 Good morning and welcome to the 28th meeting of the Culture, Tourism, Europe and External Relations Committee in 2017. I would like to remind members and the public to turn off mobile phones and any members using electronic devices to access committee papers should please ensure that they are turned to silent. Apologies have been received today from Jackson Carlaw and Lewis MacDonald and I would like to welcome Daniel Johnson to the committee who will be substituting for Lewis MacDonald. As it's Daniel's first time at the committee, I'd like to invite him to declare any relevant interests. Thank you, convener. The only relevant interest I think I have is that I'm a member of the Labour movement for Europe. Thank you very much, Daniel. Our first item of business today is a decision on taking agenda item 3 in private. Our members agreed. Our main item of business today is to take pre-budget scrutiny evidence from two different panels. We'll hear first from the Cora Foundation and the Scottish Government's international development division and later on from Historic Environment Scotland. I'd like to welcome our first panel of witnesses, Kirsty Norris, project manager international with the Cora Foundation, Claire Tind Irvine, head of the international division, Ian Nicol, the Malawi development programme manager and John Mooney, the Rwanda development programme manager with the Scottish Government. Welcome and thank you for coming to give evidence to us today. I'd like to open by inviting the Cora Foundation and the Scottish Government to make opening statements. Is this on yet? Good morning. Thank you very much for inviting us along this morning to talk to you about the work that we're doing with the Scottish Government. My role is to manage the international team at the Cora Foundation and we work closely with the international team at the Scottish Government to support the management and delivery of various funds across the programme. We have over 30 years of expert grant making experience and for the last four years we've been working with the Scottish Government to support the management of the small grants fund and more recently we've been working to support the assessments of the main funding rounds as well as the climate justice innovation fund. Just looking at the small grants fund, I wanted to talk a little bit about our impressions of the fund and some of the work that we've seen through the fund. What's amazing is the way that the fund has really built capacity of the international sector in Scotland, particularly smaller organisations. What the fund enables those organisations to do is to access institutional funding, which is often a real barrier for organisations of that size. The process of applying, managing those grants and reporting back to the Scottish Government is in itself significant capacity building for those organisations and really supports them to develop. We really see the fund as building the sector for the future in Scotland and this has been really evident in the most recent main funding round when we've seen a number of small organisations who've come up through the fund go on to secure main grant funding and it's really great to show the impact and the scalability of some of the work that's going on at this level. Just looking of course to the most important part of the fund, which is the work that's actually going on in country, the nature of the organisations that are supported through this fund, they are much smaller and therefore the partnerships that they are developing in country are often grassroots and very community focused. As a result, what you have then is very impactful and cost-effective projects that are often reaching vulnerable groups and hard to reach communities that can be difficult to access for larger organisations. That was what I wanted to say really and I'm really looking forward to talking to you about some of the processes that we have at the Cora Foundation to support the Government and looking forward to answering any questions that you might have. Thank you. Thank you, Kirsty. Thanks to the committee for giving us this chance to give our evidence to you. As you mentioned, my colleagues Ian and John are here. Ian covers the Malawi fund but he's also been very involved in the setup of the small grants programme and John, our Rwanda programme manager, has also been very involved in the setup of the humanitarian emergencies fund so if the committee has questions on those aspects of our operations, I'm happy to take those as well. I know the committee has already taken evidence on our new ID strategy but I'd like just briefly to put our session today in that context as well. This is something that we see as really important to the work of the Scottish Government and somewhere we think that Scotland does have a distinctive contribution to make and the areas that we feel that that is true is around the expertise that we can share so we try to align our grants and our programme management behind supporting that. Being innovative in what we do, we know that in comparison to many international funders our budget lines and our capacity are limited but we do try to be innovative and different and achieve impact through that. I emphasise on partnership both with the organisations that we work with and with Governments and others in our beneficiary countries and all our subject matter priorities for our funding are determined by the appetite and interests of those partner Governments. We look for impact obviously in those beneficiary countries but we also hope to have some impact here in Scotland. The international development fund is part of the Scottish Government's attempt to develop Scotland as a good global citizen and so as Kirsty has outlined with the small grants fund we see part of our purpose there is building capacity within Scotland to engage in international development and have that impact on the broader stage and we're proud not only that some of the small grants beneficiaries have not only gone on to secure more funding from us but also from other donors such as DFID or even the big international donors so showing Scottish organisations then able to play that role on a global stage. We also see the programme as being an important part of Scotland's contribution to the SDGs something that the First Minister has committed to and again partnership a very important part of that. Just on the budget it's a small budget it has increased consistently over the years but it remains small by many other impact comparators and we see that as being very important that we manage it appropriately to maximise its impact. We hope that our impact isn't necessarily entirely determined by the size of that budget and when international comparators are looked at some of the countries that come out top in those rankings including the Nordic countries often are not those with the largest amount of money to spend. But we think that this is important that our grant management processes are rigorous as they should be. This is public money and we have to meet high standards of public accountability at proportional to the size of the organisations we're working with and to the size of the funding while operating and effective in terms of having appropriate controls in place. To do that we comply obviously with the Scottish Government's internal audit proceedings, we have been reviewed and we have met the recommendations of those reports but we're also open to lesson learning and I hope that during evidence session today we'll demonstrate to you that we are interested in continuously improving the way we manage this money. As I said at the beginning this is a big year for us, the first in the new strategy that means we've been quite busy on the grant management front. Our Rwanda and Zambia projects have just started in October, that grant process ran over the summer and I think was running when the committee last looked at this area. Our small grants bidding process has just finished, Paul Kirsty can tell you more about that and our Malawi round is currently open. This has also been the first year of the humanitarian emergencies fund which has been activated three times, once for the East African famine, once for the South Asia flooding crisis and once for the Rohingya crisis in Burma. I think that that's where I'd leave it, just to say there are a couple of points in your papers around the process for the Rwanda and Zambia fund where we have gone on to learn lessons from that but we're interested in any more feedback you have and also around administration budgets where I'd like to reassure you that, apart from the humanitarian emergencies fund where a small percentage does administer the fund, all of our administration costs, including the costs for Cora's contract, are met from a separate budget line, they don't come from our headline development funding. I leave it there and we're happy to take your questions. Okay, thank you very much. You've talked about, as you see, that there's not a huge amount of money but you have managed it with, innovatively, in order to reach vulnerable groups and do things differently. I wonder if you could give us some examples of how the funding has been spent in an innovative way. I think that the small grants programme is a great example of that. First Aid Africa, which I think is one of the examples that Kirsty quoted, is a good example of that. It's a very different type of organisation that was created by students within Heriot-Watt University. That was initially entirely funded by bake sales and that kind of level of fundraising. To be able to work with an organisation like that to help them with their own financial compliance processes but also the impact that they're having on the ground using those student networks to really reach out on an individual level individual places in Malawi and using First Aid, which is an area that's often overlooked. For us, that was a good example of an organisation doing quite unusual things, doing it from a very small starting point and then being able to make the case that their activity was really giving value, that we could build this organisation to an organisation that could secure funding from others. That can have real impact on the ground in Malawi and their latest projects. They're looking at building institutions around First Aid, how that then builds into hospital accidents and emergency departments. They're looking at how that affects transport. They're looking at developing what they call an ethical Uber app, which will engage riders' motorcycle taxis to be drawn to the scene of an accident. Those people will then have basic training, they will have a line into the nearest accident and emergency department. A group in society, which is often seen as being responsible for some accidents because a large number of motorcycles and taxis are involved in these instances, is then being recruited and trained to be part of the solution and enabling those who are injured to get to help faster. That's a good example of a very small scale innovative but with much wider applications. When we took evidence earlier this year from Aid organisations, there was a lot of positive feedback about the small grants and the way that it was administered. There was some criticism about the larger funding programme and how it was operating, and you'll be aware of those criticisms, particularly from SCIA, if you would be able to address those. This is the first time that we ran the Rwanda, Zambia round, and we ran it to tight timescales. We needed to do that to ensure that there wasn't a gap in our funding. What we did to take account of that feedback and to make sure that we learned from that process was, along with the Alliance, and I think Jane Samerson from the Alliance gave you evidence last time also about this process. We ran a feedback day on 7 September to assess the overall feedback on the round once it had closed. We were pleased that that was largely positive, but we have learned from various aspects of it. One is that we are now having a longer timescale for the Malawi round to give organisations more time to prepare. The second was around turnover limits. We didn't want to accidentally exclude certain categories of organisation from our funding. We have sought to learn from that, and I think that that is part of our continuous improvement when we are trying to do things differently. There is always feedback, but John, I do not know if you would like