always are quite substantial flows of lower-skilled migrants through other routes such as family. So if we look at the non-EU route at the moment, there isn't an explicit lower-skilled migration route for most of them, and yet we do see quite a lot of non-EU migrants in lower-skilled work. So although I do accept it, our proposal would be to restrict the future flow, I don't think it should be seen as threatening the current people who are here already. In terms of the 30,000 threshold, our view for why that was appropriate was that, first of all, that is very close to median earnings both in the UK as a whole and in Scotland. Any migrants that is coming in below median full-time earnings is in a little bit making the UK or Scotland a lower wage kind of economy, and that isn't really our vision for the future. You are correct to say that the medium-skill occupations that we do propose extending the current tier 2 will find it harder to meet the salary thresholds. So, for example, if in Scotland, if one takes what are the sort of level 4 or 5, so these would be upper-medium-skill jobs, something like 52% of jobs in those occupations in Scotland at the moment pay more than 30,000. For the lower-skill, medium-skill jobs, it's 36%. Those are very close to the national averages. Now, we do think that although that is a bit more of a stretch for jobs in those sectors, that is appropriate because the reason for wanting to allow migrants into those jobs is to alleviate potential problems with skill shortages. But if there are skill shortages, we do think that it's appropriate that there is upward pressure on wages within those sectors and we see the salary thresholds as helping to ensure that. Thank you for that answer. Of course, you talk about the UK as a whole and include Scotland in that, but the median salary for a worker in Scotland is actually less than the UK average. In response to this committee's immigration inquiry, several employers stated that the £30,000 threshold was far too high. Do you acknowledge the regional variations that there are across the UK? We did look at the regional variations. I think that if one looks at the sort of median full-time annual earnings, the latest figures were published a week or so ago and relate to April of this year. I think the difference between the UK average and the Scottish average is a few hundred pounds on a base of what is slightly under £30,000. I think the median level of earnings in Scotland is actually not very different from the UK average. That's one of the reasons that we didn't think that the regional differences in earnings were sufficiently large in order to justify different salary thresholds in different parts of the UK. We did look at this question and I think if one was to go down the route of having regional differentiation, it is much more likely that one would have higher salary thresholds for London and the south-east of England than one would, for example, have a lower salary threshold for Scotland. The other thing that businesses told us is that there is no obvious ready supply of local UK-born workers to fill the low-skilled and medium-skilled roles. Where would you suggest that these workers come from if that is what businesses are actually telling us? I think that sometimes individual businesses see migration as a solution to shortages and difficulties in recruitment, but I think the evidence is that when one looks at the economy as a whole, it's not really that effective. If I try and give a particular example, an employer who might have a shortage of vacancy at the moment will naturally think that if I hire a migrant, I've solved that shortage, but that migrant then earns money and then spends money and when they do that, they're creating demand for labour elsewhere in the economy. Really, all that happens is that one shuffles shortages around the economy and the evidence that we consider suggests that when one has migration into economy, one is roughly adding to labour supply and labour demand in roughly equal balance, and that is the reason why it doesn't really alter the balance between labour demand and labour supply. Oxford Economics said that because of the lack of the reduced numbers of EE workers, which could take place as a result of if your recommendations were implemented, that we may actually have to have tax rises to compensate for the withdrawal of the money that they are putting into the economy. Do you think that Oxford Economics are wrong in that regard? I think it's important—no, I don't think that they're wrong. I think—we commissioned Oxford Economics to do some work for our report as well. That makes it very clear that at the moment when one takes EA migrants as a whole, they are paying more in taxes than they're receiving in benefits or public services, but that doesn't mean that every single one of those migrants is contributing more in taxes. Our proposals would mean that actually we think that the contribution would be even more positive. We think that if the changes we propose are done correctly, that the public finances would improve, although I wouldn't want to exaggerate the likely benefits, but they wouldn't get worse because one is being more selective about migrants and if one selects in part on earnings, one is selecting for people who generally pay higher taxes. I could just press you on that. Oxford Economics say that tax rises may be necessary to compensate for the disproportionately high contribution EA nationals make to the UK finances. Are they wrong? I think that that doesn't distinguish between different types of EA nationals and there's a huge difference between— They're talking about overall. Overall, they pay more currently, but our proposal is not to restrict all of them. It is to shift towards a more highly, highly skilled. EA migration since 2004 has been predominantly into lower skilled employment, and that represents now 60% of the EA migrants, but the Oxford Economics work that we commissioned from them suggested that those 60% from the accession countries only contribute 6% of the total surplus of all EA migrants. Some of those accession migrants will themselves be highly skilled, so we think that if you restrict lower skilled migration, they will actually improve the public finances. I shall pass on to Claire Baker. Thank you, convener. I wanted to ask some questions around the regional variation in the immigration system that the committee considered. We had a debate in Parliament at the start of this year, where there was, I would say, a broad agreement across the chamber with all the political parties in a different place on that scale, but there was, I think, support for a coherent UK immigration policy that, within it, would contain the ability to have some regional variations that would respond to the sexual needs that we have in Scotland, to the decline in birth rate and the issues of elderly population. The committee has completely ruled that out. I do not know whether the committee suggests that it is not possible, and I have seen one of the comments that suggests that that would be a political rather than an economic decision. Although the consensus within Parliament that all parties were committed to a degree of variation showed that it was a response to our economic and our demographic situation rather than a political choice, could you explain more of the committee's thinking behind that decision? Yes. Now, a view on what we saw as a political decision was the issue of whether immigration should be a devolved or reserved matter. So, we do not express any view on that one way or the other, either in favour of the status quo or in favour of it becoming a devolved matter. But even within the current system, it is obviously possible to have some degree of regional differentiation. There is already a separate Scottish shortage occupation list, although the differences are relatively small. I think our argument was that there really the economic case for having a distinctively Scottish migration policy was not particularly strong. I mean, I think you mentioned the sort of demographic issues. Sorry to interrupt, but you did not think the argument was there for a specific Scottish, but the document does recognise that maybe Wales and Northern England have similar issues. Did the committee consider a variation model across the UK that would meet the needs of not just Scotland but would be a proper regional system with some degree of flexibility for regional needs? Yes. I mean, I think that the issue that comes up here is not unique to migration policy, things like the national minimum wage are similar. There is a trade-off between having a system that is relatively simple and easy to understand. One of the complaints of many employers about the current system is how complex it is. Obviously, regional differentiation would introduce a new level of complexity into the system. That versus sort of differing kind of economic needs. I mean, our view was that we didn't, our view is that the regional differences are not so large as to justify having regionally differentiated policy. If one was to have one, I think it would be different for London and the southeast compared to everywhere else. But I think the problem with one of the issues with the regional migration policy, say if it was easier to migrate into some parts of the UK than the others, is the question of whether those migrants actually stay there in the longer run, because if they don't stay there in the longer run, you're not actually addressing the demographic problem which you were hoping to solve. I think experience in some parts, Canada for example in Australia, I do have experiences of having some region, specifically regional visas and I think the evidence on the success of those schemes is a bit mixed. I think the more remote parts of Canada really do struggle to actually retain immigrants who are, who enter under specific regional visas. Because did you look in detail at the Canadian system? That is the one that's held up as a way in which you could have a national immigration policy that contains regional variations. Another point that I wanted to raise was around the focus seems very much on work visas, which can be fairly short term. One of the issues that we have in Scotland is that once people come on the visa, it's encouraging people to settle in Scotland to become part of our society and continue to live here. I'm not convinced that the system that's been proposed really gives people that kind of long term settlement option. It seems very focused on, this is an immediate economic need, you come in and serve that and then that's your time up type model. Well the tier 2 work permit system is a system with a path to settlement. So it is possible for migrants to come in under that scheme and after a number of years they have to meet some criteria to attain indefinite leave to remain and eventually citizenship. So I think that's a fairly common system around the world. So I wouldn't describe this as a sort of work immigration system which is primarily temporary. I think on the Canadian point, I mean we have looked, I mean I wouldn't say how much, I mean we have looked at the Canadian system. And I think you know the most interesting part of that Canadian system is looking at really how successful different parts of Canada have been in retaining sort of medium longer term migrants who come in under those sort of regional visas. And as I said sort of areas like the Atlantic provinces only seem to manage to retain something like 40% of migrants who enter under those schemes. So it's not actually a terribly effective way in preventing for example depopulation in the Atlantic provinces. Okay thank you. Stuart McMillan. Thank you convener. Good morning professor. Has the mark done any modelling on the likely impact of its proposals on future patterns of migration in Scotland? Not, what we haven't done is focus is produce estimates of what we think the consequences would be on migration flows either in Scotland or in the UK as a whole. I mean the reason for that is that we think it's more important to ensure that the migrants who come to the UK are providing value, providing value are the ones that we would like and we're not so concerned about what the actual numbers are and those numbers can be extremely volatile because they're not just influenced by UK migration policy, they're influenced by economic circumstances in other parts of the world how the UK economy is doing. That's an interesting answer particularly your comments regarding the numbers. Have you ever heard of a location called Inverclyde? Have you ever heard of a place called Inverclyde, a local authority in Scotland called Inverclyde? My guess is that we will be close to the Clyde and I wouldn't be able to put it exactly on a map. I'm going to just mention some numbers for you because it's really important because of your comment a few moments ago. Inverclyde's population has decreased by 8.9 between 97 and 2017. Scotland's has increased by 6.7. The age groups within Inverclyde between 97 and 2017, the 25 to 44 category has decreased by 28.6% with the 75 plus increasing by 20.9. The population projections for 2016 to 2026 in Inverclyde is to have a 3.8% decrease while Scotland is 3.2% increase and my final point is the population projections for the age categories. The 16 to 24 age group between 2016 and 2016 will decrease by 13.2% but the 75 plus will increase by 20.8. Where are we going to get the people to come in to actually work in the social care sector to actually deal with an ageing population? I mean I think from what you're describing is the, I mean that sounds to me like an area that used to have quite a lot of heavy industry and those local industries are not doing so well at the moment. I'm not sure if that is accurate. I think the problem is that if you say well is migration a solution to Inverclyde's problems, the issue is that the reasons why local people are leaving Inverclyde will also apply to migrants. You may be able to recruit migrants in the short run to work in social care but it's quite likely that as soon as they have the freedom to do so they will then leave for better economic opportunities elsewhere. I mean the Canadian sort of live in care giver program which is sort of has some similarities isn't identical you know has had these problems that after 10 years this is a sort of specific sort of social care visa that after 10 years only something like 10% of the people who'd come in through that route were actually still working in social care because the fundamental problem is that working in social care is not very attractive and so our view was that social care faces very very serious problems but we're not convinced that migration is the solution it's much more about making sure that that has attractive terms and conditions both to UK existing UK residents and migrants alike and obviously that needs solving the financing problems I'm not saying those are easy problems but that's what our view on social care was. Professor 25 local authority areas in Scotland actually experience negative natural change so there are 32 local authorities in Scotland there is an agent population and people are going to go from one local authority area to another I think we all agree and accept that that is a reality but 25 have actually had a reduction in their population people have got to come from somewhere to actually work that's just one example of social care sector but people have got to come from somewhere to go and work in that particular sector across Scotland not just in the areas where