 Mae'r cwestiynau argyrchu. Felly mae'r cwestiynau argyrchu, ac mae'r cwestiynau argyrchu. Rydyn ni'n rhaid i ddiweddol y ffówr o'r anhygoelau ffóir i gydagiaeth. Rydyn ni'n rhaid i gynhyrch ymdeithasol i ddataeth a'r ddataeth. Mae'r ddydd yng Nghymru, Gwyfoedd Llywodraeth ac Ysgolig Gweithgolig i gyrdol i ddataeth rhai gyda gweithio'r ddataeth, ac mae'n ddydd ychydig i gydag i ddweithio'r ddataeth. i'n fawr i'r ddim yn gwneud y gwirionedd, ymlaen, ymdweud â'r ddafodol, a'i'r fawr i'r ddawl o'r drwy'r ddrwyngol. Felly mae'n fawr i fod yn gweithio'r ddweud, yr aethodol, i'n ddweud o'r ddwylliant sy'n gweithio'r ddweud, ac mae'n rhan o'r ddwylliant ymddiffinol. Mae'r ddweud yn cyffratturau'r ddwylliant i'n ddweud o'n ddwylliant, i'n ddwylliant i ddweud o'r ddwylliant, ac mae'r tyg llach sy'n chi weithio i ysgol先ol. moving up is... We've got some things that were currently just bad measurements are not helpful and we're going have to get rid of those. There's other areas we have no measurements at all. I think it is odd given the focus and outcomes in Scotland that the first reliable comparable measure we've probably got of how kids are doing in education is at the age of 16 which seems given the amount of investment were presently making in the early years utterly puzzling yn ddechrau'r lleidio'n bwysig o'ch gwelio'n ei wneud? Felly mae'r lleidio'n gweithio, y gallwn y lleidio'n bwysig o'ch gweithio mewn fflaid i'r gael ymlaen o Scotlun, ond mae'n dweud y dyfodol gyda'n gweithio, ond mae rhai i'n ddim o'n gweithio'n gweithio i gael yw gweithio, a chydynnu'n gweithio'n gweithio'n gweithio. Mae'n dweud y gael sefydliadau'r lleidio. Felly, mae'n cael eu bod yn ystod o ceg, ond mae'n cyfan gweinidol chi yw'r bobl? Ond mae'n cyfan chi'r goblau byw sydd i'r fawr, ond rwy'n ysgolol fod bwysig hwnny, wrth digon ar gyfer ddiweddol i'r lle, cyfan i'r cwmniadol. Felly, rydych yn cael eu gwsug o golygu, mae'n gweinidol chi'r bobl sydd yn rhywawr i'r cyflynyddol i gael i'r gwaithbrydol, rydych chi'n順 y byddai'r bobl mewn gweld. base a database that we have got at the present moment and also speeding up the flow of data, which is often quite slow by the time you get it back to local level. As you can imagine, we love data in Audit Scotland and it is enormously important. There are loads of it. I think that this is not a question of there is not enough data. It is about the nature of that data and what we are most importantly doing with it. To make the connection with your point, Mr McMahon, about the political end of this as well is that the data can be quite challenging. I think that there is something about how data is used to then select priorities and indeed in the selection of priorities what we are de-prioritising. Some of the examples that Colin Gave earlier on about the kind of spending decisions that need to be made, very often if you are using data about the community and about community need and about where you are going to get the biggest bang for your buck, may not always be what politically or indeed in the community people think is the best thing to do. It can be very challenging and that is why it is really important that it is robust, that it is used well and that people take care on how it is presented. I think that sometimes some of the examples that you gave earlier about things not happening is because I think that people have not taken enough care on how that is presented and how the argument is put forward. I think that we need to be more mindful of—I include ourselves in this—the context in which the data and analysis is landing, if you like. You are pushing an open door with us. The more and better use of data, as Colin Gave said, there is loads of stuff happening and we are very supportive of all those things. Can I maybe add a couple of things to that? Sit for a very supportive of the idea and application of benchmarking. The important thing about benchmarking is that it is not an end in itself. Its role is to drive service change in effect, otherwise why would you do it? In doing that, the one thing that we tend to think is that consistency is very important. If I give an example here, if we are looking at the integration of adult health and social care in a submission, sit for advocated that there should be a national performance management framework set up for data, which is client-based, so not focused around how the service has been provided, but more on the outcomes for the clients or outputs for the clients in many respects, so that, regardless of how it was done, you can compare consistently between the different ways of doing things and maybe try to establish which ones work best for which reasons. That might be a question more directed at you, Mr McKinlay, but I'd be interested to see if anyone else has got an idea if anyone can. When evidence is being produced or which a decision is being justified, you can at least measure that, you can make a judgment on whether that evidence leads to the conclusion that people think it has, but when people counter that, how can we ensure that the arguments in the other direction are evidence-based? For example, recently I've been very frustrated that a health board decision in my local area was overturned. Having been given the task of providing a service or designing a service, they produced a report, but it was overturned without any evidence to counter the outcome that the health board produced. How do we get ourselves into a situation where evidence is being produced, outcomes are being set, the inputs are being measured, but the decision has been overturned without any evidence going in the other direction? How do we prevent that situation from happening? I'm probably going to try to sidestep the specifics of that example, if that's okay, but the point that you raised is an important one. I suppose that we've talked a wee bit today about the political context in which all of this operates, and I don't think that there's any point in fighting against that. I think that that is the world in which we live, and indeed local government and national government and in Parliament politics is what makes the world go round. I think that we need to find a way of working with that. Again, this is one of the tensions that we cite in our community planning