to say more about that process over the summer and since. I would add that, following our consultation on our new strategy, which was published last December, one of the key things around that was about length of projects. We have traditionally funded projects for one to three years, but the feedback that we got through the consultation was for longer projects to allow partnerships to be developed and built and to therefore affect the longer-term sustainability of projects beyond the actual funding period. We took that into account and we have increased for the Rwanda Zambia funding round the project up to four and a half years now to allow that sustainability to develop. Again, based on the feedback from the consultation, we introduced a two-stage application process. Previously, we would have a full application and organisations would have to put a lot of effort and resource into developing those applications. Instead, we introduced a concept note stage, a much shorter application to complete, less resource intensive for organisations. Those who were successful at that stage would go through to the full application stage, where their chances of being ultimately successful were much greater. We took that feedback into account, and that is what we introduced for the funding round for Rwanda Zambia. Can I invite Ross Greer? Thanks, convener. John has just touched on this in relation to the Rwanda and Zambia projects, but I was wondering if you could outline a bit more detail how you invite applications for funding. Are there specific organisations that you approach? Is it a very broad net that is cast, if you could just outline that process a bit more, or how you encourage organisations to make the applications? Briefly, I will ask Ian to speak for Malawi, Small Grants and John for Rwanda and Zambia. We cast net widely. It is an absolutely open call for applications that we publish on our website, the criteria in which organisations will fit, but it is in our interests and the interests of our beneficiaries to get the widest range of applications possible, and that is what we would seek to get. I would also highlight the role of the networking organisations in Scotland, the Alliance, the Scotland and Malawi part, in particular in terms of publicising them to their members. We would also seek to use those networks, but Ian and then John, is there anything? As Clarell said, we just go on a full open call for funding. We also hold an information day, so we are having an information day for the Malawi funding round on 29 November, and we would ask all interested parties to come and find more about our funding rounds. The other way that it is done is through the form of Malawi. We have a co-operation agreement, and in that we commit ourselves to fund to the Government of Malawi's priorities. That is in health, education, civic governance, economic development and renewables. We would look to organisations that work in those five areas to put applications in, and we would encourage them to do that. Just to add to that, as Ian and Clarell said, we are a very wide net, where we are very welcome and have funded private sector organisations, universities, health boards and local authorities, as well as the more traditional international development NGOs. It is a very wide net, and there are a few criteria that we have around an organisation being a legal person and having a presence in Scotland as well. Other than those very few essential criteria, eligibility criteria, we have a very wide net, and we welcome and encourage applications from across sectors in Scotland. Once applications are in, if you would be able to outline the process for deciding whether an application or not, whether the funds are granted. We can particularly look at the main funds, and other members can ask more about the small grants fund, but with main grants and the other streams, if you could outline a bit more detail what the process is there. My understanding is that it is a relatively transparent process, but if you could outline that, that would be helpful. Is that intended to be? I might ask Kirsty. She is sitting here patiently beside me, and she is involved in the assessment process, if she could outline the process for us. Of course. We have a rigorous process that goes through a number of different stages. Once the fund deadline closes, applicants are invited to email us through an application inbox, and they are given an automatic response so that they know that their application has been received. The first part of the process is a very basic criteria check. As John talked about, there are a number of essential criteria that applicants have to meet to enable them to be eligible to make the full application. We quickly go through that criteria check, and what that allows us to do is inform applicants very quickly if they are out with criteria, rather than asking them to wait two, three or four weeks to have a response. If they are not within the criteria, they will be told within five working days. For the rest of the applications that come through, the first stage of that is the concept note process, and that is a much shorter application. The point of that is to allow organisations to give an overview of the project that they are proposing, to tell us about the partnerships that they are proposing, how they intend to work, the essentials of the needs assessments that they have carried out, and an indication of their budget. What that means is that we can do an assessment based on the information that they have given us, rather than asking all applicants to go through what is a fairly lengthy full application process. It allows us to do almost a first sift, and it supports a better success rate in the fund, rather than asking people to go through. Once we have done the criteria check, we then do due diligence checks. We look at applicants' accounts, organisations' governance, and we look at things like the make-up of their board. We look at whether they have any engagement with diaspora groups in Scotland, for example, which is really important for a fund of this nature. We also look at previous years' expenditure and income, and we look at what types of funds they have and how they are managing funds, because that also gives us an indication of whether they are able to manage a funding amount of the size, particularly for the larger funds. Once we have that part of the process out of the way, we go on to do an assessment of the concept notes. We look at those key areas that have been outlined in the concept note. We have a scoring pro forma, and it is a shorter one for the concept note. That allows us to look at key areas of the process and look at key areas of their application and attribute a score to those different areas. Once we have done that, we have grant assessors who work on that process. We then move on to what we call our challenge process, where we meet as a team, so there is a minimum of four of us. We look through all of the assessments that we have carried out, and we, essentially, ask the assessors to justify the scores that they have given. From there, we are able to come up with final scores, and each application is given a rag rating, so red, amber, green. We would not recommend that the applications are continued on to the next stage of the process. Amber is a project that we feel has real potential, but there are some areas possibly of concern that we would want to go back and clarify. Green is a project that we would feel comfortable in recommending for funding. We then take those recommendations forward to the team at the Scottish Government, and they are able to then select the applications that they would like to take forward. That is the concept note stage. For the main grants, we do exactly the same for the full application. Any organisations that have been successful in that first stage would then be invited to send us a full application. That has additional documents that they have to complete, so they have to fill a full application form in. They also have to complete a logical framework, which is a monitoring and evaluation tool that we use to allow them to demonstrate how they are going to measure their progress against their set outcomes. We also ask them to complete a comprehensive budget document, which allows us to look at all of the various lines of expenditure and how they plan to spend over the five-year period. The process that I have just described to you, we go through exactly the same process for the full application. We have obviously done the due diligence checks, which has already been done as part of the first stage, but we go through a detailed pro forma that scores against the various different areas that we are looking at, particularly focused on partnerships, project management, project design, the reasonableness of the budget, whether all the documents make sense, whether what they are proposing seems achievable and realistic. We have another challenge meeting. The full stage application includes senior members, so we have our head of grants that is involved in that process and our deputy chief executive that comes into those challenge meetings. We write a report to the Scottish Government with our recommendations using the same RAG rating system. It is a fairly lengthy process, but we are confident that it is very rigorous and stands up to both internal and external scrutiny all the steps that we go through. That is useful. Thank you very much. Just to fall on from that, it is a relatively small budget that we have, so it is important to ensure that projects that are funded are genuinely developmental compared to the history of western aid projects that have often been more about managing a situation than developing it. How do you assess whether, once a project has been granted and it has been through a process, what are your monitoring criteria for ensuring that a project has genuinely developed a community or developed a nation? The essential need for that approach that you are talking about is key. It starts right as part of the assessment process and it is one of the areas that form a key part of the assessment that is looking at the organisations and partnerships that they have developed. There must always be an in-country partner. As part of that, we ask them to give robust evidence on what types of needs assessments they have carried out in the country. Taking that a step further, we ask them to give evidence of how they have consulted with the communities in which they are going to be working, but in particular, how they align with the national government strategies, demonstrating that the project that they are proposing is something that has been outlined. For example, the Government of Malawi, if they have particular priorities around health, we would look to see that that project fits. It is more than a tick box—they have to really evidence that as part of the application. Another thing that is really key in our assessment is looking at the sustainability and exit around those projects. They are five-year projects, which sounds like a long time, but in development terms, how much can be achieved takes a long time. You have to get to know the community and set that project up to ensure that it is going to be effective. One of the things that we look for is evidence through the application that they have thought about the longer-term impact of the project. They have thought about things such as capacity building, particularly of national staff, and how that project will be continued and carried on in the future beyond the life cycle of the funding. That forms a key part of the monitoring process, which, for the small and for the larger grants, as part of the reports that they are completing, they have to evidence how they are working towards that exit strategy, or how they are working towards that vision of sustainability for the project. Using the logical framework that we talked about, they also have to give numerical and qualitative evidence on how they are working towards the objectives that they set, which also tie into the longer-term sustainability of the project. Just on the monitoring, the monitoring evaluation of the projects that are carried out by the Scottish Government staff. We have three teams, Malawi teams, Rwanda and Zambia, and we carry out the six-monthly monitoring of the projects. We look at five areas, and those are the five areas that the original assessments are done on. We look at the