there's a population increase so where are they going to come from? I mean I think is it our view is that they're you know in the case of social care there are plenty of domestic people workers existing residents who are capable of working in that sector it's at the moment that they simply think that they have got better opportunities elsewhere because the terms and conditions in social care are very very unattractive and I think you know I would sort of really go back to the point that you may be able to recruit migrants in the short run to plug these gaps but unless you address the underlying fundamental cause of the problems addressed you will not solve them in the medium to long run because you know for example I described the Canadian system the problems that ran into they've actually closed this earlier this spring to new entrants because they thought it wasn't actually not because they haven't got a problem with aging population they have as you know many countries have it's that it wasn't actually being very successful in addressing the problem but people who go to work in that particular sector will have a special skill set to work in that sector and accept employers and businesses they have to train people to get people into the sector as well so this isn't just solely an issue that migration is going to solve I accept that but at the same time you want to make sure that people are going to go into that particular sector who have that relevant skill set and if you can take some time to train someone up to get them to get those skills as compared to someone who potentially has them now you can go into work in that sector and I gave you the example of my local authority area as to how acute that issue is and I've not heard anything from you that's actually going to provide a solution or an answer to actually help with my local authority area but also others across Scotland I mean I think at the moment if one takes for example the sort of the main the biggest occupation in social care which is is care assistance there actually is not that much training that most employers require before employing someone at a care assistance and a very high fraction of those of those care assistance are paid the minimum wage so I think that you know it is it I mean if there are arguments that actually it should there should be more training but obviously training costs money and again this is something that the sector is is very short of but at the moment that is not really I think an accurate description of the the main bulk of employment in these sectors so I think I would go back to simply saying that you know migration is not a very effective way to do this if for example one says what about free movement as a solution to social care's problems social care has a lower share of EU migrants than the economy as a whole same is true of the of the NHS so if you're very worried about social care I would say that the existing migration system we have is not a very effective one at solving its problems actually we did flag up social care as being the one lower skill sector that we were very concerned about but I just go back to saying that we we really don't think that migration might give you a short-term fix but it isn't a medium or longer-term solution thank you before we move on professor you mentioned on a couple of occasions the situation in Canada and suggested that your enquiries showed that the regional variation didn't work as you know our committee conducted its own immigration inquiry and were advised by Dr Eve Hepburn of Henry university she pointed to a Canadian government evaluation of its regional migration scheme which used income tax returns to find out where people stayed and they found that 82% of migrants actually stayed in the region that they were originally allocated to so was your research into Canada more in depth than the Canadian government's research? Well I mean the Canadian government research that I'm aware of I mean I think there's a very big difference in those sort of retention rates across Canada as a whole and in the different provinces of Canada so if for example you take the areas of Canada that are doing economically very well we're going to talk about Ontario, Ontario, British Columbia sort of Manitoba and places there you would see very high retention rates but if you talk about areas like the Atlantic provinces which are far more remote communities with more bigger demographic challenges there you saw a retention rates that were a lot lot lower and of course those are the areas that this is meant to help. Sorry to interrupt and I do accept your point that there are variations in retention rates but according to the the Canadian government research that we have the Atlantic region that you mentioned which has the lowest retention rate still had a 56% retention rate and if you've got real challenges in terms of sectors I would have thought that 56% retention rate was really rather good? Well I think that's a little bit I mean I'm not sure whether the 56% and the number I make it makes a bit of a difference over what time horizon so I'm not quite sure whether we're on the same but I think you know when I described it when I first started talking about it I described the evidence as mixed we're not convinced that if you've got problems with you know sort of depopulation in some areas that migration is a particularly effective solution to that that the roots of that depopulation are in sort of economic disadvantage and so on and we think that actually the policies one should have to reduce those regional inequalities is much more about addressing that economic disadvantage and so there's a danger that sort of migration is used as a way of avoiding really addressing the fundamental causes of those regional inequalities. Well no thank you. Annabelle Ewing. Thank you convener and good morning Professor Manning. I note in terms of the composition of the migration advisory committee that all of the panel members are drawn from only one nation of the UK that is England could you perhaps clarify why that is? Um well I mean the I mean the application process is open to everybody from the all parts of the UK and you know then there's a process to select who are seen as the the most suitable candidates. I mean it's not the case that any member is thought of as representing any particular geographical constituency and I wouldn't think it was appropriate for this kind of committee to have members who are representing a sort of particular constituency but we do make quite a lot of effort in order to make sure that we you know come to Scotland come to Northern Ireland go to Wales and so on and the regions of the UK so that we do have an accurate picture of what people feel about migration in all parts of the UK. It's just clarify me Scotland obviously is not a region of the UK it's a nation but what in drawing up the report what specific modelling was carried out vis-a-vis Scotland to to you know further the the recommendations of your report if any could you perhaps clarify. Yes I mean the area I mean the the sort of specific the Scotland specific aspects were discussed more in in the interim update that we published actually in March than we did in the final report in September. So I think many of the issues actually in Scotland are actually not very different from the rest of the UK because sorry to interrupt that may be in your assessment but was there any specific modelling carried out in Scotland given the particular issues that we face the devolved government the powers of the devolved government the need to to pursue economic growth through income tax in terms of our devolved tax powers so you know that's why I ask was there any specific modelling reflecting the Scottish position specifically. I mean we have done in various places analysis of how for example what would be the impacts of salary thresholds in different parts of the UK including Scotland we kind we looked at what is the different sort of demographic projections in different parts I mean we have not done an assessment of how different migration policies would affect the fiscal position of the Scottish government in specifically now. Well that presumably begs the question as to the validity of your conclusions as far as Scotland is concerned given the key importance of the issues that I've just raised. You mentioned also that perhaps one way to address Scotland's demographic challenges would be to increase the pension age what what do you foresee the age being then? We didn't actually propose increases in the state pension age the only we did show what would happen to for example the dependency ratio under proposals for increases in the state pension age that already are simply government policy at the moment so I mean at the point we were simply trying to make that was that those policies to increase the state pension age that are already in place are more effective in changing the dependency ratio than migration. Model beyond age 67 years which is those are the proposals eventually I think to ride I think the current ones I'm not sure I'm going to be able to give you the exact dates from this I'll currently for them to rise to 68 over quite a long period of time but if one's looking at projections sort of 20 years out which we have been doing or we've just been taking the O&S projections that is what is currently proposed to happen. I mean I think the suggestion that Scotland's demographic challenges could be met by increasing the state pension age to some unspecified age has been met really widely across Scotland with some incredulity on the basis that it would be simply unsustainable but one last question if I may convener I know that many members wish to get in. I think Professor you mentioned a moment ago in response to an earlier questioner that if it were to be considered as appropriate to have any regional variation approach the place that you would reflect that would be London and the southeast that that is where it would be appropriate to have a differentiated approach but can I put it to you in light of the questions that I've just asked and the answers that you have given then actually what you have come up with is a policy for London and the southeast and it does not reflect the interests of Scotland as far as this Parliament is concerned. I don't quite understand why you would say that could you elaborate a little bit on what you think in our proposals does that? Well you have just accepted that you didn't carry out any specific modelling reflecting the particular position in Scotland including with regard to the taxation powers that this Parliament currently has and that you did not carry out any specific modelling with regard to that key issue so I suggest therefore that absent such an analysis this report doesn't reflect what we need to see in Scotland and rather it seems simply to reflect the interests of elsewhere in the UK specifically London and the southeast. I mean I wouldn't accept that just as we haven't done any specific modelling of the situation in Scotland we haven't done any specific modelling of the situation in in London and the southeast and I think when one's talking about the fiscal impacts of the changes that we propose I would be very surprised if Scotland was very different from the rest of the UK because its actual economic situation is really quite close to the to the UK average so I think I would be wrong to assume that you would get very different answers if you if you took our proposals about free on the impacts on the public finances and applied them to Scotland. Thank you very much Ross Greer. Thank you convener. I have to say at the offset I've been really frustrated by this debate because it's happening in purely narrow economic terms and we're not talking about units of labour we're talking about people who are so much more than their net economic contribution. I'd be interested in what evaluation you've made of the system changes that would be required to implement the policy changes in your recommendations though. I mean for example the changes proposed to tier 2 are quite considerable it would involve a far far larger number of people than at present. The Home Office is not famous for its efficiency, its accuracy, the robustness of the systems that currently employs, there are people who wait three years or more for a decision. Did you do any evaluation of how long it would take the Home Office to grow its capacity and change and improve its systems to be able to implement the recommendations? We don't we're not as a committee either expert in or generally get involved in those sort of operational issues but obviously it would be naive of us to be completely unaware of them. Part of our proposal was that the tier 2 system would as you say bear a much greater burden under this future system that we propose than currently and there are concerns about how fit for purpose some aspects of you know the operation of the current system is. So I mean we are very serious about when we say that the Home Office really needs to engage much more with users of the system which they don't seem to do very much at the moment to make sure that this is fit for purpose. But our proposals are based on the assumption that the Home Office is capable of operating a system that is efficient, transparent and fair. Could you explain a little bit more around what's in your report in regard to the review or analysis that would be required of tier 2? Much of what you've done has resulted in some relatively specific recommendations. There are obviously specific recommendations in relation to tier 2 but there's also a section in your report around the need in response to a lot of the evidence that was submitted to you, particularly by business, to conduct a much more in-depth review or analysis of the tier 2 system. Obviously on the timescales that we're operating on at the moment, with Brexit itself fast approaching, the transition not lasting that long after that, the challenges of conducting that kind of robust review and then implementing the changes that would be required off the back of it in the timescale that we're currently looking at would be for a department that managed to 60 years on to screw up something like the application documents of the Windrush generation that seems to be beyond their capabilities. The proposals are for the end of the implementation period, so this is early 2021 at the earliest. I think that there is time, although it is correct to say that the Government would need to be coming forward with pretty specific proposals in the not too distant future in order to give business adequate time to plan. But I think some of the proposals that we make, for example, when we say we're not convinced of the resident labour market test serves much purpose at the moment, that would simply mean, well, we just remove that from the current evidence required. So that isn't something that I think would be particularly difficult. So I think there are elements that, if one is removing from the existing tier 2 system quite a lot of those sort of requirements, that should be relatively easy because it's about stripping out bureaucracy rather than adding in a whole set of questions and criteria that people have to satisfy. Just one final question, convener, if there's time. The evidence that you collected was really robust in showing the clear and substantial economic benefits that freedom of movement brings. The policy position of the UK Government is obviously to end freedom of movement. Were you able to find or produce any data that shows there