 I welcome you all to the 12th meeting of the Local Government and Communities Committee in 2019 and remind everyone present to turn off their mobile phones. Agenda item 1 is consideration of whether to take agenda item 4 in private. Are we all agreed? Thank you, that's agreed. Agenda item 2 is new powers arising from the UK's withdrawal from the European Union and today we'll take evidence on that. As outlined in our meeting papers, revised analysis published by the UK Government in April lists 111 areas where EU law and devolved competence intersects. Within these policy areas, a number have been identified where common frameworks between devolved and UK administrations may be required. These include public procurement, which is an area of interest to the local government sector. Our papers also mention structural funding. While it's not identified as a common framework in the UK Government's analysis, it's an area where the UK Government has proposed a UK-wide shared prosperity fund to replace the current EU funds. Local government currently plays a role in distributing funds. The evidence session today will therefore cover these two issues in more detail and I'd like to welcome Councillor Alison Evison, President of COSLA, Julie Wells, director of Scotland Excel, Gordon MacLaren, former chief executive, ESEP Ltd and Malcolm Leitch, chair of European funding subgroup, Scottish local authorities economic development group. I'd like to start off by asking you all two things. One is that the areas of most concern to local government were common frameworks that you think will need to be established. When you're responding to that, I suppose with the obvious exception of Alison Evison, if you could explain a bit of what your organisation does and what its role will be in this process. Would anybody like to start off? I would be helpful. Hi everyone, I'm Julie Wells, I'm the director at Scotland Excel. Scotland Excel is a shared service across 32 local authorities. We do all the shared procurement, including things like care, food in schools, books in schools, bins, any number of things we do it. Our contract portfolio at the moment sits about £1 billion. Over and above that we provide learning and development to our council members to help them to get better at procurement and commercial skills as well. In terms of the areas of most concern, what is being proposed at the moment doesn't make a massive change actually to what we currently do. There are some renaming of things, so at the moment we have what we call the ESPD, the European Single Procurement document. That will change to the SPD, the Single Procurement document. At the moment we would advertise everything via Public Contract Scotland and that would automatically go to OJU basically. The UK Government has set up a new online tool, which means that we can still use PCS, Public Contract Scotland but it will go to the new tool. For us at the moment in terms of the legislation, there isn't a huge change in terms of what we will be doing certainly in the short term. That applies to both a deal or a no deal. Bigger concerns for us actually are around currency fluctuations, supply chain risk and things like that, which we have been spending a lot of time over the last years working with supply chain to attempt to mitigate. On the whole, they are reasonably well prepared, although I would caveat that by saying that it depends on what we end up doing, but they are reasonably well prepared and that's in part the work that we do with them and our member councils do with them. Our major concern is to keep the influence and involvement in development of policies, the same as we do now. At the moment, COSLA has a strong voice within Europe. We have a strong voice in development of policy and a lot of our work is very much involved in the work that's decided in Europe. Things like consumer protection, food safety, environmental influence and power policies are all very much things that we have a voice in at the moment within Europe and we would like to see that continue moving forward through any common framework. Our major concern is that we still have that voice. We still have that voice for our communities for what's going on in our local areas. That particular principle of subsidiarity is really important to us and we need to make sure that that's continued moving forward. In particular, there are 64 of the powers that are being returned from the EU to the UK. 64 of them are COSLA's test as being local government concerns. Things like the environment in particular are local government concerns. At the moment, we have a key role in those. We'd like to see some kind of framework developing that Scottish government has a key role in it but also local government has a key role in moving forward again on that principle of subsidiarity. That is a key aspect of what we're doing. We need as well to make sure that in things like procurement coming back to the UK, procurement already is devolved in many ways but we're working within the EU. We have an opportunity here to allow local councils to buy local. We have an opportunity to allow councils to pay the living wage and we need to make sure that we have a voice at that table to make sure that things like that can happen to the benefit of local government and to our local councils as well. A lot of council work is involving trade in procuring, involving buying services, involved in working with trade deals as well. At the moment, the system that's being proposed doesn't allow local government to have a say in what's happening with trade deals. Neither the UK government nor the Scottish government has involved local government at that stage in that kind of work and we would like to ensure that, following again that principle of subsidiarity, we have a key role in that kind of work as well. I think this relates very strongly to the work that we are doing with the Scottish government in many ways. We are hopefully going to see the charter of European self-government coming into law at some stage very soon now and that will enshrine those principles of subsidiarity. We are working very closely on empowerment of local communities and this is a way that we can develop systems here to allow that still to happen. Basically, it's that Team Scotland approach. Local government has a key role in trade, in environmental work, in procurement and we need to have a system through the common frameworks that allows that to happen. Mike Russell has himself used the phrase, no detriment. I think that that's key to what we're doing. We need to see no detriment to the current position of local government. Okay, thank you very much. Welcome. Thank you, chair. The Scottish Local Economic Development Group slayed for short and it's not the 70s heavy rock band for some of the more mature members of the committee, you might remember. Slayed consists of all 32 local authorities in Scotland. It is an officer network comprising officers in the economic development services of each council. It works very closely with COSLA on matters of mutual interest and is basically the repository of technical expertise in the area of local authority economic development. In terms of the subject matter for this morning, there are perhaps two areas where the issue of potential EU common frameworks following Brexit would be of direct relevance to local authority economic development services. First, those are the state aid framework that would arise should there be a Brexit, and that would in turn depend on the style of Brexit that might happen. Secondly, the other factor that you alluded to in your introductory remarks is about European funding, in particular European structural funds, which Scottish local authorities have made very extensive, and I would say good use of, over a very, very long number of years. I'm maybe slightly the odd one out here. I used to be the chief executive of ESAP Ltd. It was one of the independent programme management