relevance, every six months we get a report in from the grant holders, and we look to see that it is still relevant. We look at the beneficiaries and the beneficiaries who are still receiving those promises that they were given. Are they covering the issues that are originally covered in the application? If they are going to deal with matters such as HIV or education, is that still the case? Are the projects still doing that? We look at the effectiveness and the progress to date. Every six months, the report tells us about progress, so we are checking that progress is in line with what is expected of it. We are looking to see if the projects change direction, because we have obviously agreed to do X, Y and Z, and if they are doing A, B and C, then we want to know why that is. We might be a valid reason for that, but we would like to know that. We look at the efficiency, so we are looking at the spend. Is the spend in line with what they envisioned at the beginning, or has there been changes in spend? Is money being spent on one area rather than another? Why is that? We especially look at sustainability, and the suggestion has said that in the past people have just gone and thrown money at a problem and then walked away from it. We do not want that to happen. We are looking from the very beginning that project is sustainable, so once our in Malawi used to be three years, it will now be four and a half years. At the end of that four and a half years, is there something going on with that? Is a community going to take it on? Is there going to be a lasting impact? We do not want to waste taxpayers' money, and we do not want to raise expectations in Malawi, in my case, that are not fulfilable. Then we are looking at the impact. What is the overall impact, not only in the area of concern, but is there a higher impact? Maybe some institutional learning, or has there been a change of policy through one of our projects? We want that on a six-month basis. Are there situations in which an organisation might receive funding without having gone through the grant application process? We have, in the past, matched fund. For Malawi, that was part of the old policy purely for Malawi. In the new strategy, we have a match funding policy. That had been used to quite good effect. Recently, we have matched funded a project with the College of Medicine in Malawi. That is the Blantyre project. We provide further information if you wish. However, we have committed to £1 million over the next five years, and that has been matched by funding from the World Bank and the Liverpool Welcome Trust. We are working with the College of Medicine, Glasgow University and the Liverpool Welcome Trust. The primary object of the project is to look at non-communical diseases, in the west of Scotland, and it turns out that they are becoming prevalent in the middle classes in Malawi. It is an interesting project to look at two different communities and see suffering from the same range of illnesses. Is there a connection? Is there something there? A by-product of that will be that we will help to refurbish some research labs within the college. That will have a two-fold benefit. One, it will allow better laboratory facilities for the college itself to call upon. However, they are also looking to use that to carry out research and drug research. That way, the college will hopefully bring in money from pharmaceutical companies who will see that they have world-class facilities. That will help to build the capacity of the project of the college. That is a good example of where we have gone out with the application process, but we are actually attracting money in. What are the transparency measures around that? It seems pretty clear what the transparency measures are around the grant application process, but if there are projects out with that and it sounds like well-justified projects, what are the transparency arrangements? I would say that the competitive challenge model that we have is for the development assistance element. All of the development assistance so that 75 per cent is done through the competitive challenge process, which is what Kirsty described. We also have the capacity building strand, which is where the project that Ian mentioned comes through. That is where we are looking at organisations in Scotland that have particular expertise or capacity to work with partners in beneficiary countries and very transparently on the priorities as set out to us by the Governments in those transparency countries. Another example of a project under that would be the work that Police Scotland has done in Malawi around gender-based violence. If Police Scotland did not go through a challenge process to do that, the organisation would have the expertise in that area in Scotland. That element of the fund is done like that. The other element is the humanitarian, particularly in the past and the previous situation, where, for example, we had the hunger crises in Malawi where we were able to use some money to put through international NGOs that were active on the ground or match funding for comic relief. The competitive challenge model that we described is what we use for the development assistance, which is the vast bulk of our funding, but the other streams of capacity building and humanitarian assistance operate differently. However, they are transparent and all the documentation is available, so they are available for scrutiny. There is not just necessarily that competitive challenge access process to it. They are all reporting the same six-month cycle as well. I would like to follow up on what Ross was asking at the beginning about the competitive challenge mechanism. You have outlined the various stages, but, in particular, at the assessment stage, according to your submission, you have six different criteria that you then score and then give a rag-rating role. Could you just explain how those scores are attributed in each of those areas? Are there criteria that you set in advance? How do you measure against those? I would just be interested to hear a bit more about how those scores sit. As I talked about earlier, we have a scoring pro forma, and that outlines the key areas that you saw in the evidence that I provided earlier. In each area, we have the different elements of the application form and the different key areas that we would want to see. As part of that, we have a scoring table. We have a process of grading, so we look at the level of evidence that is given for each of those sections. For example, we would talk about very good evidence, so evidence that gives us no doubt that the applicant has considered the needs of the community, for example, if we were going to look at needs assessment. We would look for evidence that they have collaborated as part of that needs assessment process. We would look at evidence that they have considered the wider context in the country and looked at, as I said, national strategy. That would give them a top score of 10. Down it goes from there, so you have excellent evidence, good evidence, clear evidence, and then we would have unsatisfactory and no evidence given at all. We have cases where, in applications, people just do not answer the question or they are very clear that they have not given it full consideration. What we then do is take those scores and use them as a benchmark. That means that every application that we look at, we are looking at the answers that they have given, the information that they have given, and we are marking it against the same benchmarks for each area. Just as part of that, we also apply weightings to different areas. In discussion with the Scottish Government, we look for areas that are particularly important as part of that assessment. Monitoring and evaluation is incredibly important. We need to make sure that the project is going to be monitored effectively so that you can see that the outcomes that are set are going to be achieved and adhered to throughout the project. Needs analysis—I have already spoken about that quite a bit, but it is a very important part of the process—budget, making sure that you are getting value for money and that the budget is realistic and has been well thought out. Those areas will have weightings applied, so a higher score would be given for excellent evidence, for example. They might receive a score of 10, whereas another area might receive a score of 8. We use that. As part of the challenge process, that is the opportunity to make sure that there can be no bias in the process whatsoever. Everyone in that challenge process has read the assessments, the application and the opportunity for the grant assessors who have attributed those scores to justify why they felt that that score was appropriate. At that point, if it is felt that a score has been given unfairly—a low score or a particularly high score—there would be some discussion around that and an agreement would be reached on what the most appropriate score would be. At the end of that, we look at the scores that we have, and that is when we come up with the rag ratings. We can see from the scores that we have where the splits are, and that is when we decide at the end of the process what would be considered green, what would be considered amber and what would be considered red. Briefly, the weighting is—we have particular categories of the six categories have relative weightings to one another. It is not weightings within the fine, thank you. On that point, you have set out how it is based on evidence. That is evidence provided by the applicant themselves. In a process like that, you are very dependent on what they give you and what they are saying, which is not necessarily the same thing as their actual capability and capacity to deliver. What do you do to look at what is delivered as compared to what was originally put in the application? Further to that, what is your process for assessing your ingoing criteria and altering them on the basis of what you find? For the criteria, it would probably be more appropriate for the— We need to—there is no point in giving a grant to an organisation that is not capable of delivering, and they are only finding that out at the end of the process when they did not deliver. That is an outcome that we seek to avoid. Through the assessment application process, parts of the form are designed to assess the capacity of the organisation. What financial compliance do they have in place? What audit do they have in place? What is their track record? We seek to get that information from the organisation that is applying for the grant funding. As I said at the beginning, we seek to build that capacity, so we will support people as well. That is part of what the on-going monitoring process is. If something is not on track, the idea of the regular reporting is that we are able to intervene and say what is going wrong here. I am sure that Ian Johnston can talk in more detail to that process. Does that get to what you are asking about? My point is how you assess the effectiveness of your assessment criteria itself, rather than how projects are being delivered while they are in flight. Is that the ability to reflect and scrutinise your own processes? When we look at the overall outcome of an assessment process, how confident are we that the right projects and the right organisations are— How reflective are your criteria? I think that that is built into the process, built into the challenge structure. The challenge structure is a really good way of, first of all, making sure that the process is very transparent and that different people are going through and looking at the scores that have been attributed. In terms of reviewing the actual scoring proformas, that is something that we do at the beginning of every round. We make sure that those proformas reflect the different priorities that have been outlined as part of the fund background criteria. We make sure that we pass them to the team and we review them together. We can also tell through our own assessments. If there are areas where we are assessing but we are consistently not having enough information coming through the application, that would give the indication that possibly the application form and the assessment are not talking to one another. That is something that we would review. As part of our process, we do a lessons learned report at the end, so we look back at the funding process. Part of that is reviewing the actual assessment process itself. We look across