being a net economic benefit of ending freedom of movement? Or were you limited in the scope of what you were able to do to try to design a system based on the assumption that policy decisions had already been made and tried to find something that reduced the negative economic impacts as much as possible? I mean, I wouldn't describe our conclusions as being that freedom of movement has had clear, clear benefits. Our view, you know, we looked at a wide range of outcomes, but it's... Sorry to interrupt, but did you find any evidence that freedom movement has not had clear economic benefits to the UK? Yes, it's had very... I mean, I think our view was that the effects are being fairly small. There have been neither big costs nor big benefits. And our view is that if you alter the system, you can accentuate the benefits and mitigate the costs. And the issue with freedom of movement is that there's really no control over the numbers and the mix of migrants who come to the UK. And we think that if you do have some control, for example, on the mix, you make it easier for higher skilled and lower skilled, that that would be something that would accentuate the benefits and mitigate the costs. And that kind of, you know, proposal that you should have migration that's easier for more skilled people. I mean, that's in line with what most other countries, you know, Canada, Australia, New Zealand are doing. They're not choosing freedom of movement because they want to have some control over both the numbers and the mix of migrants. Thank you. Thank you very much. Alexander Stewart. Rina, a good morning, Professor Manning. Given the increasingly competitive nature of international students recruitment and the decline that we've seen in locations like India coming to the UK, would our post-study work visa scheme not make the UK a more attractive place to come? I think our proposals, I mean, we think that a post-study work visa with sort of unrestricted work rights would increase demand for, probably increase demand for places in our educational institutions. But we think that demand should be based around the quality of the education offered and the opportunity to move into skilled work. So our proposals, while we don't propose a specific post-study work visa, we did propose extending for masters and PhD students the opportunity, the length of time they have to find skilled work after completion of studies. And we did propose that the advantages that currently students have if they want to move into a tier two work permit while they remain in country, that those should remain for some years after graduation, even if they lose the UK. So we do think it's important to build, you know, demand for our higher education around work opportunities for graduates, but it's important that that's skilled work and not any work. And universities wish to remove students from the net migration target. So why is it the Mac is recommending that students remain within that target? Well, what we said was that if there's a problem with students in the net migration target, it's a problem with the target itself rather than the inclusion of students within. If we removed students from the net migration target, it would require an awful lot of work because we don't have good statistics in particular on student emigration at the moment. And it would make almost no difference to the net migration statistics. And the reason for that is that most students leave at their end of their studies. So they come in and then they count it as an immigrant at the moment, they leave, they count as an immigrant. If you don't count them in and you can't, you have to stop counting them out as well, all you do is really alter the timing of when they affect net migration. But it makes almost no difference to the net migration figures. Thank you, convener. Thank you very much. Kenneth Gibson. Thank you, convener. Good morning, Professor. I think one of the reasons why colleagues are concerned about rigid society criteria is because it does give London a competitive advantage. So that's obviously been expressed by others. So I won't go into that any further. One thing I would say is, of course, that we've never had really completely free movement across the EU because when the accession states came in a decade and a half ago, the UK was one of only three countries that didn't actually put barriers against them, as you'll probably recall. Now, migration is, of course, a two-way street. I note that, in your report, you're really focusing on the work route only, which I think is probably a weakness of the criteria that we're set for you. I'm just wondering, you don't see a compelling reason for having different policies for EEA and non-EEA countries in terms of inward migration following Brexit, but will there be the impact on UK citizens going to live work and study in the EU if there is no differential? Would EU countries then immediately feel obliged to put up barriers against UK citizens? Well, I mean, our recommendation that should be, was in for the scenario in which the UK immigration has not been part of the negotiations with the EU, and so, in some sense, the UK is setting its immigration policy on its own after the end of the implementation period. We didn't make any, express any view at all on whether immigration should be part of the negotiations at all. So, I think if one was, you know, the natural place for having some part, some preference for EU citizens in the UK and correspondingly UK citizens in the UK, that would be a part of the negotiations rather than if we ended up at a situation where they had not been part of the negotiations. But I think one of the, I mean, you're quite right to say that freedom of movement is a reciprocal right, and so there is a risk that, I mean, that the UK citizens will lose those rights to go to European countries. And I think prior to 2004 freedom of movement was more or less not just reciprocal on paper, it was reciprocal in practice that it was more or less balanced. But I think that what happened after accession of the Eastern European countries in 2004 is that it became not really reciprocal in practice. So, there were many more people from Eastern Europe who wanted to exercise their treaty rights in the UK than UK citizens who wanted to exercise treaty rights in Eastern Europe. And that was probably one of the sources of the concern that people have had about freedom of movement, which didn't, I think, probably was less concerned to people before 2004. As I mentioned, only three EU countries is not actually restricting the number of accession states citizens coming in initially, and there was no throwing out of the whole freedom of movement policy. The baby wasn't thrown out with the bath water, but I'm just wondering. You've looked, obviously, at the impact of restricting migration to the UK, but surely there is a quid quo pro. I mean, if we do that, then our citizens may be restricted from going to the continent. And I'm just, as I said, what impact would that have economically? I mean, surely that would be a diminishing of both the UK and the remaining EU states? I mean, I think one would have to be realistic if we did it, if immigration had not been part of, it does not end up as part of the negotiations. And as a result, the UK ends up in a situation where it's setting its immigration policy more or less on its own, you know, as countries like Canada and Australia do, that we would be a third party with, you know, third party country in the eyes of the other European countries in them, in then treating immigration of our citizens into their countries. And that would be, you know, that would be something to be bear in mind in considering whether immigration should be part of the negotiations. And lastly, that would be detrimental to considerable numbers of UK citizens who want to live and work in the European Union. Would it not, if these restrictions were, therefore, imposed upon our citizens? I mean, there would be, obviously, a restriction in choice. I mean, it wouldn't be that unusual, obviously, Canada, you know, and other countries, Australia restricts the right of our citizens to immigrate to their countries. And they don't consult us when they make those changes. So, I mean, again, it's not a completely new situation in a global sense, obviously. It would be new in regard to Europe. Thank you. Thank you. Tavish Scott. Thank you. Professor Manning, I just wanted to understand the arguments that you made at the start about the £30,000 salary cap and how that impacts on industries across the whole of the UK who rely heavily on people who are paid under that amount of money. Is your contention that that's for these industries to sort and migration, if I heard you correctly at a role, migration is absolutely not going to be part of the solution to those problems, those labour shortages? I mean, I think that our view is that the migration would consult skills shortages when we're talking about jobs that, for example, require sort of skills that require a relatively long training period. But if one's talking about migration as a solution to generalised skills shortages, it doesn't really solve the problem because it increases, I mean, a shortage is essentially labour demand running ahead of labour supply. So migration does increase labour supply, but because those migrants also spend money and so on, they also increase labour demand. So it doesn't actually solve the problem. I mean, I think our view is that since 2004, most EU migration was in lower skilled jobs. The average earnings of migrants from the accession states is 30 per cent below the average. That availability of labour to those lower wage and generally lower productivity sectors sort of gave them a tailwind, which has led to expansion. But if our vision for Scotland is to make it a sort of a high-wage, high-productivity kind of economy, our view, what we said was, well, it's not obvious that that migration has actually contributed to that vision, and a little bit has probably gone in the other direction. Fenton Edinburgh here last, let me get this right, Thursday, for the UK hospitality industry. I sat next to a person who owns a hotel in the west country of England, and I have family down there, and has hotels in Scotland. He told me that they simply can't get staff to do some of the lower wage posts, jobs in those hotels without finding people who come from different parts of Europe and who currently work for them. If the salary cap is 30,000 pounds, he won't have those people, will he? Unless I'm misunderstanding the proposals that your committee are making. Many of the jobs in the hospitality would not be eligible under our proposals, but the hospitality sector has been fantastic in creating lots of jobs, in quantity of jobs, but it's not been very good in creating quality jobs. 95% of jobs in hospitality paid below average earnings, and it's not really clear that this is an important sector in the west country and parts of Scotland. No one is saying it isn't going to be, but if we want to move towards a high-wage, high-productivity economy, hospitality, as it runs at the moment, which pays really rather low wages, is not obviously a sector that you want to encourage in terms of growth. What we've said, our view is that since 2004 they found it rather easy to grow, but our proposal is that that growth should not be so easy in the future. It's about restricting growth, not getting rid of what there is already. I just want to understand that you're saying that the hospitality industry shouldn't grow, or the number of people who come in from different parts of Europe shouldn't grow, who work in the hospitality industry? I think that every extra job that's in the hospitality industry on average makes the UK a lower-wage, lower-productivity economy. If you talk about what are the sectors that we want to grow as a share of employment in the UK, you would not be focusing on hospitality as one of those sectors, and yet we've had a migration policy since 2004, not by design, but just by accident, which has favoured lower-wage, lower-skill sectors. What we're saying is that we have to sit back and think about, really, is that the way in which we want the UK to go? I'm a bit puzzled because tourism is Scotland's biggest industry, and as the hotel owner from the west country said to me last week, it's the biggest industry in the west country of England as well. I don't mean this personally in any sense whatsoever, but your analysis there suggests that we should give up on tourism. The only people who are able to afford to stay in hotels are people who can afford, presumably, £500 a night in the middle of Edinburgh or London, because if your argument follows through to its logical extent, everyone's wages will have to go up to a level that they're currently not at. By definition, those businesses will have to push their costs up. By definition, staying overnight will cost a huge amount more. I can't think that's going to do anything other than destroy the tourism industry in the west country of England. I don't think it will destroy it, and I think it's important that this sector competes for labour with other sectors like retail and so on. Many of the jobs in hospitality could potentially be done by people who are not currently working in hospitality, but the problem hospitality has is often that it pays very low wages. As I said, 95% of the jobs pay below average earnings, and so the sector does need a little bit of pressure on it in order, I think, to increase its productivity, to provide quality of jobs rather than quantity of jobs. By making migration harder, not impossible, we're not saying there's no source of labour for this sector, that that is an appropriate nudge for them to go down that route. Is this government policy been given to the owners of the hotel chain who are now hiring out rooms for £19 a night in London and Glasgow? I would say we're interested ultimately in providing high quality jobs for UK residents who are having a high quality of life for UK residents. I'm not entirely sure if one, I don't know about those hotel chains, but I don't know if one looked at the wages that they're paying their workers, whether they're actually contributing to, you know, providing a high quality of life for UK residents. Thank you very much. Thank you very much. Following on from Tavish Scott's line of questioning on tourism, Professor Marring, there's another area of the economy which is also very important to the Scottish economy, which is agriculture. The national farmers union is very concerned about your proposals because 99 per cent of seasonal agriculture workers in the UK are from EU countries, and if they don't have access to those workers, there's a very real possibility that crops will go unharvested. I was very concerned by some of the comments that were made in the past, I believe in your report, where you responded to concerns that the seasonal agriculture workers' scheme wasn't sufficient to meet the needs of the industry. If I could just quote from your report, you say, while the failure to have some type of seasonal agriculture workers' scheme would be bad for the sector, it is a small, low-wage, low-productivity sector in the wider UK context, so that should not be seen as catastrophic for the economy. Do you think that crops going unharvested is really not catastrophic for the economy? Let me say first of all that we did propose a seasonal agricultural workers' scheme in this, for exactly the reasons that you gave that we see close to 100 per cent of the workers in the seasonal