executives that managed the administration and disbursement of European structural funds up until 2012. My approach to that is one of, obviously, huge dismay at the whole issue of Brexit and the impact that it's going to have, but wanting to see some level of continuity of structural funds because I think that they've been a force for good, certainly in Scotland. Indeed, Scotland has a huge reputation in the delivery of structural funds both at the operational level but also at the policy level. Across Europe, I worked for a time in the commission in addition to managing structural funds in Scotland. My comments are perhaps more about delivery and the importance of delivering, the importance of partnership working in that delivery. As Malcolm and my other colleagues here have spoke of, local authorities have played a huge role in taking up delivering and successfully delivering projects on the ground. They've always been a key partner. From the very early days of structural funds, they were a key player. Partnership, as it evolved in structural funds context, particularly at an all Scotland level, was an equitable dimension. It was important in the job that we did in managing structural funds to make sure that it was a genuine equitable partnership that everyone had a say in both the development of the programme priorities, the delivery and the processes that were required in terms of adjudicating and deciding which projects would go forward. For me, partnership is absolutely key. The other thing is accountability. I've read through the other supporting papers, but people have, over time, forgotten the issue of accountability, and it needs to be acknowledged that those are public funds, taxpayer funds, and it's beholden on all of us involved in the management and delivery of those funds that they are delivered in an effective and successful way. Also, in a compliant way—you'll have it in a number of times—the complaints about the administrative burden that goes along with structural funds. There is a huge contingent responsibility. The audit regime is perhaps extreme. I'm not going to defend that for a minute, but there has to be a balancing act going forward that says that we have to be accountable on how those funds, wherever we call them, are going to be dispersed in the future. People need to understand that they have to behave responsibly, they have to account for how the money is spent, and it needs to be compliant in the context of procurement, state aid and the like. The state aid regime post Brexit is obviously one that the UK will establish, but it's still important nonetheless that we don't support something at a sub-regional level that distorts local competition. We need to remember that that is fundamentally important. The last thing that I would say quickly is an issue called capacity building. If you look at structural funds programmes over the years, there is a budget line in the financial envelope called technical assistance, and that refers to capacity building in terms of the administrative arrangements in delivering structural funds. It also includes things like evaluation and monitoring in IT systems, but I just want to make a comment on that in as much as that was largely what we did, and we were funded by technical assistance in managing the programmes. There has to be a proactive approach to supporting bodies that draw down structural funds, and if there's any delay in spend and commitment levels, you have to take a proactive approach. I note that it's slightly concerning that we've already had to return significant sums of money to the commission, whom I may say they don't want to have, they've received the money back, they want to see it invested, but money is being lost. Going forward, that issue of capacity building in terms of both lead bodies and the administration arrangements that may be put in place is key. Technical assistance represents a maximum of 2 per cent of the total financial envelope. We never, ever used the full amount of 2 per cent, but I would suggest, excuse me, that that's maybe something that's taken into consideration in the future. Okay, thank you very much. Good morning. Just picking up a few of the points already, I know that colleagues have got more detailed questions. We've kind of, I suppose, in very broad brush covered many of the areas that we wish to look at in more detail this morning, but picking up a few things at this stage, so I note that Councillor Evanson stated that COSLA was working with the Scottish Government as Team Scotland and that it's part of your normal work with the Scottish Government, and making the point quite rightly that local government's role in those areas, including, of course, the important role of the structural funds and those funds should be respected, but I just wonder, in terms of what we understand thus far, which we know very little about what the UK Government's planning to do, is that it might be the Westminster housing, communities and local government departments that could be responsible for administering those funds. I just wonder how you feel that would fit in respecting the role of local government as regards structural funds and social funds, which would be part of the shared prosperity fund. Thank you. I think that it's clear that the role of local government will change. I think that the common framework that would involve us having more of a relationship with the UK Government than we do at the moment. At the moment, we work very closely with the Scottish Government and we work with Europe, and we have very few connections with the UK Government. I suspect the way things are moving, that that will change, and we will also have to have some kind of relationship more involvement on all these levels with the UK Government. Last year, we welcomed the announcement of the UK Government that they would create a consultative mechanism between the UK and local government, between our partner local government organisations in England, in Wales and Northern Ireland as well, a partnership, a consultative arrangement whereby we could discuss policies and we could develop things that were of mutual concern to all of us and develop policies before they got to the stage even of the Queen's speech. Unfortunately, that was promised, but nothing's developed from it. There is no movement on that apart from the initial promise last year, but that kind of involvement will become crucial. Obviously, we would argue very strongly that a similar arrangement needs to be made formally at the Scottish level as well, that we need to be working. Yes, we do have a developing partnership relationship with the Scottish Government, with ministers from across the table in Scotland, but something more formalised I think would have to come as part of these common frameworks. At the moment, the UK Government's promise, but not delivered, and the Scottish Government, we're still talking about it, so there's improvement to be made on both levels of that work and across all spheres of government. You're right, we will need a closer relationship, I imagine, with the UK Government as well as the Scottish Government. Can I just pick up on some other members that the panel might want to chip in? Obviously, the Scottish Government would be keen to be as open, transparent and collaborative as possible, but if you don't have the clarity about what on earth the policy is, it puts a few challenges perhaps in the way of that at this stage. I was disappointed to hear that the UK Government is still not able to provide any real information, nor does it appear that it is working really with anybody to seek to move this agenda forward. Obviously, the Queen's speech has been delayed now to the autumn. In the meantime, what do other members of the panel see as being a way forward, because time is marching on and we still have no clarity at all whatsoever about any of the key issues with regard to the successor to the structural fund and the