areas in that report around the relevance to the criteria, what we found was coming through and how it was relevant to the criteria that had been outlined. We look at some of the challenges through the assessment process, in particular areas in which we were struggling to get enough information. What we do is look back ahead of the next funding round, as we have done for Malawi. We then look to revise the proformas and revise the application forms for the applicants to make sure that those are as conducive as possible and to make sure that the assessment process is fair. Another point that is important to add is that, as part of the assessment process, we do not simply assess on the basis of what we have been given, so we build into that process telephone assessments. We are very aware—again, talking about building capacity—that, if an organisation has never applied for institutional funding before, it might find it a challenge in itself applying the application process, going through putting together an application and putting together a budget. Once we have done a first review of the application form, we will set up a telephone appointment with the applicant, and we will have about an hour to an hour and a half phone call. We will go through the application with them. In any areas in which we are not clear or would like more information, we will give them the opportunity to talk to us about their project, because, often, that is a really good way for us to get a full sense of their capacity and knowledge of the project. You mentioned before that somebody could write something in an application, but does that really give an indication of how well they know how to deliver it? Often, through a telephone assessment, you get a much better sense of someone's in-depth knowledge and understanding of what they are going to deliver and the community that they are going to deliver it in. You mentioned having them by telephone, but you would not be meeting face-to-face. We do not have face-to-face conversations largely due to capacity and time, but as part of the Malawi funding round that is coming up, we are building that into the process, particularly because of the size of funding that we are talking about. Telephone assessments are something that we use across all of our different funding streams at the Cora Foundation, and we find them to be very effective. We also have the option of Skype, which we are doing more and more. Particularly for the Malawi round, we are hopeful that we can do face-to-face assessments because, again, you get a lot more information at that type of level of communication with applicants. As Iain mentioned, there will be the information days, but we are also looking to repeat those through the assessment process. Those organisations who are successful in getting, for example, through from the concept notes for the application, we will again offer them the chance to come in and meet us and have a whole day of discussion. That is a chance to do a face-to-face assessment, and for them to surface any issues that they are concerned about or asked to have the chance to talk to them in more depth about any points that have come up in the assessment process. Does that get closer to what you were? Other members wish to come in. Can we move on? Rachel Hamilton We have talked a lot about the application process and the criteria of the funding. I just wondered what kind of consultation the Cora Foundation has with the Scottish Government and what sort of pitch it goes to the Government with. It must be very difficult to turn down projects or to have projects in the Amber criteria. What interaction and discussion do you have with the Scottish Government prior to the allocation of funding? Of course. We have regular communication with the Scottish Government at different key points in the funding process. We get together and talk about the criteria ahead of the fund, because what is important for us to make sure that we can do the best assessments possible is that we need to know the criteria inside out and understand exactly what the priorities are for the funding round and how we can best assess those applications. You are right, it can be very difficult, particularly when you have Amber projects that have a lot of potential, but you are unable to take them forward. The reality is that they will only ever be a small number when you have a large number of applicants coming in. The assessment process itself, I would say, we do consciously that we almost kind of disappear off. That has to be a very independent process. Once the fund has closed, we go and we do our full process that I have described before. The communication during that process that we have with the Scottish Government is mainly around areas where something might come up in an application and we are not 100 per cent sure how that might fit with criteria. For example, if something comes up in a budget, if somebody is asked for something at a cost, we are not sure whether that would be acceptable or not. That is the type of thing that we would then get in touch. At the end of that process, we write our recommendation report. We give full justification for the scoring and we give justification around the rag writing. For example, if it is an Amber, we would outline the concerns that we might have, why that project has not quite made it into the green, the top of the pile, and for any in particular who have been given a red rating, we make sure that that is fully justified through the discussions and the process that we have had. Following that, we have a meeting between ourselves and the international team, and we go through every single project, so we do not just talk about the greens or the ambers or the reds. We start from the beginning and we talk through the process. We talk through our findings in the assessment, our concerns, what we found was really positive about the projects, and again giving the reasons for why we have given a recommendation of funding or not funding. From there, I think that we will probably pass over to you as to how you take our recommendations forward. It also depends on the situation. I do not think that it was an issue with Rwanda and Zambia, because I think that they had enough projects to meet the budget that we had. It was the difficulty that we had in Malawi, in the last Malawi round, where we received 52 applications. It was a previous assessor and they gave a rag rating. Originally, we only had seven applicants who passed green, so that meant that we then took up a small amount of our available budget. We then had to make a decision about whether we should just end there or look for a process where we can use our budget effectively. That conversation was with our assessors. They came in with the amber projects and we had a discussion about what they thought was wrong with it and how that particular project could be brought up in speed. We selected, if I remember correctly, maybe 20 projects. We went back out to those projects and thought that they were just missing the benchmark and that they could be brought up. We worked with them over a two-month period or a three-month period to bring the projects up to fundable standards. It still meant that there were one or two projects where there were still little issues, but we billed that into the grant conditions. One of the conditions would be to do x or y within the first six months. It is a different conversation depending on the funding situation and the situation with the applications themselves. Mr Nicoll, you mentioned your engagement with DFID and you mentioned private sector funding. Does the private sector come to you or do you go to them? What kind of relationship do you have with them and how much engagement do you have with DFID? On the private sector, they apply to our funding rounds, as any other applicant would. They are part of the competitive competition. For DFID, we keep in touch with DFID. The scale of what they are doing is so different from us. There is a limited natural intersection, but where we work with them very closely and have a good relationship is very much through their country officers in our beneficiary countries. They have that presence on the ground and that local knowledge. For example, when we visit country, we would always speak to them about their assessment of the local conditions, the context, any particular information that we ought to be aware about, areas where our partners are operating, anything that is of concern to them. We have a very close natural relationship with them in country when it comes to the UK-based side of things. We have an ongoing dialogue, but the level of intervention that DFID is doing, the level of intervention that we are doing, tends to be quite different. One exception to that is DFID have introduced a small grants programme themselves quite recently. We do not have absolute evidence that it is modeled on ours. It is quite similar to ours, which we take as a vote of confidence. You would have to ask them more about the background to that. That shows that they think that some of the stuff that we are doing is innovative, as I said, in the first place, and it is worth modelling their activity on. We keep in touch on that basis. Iain Nicol, some of the points that you made earlier in response to Ross Greer's questions and it was about the monitoring of projects and the importance of the longer-term sustainability. Is the monitoring process for those larger projects similar to the monitoring process for the smaller grants? It was just really to hear a bit more about that. The monitoring process for the small grants is similar. Applicants and what once have been successful organisations are asked to provide reports on a six-monthly basis. The reports are looking at key areas to check that things are on track, so we look at asking them for an update on activities, any delays, any issues that have arisen during the reporting period. We ask them, as part of their original application in the small grants programme, to outline an M&E plan. Although they do not have to complete a logical framework, which would probably not be seen as proportionate for the size of funds that they are receiving, they have to outline what different areas they will be measuring to help to progress against their outcomes so that they are asked for an update. Importantly, they are asked to do an expenditure, so they give us a detailed plan of how they have spent their budget next to what they planned and what they are planning to spend in the next period. One of the things that is really important to note is that we encourage the development of professional relationships with those organisations over the three-year period. What that allows us to do is to have a transparent approach with them. Over the time that we have been managing the funds, we see organisations that feel able to tell us when things are not on track. What that allows is early intervention if something is not going as planned. With any project, you might have a great plan at the beginning and then you get there and something goes wrong, there could be an election or something changes in country and that can have an impact on the project. It is really encouraging for us to see real honesty coming through in the reports and that is really, really important because it does allow us to work with them and with the team at the Government to make sure that we can support those organisations. One of the things that is great about the fund is that we want those projects to succeed and we want them to be a success. It is a competitive process but it is one that is about building capacity and seeing success for the organisations and the project. There is a real feeling that if they can tell us what is happening, we can support them in every way possible to make a success. The only 12-month report is a bit more reflective. It is looking back at the year, lessons learned, how they disseminate any learning that they are gathering through the work that they are doing and their annual payment of their fund. The small grants have annual payments at once a year and those payments are made on the basis that both of those reports have been completed and that there is no areas of concern that would lead us to talk to the Government about delaying their payment or changing their payment in any way. Thank you for that. In your opening statement, you talked about how some of the smaller organisations in particular have