agriculture are currently migrants, and that we don't see any realistic prospect for that being sourced within the resident labour market. I think that what we also said is that one has to recognise that the level of productivity in agriculture as a whole is 40 per cent of the national average. Some parts of it are more productive, but it really is a very low-productivity sector. Again, it's one of the sectors where one doesn't have anything against the sector, we would like them to produce output in a more productive way. It's not that we want crops to go unharvested, it's that we want them to become a more productive sector in producing crops. In doing so, they'll then be able to pay higher wages than they currently do. Again, they tend to be a rather low-wage sector at the moment. Just to clarify, the NFU has said that the pilot seasonal agricultural workers' scheme is not sufficient to recruit the number of workers that they actually need. From what you seem to be saying, you seem to be saying that in agriculture you want to see some businesses collapsing, you believe that they're not productive and you would like to see them go to the wall. Is that basically what you're saying? No, we would want to see them increase their productivity, so we want to see all businesses thrive, but at the end of the day, it's got to be that if you can't be productive enough in order to pay competitive wages, I'm afraid there's no business that has the right to be in business at wages that they say they can afford. I'm afraid that is true, not just in agriculture, but everywhere else. What our proposals are, we do recognise that this sector is very dependent on seasonal agricultural labour. The pilot is a government proposal, that's not our proposal. I think the NFU had the concern that the numbers involved were rather small relative to the total seasonal agricultural workforce, but I think if one looks at the problems over the last two seasons that farmers have had in Scotland and the rest of the UK, it's important to understand that those have been problems that have occurred without changes to the current migration system at all. It's primarily been driven by the fact that when the pound fell in value after the referendum, seasonal agricultural workers suddenly, if they're earning in pounds, their wages have essentially fallen by 15%. They could earn more if they went to Germany or other parts of the Eurozone. Those recruitment problems have come about because the sector struggles to compete for labour in their case with other farmers in other parts of Europe. Not rather make the point that if that's the situation before Brexit has actually happened, it's going to get even worse after Brexit. As we showed in the report, the amount of land that's been planted with quite a lot of the labour-intensive crops has increased a lot since 2004. This is one of the sectors that has had a tailwind with a ready availability of lower skilled workers prepared to work for lower wages from Eastern Europe. So I think it is possible that that sector would not expand as fast as it has done over the past 10, 15 years. It's possible even that it contracts a bit, but I think it's important to have a sense of perspective on that. That will be sending the sector back to where it was a few years ago. It's not completely destroying a sector like we've never seen before. I think a contraction in the food and drink sector in Scotland is acceptable. It's a pretty acceptable price of Brexit. I think we have a very low unemployment rate generally in Scotland in the UK at the moment. Our problem is not really with the quantity of jobs. It is with the quality of jobs. It's with real wages at the moment. It's important that the sectors that we really want to grow are the sectors that pay higher wages. We want there to be upward pressure on wages within sectors because those are what determine people's living standards ultimately. I think that some of these sectors, yes, we do want there to be competition among employers for workers, that the workers will then go to the employers who can pay them the better wages. Those generally are the more productive workers. That is the mechanism by which we become a more prosperous economy in society. I think that this is something that looks to have been thought of as some kind of laboratory. Ross Greer talked about real people. If I have a small guest house in the Highlands, in his mid-fifties, where he is employing four or five workers and trying to compete, not just locally but internationally, for customers, by forcing up wages, making my business uncompetitive, am I going to certainly be working in the artificial intelligence industry? A lot of those people do not have other options. It is simply not the case that the quarter of a million people who work in the Scottish tourism industry, the tens of thousands of work in agriculture, can change. It is quite flippant to talk about effectively destroying people's livelihoods and businesses by saying that we can go back to where we are in 2004. People invested their time, their money, their skills, their emotions in building up businesses. You seem to think that at the end of the day they are not particularly economically productive, so what? You talk about quality of life. If ordinary families cannot afford to stay in a hotel because they are no longer competitive and they take their money overseas, how is that helping the UK economy if they are not spending money holidaying in the Highlands or in Cornwall or Wales? I just do not understand the arguments that you are actually putting forward from an economic perspective. From an economic perspective, we are not saying that the employer of that guest house should be competing for workers with all other employers in the local economy. That is what we think of as being appropriate. In small Highland villages or in other parts, there may not be these workers. They have to bring them in from elsewhere because there simply is not enough people available to actually work in those places. It is not an easy job to work in those long shifts in hotels and far off rural places. A lot of people might want to do a year or two when they are young and then move on to something else in life. However, if you strangle that opportunity because you are effectively making Scotland and the rest of the UK uncompetitive in the world tourist market, and we have been having an inquiry on that with regard to possible tourist tax, I do not see how it helps these communities or individuals. I do not see how it helps business owners at all. I do not think I see how it helps the overall UK economy. I think that those communities often also have a problem with retaining people who grow up there, leaving there and so on. That is connected to the fact that the employment opportunities in those areas are often not terribly appealing. On the one hand, one of the things that those communities should be trying to do should be trying to provide higher quality jobs. It is not just a question of the wages they pay. There is also a question of productivity. There is often a way in which you can think about using your existing employees. No one here is saying that you should not be allowed to retain your existing employees. You can use those employees more productively and so on. That is the route that we would like to nudge businesses down because it is ultimately productivity growth, which is what leads to rising in living standards. That is ultimately what we want to do. No one is really threatening the businesses. We are saying that we would like those businesses to be less reliant on a continual flow of workers. In some of them, and I do not know about specific cases you are talking about, some of them are just at minimum wage. More to think about ways in which they could have their business thrive without being so reliant on a continual flow of lower-skill migrants, which they do not manage to seek to retain because those migrants then go on to have better opportunities elsewhere. I do understand the argument that we have identified low-skill and lower-wage sectors. Tourism can be open to that as well as agriculture. I understand the desire to increase wages in that sector. I am just not convinced that cutting off the labour supply is the way to do that. I wonder whether the committee has done any analysis of the impact that this would have on particular sectors that members have identified this morning, and where, when we have already spoken about Scotland's low birth rate and elderly population, we can see other areas across the UK that are facing similar problems. Where the workers to replace the freedom movement has stopped, where the workers to replace those that come from overseas? Where are they going to come from within the UK economy? The first thing is to say that there is the existing stock of people who are already here. No one is proposing any change to them that they should be so they have settled status and so on. It is also, even under our proposals, it would not be that one is cutting off the flow of lower-skill migrants completely because there is always a flow through other non-work routes. I think we think of it as more accurate to think of... That would mean something like the family routes and so on asylum routes and things like this. There is quite a lot of other so that someone who comes in under the family route, we would see quite a lot, non-trivial numbers actually working in lower skill jobs. What one is doing here is really meaning that the restricting the growth in the labour supply to these sectors. One is not proposing reducing the overall labour supply, it is reducing the growth in the labour supply. Yes, that would put more pressure on these sectors. They have had us since 2004, growth for quite a lot of them has been relatively easy. It would be a little bit harder, so we are honest about that. I think that we are looking at... I mean, people might as well have described the extreme difficulties that these sectors will face. You have also expressed an opinion that we should be looking at restricting growth in these sectors within tourism and agriculture, which I think is astonishing actually to make those statements this morning. Well, not growth in... I mean, I think that if you say... People, I think I find it very hard to say that they don't... If we ask people what sectors would you like to grow as a share of the economy? People often find those questions very easy to answer. They talk about tech and high-end manufacturing and universities and things like that. But the other side of that coin is that they then have to be some sectors that you say, yes, I'm prepared to see fall as a share of total employment. People do find that much harder to talk about because it does mean two people, small business people who've worked very hard on their business sometimes, meaning it's a little bit harder. But I'm afraid I think those are the harder decisions that you have to make in some cases that we have gone down a low-wage, low-productivity route in the UK as a whole by accident more than design. And the question is whether you want to continue going down that route or whether you want to try and rebalance towards a higher-wage, higher-productivity economy. And if you do that, you sort of need to... I think our view is you do need to have migration that's easier for higher-skilled than lower-skilled workers. Thank you very much, Professor Manning, for coming to give evidence to us today. We're now going to suspend briefly to have a changeover of witnesses. Thank you. Okay, let's move on. Our second item of business today is an evidence session with Creative Scotland, and I would like to welcome our witnesses, Robert Wilson, the chair of Creative Scotland and Ian Monroe, the acting chief executive of Creative Scotland. Thank you for joining us this morning, and I'd like to invite Mr Wilson to make a short opening statement. Thank you, convener, and thank you also to the committee for inviting us here to give evidence this morning and for the opportunity to say some opening remarks. You will have seen our written submission to the committee, which provides up-to-date information on a range of topics that has been of interest to the committee over the past year. I hope that you found this useful, and both Ian and I will be happy to answer questions on any of these topics or anything else you would like to talk about during this session. It has, as you know, been a challenging year for Creative Scotland, but also one where a great deal has been achieved. I joined the organisation as chair in February of this year, and following the departure of the previous chief executive in July, we appointed Ian as acting chief executive, and I'd like to recognise everything that he has done over the recent months. Everyone at Creative Scotland is committed to rebuilding that trust and confidence in our organisation, and we are all working extremely hard to do this, alongside continuing to deliver with care effective, on-going support of the arts screen and creative industries in Scotland. We have instigated and delivered some major pieces of work over the past few months, which will help us to achieve this. In July, we commissioned an independent evaluation of the last round of regular funding, the recommendations from which are included in our submission to the committee today. Along with all the other feedback that we have received, this will feed on our broader review of our approach to funding, and we aim to achieve this next year, in which we involve the voices of the people and the organisation that we are here to support. I have instigated, along with the board and with Ian, a process of organisational development, looking at our structures, our processes, our values and our behaviours, and we are working with a Dundee-based company called Open Change to help us with this process. Significantly, in August, we formally launched Screen Scotland, the dedicated partnership initiative that will deliver a true step change for screen support in this country, supported by a £20 million budget from the Scottish Government and the National Lottery. Alongside this, as the newly appointed chair, I have been overwhelmingly impressed with the dedication, the expertise, the commitment and the sheer hard work of our staff that bring to supporting the arts screen and creative industries on a daily basis. In 2017-18, we made over a thousand awards to a total of £70 million to artists, creative organisations and projects across Scotland. All of that makes a positive and continued difference to the people's lives in Scotland, and I would like to take this opportunity to thank everyone whose work continues to drive the extraordinary cultural landscape that is Scotland. I look forward to this morning's discussions and thank you. Thank you very much for that, Mr Wilson. Can I start by asking you about your organisational review? I am keen to get a little bit more detail about that. Why did you decide to embark on the organisational review? Well, as I said in my opening remarks, this has been a challenging time for Creative Scotland. When I came in, it became clear that there were some fundamental changes that we needed to instigate. This is an extremely impressive organisation, but clearly there are aspects of it that need to be improved. The way I have seen organisations in the past that this is a perfect time to look at an organisation, to see where the strengths, where the weaknesses are and to see how we can improve and move on in a much stronger way. Can I ask which independent consultant has been