social fund? Thank you. I think that you're raising some points. I think that many of us in the local government and particularly in the field of economic development share on that. One of the defects about the UK share prosperity fund is not just a lack of detail, but there's no guarantees that it's going to be an enduring part of the landscape beyond a certain given, say, spending round. We're certainly, in a way, aware that within the UK, within Scotland, there are big disparities in regional economic development, in regional economic labour markets. As long as those exist in the UK, there is a need for a regional policy that needs to be underpinned at a somewhat higher level than just a short-term three-four-year spending package. One of the things that many of the correspondence to some of your sister committees inquiries into aspects of the subject have made over the past year has been a need for a long-term perspective, one that isn't just contingent in one particular spending round and one that has some sort of degree of permanence to it. In a way, it's important to note that the European structural fund regulations are regulations, so they directly apply in UK law. Once that's moved or removed, there is no... At the moment, as I understand the situation, there is no proposal to replace that legal framework with anything to replace it, and that is a sort of weakness. As I say, what's happened is that we had UK regional policy right from the 1930s onwards underpinned by primary legislation beginning with the special areas act 1934 and moving on to various iterations over the 50 years or so thereafter, but that was increasingly subsumed by EU legislation in the area of structural funds, in the area of regional state aid, for example. In a sense, we have our approach to regional development in the UK that is ultimately predicated and direct legislation originating from the European Union, and that is what gives a degree of certainty. My colleague Gordon, who is an old friend of mine, alluded to some of the technical difficulties. The EU policy has changed. We all have had our complaints with it, but at least we all had a certainty it would be there. We may have had complaints about whether this area got its priority in another area or didn't. We may have had complaints about what you were allowed to spend the money on. You may have had complaints about what the grant rates were, but at least you knew that if the successive seven-year cycle, the policy would be there in some shape or form, and that is the risk of a lack of a framework for that sort of activity that we face as local government at the moment in the economic development sphere. Mr McLaren? Sorry, I think that Mr McLaren does that. Sorry. I just relate to echo some of Malcolm's comments. Again, just going back a little bit in the history if you will indulge me for a moment. Malcolm's right. The regulations are set by the EU. The commission services then set the high-level priorities at the policy level, but we do remember as a member state. We all have discussed those add-in to an item at different committees in Brussels, so everyone's member state, UK included, has signed up to these high-level development priorities. What then happens at the kind of sub-national level, for example, in Scotland? We had a fair latitude to develop within that overarching framework of development themes, the kind of issues that we wanted to pursue and prioritise. Yes, there was a huge debate in terms of how the money would be dispersed at a territorial level, but we worked those out and we were able to do that at an all-Scotland level, and we didn't necessarily have a white-haul breathing down our neck, which was the case in the early days. We had a very good and very constructed relationship with the European Commission, with the commission services, and we could deal with them directly. The negotiations that we had in the past, leading up to a new programming period, went generally pretty smoothly. We were talking to them very early on. We were learning lessons of the current programme, what worked, what didn't work, which way we wanted to go. Sadly, that's been lost for a variety of reasons, but we've always had very good and very supportive relations at the commission level. I guess what I'm saying here is that whatever happens, Brexit does take place and suddenly we don't have that. Safety net is aware of the EU regulations still allowing us to go forward with a regional policy. It was the EU that brought in the whole concept of regional development and regional policy. We should continue that in a sense, and it's easy for me to say now because I'm retired, but it's within Scotland's gift to take the initiative and say we've got this headline, the shared prosperity fund, but what would we want to do? We had a level of continuity in terms of €800 million, 900 million, what would we do with that money? I know that this is a local authority perspective, and it's been the biggest player in structural funds that's the greatest knowledge base, but they work closely with other economic actors, including the third sector. Getting people to come together and coming up with a joint vision of where the priorities would be and how we'd want to direct that funding. It might be big-ticket initiatives, like the broadband roll-out or whatever. I'm slightly behind the time support for renewables, but I guess what I'm saying is we shouldn't just wait, and certainly in the past we were generally always well-prepared in Scotland because there was always a push coming politically from local government from Scottish Enterprise, from universities. What's coming up next? What is it that we need to do? Thank you. Very briefly, convener, just to make the point that there isn't any commitment about funding yet at all, albeit that we didn't preclude a conversation. I do take the point that Ms McLaren makes, but there are key steers that would facilitate a useful conversation, and we don't have that because Westminster is not engaging. Nor is there a plan for a Queen's speech until the autumn. Picking up on the state aid point, the state aid is not reserved, it's not in schedule 5, the state aid is devolved. That would be the legal perspective. Thank you. Andy, Tordi, will you come in there, if it is very briefly? I just think that my question was around funds, and that seems to have been what Annabelle Ewing has been asking about, so it may follow on from that. It's up to you, convener. We'll come in later on, because Annabelle's was a more general question, I think, about all the stuff. Andy? Thanks very much. I want to talk about procurement, and to an extent perhaps state aids as well. I missed Annabelle Ewing's past last comment, and I'm not sure if she's saying that state aids is devolved. It is. It doesn't appear as reserved in schedule 5. Everything that is not reserved is devolved. That is the rule of the Scots. I understand that. The position of the UK Government that it is reserved is also the position of the Scottish Government that it is reserved. The position of the Scottish Government is that it is devolved, and they have been in contact with the UK Government on many occasions to make that point. Right. I don't want to have an argument about this. That's not what I'm reading in Scottish Government guidance. The point is that there is a dispute about that. The UK Government takes a different view. Let's come back to state aids. I want to talk about procurement. Alison, you talked about procurement possibilities. Procurement is one of those areas where it's been identified to be a non-legislative common framework. As I understand it from Derek Mackay's letter to the Economy and Fair Work Committee, all parties have now agreed that there doesn't need to be legislation, but there will be a non-legislative common framework. Of course, it also has potentially significant implications in terms of any potential trade deals that are reached. Julie, you mentioned