stronger links to the community and can have more of an impact in a way than some of the bigger organisations. It was interesting to hear about if you had any examples of some of those projects that have been funded through the smaller grants programme. We have a number of projects and one of the ones that I sent in as part of the evidence was the Love Plus project. It is a really good example of an area that you would not necessarily hear about much these days, so it is working with communities that are affected by leprosy. This is an organisation that is really small in Scotland and it has managed to make connections through a church-based organisation. In developing countries, the church has had incredible reach into communities. Those communities are highly stigmatised. It is a disease that people do not want anything to do with those people. They can become very isolated. Part of the impact that that project is having is working with those communities to support them economically. In villages where there are a number of people affected by leprosy, they are developing work to allow them to generate their own income. What is great when we read the reports from Love Plus is seeing how there are a number of different impacts that that project is seeing. Not only are people able to start making their own income, which is so important. They also find a place in that community. They have started, for example, selling crops at market. A lot of them do chicken rearing, so those are things that can benefit the wider community themselves. One of the great things that we read in the most recent report was the increased confidence of the community and people feeling part of something and belonging when a disease such as leprosy can be so isolating. That is the reason why I included that. It is a really quite powerful example of how, not necessarily on a huge scale but on a smaller scale, you can have a great impact for different communities. Iain, do you want to talk? I just want to add something on the reporting. We have the formal six-month of the reporting, but we also encourage our projects to contact us so that we will have face-to-face meetings regularly with them. That way, we build up a better rapport and they are more willing to come when there is a problem early. We also try to visit some of the projects and go out and see what the impact is and speak to beneficiaries. Sometimes beneficiaries have a different view on the project from either the project manager in-country or the project manager here. If we can link those three up together, that gives us a rounder picture of the project. When it comes to doing our assessments at the six-monthly stages, it will have a better picture of what is happening on the ground. In terms of the longer-term sustainability, would you say that it has been the case, in the vast majority or all the programs that have been funded through the small grants, that they have continued to have that longer-term impact? A lot of the work that goes on through the small grants is about building capacity at community level. The other thing that the fund brings is building capacity of the delivery partners. There are a number of different ways to look at sustainability in that case. If you are something like the Love Plus project, what you are doing is enabling people to generate income in a way that they possibly did not have access to before. For a few years, you are putting in that energy and that support for them and they can then go on and grow businesses. With the chicken rearing, for example, or any sort of animal agricultural project, they can then sell animals to other people who know that it is a way to support them growing a business. The capacity building of the local partners is really important, because the type of funding in its very nature institutional funding raises the standard of project delivery, because there is more scrutiny than possibly other types of funders. Projects are having to learn lessons about monitoring and evaluation and looking back and assessing the impact that they are having. A big part of that is learning lessons and then adapting the way that they work. For me, looking at the small grants, the way that those projects are starting to build sustainability is really supporting those smaller organisations in countries to raise up the work that they are doing and to look at more effective ways of working in development. Often part of that is building the sustainability of the communities that they are working in. You can never guarantee what would happen in the future for every single project, but going back to the importance of the assessment process and the application process, requiring people to think about it and have a plan for it from the start and being able through the reporting process to check whether those plans are in place, gives you the best possible chance of doing that. I think that that is what we are looking for our projects to achieve. I am sorry, we are almost out of time. Stuart McMillan, do you want to come in? Do you see a trend of organisations that are applying with different projects round after round? To a certain extent. A and you, John, would you have the best view of whether there are people who will repeat funding? Overall, you are looking at the larger international NGOs of the base in Scotland. Oxfam, Christian Aid, Tier Fund and those types of organisations will traditionally apply, but we have also seen an increasing trend of universities applying as well. As I said, local authorities and health boards do have a mix, but traditionally it will be the larger international NGOs. With the benefits of the small grants programme, we have had a number of organisations that graduate from the small grants to apply for the main funding programmes. For the Rwanda and Zambia funding round that ran this year, we have had two successful organisations, First Aid Africa, which I think has been spoken about already, and Gaia Education, which both received a small grant and then graduated on and have been successful in receiving a larger grant. That has been one of the real benefits of the small grants programme, which we have seen an increase in the smaller NGOs that are engaging with us and accessing the larger amounts of funding. Moving beyond us was the larger, better known international NGOs. For Malawi, it has been a bit different. We have always had the big six, so to speak, but because there are more civic links in Scotland, we have had a full range of organisations that have been applied to the Malawi Rwans. In terms of the process, you stated earlier that you would check the financials of the organisations, but if you are having larger NGOs and health boards applying, you would not necessarily then go and check the financials every time they put in an application, would you? Every new funding around every application is treated the same. Where we know that organisations have been funded before, we look for evidence on how those projects have been managed, because that is essential information to make sure that we are not going to be refunding an organisation that has not managed funds in the past, but every organisation would be taken through exactly the same process. Organisations, no matter how big or small their governance can change and their financial situation can change year on year, are such really important that we do review that every time. In terms of the applications, for each round on average, how many applications would come in as compared to what you actually successfully allocate money to? The last one around which was Zambia and Rwanda, we had approximately 40 applications, I can't remember the exact number, but Christy might go to 49. We've taken through, eventually, 12 have been successful, so 40, and we took probably a sort of attrition rate of about 50 per cent from concept note through to full application, maybe fewer than that, and then, as I said, 12 are ultimately successful. Funding round, we had 52 applications, 51 within criteria, and we funded in the end 20 projects. In terms of the administration aspect of this, do you have a particular percentage target that you would look for in terms of what money you allocate out? That's a percentage that would go towards administration, and that's a percentage that would go towards delivering the particular project. If you mean the administration and the actual project by the successful organisation, we have a 10 per cent limit for Scottish-based administration costs, so that's a maximum of 10 per cent, and those are for staff costs. We don't fund overheads in Scotland, only running costs. There isn't a similar limit for in-country administration costs, but there are benefits through creating employment in our partner countries as well, so we don't have limits particularly. If the administration costs in country were particularly high, we would certainly question that and look for full justification as to why they were high. The other thing that we would ask people not to just go for the 10 per cent, we would ask to actually look at their administrations. To be honest, I find small organisations are far better at that. They are used to working on a shoestring, and they can manage really well, is my experience. We're out of time now. Just before we finish up, I just wanted to go back to something that Ian Nicol had said and clarify me if I've picked you up wrong. Earlier on, you talked about when you were talking about the RAG system, and you mentioned that in Malawi you had quite a very few projects that got the green light, and you had to go back to them. I was quite surprised at that given the length of engagement that we have had with Malawi. I would have thought that there would have been more projects that got a green light. It was just down to the quality of the applications. They were all assessed in the same manner. It was just the seven past, the benchmark, and the other 45. The quality was questionable in them. We've done a little work on it. We've fed that back in, and other organisations have been trying to do some work on applications, so we'll offer more support on the applications, but I'm afraid that it was just a case of they never reached the benchmark. Is that because our relationship with Malawi is so well known that you're getting applications from less experienced applicants? Is that the reason for that? No, I don't think that it was. It's a well since I've looked at them, but there were some surprising organisations in the amber and red section that people didn't expect, or people we didn't expect. It was just down to the standard of the applications. Was that a fluke? Was it a one-off? That was my first round of funding round, so we're looking forward to seeing if it was a fluke with the next funding round. But it's different to Rwanda and Zambia. We had a lot of good-quality applications. We did have a very small number that were red and a few amber, some of which we went back to to see if we could help develop, help work with them and develop and push them into green. Rwanda and Zambia, because we don't have the same depth of partnership and relationship as we do with Malawi, are getting just the larger organisations predominantly applying for that, who have more experience and have more resource to put together an application. We benefited from that in getting overall higher-quality applications. Actually, the size of the organisation in my experience bears very little resemblance to the quality of the application. We've got some fabulous applications from individuals. Well, thank you very much for that and to all our witnesses for coming to give evidence for us today. I'm now going to have a brief suspension so that we can change over our witnesses. Thanks again. We shall now continue with the committee's evidence in relation to the budget. Before we do, I'd like to welcome a group of journalism students from Napier University, who are in the audience today—the public gallery, rather, today. I was participating in an event in the Parliament last week from the Political Studies Association about journalism. We were commenting that not enough journalists paid attention to the work of the committee, so it's very good to see so many students coming to hear about the work of our committee. Our evidence session now is with Historic Environment Scotland, and I'd like to welcome Alex Paterson, the chief executive, and Danella Steele, the director of finance with Historic Environment