appointed to support the organisational review? It is a company called Open Change in Dundee. They have had a very strong track record. They work very closely with Historic Environment Scotland and we were impressed. We went through a very rigorous recruitment process. We were very impressed with the approach that they were going to be taking. They will be working with us over the next six months. You also stated in your response to 31 August that you are also reviewing the open project funding. Is it the same company that is involved in that? That is a separate review. We are making some internal refinements on the existing funding processes, particularly on the open project fund and the small scale grants strand of that under £15,000. That is not intended to be the bigger and fuller funding review that we are planning for all of our routes to funding, which will take place over the next few months. We are also involved not just with the staff, but with the applicant organisations and the sector representatives who will have a chance to feed that review and to explain their expectations and needs to help us to finalise what that funding model is more effective for the future looks like. That would be a review of both your regular funding and your open project funding. It would be a review of all your funding streams, so you could completely change the whole structure of your funding, potentially, as a result of that review. Yes, we are taking stock of all of them. Regular funding, open project funding and our third-rate funding, which is targeted funding, which is time-limited strategic funds. What is really important is that we understand what the most effective balance of those three types of funding are for the organisation going forward, as well as the detail of how the processes themselves actually work. Both in terms of the overall funding review and the organisational review, could you tell us a little bit more about how you intend to consult stakeholders in terms of both those reviews? On the funding review, which is a complementary piece of work to the organisational development process, we are planning to take a five-step approach to that. What we have already got and what the sector has told us innumerable times is that they feel consulted out. What we are doing at the moment is really taking stock of all the information that we have already got available in the first instance, including the evidence that was given to the committee in the regular funding inquiry. The Wavehill Evaluation Report, which is the independent evaluation of the regular funding process this year, as well as horizon scanning to look at international examples of different kinds of funding models. We will assimilate all that information and reflect on it and then take that out for consultation and conversation with the sector in a variety of different ways, online and indeed in group sessions that we will be planning in the early part of next year. That will all give us all the opportunity to understand not just what the needs are but what the best models might be. What we will do thereafter is to refine that, propose some models, again test that with representatives from the staff in the sector before we finalise that model and then look towards the implementation period. Of course, when we understand that this is quite broad in its scope, we will have to have us some form of transition between one model and the next. We will need to handle that very, very carefully and more sensitive to ensuring that we have a continuous offer there that works for people in the sector whilst we move to a different, more effective model. I think that we would anticipate overall that we will still have some form of mix of regular funding in some way, shape or form, coupled with project-based funding in some way, shape or form, coupled with strategic targeted funding. As I said earlier, I think that it is the balance across all three of those and understanding the dynamic and the complementarity of them will be ticking stock of as well as the detailed processes. You said in your submission that you had been talking to the Arts Council in England and other Wales as well. Have you looked further afield at different models? This initial scoping work will be examining those international models as well. I think that we want to have further conversations with Arts Council England and Wales, but in the international context, if there is anything significant of interest, we will want to have those conversations too. Will that all be wrapped up in a piece of worker report that will then go out to consultation? Is that what you said? What the form of that is, I cannot be absolutely sure yet, but it will be some form of documentation that we are able to take for conversations with people in a transparent way. I think that it is fundamental that we are able to explain the steps of the journey that we are going on and to afford people the opportunity to feed that conversation about what is best. You are aware that one of the strong arguments that came out from the sector as a result of our committee's scrutiny was that sectoral organisations were competing with artists for funding. Over and above that, there is frustration among artists that the current system of funding does not really leave them many opportunities compared to the old system under the Arts Council, which gave smaller grants for artists. Is that something that you are giving quite a lot of attention to in the current piece of work that you are doing? We absolutely will be, and that is my point about the balance of the routes to funding and how they work most effectively. I think that the point about the sectoral development organisations is absolutely understood. I think that it is worth recognising that when we ran the first regular funding process for the 2015-18 portfolio, sectoral development organisations were included as part of that process. What we did in the event of decision making was to recognise that tension that has been described again between those organisations that produce and present work and those organisations that are sectoral development in the broadest sense. Although we should also recognise that there are several organisations in the network that do both themselves. At the point in that first round when everybody was included, what we did was to separate out the separate sectoral development organisations. However, the numbers are almost identical. In that 2015-18 period, we had 123 organisations, which comprised 118 regularly funded organisations and five sectoral development organisations, to a value of £102 million. This time, we have got 121 organisations to the value of £102 million. They are almost identical, but I accept the point about the tension in the nature of a competitive process about the dynamic of that. I am getting at a more fundamental point. There is a lot of public money going to support art administrators and management, whereas artists themselves are left to struggle from one small grant to the next and just to scrabble around wherever they can get it. That is the fundamental challenge. Do you agree with that? I absolutely recognise that. I think that most people would recognise the value that sectoral development organisations have overall, but it is that tension with those who are the creators and presenters of that work. It is partly why we are currently focused on a refinement to the under £15,000 open project fund in order to ensure that we are targeting, through that single mechanism, support for individual artists. We have just made an announcement yesterday about the latest round of open project funding. What you will see is nearly £1 million of awards to 44 individual grants, the majority of which are to individual artists. It is still a strong component part of what we are able to offer. However, we should not overlook the fact that funding for regularly funded organisations themselves or other targeted funds also offers opportunities for individual artists to be employed and produce their work. Our latest statistics from 2016-17 demonstrate that there are 4,500 individual artists employment opportunities for the 121 RFOs that were funded in that period. I accept that there is discontent and that you need to do more. Yes. Okay. Thanks very much, Clare Baker. Thank you, convener. There are a number of reviews on going at the moment. The committee was prompted in the summer earlier this year to undertake an inquiry after the concerns that were expressed to us around the regular funding decisions. The reviews that you are undertaking at the moment, you have described the number of them this morning. Obviously, Ian Monroe is here as the acting chief executive. Is there a timescore decisions made about the appointment of a chief executive? Are you comfortable moving forward with the depths of the inquiry at the moment without a permanent chief executive in post? Yes. The organisational change review, which is very much the bit that I am championing on, as I said earlier, there is a time in an organisation where this type of review is absolutely crucial. We felt that, having discussed it with the board, we needed to push on with that sort of review. The recruitment process of a new chief executive would probably take six to nine months and then the new person would then have to get themselves fully under their feet under the desk. The board also has a lot of confidence in the acting chief executive to be able to drive this change, but I also set up a very small board subcommittee of four members of the board to drive this change agenda. It is a very deep and far-reaching review and one that will also have a strong external focus. Open change, again, part of the reason for their selection, was how they have worked very strongly with external stakeholders to cast a light into our organisation. I think that there was very much a sense that we had to keep the momentum for change moving forward. That is probably too early. I do not know if you are able to comment on the organisational review and the role of open change, because I am assuming that the organisational review will be considered in the role of the chief executive and whether there has been any concerns, not about the individual, but about the role of the chief executive and the statutory status of Creative Scotland if that will be considered by the organisational review. The organisational review, we have just started that process. In fact, they were appointed in October. It is really too early at this stage to describe the full extent of how far that review will be going, but I think that what you should be reassured is that it is seen as a really very, very important priority, that the strengths of this organisation are clearly annunciated, but also where there have been weaknesses in the past. We have to try and resolve those and to find a way of moving forward as a much more fit-enabled organisation. Can I ask about the Wavehill review of the 2018-21 funding? You might argue that it was not a response to our inquiry, but it timed along with our inquiry. What is that due to be concluded? The committee has received a number of papers from Creative Scotland that quotes from the Wavehill review, but we do not actually have a finalised copy of it. What is the status of that review at the moment? It is not available yet, but I can just explain. We did commission in the previous RFO process a similar piece of work, but the significance, importance and value of that piece of work is what we have recognised. We commissioned it originally in July. It was quite an ambitious timescale. It was a seven-week turnaround, and it involved consultation with staff and the leadership of the organisation, including the board, as well as all of the individual applicant organisations. On this occasion, we had 105 of the 184 applicant organisations respond to that, and some of that was followed up in detail conversations between the consultants and the individual applicant organisations. What we observed when we got into it was that there was an opportunity there to get even greater value from that piece of work. As I said, the context for this and the value for this was the ability for it to play quite powerfully into the reviews that we were planning to undertake, including that wider funding review that I spoke about. What we did was to extend that process with the independent evaluators, to give them the opportunity to look even more extensively at the material, the analysis and so on. That stretched over into September, and the report concluded mid-October, which is what we have shared with you in terms of the recommendations and the evidence that we have given you. It is really important at this stage that because that is such an important piece of work and covers quite testing and challenging ground for the organisation. It was a bruising experience, including for staff. I am very sensitive to that in terms of supporting the staff to really take time to understand that report, the issues that it is discussing and the recommendations that it is making, and get people comfortable with it before we share it in due course. I anticipate that there will be a position to do that over the next few weeks. One final question. The reviews that are on-going at the moment are a number of reviews, and you said that you recently announced some open funding awards. Does that mean that you do not expect the reviews that are on-going to have any impact on upcoming awards? Are stakeholders quite clear about the current awards that are available that they might change, or what the timescales for any changes might be? We know that we have some communication to do now as we internally as well as externally about how those reviews are dovetailing and will move forward. Some of the next steps are only possible to know once you have gone through one stage of it, so what will be important is that on-going communication. In the meantime, it is really important for people to know and understand that on-going business delivery and the opportunities for people to access support in development terms, not just in funding terms, will continue. We are not going to disrupt the current offer in terms of the three routes to funding. We will continue to deliver those three as planned and as communicated. However, as we move forward into the prospect of new models, and then, in due course, the actual new models will be very clear about how we are going to navigate that and be communicating that very clearly so that people can understand how they can access support, but also what is coming next. I am sure that you recognise how important that is. Given one of the issues that we had over this summer was the Turing fund, the way in which that was announced and people not being aware of the changes, it has been announced at the same time as the regular funding. It has just been confusing around that about how important it is going forward to make it much clearer to people where changes are expected to be coming along. The Turing fund, we recognise that a different approach would have been better, but since we have engaged with the theatre and dance sector and FST themselves proactively and collaboratively, they have helped to shape what the Turing fund has been launched as in August of this year. Indeed, that will continue because we are currently recruiting independent sector representatives to be part of the panel that makes decisions on those awards. The deadline for the applications is next week and we have already seen some applications coming through for that, but that will continue. We