in your opening remarks that much is staying the same in terms of the immediate administration of the process, but you talked about the possibilities of taking into account things like living wage and local supply chains. I'm wondering if you can say a little bit more about the extent to which you think procurement policy will be able to be developed differently in Scotland from the rest of the UK? And to what extent, following on councillor's remarks about subsidiarity, do you feel that councils should be able to adopt different rules to an extent around procurement? Our position very much is that things should be decided at the lowest possible level that's most effective for them. They should be discussed at the most appropriate place. Obviously, councils therefore have a strong role in their local areas to do that. So, yes, I'm arguing strongly for a position within these common frameworks for local government, that we need to have a voice at the table, we need to have our views put forward, and we need to be working very closely with the Scottish Government and the UK Government where appropriate to push these things forward. At the moment, we are following obviously EU public procurement legislation and there's a framework through that. There are maybe not many opportunities to come from the situation that we're in at the moment, but one opportunity that does exist is for the policies and procedures that we would like to have seen that are not currently able to do to be put into practice. Lots of local authorities are supporting economic development in their own areas, which is obviously, inclusive economic growth is a key aspect of local authorities' work. We want to do all we can to support that. One key aspect of that would be having more ability to buy local, which obviously is not always possible at the moment with the current EU legislation. Things like paying the living wage through community benefit clauses on procurement is difficult at the moment in the way the wording has to be done in the way it can be done through procurement policies. If we're able to have a common framework that involves a greater voice, we can develop something that's more appropriate to our wishes in Scotland and what we are trying to develop. We are linked very closely. We jointly launched with the Scottish Government the national performance framework last year and within that fair work, living wage are key aspects of where we want to see Scotland going. In our procurement that we're developing into the future, post where we are with Brexit at the moment, we would have the opportunity to do that and benefit all our communities and benefit that inclusive economic growth, which is a key aspect of our work. Julie, do you want to say anything about that? Yes, please. I would start by saying that I believe that Scotland is probably more further forward in terms of developing what I would call social procurement than the rest of the UK because of the laws that we have in place. That's based on discussions with my peers in the rest of the UK who indeed come to us and ask how can we do this better. I think that we've come a long way around using the power of public procurement for social betterment in terms of community benefits. In the living wage debate, although we haven't been able to make it mandatory, we've seen a huge increase in the number of suppliers that are willing to try and pay all of their staff the living wage and indeed become accredited. All of the things that we've done to date has made a difference. I think that the changes ahead create an opportunity to make even more of a difference. I always worry that I'm in councils every day because they're my customers and they often say, the elected members will often say, why can't we just spend all our money within our council area? We show them how much economic benefits come from the surrounding councils. I'm wholly in favour of getting the maximum local economic growth for those council areas. We need to be careful about building barriers around our own areas because in some ways that can be detrimental in lots of situations. The spend data supports that, so we need to be careful about that. I think that that creates an opportunity for us to forge ahead in the path that we're already on, which is about using public money for social good. To be clear, you would like to see a procurement regime developed whereby different councils could have the flexibility to apply different rules. The key word in what you've said is flexibility. What's appropriate, what's helpful, what inspires and creates that inclusive economic growth. In different areas, different councils working with other councils in the local area will come up with different solutions. It's a point again of local decision making, I suppose, and subsidiarity, and getting what is right for a particular area. It's not precluding working with other authorities or selling services to other authorities, or anything like that. It's about that flexibility to allow it to happen to greater extent to the world in which it is able to happen at the moment. Is it your position that that flexibility is currently constrained by the existing procurement rules? There is an opportunity at the moment that we've done as much as we can within the existing framework, within the existing rules. There's an opportunity to fly and go much further that we need to take for the basic economic growth of the whole of Scotland. If we're supporting inclusive economic growth in local areas, we're supporting Scottish economic growth. It's important to do that for all our benefits. That's a good microcosm, I suppose, of the wider discussion about how to take forward these common frameworks. You were clear that you wanted to have a role in the development of such a common framework. Beyond the role that COSLA usually has, as a consultant, it sits on working groups and all the rest of it, just to be clear, are you talking about an enhanced role in decision making so that any future common framework should be subject to the sign-off of local government, just to be clear about what you mean by that? At the moment, we have a very strong role through the Committee of the Regions within Europe. We have a key role in developing policy and we have an input from the very beginning of an idea for a policy. We have an input through the Committee of the Regions to that at that stage, and it might be five years before it becomes policy, but we're there right at the beginning. We're putting ideas forward, and many of our ideas have been taken forward through that kind of mechanism. It was the work of COSLA in Europe, for example, that argued for things like Erasmus supported by the EU, and it was our argument at that stage to enable that to get to the stage we are with those kind of policies. So we've got that situation already within Europe. We've got that influence on policy and as it develops. I think those words again from Mike Russell, those words of no detriment, I'm going to quote those again, because that's what we need to see moving forward. We shouldn't be losing out from this process. We've got a key role, we've shown we're responsible, we've got an understanding, we've shown we've got both elected members and officers who are able to work on these processes and take it forward for the greater good, and the system moving forward, the common frameworks need going forward should involve that as well. We've already got a good partnership in many levels with the Scottish Government that's developing, and it's to everybody's benefit that we have that. We saw it maybe in local issues as well last year, like the development of the 1140 hours, the involvement of local government in that we need to make sure that we still have that role. So, yes, I do think we need that strong role in the development of policy and the agreement of policy in the carrying forward a bit. Just pursuing that a little bit and other panellists welcome to come