Scotland. Mr Paterson, would you like to make an opening statement? Well, thank you, thank you, thank you for the invitation to meet with the committee. My first time at this committee, and I think probably the first time that Historic Environment Scotland in our new guys has been here as well following the merger of Historic Scotland and Arkham a couple of years ago. I'll say just a few comments, but we have introduction. First, we are, as you'll know, the lead public body for Scotland's historic environment. A lot of what we do is set within the context of the national strategy for the historic environment, our place in time. We're a very diverse organisation. We look after 336 properties and care of Scottish ministers across Scotland, so a major role we have is conserving them and making sure that they're enjoyed not just by us but by generations to come. 77 of those sites are staffed, including some of Scotland's leading visitor attractions, and as you'll know yourself, visitor numbers are increasing. We're a regulator, we're part of the planning system in that we look after listings and designations, and we look after a lot of Scotland's national historic record through our archives and our collections. We're investing a lot in traditional skills, and we're doing some very interesting work, which many people perhaps don't appreciate in areas such as climate change and digital documentation and visualisation and increasingly augmented reality. The new MERS organisation has a single operating plan. We have five themes which the whole organisation is aligned behind. In the year 1617, we had a very successful first year as a new organisation, delivering 96 per cent of our KPIs. I'm pleased to say that we're making good progress in delivering our current year's performance indicators as well. Our budget is a combination of grant and aid and commercial income, raised through a range of vehicles such as emissions prices at our sites, membership and other commercial operations. This year, the year we're in, we've had an increase to our budget, a capital increase to help us to take on some projects, as well as benefiting from an increase in commercial income through increased visitor numbers. The final thing that I want to say is that although the word historic is in our name, we don't just deal in the past and the historic environment in this organisation is very relevant to the world of today. I would argue that the past will help to shape Scotland's future. We are a significant contributor to most of the national performance indicators that the Scottish Government has. The £4.3 million visitors that came to visit our sites, paying visitors last year, contributed to over £400 million to the tourism economy. We spent £32 million in local contractors and suppliers, which in turn supports local economic growth and local jobs. Through our work, we support over 15,000 FTEs across Scotland, and more than 100,000 learning opportunities were provided to youngsters in schools and colleges across Scotland last year. Through our grants programme, the reach of our funding extends into many local projects across Scotland. We are a young organisation. We are an ambitious organisation. There are lots that we yet want to do, but we have made good progress since the formation of the organisation in 2015. As you say, you are a young organisation, born out of the merger of two organisations. Has the merger saved money or are you still carrying over costs of the merger? If you look at the objectives of the merger, there were seven objectives set out at the time the merger was agreed. We believe that all seven of those objectives have been delivered. There was an independent gateway review undertaken that confirmed that the transition to the new organisation had been successfully delivered. Our focus is really about making sure that, as one organisation, we are delivering to a consistent agenda, which is why you will not find any reference to merger on the organisation any more. It is one organisation with one corporate plan with five themes that the whole organisation gets behind. On the budgets, we have benefited in the last couple of years from increased budget, partly to address some of the long-standing financial challenges that the historic environment has, but also to invest in new experiences at many of our sites. Our budget has increased staff security of employment, which is one of the objectives of the merger, has been maintained. The benefits of the merger are starting to merge, and the objectives set out at the outset have been realised. That is great. I am sure that you are delighted that your budgets have increased, but are there costs associated with the merger that you are still carrying, or are you already making savings because of back-off of staff and that kind of thing? That is what I asked. Yes, sorry. The merger itself had a budget attached to it, and that was delivered within the budget that was allocated to it. There is no doubt that, in terms of moving forward, there will be savings, because we do not have to replicate activities that were replicated within the two organisations. We are moving into things such as shared IT services and shared HR functions. Clearly, there will be efficiencies where those things are not duplicated, and we can provide that services or those services consistently across the organisation. You mentioned the increase in your visitor numbers, which is very impressive. Obviously, that generates an income for you. Do you expect a similar footfall in 2018? How do you plan to optimise that and use it in the best interests of the organisation? Visitor numbers last year were £4.3 million, and that was a record, which we thought might be a challenge to match. This year, year to date, visitor numbers are 19 per cent up across the whole of the estate. It varies from site to site, but, if you aggregate it across our estate, visitor numbers are up again. That provides additional income. One of the things that we did at the start of this year was to develop a prioritisation as to how we might use income most effectively. We are doing a number of things with it. One is that historic sites do not stand still. They deteriorate just by standing there with climate change and other issues. We have been able to allocate additional funds to progress the conservation work that we have been charged with delivering. The second thing that we have done is to bring forward a number of improved visitor experiences at many of our sites. It is part of what we do year in, year out, but we are looking at a number of sites where we want to do something significant in improving the visitor experience. The benefit of additional visitors is having a direct impact on our core business, which is looking after all those historic sites and improving the visitor experience. We are also able to put some money that we have not been able to do for many years into other areas such as digitising our archives so that they are more and more available to anybody through online access. A range of ways in which we have been deploying the resources is driven by four real criteria. One is about the conservation of the sites that we have. The second is about improving the visitor experience. The third is about preserving the cultural significance of our sites and our collections. The fourth criteria that we will look at is how does our investment leverage wider benefits, whether it is economic, social or community benefits? Those are the four lenses through which we look at our investment priorities, but as I said, it has been manifest in funds into our core business. Are you able to say which particular sites have benefited from the extra money? Where have you put the money? Many sites across Scotland—I think that there are probably 60 or 70 different sites are benefiting in different ways. In some it is conservation work that, for budget restrictions, we have not been able to do in the past, so we have been able to do that type of work. In others it has been improving the visitor experience. Let me take just a couple. Doon might be a good example where visitor numbers have increased quite considerably. At that site, in particular, we have done a number of things. One is there was maintenance repairs that had to be done, so we have managed to do that. Secondly, we have improved the toilets. I will come back to car parks and toilets, which is one of the biggest challenges we have. We have improved the toilets, the shop and the visitor experience. We are having a look at the car parking around that type of site. It is a good example of looking at a site in the round and saying what more can be done, what more need be done. Calaverac is one that we are having a look at just now. It is a fantastic site, and we think that it has more potential. We are doing work around the paths at the moment. We are improving the visitor experience. We are looking at augmented reality. We are having a look at car park options there. During the summer, we have brought jousting back to Calaverac as well. There are literally dozens of small projects across Scotland, in which we are addressing visitor issues or conservation challenges. However, there are a number of projects, such as Doon being one, Edinburgh being one, Calaverac being another and Orkney being another, in which we are looking at sites in the round and saying what can be done collectively to improve the offer. South of Scotland MSP, I am delighted to hear about your plans for Calaverac. Richard Lochhead There must be a figure somewhere that you have about the backlog in terms of all the properties that you have to repair or upgrade or protect, and I just wondered what that figure would be. Richard Lochhead So, back in January of this year, we published a report, which was a report on the conditions on the properties and care. It outlines the different factors that impact on them and so on and how we measure it. However, it concluded that there probably was a backlog in the order of 65 million, accumulated over a number of years, a sum that would be required over a period of time, and we were talking about it over 10 years or so, to take the physical conditions of the sites from where they are today to a condition that we would like to have them in. That was the backlog figure that we published back in January. What we have been doing over the course of this year is to take strides towards addressing some of that backlog. Some of the additional capital income, capital funding that came from the Scottish Government, which is an ally to some additional investment that we have been able to put in through the visitor numbers, has allowed us to make progress towards addressing some of the backlog, but also taking forward new developmental work. That was the figure that we published in January. Richard Lochhead is a significant figure. On the increased number of visitors, which is great news, what has generated an extra income? Give us an indication of what that means. Our estimated income for last year was that we would have a commercial income of around £49 million. The year before we estimated it, it was £42 million. The outcome last year was that our commercial income was £49 million gross. There is a cost of sales that comes off that, which is cost incurred in delivering that. This year, we expect our commercial income to be probably mid-high 50s. We are only partway through the year, but that is the order of magnitude which the visitor number increase has delivered. That is not all within our gift to use. There is a discussion clearly that we have with the Scottish Government about how income in excess of what we predict is used, but 49 gross last year, mid-high 50s is our expectation for the current financial year. We have been able to deploy a lot of that into core deficit, but also development opportunities, which I guess for many years we have not been able to do. That sounds very encouraging. That is a significant increase, thanks to the number of people visiting Scotland, as well as local people. On commercial income and working with the private sector, I have clearly been working with you over Dallas Do and my constituency, and there are some exciting prestigious companies wanting to get involved with that. It is slightly frustrating that it has taken several years of raising this time and time again to get anywhere, but we can perhaps put that to one side. Is there any obstacles that you feel the Government could help to knock down that