have committed in the published guidance that we will reflect on the experience of all that in terms of future iterations of the Turing fund and adjust that as necessary as informed by the sector themselves. They have a direct input in a very helpful way, and I think that it is a helpful model. Thank you very much. Did you have a supplementary, Kenneth? Funding, if that is okay. You have mentioned and talked a lot about it. You have talked about, for example, the balance of funding. I look at page 8 of your submission and we look at the geographic funding distribution for regular open project and target funding. I notice that the area that I represent in North Ayrshire, the grants of just over £192,000 in year 1617 were only 1% of the £19 million that Glasgow has. Glasgow has got four times the population in North Ayrshire, but it is 100 times the number of grant awards. If we look at the two Scottish largest cities, Edinburgh and Glasgow, they get 60% of the number of grants and 60% of the total, funding over £40 million at £66 million. I am just wondering what Creative Scotland will do to try and encourage more applications from organisations and groups outwith the big cities to ensure that there is a much more even distribution of funding and to try and support and stimulate arts groups and individuals in those areas. I think that, to be fair, the laws with a disproportionate grant award in Edinburgh and Glasgow for obvious reasons are magnets for people of an artistic bent, but a 25 times upper capital grant award seems to me shockingly disproportionate. It is not just of course North Ayrshire, there are many other areas in Scotland, such as Weston, Bartonshire and Clackmannanshire. Falkirk, for example, seems to have very low levels of applications, awards and I just want to know what can be done to rebalance on that. I can understand absolutely that perspective and we are absolutely committed to ensure that we are able to support activity and work and individuals and organisations across the length and breadth of Scotland. I will come to the specifics of that in a second, but just in terms of the wider context it is quite a complex dynamic that is in place here, but I think that we should see that, for example, the work of the regularly funded organisations are captured in terms of the geographic-based location of those organisations, but of the 121 that we are supporting in this next three-year period, 74 per cent of them and their work takes place across the whole of the geography of Scotland. There is a distinction there between where they are geographically based and that is important, but also where the work and the activity itself actually happens. We also have national programmes that we work on, things like the Youth Music Initiative. There is nearly a quarter of a million school children and young people who have been involved in activity in the most recent year for that across all 32 local authorities. However, to get to the heart of your question, I think that in terms of recognising what the data and the statistics tell us and addressing that, one of the most important interventions that we have been undertaking over recent years is around place partnerships, which is about working hand-in-hand with local partners and the sector in the local area to build that capacity and that confidence, understand what the aspiration and ambition is and look at how we can work together in order to support that in some way, shape or form. It is not really about project funding at that point, although some of that does take place, but it is about understanding what strategically might be the big shifts that could take place in the local area that will help to build that confidence and that capacity and deliver the ambition. What we do is to co-invest with local partners in that area over a number of years. In earlier years in that programme, what we have had is an approach that is changing now in favour of understanding where there is a real opportunity to step in to an area of lower spend in order to work together effectively, whereas previously it had been more about where there was a willingness and a positive opportunity. What we are keen to do is to build our own geographical presence as part of that equation in terms of how we operate across the geography of Scotland, our staff writing about for a variety of reasons right across Scotland, for different reasons. We can do more of that and that will be something that we will reflect on too, as part of the reviews that we are going to be going through. Just one final question. Obviously a lot of those areas are not going to funding a fairly deprived, so additional funding, I am sure, would be particularly important. In five years from now, do you think that we will see a significant difference to those figures? Yes, absolutely. It is already evident in the way that we have seen. We have currently 14 live place partnerships across Scotland and there will be more to come. The newest one is in Angus. And they will cover the whole country? Eventually they will cover the whole country. We have done 16 so far to have completed another couple of about to complete and 14 are currently live and we will continue to build on that. Eventually we will have covered the whole of the geography of Scotland. I am absolutely confident that we will see the picture improve. I can just comment that during the committee's inquiry into regular funding it was commented that if the place partnerships that have been in place for some time were supposed to build capacity in different parts of Scotland so that you would see regular funding going to organisations in those parts of Scotland and that did not happen in the last round. I am pleased to hear you saying that you are pleased that it is going to happen. You believe it will happen in the future. Yes, and we will be committed to ensuring that we afford every opportunity. I mean I think obviously the regular funding process in whatever form in the future will reflect on this. Obviously when you have got 2 million for the fruit market gallery in Edinburgh and nothing in Ayrshire that is a problem isn't it? Well only if you look through that one singular kind of route to funding in that one lens. But I accept the point that of course there is much more to be done to ensure that we can see funding and investment across the whole of the geography of Scotland. Thanks very much, Ross Greer. I've just got two brief questions, two brief requests for reassurance really. The first is around the issues that we had with factual inaccuracies in the 2018-21 session. In the last session we had on this Ben Thompson was in the interim chair said and direct response to my question on this. The board was unaware of any factual inaccuracies. Now I've since been informed by fire exit that that was not the case, that individual board members were emailed and informed and otherwise informed about factual inaccuracies. I'm not asking you to respond or update on Mr Thompson's question. What I'm asking for is reassurance that the issues with factual inaccuracies but also the issue of organisations feeling that they were unable to have those addressed during the process are being taken into consideration in the process that you now have going forward? Yes, I would give you that assurance. I mean, I think we take the feedback very seriously and some of this is reflected in the way for RFO evaluation. I think just to be absolutely clear and we have put this in the written evidence previously at the end of August that at the timing of that exchange in the previous committee evidence session was at a certain moment in time what we've subsequently had is the kind of eight formal complaint process investigations that looked at the detail of all of this and in two instances we found that there were matters of significance within it which we've communicated fully back to all of the complaint organisations. We've not had any direct follow-up or challenge in response to that but in the event of all of those, the instances of complaint, those organisations were recommended for support anyway but we do accept that it's really important that the quality of the work that we do is transparent and accountable and can be explained to people so that they've got full trust and confidence in the processes that we run whilst they might not always agree with the outcome and the decision. That's reassuring. Just to pick up on one thing you mentioned there about the organisations where those issues were raised, it did in the end receive funding. Firex also mentioned that three years previously in the previous round they had raised concerns about factual inaccuracies and were essentially told not to worry about it because they were getting their funding anyway. That is not a good reason to cease worrying about factual inaccuracies in the reports. Of course, I'm quite sure that they and others were delighted to receive their funding in the end. It doesn't resolve the issues of stress, anxiety and everything that went with that process, so that does need addressed. The second point that I'd like to reassure and so on is in the recommendations for the five stages of the process going forward, there's one particular recommendation. Future guidance documentation for applicants should consider outlining expectations of what constitutes acceptable conduct following any announcement of funding awards. Given the very public negative statements made by a number of applicants off the back of this last process, I'd also like to reassure you that the purpose of this recommendation is not to restrict applicants' ability to conduct discourse in the public realm if they feel it is necessary. Of course, we would never inhibit that. I think that what we're on a journey towards is greater trust and confidence in the work that we do and a greater sense of transparency and accountability that can stand up to scrutiny. That must be at the heart of our work as a public organisation. I would give the assurance about that. This is an independent evaluation and I want to be clear that this is the independent findings and recommendations of that analysis work that has been undertaken by wayfield consulting. I think it's important to record that it's been a time of anxiety and frustration and anger. I absolutely see and hear and understand that. It's also worth recognising that it's been a very bruising experience for the staff of Creative Scotland 2 who, as you heard from Robert earlier, are very committed to what they do and do that with such diligence and care. We have had instances of what I would consider unacceptable behaviour for anybody in any form of public life, which is straight into, indeed, people individually as staff members of Creative Scotland being abused in a very open public environment, so not even in a closed setting, which in itself would be a problem. We have a set of standards in the way that we operate, which I think we would want to ensure was reciprocated with the sector in terms of trust and confidence, but also in a mutual respect. I think that, although we might not always agree, the business of Creative Scotland is absolutely delivered by people and people are at the heart of it. Discussion and debate and dialogue and sometimes disagreement is at the heart of it. It's built on people and those relationships, and I want to make sure that we've got a mutually respectful relationship there. The recommendations in relation to protecting Creative Scotland staff during future processes are particularly welcome ones, so I think that we, as a committee, would be interested in how they are fleshed out in the future. Just picking up on Kenneth Gibson's point, I represent Couttenbeath constituency, and I would be keen indeed to see the nascent cultural activities in some areas being encouraged and facilitated. I will be looking at future developments in that regard very closely indeed, because I think that it's very important that we recognise that, right across Scotland, people are desperate to participate and contribute to the cultural side of life, and I think that they should be encouraged in all ways. Picking up on the Wakehill report—I mean, it is a pity, I have to say, that it was not available in the public domain in advance of your coming to the committee today, because perhaps we could have had a more meaningful discussion in terms of the specifics that are in that report that we've not really been able to get a handle on thus far, but, doubtless, there will be a further opportunity when the report is finally published. Looking at the sort of top-line issues, I appreciate that there's all these reviews ongoing and so forth, but the top-line issues, I mean obviously the funding situation in earlier this year was not ideal to say the least, and I just wonder already, absent the conclusions of these ongoing reviews, what top-line lessons do you think have been learned by Creative Scotland further to the kind of situation that pertained earlier this year? We've touched on some of the themes in the variety of ways already this morning. Trust and confidence comes in many different ways. The lessons to be learned are about greater engagement and transparency, about clearer descriptions of what and why and how we work. All of these will be important conversations as part of the reviews that we have with people. I think the organisation in the breadth of the brief that it holds is at risk of tying itself in knots trying to be all things to all people all of the time, and I think a greater sense of clarity about who we're here for, what we're here for and how we do it is part of what these reviews will help us to deliver. I have to say that also part of this equation is that we know, and it's very unsatisfying from our perspective too, but we know as part of all of this equation that plus we have a very supportive Scottish Government and a very supportive Cabinet Secretary, and they absolutely understand the importance of culture. Our overall budgets are in themselves limited, and that's always going to be the case, but if I take a couple of examples, Open Project funding, we're only able to support fluctuates between a third and a quarter of all the applications that come forward. We could support many, many more, but regular funding is an interesting case in point because we had 184 applicant organisations. 