in. A non-legislative, what we're being asked as committees in Parliament by the Finance and Constitution Committee are our views on the role of Parliament, because we are committees of Parliament, the role of Parliament in the development of common frameworks. In those common frameworks, obviously legislative ones, we will have a role, but non-legislative ones, it's a little bit less clear. So because procurement is a non-legislative common framework, the danger is it is agreed behind closed doors by ministers and Parliament finds it difficult at the best of times to scrutinise a Government where in relation to discussions with other agreements, that's a difficult one for us to scrutinise because there's issues of confidence and all the rest of it. So do you have any proposals or ideas about how this non-legislative common framework should be developed, such that your voice is an effective voice? And indeed, consider how Parliament's voice could be an effective voice as well. Or have you not thought about that? That's what we're grappling with, one of the process questions. No specific ideas at this stage, but what is required is a joint discussion. We need to be at that table formulating it. There's a lot of constitutional changes that are going to be brought forward, a lot of rethinking how we do business, how we work together. What we need is what the UK Government has promised us and not yet delivered, this consultative committee in which we can work together, we can sit down and evolve policies from the very beginning. We've had that proposed and we've agreed it from the UK level. We need that kind of work to be done in Scotland as well so we can have that kind of structure set up. It doesn't exist at the moment. We need to work with officers, we need to work with elected members to actually come together about what that can actually be, but at the moment, no firm proposals apart from the fact that we need that discussion. Okay, and moving on to stay aids, as I say, there's a difference. Okay, very briefly, on stay aids, there's a difference of views about who's got competence to this, but putting that to one side, there will have to be some rules, there will be some rules to replace the existing ones. How important are stay aids in local economic development and the way you do business? I think that I can perhaps give some answer to the points raised there. They are important because a large amount of economic development activity that we do in local authorities, well, all economic development has to be stay-aid compliant. In some cases, the aid that we give is not considered stay-aid within the legal definition. In areas where it is, we have to comply with that. Two principal instruments through which we comply with EU stay-aids legislation is the general block exemption regulation which covers a fairly wide range of activities and was reformed in 2014 precisely with the view to simplify the process from the European Commission's point of view so that if the particular assistance complied with G-Bear, it didn't need to be notified up front that this proposal to award aid was being done and this would focus there for the capacity in DG competition to look at the big cases. So looking at the vast amount of state aid they anticipated would be dealt with by the provisions of the general block exemption regulation. Local Government uses that. I think we have some of the eight or nine schemes through Slade that have been registered with the European Commission that allow us to do things like pay wage subsidies, award training grants and give support to small and medium size enterprises, invest in local infrastructure, preserve the historic environment and culture so there's a whole range of things. We have other agencies such as Scottish Enterprise that own raft of registered schemes under this particular piece of legislation so it's a really, really important piece of legislation. The other piece of legislation that Local Government in particular uses quite frequently is the so-called de minimus regulation which basically allows a public authority to award up to 200,000 euros over a rolling three-year period to any undertaking engaged in connectivity for any purpose, subject to a few safeguards. So these are the two sort of legal instruments that currently Local Government use and have to use in terms of the current legislative framework within which we operate. Just the other aspect that's important of course is that as part of the family of EU state aid's policy there is a thing called the regional aid guidelines and it's the regional aid guidelines that determine how and what you can do within the so-called assisted areas. Some of you may recall that every so often with every policy cycle in the recent past there's been a review of the so-called assisted areas and this particular impacts on mainly Scottish Enterprise's regional selective assistance scheme. The policy designates areas where such assistance can be awarded. It also says the types of firms that can be supported and it also specifies what's called in the jargon the aid intensities. So that's a key part of that. It's not something that Local Government as such is directly involved but it helps, for example, support our inward investment. Activities who are wanting to attract an inward investment to an area part of the package can very often be some of the support that can be made available through schemes such as Scottish Enterprise's regional selective assistance but these things are usually part of a much, much broader package of which the RSA grant will be its important component. So I hope that that gives you some flavour. That's very helpful. Morning. Can I just pick up on Andy's point about the procurement? Because obviously we don't know the outcome of Brexit and many hope that the outcome will be that we actually remain. Given where we are are you saying that currently there are, as a result of European legislation, restrictions on local authorities being able to focus more on putting in clauses like local employment employability like the living wage? Is those restrictions there or is it a lack of political will within local authorities or a lack of knowledge and know-how to support economic growth in local areas? I would suggest right across the 32 authorities of Scotland there is a political will to do what we can to support economic growth. That's key. The community benefit clauses at the moment are in such a way that local authorities cannot always do what they want with them and they have to be as again as Julie's answer that they want to deliver things like the living wage they want to support that but it's dependent on the moment on them wanting to do it and using their support to do so. At the moment we don't have the legislative ability to follow through everything we would want to do and this is something that the current situation we are in should allow us to be able to do to improve the current situation to allow that political will to become reality. Are we saying that if we leave the EU that opportunity is there but right now it's not? Is that what we're saying? Has Scotland, Excel and Cozlad done any work on this and produced any papers that say here are the barriers to putting in procurement policy that is much more socially and economically geared to local communities? If I could answer purely from a Scotland Excel perspective and member councils might have a different perspective it should be said so the main probably restriction I think we have is around the living wage and the fact that we can't mandate it I suppose what I said earlier was that the work we've done has definitely seen an increase so it hasn't stopped us improving the situation but if you wanted to change it completely you might mandate it so that's probably the one big change around the other social aspects community benefits it's a real mixed bag in terms of how they are applied in some cases they are applied to the full extent