prevents you from having better relationships with the private sector or getting commercial income? If I was being honest, no. We operate within a governance framework, with framework agreements and other sort of things with the Government, but, by and large, I could not identify any major obstacles. We have a trading company through which we can bring in non-core activity. We have a good settlement through grant and aid. We have an arrangement, which I guess is always negotiable around how we can use additional income that we bring in. We realise that we are in a very fortuitous position of having the commercial income option. We have a very good working relationship with the Government, and the dialogue is open. Opportunities to develop commercial income is just one of the angles that we will be looking at going forward, but I will not identify any major issues. The final question is about your organisation's wider role in supporting the Scottish economy, particularly in the likes of our town high streets and city high streets. There was a case in Murray and Elgin just recently where your organisation knocked back a development proposal for some empty derelict buildings on the high street in Elgin, which is clearly a bit of a blight. I am trying to get my head round how you see your role. I understand clearly that you have to look out for the conservation criteria, but the result is, in that case, without being too parochial, but I am sure that it is replicated elsewhere, we are left with a blight on the high street, which is very unfortunate from the local economies point of view. Is your attitude to just look at the application and just knock it back, or is your attitude that we are going to get stuck into this and find a way through this so that we can improve the high street in Elgin or any other towns or cities in Scotland and maybe offer some financial support and be proactive about it? So a number of points in there. In terms of support for high streets generally, we have a grant scheme and that is what it does. It provides support for refurbishment of properties and so on in many towns across Scotland, and we have just announced a new round of car funding. We support town centre regeneration and so on. In terms of the approach, I cannot remember the figure off the top of my head, but it is in the 90 per cent of cases that we are asked to look at that we approve, whether it is for listings or designations and so on. The number that we push back on is very small. Without going into the specifics of Elgin, our approach would normally be to engage with a developer, whoever they were, at an early stage and provide input and advice at that early stage. If we take a view to object to a development, then there is a very clear and transparent process and rationale for why we have done it. There is always an opportunity to engage with a developer after a decision to say, well, how best can we take something forward? There are other cases around Scotland where it has not been a case of no for no sake. There has been a good reason why we have said no, but we definitely want to engage with projects to see how we can make something happen. Either at an earlier stage where understanding issues is important or in a case like that, where a decision has been made to object, how can we work with a developer to see if there is a more acceptable project that can come forward? I will leave that with you. Maybe there is a way in which you can find a more proactive role to go out and find those blights where perhaps developers are not attracted to developing them because they feel that, because it is listed, it is going to be either very expensive or there is going to be too many obstacles to overcome. What I am interested in is just the outcome, the fact that we are left with a blight on a high street in one of our major communities in Scotland, and I just wonder whether, because they are listed in those buildings, there is a way in which your organisation can proactively intervene. I will leave that with you to think about it. My only final comment is that it should not be the case that because something is listed it means that nothing can happen. My encouragement to any developer of our project is to come and speak to our team quickly and early to understand what the answer to the possible is round about it, but we can pick up separately on the specific. Certainly the committee understands that the historic environment in Scotland helps to develop skills and building capacity in the sector by working in partnership with the construction repairs and maintenance sectors to deliver the traditional skills strategy. Certainly one aspect of that would be staying glass. You mentioned quite a number of properties that you look after. Is that certainly a feature that you really have to consider in terms of the issue of staying glass and any particular training that would be required for that going forward? I was at Glasgow Cathedral a couple of weeks ago and staying glass is an issue with the conservation of the cathedral. Where staying glass is part of the fabric and the conservation of one of the properties, then, yes, we would have to be able to address that challenge as well. I might come back to you on the specific of staying glass, but the general point about traditional skills is really important. We have just opened something called the engine shed up in Stirling, which has as its focus traditional skills, materials, knowledge and so on from blacksmithing through to everything there. Whether staying glass is an integral part of it, I need to come back and check with you. Traditional skills, the development of them, the encouragement of them and the promotion of modern apprenticeships. We have been discussing the skills development in Scotland and how we develop a broader framework around traditional skills, so it is hugely important for us and for the sector going forward that we invest and look at opportunities to develop in the engine shed as a bit of a manifestation of our commitment to that type of thing. I certainly mean the convener now, but we have had this discussion a couple of times regarding the issue of staying glass and certainly there are not too many people around at the moment who can deliver that particular service and certainly going forward then there will be less people, so it may well be an opportunity for yourself to consider. I am happy to take that on and the point you make is a very valid one, that in some of the skills the number of people out there able to deliver them is actually very small and sometimes diminishing. Part of the work with SDS is refreshing the traditional skills strategy, but also ourselves looking at how we can support some of these skills that are maybe small in number, but actually very specialist and important. In terms of the organisation, how much time does the organisation spend in terms of planning and planning applications? In terms of time, I could not give you a quantification of that. All I would say is that I think that it is on a monthly basis that we are dealing with over between two and three hundred cases that come through. Our heritage directorate where our listings, designations, planning functions sits deals with all of that, but it is over 3,000 a year that we are dealing with. I know that through correspondence I have raised an issue with you regarding wider planning. It is certainly not for today, but I am keen to sit down. I shall have a discussion with you about that after here. If that is okay, thank you. As the convener of the cross-party group on culture, the area of stained glass, where we once were world leaders in stained glass in the Victorian period, we now have nowhere where it has actually been taught at that advanced level since Edinburgh University. We have shut down the glass department that teaches stained glass, so perhaps both Mr McMillan and I could follow up on that, because it obviously has a big impact on your buildings, because we will have to import stained glass artists and conservatives in the future if we do not train them. Mary Gougeon, do you have a specific supplementary on the skills? I am interested in the traditional skills element as well, because I represent Angus, Northern Merns and Breachan, the city where I come from. I had timescape heritage and initiative funding to be able to do a lot of work. People would not have been able to do otherwise without that funding, because obviously trying to look after and conserve a lot of Breachan high street was like category A listed buildings, which people did not have the money to be able to to upkeep their properties before. It really just was going back to the likes of traditional stone masons and other industries. How big an issue is the skills shortage at the moment? You talked about Skills Development Scotland and what is actively being done. Are you as a result of the work that they are doing, are you starting to see more people coming forward into the more traditional skills? We have agreed with Skills Development Scotland to do something that is maybe the first, which is a skills investment plan for the heritage sector. If you went to the Opit Historic Environment Forum that the cabinet secretary chairs, skills is probably one of the biggest issues that comes out from that. We have embarked on that project and we hope to have something coming out of it by the spring of next year. That will quantify both the current and the future requirements, but anecdotally we know that there is a skills gap. There are a number of ways of addressing it. We are working with CITB on how the heritage skills become more of an integral part into mainstream construction training. That would be useful. Secondly, we have expanded our apprenticeship programme. Can we bring more youngsters in through apprenticeship routes? We are looking at foundation apprenticeships to address some of the gaps that we have. We had about 10 apprentices finished their training last year and we took them all on because we know how important they are to us. Even if we do not, they find their way into the sector, into the contractors, but there is a shortage. We also have an intern programme where we place interns with small businesses. I was looking at a video last night, for example, of one of our interns who is a blacksmith who has been placed with a company. That is about not trying to train 100 blacksmiths, but it is small numbers developing these specialist skills. We are trying to address it through a skill strategy. We are trying to address it through apprenticeship programmes. We are addressing it also through the engine shed, where it is a facility for the sector and beyond, and a lot of international interest in that as well, to come and get high-quality training in those traditional skills. It is a huge issue going forward. It is also important—this is what we are trying to do through our grant schemes—that, when some of those works are being specified, the need for the traditional skills is built in by architects and others who are influencing the design of some of those projects. We will have a quantification on it going forward. Intuitively, we all know that traditional skills is a challenge, but, as a number of steps, we are already taking to try to increase the supply. Just another quick question on the back of that. You talked about apprenticeships and internships and things for new people coming into the various sectors and industries, but are there opportunities for people to reskill so that they could already be involved in a trade, but to pick up some of those more traditional methods? Well, absolutely. Yes, and probably yes. Where are our apprenticeship frameworks? Yes. One of the conversations that we have been having with Skills Development Scotland is that some of the skills within the sector are quite specific small numbers, and if you need some tailored awards and tailored qualifications for them, that is what we are trying to do. We have also formed a partnership with the 4th Valley College of the University of Stirling just to try and make sure that we have joined up on skills, because at one level you need it for additional skills, at another level you need it for leading-edge digital augmented reality and climate change science and research. Through that partnership, we either can or will very soon be able to offer a full qualifications provision right through the entire SCQF framework. At all ends of the skills framework, if you