160 of them were recommended for support to the value of £140 million. The 121 that we ended up funding could have been supported at their level of request, £123 million. So our overall budget, which comprises both grant and aid and the national lottery, was two component parts, roughly two thirds grant and aid, one third national lottery. The grant and aid part of it represents 0.2% of the overall Scottish Government budget. We know that we could see an absolute transformational step change with just a wee bit more money within the equation. I think that this is also in the context of the landscape in which cultural organisations and individual artists and practitioners are operating because that landscape is contracting. There are pressures on public funding. There are pressures on trust and foundation funding, private giving, philanthropy and so on. It throws into even sharper relief an expectation on Creative Scotland to be able to compensate for that in some way, shape or form. So I think that the overall budgets that we have at our disposal are part of this equation in terms of how we can be clearer on the one hand about what our priorities are and how we operate, but also not ever stepping back from championing and advocating for further resources from whatever sources in order to enhance the opportunities for people to present their work. Thank you for that, but I mean obviously in terms of this year's budgetary settlement, I do remember colleagues who were really quite pleased indeed at this tremendous settlement that the cabinet secretary, Fiona Hyslop, managed to secure. I think probably other portfolios we are looking on with some jealousy perhaps at the fantastic settlement that Fiona Hyslop managed to secure. I mean obviously in terms of resources, further budgetary discussions will take place. I guess that one always has to be confident in terms of allocation of money that is the public money, taxpayers' money, that it is well spent and that brings us back to your organisational review, ensuring that you do everything that you can to ensure that any public money you get is going to be properly spent and to charge your obligations to the public at large. In terms of the reviews, what will the specific remits of these reviews be in the public domain so that the public can understand what exactly the review is tasked to do? Yes, we'll acknowledged earlier to clear Baker's question about those reviews and the communications of this. It's going to be important, so yes, we want to be very clear about it. The remits are, and how they're intended to operate, timescales as we go through them, and then on-going progress against them. Because they're complementary and they dovetail, and I can appreciate that that's quite a complex equation to understand if you're not in the heart of it like we are, so we'll ensure that we're producing as effective communications as possible. On the budget, I apologise. How will you communicate that to this committee, the progress of these reviews and indeed the outcomes of these reviews? We'll be happy to give the committee further written updates of progress as we move through the next few months into next year. If you could, that would be good, sorry. No, that's to that. You were going on to deal last year. I was just on that budget point. As I said as part of my answer, we absolutely applaud the Scottish Government and the Cabinet Secretary for the support that we've experienced and it was a settlement that we're very much welcome still. Part of that was around the drop in challenges to the national lottery income. What I'm saying though is that in constrained budgets, which there will always be, we know that there is so much more quality and ambition that could be supported for where enhanced resources to be available, and we would want to continue to advocate for that. The regular funding of 121 organisations takes up about 85 per cent or so of our grant and aid budget. That's quite a significant component of available resources through that one funding stream for 121 organisations. It therefore limits the remainder of grant and aid in terms of what is possible with it, but it also throws emphasis on to the national lottery income stream that we've got, which is around a third of our budget, which has continued to be under challenge, although it's stabilising now. That has dropped nearly a quarter in the last four years. This is where the Cabinet Secretary and the Scottish Government were able to address that, but that challenge remains very alive for us in terms of the national lottery perspective. We are working very hard with the wider national lottery family, which is all the distributors across the UK, and with Camelot, the national lottery operator, and with the DCMS and the gambling commission to ensure that the importance and value of the national lottery to the life of the nation is preeminent, so that that converts those good causes into ticket sales, which flow back into the distribution of funding that is available to us. We've talked this morning and you've acknowledged the challenges that you've had, the difficulties, the confidence and all of that. You've given us an insight as to how you're trying to manage that situation going forward. I think that the dialogue, the transparency, the openness that you've given us this morning gives us an insight as to your outlook of trying to secure that and increase that. The communications that you need needs to be robust, because you must have suffered some sort of reputational damage in the sector and in the public eye throughout all of the situation that you find yourselves in. By putting forward the policies and by putting forward some of the procedures that you want to enhance, that may alleviate that, but in the long term, you have to rebuild that confidence to ensure that there's the opposition. In doing all of that, we've talked about the budget and resources being available, and you're having to do, as everyone else says, yes, more with less resources than you would want. How do you prioritise to ensure that that reputation is rebuilt? I think that we should have acknowledged all of that as we have done earlier. I think that we should also recognise, and it was mentioned in Robert's opening remarks, that the organisation is not fundamentally broken. There are many positive things that our organisation continues to support and enable and deliver, and we have many positive relationships with people in the sector, be those individuals or organisations or, indeed, with partners and stakeholders. I think that, as I mentioned earlier, at the heart of that is the human relationships that we have with people. It's fundamental. We have very many positive relationships, as I've said. If we can continue to ensure that we are connected with people across the geography of Scotland, hearing their concerns but also their ambitions and on the odd occasion, some positive feedback, it helps to inform how we work, what our priorities are and how we can explain and account for ourselves. It also helps us refine our processes and so on to ensure that we are continuously learning and improving as we go. What those reviews are about are taking quite a comprehensive stock of the situation across a whole range of areas to reset the organisation, but that's not a blank sheet of paper. I wouldn't want us to overlook the fact that we have some very positive things that we're doing, but at the heart of it are people. I think that being engaged with people on discussion and debate and dialogue and so on is very important to us. The wealth of talent that is in the sector is continuing to grow and continuing to expand their ambitions and their abilities to try and communicate all their creativity across the sector. You have a very big role within that to promote and to ensure that the ones that you are trying to move forward get the chance and get the opportunity and that's through the funding that you may require and they may require to ensure that they have that opportunity to expand their horizons. In doing all of that and you've touched on partnership working today and I think that is very crucial to ensuring that you have the success that you're trying to achieve, but there will be and there are, as we've already seen, locations across the country that are stifled from that debate and from that discussion because they do not have the opportunities and the wherewithal for that to happen. You have a key role to ensure that that does now. You break down some of those barriers and that you do give them the chance to develop and progress and see their ambitions being realised, but that is a very difficult thing to achieve in a very short space of time. When you have those reviews, how will that be fed into it to ensure that we can see for ourselves here at this committee but for also the general public and the wider sector to see that there is progress and there is a movement of progression for the organisation? What's important about what you've said is that our relationships with people are not just about funding, it's also about development and advocacy and influencing. There's much expectation on Creative Scotland as a national body, but what I'm keenly to do as the organisation moving forward is that we're in partnership rather than some sort of parental relationship with individuals and the sector as much more can appear to appear. What the place partnership example demonstrates is that in that peer-to-peer relationship we are working together with the relevant people and partners in individual areas in a respectful way that is empowering in that local area of those individuals and organisations. We find opportunities to understand where we might be able to provide development support through expertise and knowledge that we hold or the ability to invest through some funding, if that's appropriate to. As well as in partnership with those in the local area, talk to others who may not be quite as much on the same page in terms of the value and opportunity and contribution that culture and creativity can actually have to the area and be shoulder to shoulder advocating for that and trying to influence people. The youth is very, very important and I think we are doing a huge thing with Time to Shine and our national youth advisory group where we're trying to get the young from 16 upwards to really engage and again touching on your point it's often if you can get the youth involved at a very early age that you have this potential transformational potential and that's a very, very important part of what we're doing as well. Thank you. Thank you very much. If I just pick up on him when Alexander Stewart was talking about your reviews and I do appreciate that you've said that you will keep the committee informed, I think it would be useful in the first instance for you in writing to tell the committee what the sequence and what the timetable of the different reviews is because we've got Wave Hill into RFO first, then understand as the organisation review, there's a review into open project and then there's a wider review into all funding streams so if you could give us the targets for each of those so that the committee is informed that would be very helpful at the outset, would you be able to do that? I'm not happy to take that away as an action. What I can try and simplify just now in this moment is to say that there are three strands to it. One is about our strategic review which is about our purpose and our priority so who and what are we here for? The second is about our funding model as a whole so that's all our roots to funding and the third one is about organisational development which is about culture and values and behaviours and systems, structures and processes so that's the three, strategic review, funding review and organisational review. Things like the open project, that's part of one of them, that's part of the funding review? It will feed into it but that's a good example where we already see opportunities before we even conduct a wider review involving conversations with the sector. Is that a separate piece of work? It is, it's complementary, it's stuff that we can act on now. Can you write to the committee with a list of all the different pieces of work that you're currently undertaking and the timetables for them so that the committee can scrutinise them? We'll be happy to do that. Tavish Scott, did you have questions, I know that you want to speak about the screen sector but did yours have more general questions? Okay, maybe you could ask all your questions just now then. I nearly think you'll spend more time writing to the committee than you will doing all the interviews, Mr Monroe. I actually wanted to ask about and to reflect on last year on the funding because by definition when you award money to arts bodies there are some who don't get it so there are winners and losers. The losers, as we know last year, quite understandably kicked up about that as inevitably and in fairly they would. They got in touch with MSP, MSP has raised it in Parliament, first of all there's questions, the whole works. So I guess my question is and then you get pressure, no doubt you get the heavy call from the Cabinet Secretary, you get civil servants falling out from the sponsoring department saying there's lots of parliamentary pressure to change your position. I guess my question is the robustness of your review on funding as to how you'll be able to ensure that when that happens in the future, as inevitably it will, the organisation can say, look we have done this absolutely transparently and clearly and we have absolute confidence we've made the right decisions on allocating funds to the following organisations and yes those didn't get it so we're really saying to you Cabinet Secretary please don't second guess us. Is that what you're trying to achieve through the review you've been describing to my colleagues this morning? Yes absolutely but I would want to give you assurance that yes of course there's a lot of interest and scrutiny from a Scottish Government perspective and we have regular meetings as you would expect through our kind of sponsor relationship with the Scottish Government and that's a very supportive relationship. You know the Cabinet Secretary is very clear that you know she's not interfering but does want to ensure that our organisation can stand up in a very transparent and accountable way to the scrutiny that inevitably arises on the processes that we run so what we're endeavouring to do is to get a much stronger position on that of where there is full trust and confidence in those processes in the eyes of the applicant organisations in this sector more widely. That's fine and as part of that therefore presumably you'd look to the Cabinet Secretary to the Government to make clear that when you've done your review and the Government by definition is comfortable with that I take all the convenience points about writing to the committee and making sure the committees have consulted but that in effect you need government to say look this is our body they're responsible for making funding allocations to arts bodies we expect them to get on with that and we trust them to do that yes and as an independent non-departmental public body that's entirely appropriate and right yeah and that's the initial I'm sure you've shared your thinking about these reviews with the government and have those discussions already they are already I take it accepting that principle that it's not their job to interfere with your operational budget operational decisions over funding different authorities yes and they fully respect and honour that but as I said it is absolutely appropriate for them to want to ensure that we are as a non-departmental public body expending public funding that we're doing that in a confident way in a position of trust and confidence but also transparency okay okay thank you thank you thank you and Stuart McMillan thank you convener good morning gentlemen just there's a couple of questions regarding the screen Scotland and just that the first thing I actually just want to put in the record is I think the website is very effective I think it's also very easy to navigate and I just I wanted to make you aware me that obviously there have been a number of criticisms in the past but I think that's actually that's not very useful tool to opening Scotland up for for further activity we had the debate on our report last week in the chamber and also you know one of the continual issues that has arisen over the something over that piece of work but also prior to that was the issue of a of some type of film studio and not just not just some type of temporary facility or something that's just being converted but naturally purpose-built attractive studio location no also the issue regarding