and they work brilliantly in other cases less so I think the legislation that we have is reasonably flexible to allow the types of things that we're talking about but there's always room to improve on that there's always room to do more so this might create that opportunity from a national perspective the changes in the law and over the last few years have allowed us to do a lot more around community benefits around sustainability around the living wage supported business you name it so for me it feels like we're quite a good bit down that journey in terms of including the kind of things that we all want to see and getting the outcomes that we want but the openness the transparency the fairness that we have currently across Europe inevitably means you can't say I'm going to always buy local that's just not something that we're allowed to do having said that there's lots of mechanisms that member councils use every day to try and buy locally so not to get too technical but we've got a thing called quick quotes for a spend under 50k now the law would allow you only ask local suppliers to bid for that there's no rule against us doing that and lots of councils currently do that so there are plenty of mechanisms at the moment they are being used to varying degrees we can do more with what we currently have and indeed I suppose we welcome an opportunity to see if this change allows us to do even more but I suppose I feel that we still have a way to go within what we currently have personally from a Scotland Excel perspective that is I read recently a paper on pressing council and the work that they've done not just as a local authority but to bring a whole range of different organisations together to come up with a joint procurement policy that they claim or the paper claimed had brought hundreds of millions of pounds of investment or kept it within the local economy but it's what the barriers are but to my question is there any papers being done that set out the barriers not to my knowledge it's not something that we've been asked to do so I'm not aware can I also ask do you believe that local authorities have the capacity cos I'll argue that they should have a far greater say almost like the sitting tier a government and a sitting chamber almost to the Scottish Government has the capacity there because when I look around Scotland I see major projects that have been procured and then cost the taxpayer an absolute force and the trams in Edinburgh where we are now in Fife, the Carnegie Centre I could probably go into many local authorities and see procurement projects that have just completely got out of control is the capacity there for cos law to take on what you're doing at present given also the financial restraints well first of all I'll correct the tiers to spheres of government that we'd like to see to be a sphere of government not consort of those tiers as an important aspect of what we're doing I think at the moment we have that capacity within Europe to develop policy to get involved in aspects of work there and we have officers working across in Brussels and in Strasbourg doing that kind of work so the capacity is there already we're talking about redirecting it because if things develop in a certain way we will need to do things more locally within Scotland, within the UK so there's a difference there of course we know the budget restraints that local government is under that the core budget has been reduced and we have less money we have as a result of that less officers as well to work at a local government level so there is obviously that background to the work as well but we're talking about something here that will be bringing things within Scotland in particular and we're talking about services that would benefit our local communities if we're serious about that idea of empowerment, if we're serious about the idea of local work local governance as has been developed jointly with Aileen Campbell as well through the local governance review if we're serious about all that kind of work we need to put it into practice that means better different conversations when it comes to budget setting next year with Derek Mackay then those conversations will have to take place but we do need to do this work for the benefit of all our communities I suppose it's dangerous, people just wonder are you doing that well at what you do before you start to take on more and more but there you go there you go Alexander Stewart we've outlined this morning or you've outlined to us some of the challenges and some of the priorities that are taking place across the sphere in the preparation for what may happen in the future but can I ask about the opportunities that are going forward and the implications that there are for the potential for further devolution in local government to take place across these common frameworks where do you see that opportunity happening and how ready are councils and local governments for that process I think this is a process that we've been working towards since we had the commission for strengthening local democracy since all that work was done all the arguments about subsidiarity transparency about local democracy that background work about what was needed was done in 2014 I think the year of that report which was done as a cross party basis coming up through discussing with local communities the work that needs to be done and I think that preparation has been done since that time thinking about the European Charter of Local Self-Government and how that would be implemented in our local communities and that work is being done as well we've been looking at what that would actually mean in practice for our communities when I hope I said when again when that becomes a law within Scotland so the preparation work is being done obviously we're talking about adjustments having to be made we're talking about changes in some practices and we're up for that we're up for that because we're talking about those key ideas of subsidiarity we're talking about local democracy we're talking about local empowerment we're talking about local economic growth that's the key goals we want to achieve and they are really important to us that's the bed and brush of constant work of government's work so yes we're up for it and we're willing to have that flexibility to deliver that change and rightly so you see it as an exciting opportunity for local government to develop and expand but you've touched on today again once again about the capacity the budget implications that you have that has obviously an effect on how progressive a council can be and not all councils are at the same level or at the same stage so would there be opportunities for certain councils to do things in a faster way in a more progressive way or should we once again see councils working together to try and devolve one another in trying to achieve that goal for the communities that they represent there are obviously 32 local authorities and there are all 32 different local authorities and there's even differences within local authorities so yes we do have that background to work with and we do need to be aware of that councils already do work together not only in COSLA itself support from the improvement service we've got that structure already to encourage us to work together and councils have shared services and they seek to develop shared services in more areas as well yes that work is already going on and that again is the nature of local government work and with all 32 councils members of COSLA we've got that opportunity to work and communicate and share good ideas and through the improvement service we have the local benchmarking framework as well which helps share good ideas helps people to see where things are working reflect on their own practice so the basic work of that that we're doing yes budget is an issue but you know I think this is where we come back to what we actually want to achieve across Scotland we want this Team