like, but with a particular focus right now on the traditional skills craft side. I take it, given that this is budget, scrutiny that you are putting more of your budget and planning to put more of your budget into this area in the coming years. Is that right? We are. The engine shed itself was a major multimillion-pound project. As Evan and Sovart, we have increased our own apprenticeship programme as an organisation, leaving aside moving beyond traditional skills. We have a new people strategy, so we are putting more money into developing our own people. Rachael Hamilton, your engagement for young people and ahead of the year of young people. I wondered how Historic Environment Scotland was going to use their budget to encourage young people to go to their sites and to visit. I know that you obviously have an educational visit programme, but what plans do you have ahead of the year of young people? Plans that we will hopefully be able to announce quite soon. We did a lot for this year's history heritage and archaeology. That was something to say in an easy year. It is a year that had our name on it, yet next year is an opportunity. We actually do a huge amount of work with young people already. The opportunity for a themed year is to do something above and beyond that. We have a number of initiatives planned for next year. We are also working with Young Scot to help to shape up some of those initiatives, because part of the requirement for the year of young people is the co-design of initiatives with young people. I have a list at the top of my head—maybe not, but we have a fairly extensive programme for next year. One of the things that we also want to do is to create a youth forum so that a legacy extends beyond just 2018. Through that, we want to make sure that the voice of young people is heard feeding into what we as an organisation do on an ongoing basis thereafter. I am looking at Danella, whether she has got more detail in the year of young people or not, but we have a fairly extensive programme almost ready to go. No further detail here with us today, but we can make it available to the committee afterwards, because it is not long. It is only about six weeks' time or something, so it would be great. Do you know the committee and tell us the detail of that? I also ask a different subject question. I wonder if you believe that there are any continuing issues in the integration of your predecessor bodies? I think that I will go back to my opening comment, which says that the merger has been affected and the objectives that were set at the start have been successfully delivered, but that is the start. The opportunity that the merger has brought is to realise the benefits, and that is really where we are at now. In terms of outstanding issues, we are making very good progress and will probably come to the end of projects related to IT, where everyone now is on one IT system. We have integrated HR, so there is one HR function. It is now about focusing on what are the opportunities that the merger brings, and there are some already there. Just moving the organisation forward, a major part of it was just having one clear operating plan for the organisation. We are all aligned behind the same five priorities irrespective of where we are or where we came from. Transition to the new organisation completes the benefits being realised, but further to go. Has the Scottish Government been supportive of the merger of the bodies and have they given you support during that process? It is a difficult question for me to answer. Probably an even more difficult one for Danella to answer. Danella joined us in the summer arrival and has been here for just over a year, so I guess we came in at the end of the process. All I would say is that the sense that I get was that the merger was not an easy couple of years for staff and it was good to be through it, and there was a bit of a revolving door in my seat for a bit of time as well, which probably did not help. So just a bit of stability has been helpful, I think, over this year. I could only speak from the experience of the last year, which is that I have had nothing but support from the Scottish Government in terms of my thoughts on taking the organisation forward and the provision of additional capital funding to enable us to address some of the challenges that we alluded to earlier. I compare it with experiences elsewhere that I had before I came here, so I am very comfortable with the support that we have from the Scottish Government. I actually wanted to ask you about development management along the lines of Richard Lochhead, because it is not just your budget that gets affected, it is another organisation's budget, and ultimately, in the case that I am going to give to you, it is another Government department's budget. You are familiar with Scalloway, you are familiar with the shadow and monument that is Scalloway Castle, with your previous jobs high. You know that there is a two-storey fish market there, there are Scottish sea farms there, there are two ice plants there, and there is a heap of business all around that shadowed monument. There is now a business that wants to develop a new, they want to develop their own business, which has been given a grant by the Scottish Government. The Ewing's department has very, in my view, rightly supported them in that way, and the paperwork that I have seen last night is that Historic Scotland is blocking this development, with their argument being the visual impact on a shadowed monument. When the neighbouring buildings are all higher than the proposed development, that is a bit I do not understand, I just do not understand. Your organisation could cost this business a huge amount of money to go through appeals process and all the rest of it. What I do not understand is why, from first principles, your development team did not go up and have a look and say, wait a minute, that development is actually smaller than the neighbouring buildings, and therefore why we may not like it, it's actually very difficult to argue on visual impact grounds that this proposed development, particularly as it's being granted by the Government, it's being supported by local planning authorities, it's being supported by Shetland Islands Council, everyone else has been through this and says it's okay, and I wonder if you could go on away and look at that and come back to me and find a better way to allow this business to get on with what they're trying to do, which is to create jobs in a rural part of an island part of Scotland. They export all over the world, this is a good business and I want it to succeed. I know Scallowy well, so I'm glad that you're not asking me to respond to it just now, but let me look at it for you. There are some other areas that I would like to cover. In particular, you were recently accredited as a living wage employer. Why is that important to your organisation and whether there are any impacts on your budget? We just have to be, it's the bottom line, and it's just taken us a wee while to get to the point. A few weeks ago, we were awarded the Scottish living wage employer accreditation, and that living wage extends to all our apprentices as well, so everyone in the organisation is now covered with that. We'll affect our budget marginally, but we build that in, as we do with the pay remit every year, so it's just part of our on-going budgeting, but the most significant thing is for us to be able to say. We're also a healthy working lives accredited employer. We've now got Scottish living wage accreditation. That's just what an organisation like us has to be. Also, your corporate plan in 2016, key element of your mission, is that Scotland's historic environment is cherished and understood and shared with pride by everyone. We've talked about what you're doing in terms of young people and education, but obviously in terms of reaching out to hard-to-reach groups, not necessarily just young people, but that's a very important aspect of that mission as well, and obviously in terms of the Scottish Government's priorities, in terms of fairness and equality and inclusivity, what are you doing to reach out to those harder-to-reach groups? Quite a lot. On equality specifically, we've got a new equality report and four equalities outcomes that we're working towards, which is one element of it. We have an access policy, and contained within the access policy is a lot of the work that we're doing to try to reach out to a number of different groups. We're working with UN's guide for that group. We're working with the sign language—probably I haven't got the name right—a group to help us on their interpretation for other areas. The whole issue about broadening the appeal of Scotland's historic environment, enabling access to our sites, whether physically or digitally, one of the things that we're developing—a number of sites—is virtuality, where access is not easy or where individuals can't have the physical experience of developing other ways in which the historic environment can be enjoyed. A whole number of areas, both through our equalities agenda and strategy, but also in terms of our outreach to visitors and making the historic environment accessible, is a whole raft of things that we're doing to try to make sure that we're appealing to all. Okay. Thank you very much. Finally, you talked there and earlier about putting some of the additional revenue into digitisation. Can you give us a little bit more detail about the kind of material that you're spending money digitising and when that will be available to the public to look at? So one of the things that we're developing just now is a digital strategy for the organisation. We're just, again, one of those things that the living wage—you know, the world is going digital, so we need to go there as well. It doesn't mean that we're not, because in some of the stuff that we do, particularly around our digital documentation and visualisation, particularly in terms of how we look at monuments and their condition, we are probably world-leading in terms of that aspect of digitisation. We're starting to use augmented reality and apps to demonstrate and provide access to some of our sites. The digitalisation that I referred to earlier was specifically around the archives, so we have a huge archive. There's 1.2 million items currently available through Canmore and Scran, the two websites. What we've done this year is allocate a bit of additional funds to try and accelerate the process or the speed at which the archives are digitised. We're aiming to put another at least 50,000 items from the archive into digital format this current financial year, and that's the direction of travel that we want to progress over the coming years. That will be free to access, will it? Yes. You can go on to Canmore in those places just now and you can access a lot of that free. There's a slight charge if you want to download very high-res images, but the vast majority of that is accessible free. Does that include things like your aerial photography collection? No, that's more of a commercial thing. That's a commercial thing? How does that work then? There are different types of aerial photography. There's an end cap, which is a national collection of aerial photography, which is part of our commercial activities. That is made available on a commercial basis. However, if there are other aerial photographs within Canmore, the free access would apply to them, just as it would apply to other items within that database. It's something that you're planning to spend money on over the next few years. When the units come before the committee—I think that this is your first visit—it won't be your last, so we're looking forward to hearing from you again. You'll be able to give us more details on your digital strategy the next time you appear before the committee. Correct. Part of it will be archives, and part of it will be the experience that you get when you go to your sites, and part of it will be calaveralc, where we're looking at what's the opportunity around augmented reality to enhance the visitor experience, and part of it will be around how we take forward the use of digital expertise to understand and help us to manage the conservation of our sites. A broad-ranging approach to digital. Thank you very much. If members don't have any other questions, I shall draw the session to a close. I'd like to thank our witnesses for coming to give evidence for us today.