Pentlands is is still under way as we know but can you provide further information in terms of where we actually are with with any new investment to come in to Scotland via some type of new studio so on on the studio you'll seen from our written evidence that we were pleased to have secured in principle agreement from the cabinet secretary on behalf of the Scottish Government to the business case that we had submitted in June that business case just to be absolutely clear is a very comprehensive technical document that we were required to undertake in accordance with the HM Treasury Green Book appraisal which covers a kind of structured approach in that business case to cover areas of strategy or finance and economics and risk and so on since then we as part of that approval had further technical work requested to be undertaken which we've done over the course of the summer and in parallel to that we've been gearing up towards being able to go live with the proposition that's been approved in principle by the by the Scottish Government it's hard to say any more about the detail of that yet because we're in a very delicate stage at the moment in terms of commercial negotiations with the prospective landlord about that proposition and it would be premature to say anything premature and prejudicial potentially to say anything further about the detail of that but what I would want to give you confidence and assurance on is that the central importance of this as part of transforming the opportunities for the industry as part of this five year plan that Screen Scotland is working on with the partners is an absolute recognition of that it's one of the central priorities for us and a key focus that we've been working on we've never been so advanced in terms of the the point of which we are now at in comparison to previous iterations of the studio infrastructure because you'll remember in 2014-15 we ran the tender process with Scottish Enterprise that was non-site specific but it also took place in a completely different landscape and context so the technical position on the studio case and so on is very advanced but what I'm highlighting is that the set of conditions in which we're about to embark on an actual tender process to name a site and location to attract a private sector operator to be the operational partner to deliver it in partnership with the public sector is within the context of Screen Scotland where we've got enhanced funding we've got an enhanced screen commission and location service enhanced screen skills and expertise and relationships with the sector and so on so the conditions are right and absolutely ripe and it is an absolute priority for us to ensure that we now get this over the line in a way that we haven't been able to do before and we're very very close to that now in a way that we haven't been before. Will this be one studio or will there be multiple studios that could be designed and generated and built across the country? So what we're focused on is a specific proposition but it absolutely is the case that that will sit amongst other studio offers within Scotland and we know and there's agreement on the fact that Scotland can sustain more than one studio operation. What we're focused on is this single proposition but that's complementary to Ward Park, the pyramids and indeed Pentland and clearly they're considering their position in that regard but there are beyond even those there are other kind of temporary facilities that some productions find more favourable but of course the central proposition that we're working on as a permanent studio with a private operator is significant to ensure that we've got that long term stability at the heart of the infrastructure for Scotland going forward. Okay. I've raised this before, I've raised it again last week just in terms of the actual locations. No doubt Screen Scotland will consider somewhere like Glasgow or Edinburgh as the primary location for a new studio and I can understand why in terms of the catchment, in terms of the bigger city offerings but there is also a world outside of the cities in Scotland and as I said last week in the chamber I think there is a there would be a welcome to actually have some type of offer in Inverclyde because there is a space there, there is a talent pool already there, a creative talent pool as well as the skills talent pool and it's something that I'd like you to consider. I think we could all make a pitch for our own areas Mr McMillan and I'm sure the Creative Scotland will take that point on board. I think we have a supplementary here from Claire Baker. Thank you, convener. I was hoping you could be able to tell me a wee bit more about the studio proposal. I understand that you're in negotiations at the moment so that might be sensitive but you've described it as a private operator would come in to run the facility but I still unclear about how is it going to be purpose built and who pays for the infrastructure, who pays for the building of the facility. Are you looking for private sources for that as well? You described the private operator as running it but I don't understand how it's going to be. I've got to be careful in terms of my ability to fully answer that question at this point in time but I'll explain how and why. In terms of what I can say now, the issue of state aid has been raised many many times. There are two key steps that will enable us to address and manage the state aid issue that are part of what we're doing. The first on that is to run an actual tender process so the business of market failure which is a kind of state aid consideration. The process of the tender will be in itself helping to address the issue of state aid so we are not as the public sector solely delivering that studio. The second component part is the tender itself will be seeking a private sector interest and operator to partner with the public sector in order to deliver that studio in capital and physical terms and then go on to operate it. The actual nature and proportion of the public-private sector partnership there will depend on the response to that tender but what is very important is the combination of the two issues for state aid purposes. The actual tender itself and securing private sector interest and investment alongside public sector, those two combined will help to address the state aid issue. In due course, once we're clearer, once we've gone through the tender and named the site location and can secure that preferred operator, we will then work on the negotiated deal that will understand the nature of the public-private sector arrangement and the Government's arrangements that will sit alongside that. That's helpful, thank you. The new executive director for Screen Scotland, when we did the inquiry, there was some concerns raised that that role would be not exclusive for screen. I think that you've given a commitment that it will initially be but I'm not sure what the future plans for that executive director role is. Absolute assurance to the committee again that Isabel Davies, who's very firmly in post now and very firmly focused on screen, will continue for the foreseeable future. We will take stock of this issue as part of the organisational development review, which also is going to be looking at structures, to ensure that Isabel's focus remains on screen. The additional element of the job description that she was recruited against, we will continue to reflect on as part of that process but I want to absolutely assure you that Isabel is here to lead Screen Scotland and I don't see any change to that focus for the foreseeable future at all and we'll reflect further on that to ensure that that's absolutely clear going forward. I was glad to hear what you said, Ian, about this proposal being much further advanced than where previous ones have been. I think it would be fair to say that, as much as since it hit the Herald on Sunday a couple of weeks ago and even what you said to the committee previous to that, there's been a lot of enthusiasm and welcome words from the industry but also a healthy amount of scepticism because there are a number of people who feel like we have been here before, we have heard this before and nothing has materialised. What I'd be interested in in this case is once you're at the point where you can go public with a specific proposal, what are your plans for industry consultation, not with those who will be submitting in the tender process but with those in the wider industry who obviously have a key stake in seeing a successful site coming into fruition? Specifically in relation to the studio? Yes. So the process itself will procure the preferred operator that, as I said to Claire Baker, will then absolutely bottom out the arrangements and so on. I think that that's a key moment where once the operator is known, they will be able to engage directly themselves and we can help facilitate that to understand what the needs and expectations of the sector more widely are. There's a lot of information already known and a lot of ambition and expectations already known and understood about what the sector is looking for but I understand absolutely the point that's being made that it's got to be clear that this will help address the needs of particularly the indigenous sector within Scotland to ensure that it has a relevance and an appropriate offer to them too, as well as, of course, the work that we do to promote incoming productions from beyond Scotland. Is your role in the process partly to ensure that that engagement between the potential developer and the wider industry happens? Do you see it not just that you would recommend it, but that you will ensure that engagement happens? We will facilitate that process, yes. I think that, in reality, it's hard until we get to that point of knowing who the operator is. We won't set that as a requirement within the tender, per se, but as a criterion, if you like, but it will be important for us to have that conversation with the operator in due course to ensure that that takes place. What's the timescale for when will you be announcing the operator? That will come on the back of the tender. The tender that we will be able to go live with as soon as we're able to finish the negotiation with the preferred landlord on the proposed location. It's in the hands of that negotiation principally, but I'm hopeful that it will be sometime in the next few weeks. The tender process itself then will be live for a number of weeks, and we'll conclude in the new year if all that timescale plays out. So, realistically, when could we see our film studio? In 2019-20. In 2019-20, okay, that's great. Thank you very much for that. Just to wrap up another couple of things in terms of the screen unit, you're aware that this committee has very strong view that we should have a standalone screen agency, and we'll continue to monitor the progress of that and continue to make that case. In terms of where we are at the moment with the screen unit, we had a number of other areas of concern, and I just wanted to run a couple of them past you. How is business development support going to be tailored? Obviously, you have a collaboration with the Scottish Enterprise with regards to that, so I wonder if you could tell us again timescales and what business development support is going to be recruited. Also, data gathering was an issue that came out in our inquiry as being not as robust as it could be in terms of the screen sector, and we were particularly concerned with the evidence that we took that there should be dedicated data gathering for the screen unit, not just part of overall data gathering within Creative Scotland. I wonder if you could address those two aspects, the business development support and the data gathering. Okay, so business development support first. In place at the moment are two key business support—targeted business support services, so this is beyond the general business offer, which is on behalf of all the partners on the single front door website, which Stuart McMillan referenced earlier on. Those two key specific targeted business development support initiatives in partnership with Scottish Enterprise are Focus, which is about support for production companies across a range of skills and expertise, and a programme called Deep, which is about individual producers and a partnership with the BBC and Channel 4 to connect them with production opportunities and commissioning of work and so on. In many regards, they are pilots and they are being evaluated and due course. The Focus project is a two-year pilot and the Deep project is three years. They are scalable, so they are very targeted live current specific business development opportunities that exist at the moment that, so far, are proving positive for those who are engaging with them. In a wider sense, what we are also doing is recruiting business development specialists within the Screen Scotland team—that is in the phase 3 jobs that we are embarking on—and they will be there as the fulcrum of the business development support across the partnership, which is being discussed in the wider sense across all five partners, but also involving the business gateway in terms of the offer across the whole of the 32 local authorities. That is not just about Screen, but about the wider creative industries. 84,000 people are employed in the creative industries in Scotland and 15,000 businesses. For all of them, as well as Screen, but Screen will benefit from the wider partnership conversations. We are looking at how we can strengthen our own skills and expertise in the organisation to complement those targeted programmes, while we continue to look at the wider partnership with the business gateway to strengthen its offer to ensure that it is delivering effectively for creative businesses, too. Again, we will be happy to keep people up to date on progress as we go through that, because it is fundamentally one of the planks within the plan for Screen Scotland and the five-year plan that we have set out. We will communicate on that in due course, but there are already measures in place, as I said, that people can access and we will be happy to keep. Very quickly update us on the data, because our clock is ticking. It is a very short and quick answer to that. Again, as part of our recruitment, we have a specialist recruited into the organisation to enhance our knowledge and research team, who is going to be helping to shape the next steps on how we improve that data hub proposition that was in the business case for the Screen Scotland five-year plan. Again, we will be happy to report back on that. You do not have a dedicated screen data specialist. Yes, that is the person that we have just recruited. They are dedicated to Screen. They will be progressing the hub. We will have a hub. Yes. In some way, shape or form, we need to see what their own reflections on that are with the partners about what the actual form of that is, but absolutely the enhancement of data capture, gathering and analysis and playing that back out is an important strand of the work that we are doing. My expectation in the sector is that there would be a dedicated hub for Screen, but I am aware that it was a very long inquiry and a weighty report. We have not really had the time I feel to really dig into this session, but the committee has expressed a desire to continue to monitor progress in Screen. I am no doubt that we will be speaking to you again about it in the future. Thank you very much for coming to give evidence to us today and we shall now close. I am going to private session.