Scotland approach what do we want to deliver what do we want to deliver for our communities for all areas of Scotland and we need I think to when we're looking at the budget to think far more in terms of outcomes and if these are outcomes are important for all of us if that national performance framework which we all signed up to really matters to us that the money is put there in order to deliver that and this is really a way of put your money where your mouth is it matters to deliver this and therefore we've got to be seen to do that and if it's a priority, if the outcomes matter the finance needs to be there to support it any other members of the panel have views on? just a brief thing also in terms of capability and capacity which seems to be a concern for the panel from a procurement perspective and purely from a procurement perspective councils have been assessed on their procurement performance for the last 10 years and they have been rapidly improving so it's true what you say councils develop and improve at different rates and that's clear in the work that we do because we carry out the assessments but certainly when you compare where local government was in terms of procurement across the sphere of what we do whether that's construction care commissioning, general supplies and services capability has increased quite dramatically over the last 10 years that's not to say there's not again room for improvement and it's not to say that everybody's at the same level because generally what we find is that the bigger councils we have invested in this tend to do better and are better but hopefully it gives some comfort for you to know that councils are doing a heck of a lot better at this than they were previously Everybody else comes in Kenny, you said you'd appointed to raise on this Just the issue that Alexander was raising in terms of common frameworks, I'm just wondering if the panel feels that there's any contradiction between the issue of common frameworks and subsidiarity I'm just wondering where the kind of clashes might occur and I know that the Scottish Government has said it's committed to any quote not to create divergent policies but it's hard to see how that won't happen over time just as a natural evolutionary process So it's about where the kind of boundaries lie feel like in a wee bit and how to ensure that there is smooth kind of working without without this happening I think that it's dependent on who's at the table in the first place and developing the common frameworks I think we need to be at the table I think that's key to that and if you have the right people at the table at the beginning of that voice is being heard and throughout the development of the policy you continue to have the voices being heard from everywhere then you get that voice anyway and I don't see then a conflict if you try and have something that's imposed from Scottish Government or UK Government level on local authorities then you do have a conflict with subsidiarity I agree Is there a commitment to that to involving COSLA fully in terms of developing of these common frameworks that you are concerned about for example your connections with the UK Government are not as extensive as it perhaps could be and you would like to see so do you have underlying concerns about that? At the moment yes it must be a concern because we've had the promise and yet we haven't seen anything delivered in practice so yes at the moment is a concern we've been working very closely with the LGA, the local government association in England with the Welsh LGA and with Nildra, the Northern Ireland and we must have been working because it's meant to be something for all of us to get involved in when we're working at that level with them and we haven't had anything delivered yet so at the moment it is a concern but I think this is maybe something where Team Scotland needs to work together as well Team Scotland needs to raise this as a key issue that we need to develop this together we need that kind of arrangement at the UK level but we also need to make it Scottish level as well and you know there's an opportunity here for Scotland to show what should be done right here in Scotland and then go back to the UK Government with the promise they made that they haven't yet delivered I just want to further point if I can make it convenient, it's just time scale is there any time scale for this that's been laid down because I understand that the UK government had said that they would outline details of the shared prosperity fund and how it would work prior to Christmas but now it may so there seems to be a real drag on this so I'm just wondering if you've got any indication as to when progress is likely to take place A on that and B in terms of development of frameworks I don't know anything about progress because we're not involved I don't know if Malcolm can come in on that one Just very briefly, yes you're quite right, we were expecting we're all geared to have this formal UK Government consultation the UK shared prosperity fund before Christmas and it didn't happen obviously it won't be happening any time in the next few weeks because it's a perda period coming up with English local elections tomorrow for example which would prevent any launch of a major initiative such as UK shared prosperity fund at that point in time then there's a prospect of the European elections at the end of the month so we're not therefore expecting anything to come out over the next three or four weeks on that based on some contacts I've had with colleagues down south and some of our sister organisations with which I work probably they're kind of waiting until there's some sort of clarity on the overall Brexit package before they commit to launching the formal consultation but we understood based on some workshops at the Scotland office and the ministry for housing communities and local government conducted towards the end of last year that the thing was more or less ready to go once some of the broader issues had some clarity on that but we don't quite know what the scope is into what debt that will go into governance arrangements and decision making these are really important issues of course but at the moment it's a bit of a big black box black hole more like thanks very much okay thank you very much Graham just sort of mopping up on some of the areas we've covered and sort of questions that I've got around about the spending restrictions on procurement I think it will be useful you may not be able to give us it today but it will be useful to hear where individual councils have wanted to do things and haven't been able to because of the existing rules I'm not expecting you to give us a long list today but Julie Welge said that there is the ability to use smaller contracts to spend locally the implication of that is if you've got bigger contracts you can't spend locally so I'm thinking like maybe a school meals contract where you might want to buy local but can't so if we could have examples of that and I think it was yourself Councillor Everson I think it was you that said coming back to the UK that would affect local government a list of those would be useful don't give us them now but that would be interesting to see so that's just some work to go away with if I could ask about EU structural funds and if you know sorry, I'm being heckled from the side if you happen to know how many how much of EU structural funds is spent in local government in Scotland that's a difficult figure for welcome very helpful your colleagues and Spice produced a report on the deployment of European structural funds in Scotland just a couple of weeks ago during the Easter recess the figure so that roughly just between the sort of figures does change on a weekly basis as new operations are approved or existing ones are to use the jargon re-profiled but roughly between 25 and 30% of the current structural fund programmes in Scotland are awarded to local government as lead partners that's not to say all the money goes to local government a lot of the money that's awarded to local government is then recycled out to the third sector for example in relation to some of the poverty and social inclusion activities and also the employability to a local challenge fund mechanism or a secondary procurement exercise but in terms of leadership therefore of the design of the intervention operation the local government's share of the current programme is somewhere in the 25 to 30% bracket if that's clear enough for you that gives me a percentage but doesn't give me a figure again the figures are if you might refer to the Spice report it was done on the commitments to date I think it's what you're looking for rather than the overall size of the budget and I think they're contained in one of the tables in the report programme value thanks gardeners committed in euros is just under 600 million at the moment which is roughly about two thirds let's look behind where we'd like to be at this stage in the programme but not disastrous in that respect therefore of that therefore the local government's share would be somewhere between 25 and 30% of that figure in terms of leading an intervention though I would emphasise again that it doesn't all go straight into local government coffers a lot of it is recycled out to the third sector and the voluntary sector in our communities okay so if we have this UK shared prosperity fund if and when it's set up and whenever we get the rules around that clearly one of the risks could be that you get less money but if you don't get less money then do you see opportunities for spending it differently yes I think the key to it is spending locally that regional element is crucial getting spent within local areas being sensitive to what's needed in a local area is really really important the big thing about the funds at the moment is yes you have the financial amount but the triggers they allow is really really important as well structural funds exist beyond a parliamentary term and that's something that's a real benefit because you're able to do that longer term planning from it so you're able to work with other organisations in a local area in a longer term and I think that's something we mustn't lose we shouldn't link it to a small period of time where you might get money for a bit and you don't know what's going to happen in the future the structural funds transcend that and that's a key element it encourages that partnership working that Malcolm was talking about as well with the third sector with local partners because it is more longer term because it's got that sense so we need to make sure that the shared prosperity fund or whatever we have in future really does allow that kind of work in a local area what it works on will depend on what's needed in that local area the social, the environmental the employability all those aspects will come from a particular local area but we do have that framework now with the national performance framework we do have that framework for what we're trying to work up together to get somewhere and looking at what areas they're missing in a particular area we've already commented that there's 32 authorities there were levels somewhere progressing in one area and not progressing so much in a different area that local funding that geographical sense is crucial and to address whatever issues are important in that local area we need to make sure that it carries on being able to do that Anyone else? Just a very quick point one of the opportunities that does come with UK issues is perhaps to spend the money on slightly different from what the European funds have been doing we're very, very constrained in terms of what we're doing thematically in Scotland and indeed many other parts of the UK and EU as a whole on what you can spend EU structural funds on particularly in the ERDF 80 per cent for a more developed region which is what most of Scotland that is everywhere that's not in the Highlands and Islands has to be spent on just four of the thematic priorities innovation, ICT speed development and the low carbon economy so anything else you might want to do on climate change, on transport on social inclusion has to come potentially from that just 20 per cent available so that's kind of a constraint we've had and whilst at a high level these look very attractive areas to spend money it's not the totality of what we want to do development and particularly there's still a lot of stuff that colleagues keep on reminding me that we need to do on the physical regeneration agenda which has been kind of starved of resources for which European money has made a big, big contribution in the 90s and the early years of this century but it's been becoming increasingly difficult to access that sort of to complement the people based activities and we're serious about the inclusive economic growth agenda so I guess the plea seems to be that local government should be involved in setting the rules on this shared prosperity fund so it should be a bottom up approach rather than it being top down whether that's UK level or EU level you want to be, local government wants to be involved in setting those parameters at the moment we do have we do get involved at the European level at the moment we do have that voice within the European Union through the committee of the regions and through people at MSP level and at council level we have Tony Buchanan in particular is very much involved in the work that's going on in Europe Andy himself and Mary Gougeon are also very much involved in the work we've got in Europe through the committee of regions so again it is making sure that the voice we currently have in Europe and the voice of local government I met with Michelle Barnier myself about 18 months ago now and he was strongly arguing about the importance of local government he himself sees it as a key aspect of what happens in Europe he comes from the local government background himself and it is fully committed to the importance of it we need to make sure going forward we still have that role OK, thank you very much can I just say thank you all for attending this session remind you to do your homework that Mr Simpson had given you before you leave the committee will consider the evidence we've just heard in private at the end of this meeting and thank you once again I suspend briefly to allow the witnesses to leave it to you agenda item 3 is consideration of negative instrument 116 as listed on the agenda I refer members to paper number 3 the instrument amends SSI 2019 stroke 40 which we considered on the 20th of March that SSI miscounted by one the number of days in the current financial year meaning that the formula brought into law was slightly wrong the sole purpose of this instrument is to correct this the instrument is laid under the negative procedure which means that its provisions will come into force unless the Parliament agrees to a motion to annull it no motions to annull have been laid delegated powers and law reform committee considered the amended instrument at its meeting on 23 April 2019 and noted that it did not respect the usual requirements to be laid at least 28 days before coming into force however the committee considered the reasons for this given by the Scottish Government to be acceptable under the circumstances the committee made no other recommendations on the instrument do members have any comment on the instrument Andy? I think we just note for the record that delegated powers and law reform committee and this committee overlooked the fact that the number was wrong mild rebuke for both of us yes could we strike that from the record please okay if there are no other significant comments then I invite the committee to agree that it does not wish to make any recommendations in relation to this instrument are we agreed thank you that concludes the public part of today's meeting and I move the meeting now into private