report. People are making decisions and judgments from slightly different viewpoints and perspectives, so a council is designed and elected members are there to do the best for their local area. That will not always be the best necessarily for the health board in that area, which won't necessarily be the best for the NHS as a whole, and so it goes on. It's exactly the same challenge now that exists in the Scottish Fire and Rescue Service and Police Scotland and other places. There are real tensions now in that local, regional and by local I could go right down to an award neighbourhood street level. There are always discussions and negotiations and tensions inherent in this process about what the best answer is for a particular place, and people will come at that. In terms of the evidence, people can have a very strong case that this is the best thing for my neighbourhood. I live in Haddington, so this might be the best thing for Haddington. It might not be the best thing for Musselborough or Dunbar or anywhere else in Eastlothian. That's the kind of tension that I don't unfortunately have the answer to that. I don't think that there is a silver bullet. That's why some of the stuff that Colin talked about in terms of relationships and trust are hugely important about understanding where your priority focus is. Taking the community planning example, if the community planning partnership is focused on inequality, where are the most problematic pockets of that inequality and what are we collectively doing about it? It comes back to me about that clear sense of priority in the first place and then everything else follows from that. It would be odd for me to come to Parliament to defend politicians, so you can do it for yourselves. In a way, I think, in the absence of this just being left to the market, in which case I'll meet my decisions about my preferences and choices I wish to make, if we're going to do it collectively in a democracy, we elect people and those people then appoint people to health boards and other such devices to meet collective decisions on our behalf. Part of making a decision is unquestionably as there are evidence for and so on. Another part may be no, we as a community just don't like this in exactly the same way as I don't buy things I don't like the taste of not because I have a rational case for not doing so, I just don't like it so I'm not doing it. The most spectacular example I can think of was probably the care report back in 2067, where an entirely rational analysis, evidence based and so on was given at the Scottish Health Service. It said we should take out quite a number of A&E units, reconfigure hospitals, et cetera. It was utterly hated by a lot of the public, significant number of clinicians who were affected by the change being proposed and in essence it was probably done in by people marching down streets saying hands off our A&E unit is the honest truth. Now you could say that's utterly irrational but these services are for the public on behalf of the public and if they simply don't like something that's part of what I suspect we have to factor in. So I'm not sure, I think politicians actually have a very important role here to reflect public opinions, some of which will not be entirely rational, but is about values, feelings about the local area, historical sensitivities, et cetera, but that's part and parcel of how we make decisions in our private life. It would be profoundly unlikely it will not be part and parcel. So as long as the politicians are well engaged with the communities they serve, and I think that's the critical thing, then some of that non-rational, non-evidence-based stuff is important. I think the second point I make is very often one of our difficulties, and I think Fraser was really alluding to it, is much, we have a lot of policy-led evidence because we've done something, we've got evidence about it. We often don't end up with evidence-led policy, we just have policy-led evidence and that's almost inevitable I think in the mature system of public services. The challenge that Gareth talked about earlier on, therefore, means important that there are oppositions at every level of the system who will challenge whether that evidence is good enough, whether that interpretation of evidence is reasonable and so on. So I think evidence itself really resolves anything unless there's active people doing things with it as part of a scrutiny process, a challenge process, et cetera. Can I just add briefly, one aspect to that, which may be cut slightly across or cause difficulties for the role of CPPs generally, that in responding to the independent commission on local democracy, we did suggest that one of things to consider is defining what locality means for any individual service. You probably wouldn't try and think about designing a trunk road network for Scotland and thinking right, okay, at a locality level we'll think about five square, five kilometre blocks of that, and I think that there's maybe an issue about being clear when you're talking about services, what sort of scale you're meaning by locality and what area you're actually trying to service with that, and I think that that's where the challenge might come in about, you know, psych, is it the local town level, is it a regional level, that sort of thing. So I think the locality for the service, what locality means for each service might be different. Thank you. Michael Gamm to be followed by Malcolm. Thank you, convener. Just two brief issues. The first one is from the Audit Scotland paper, it has been mentioned already, but the statement was made in that paper, we should map the pathway connecting a portfolio contribution to the national outcomes. So on first blush, a statement with which I would wholeheartedly agree, but just on listening to sort of evidence over the course of the morning, I just wonder how achievable and how useful such an exercise might be, particularly when you say that something like housing, for example, touches on everything. So would you just end up with a diagram of housing going to all 50 national indicators saying, I just wonder, you know, while agreeing with that statement initially, how useful would that exercise actually turn out to be? I think that's a very fair question. As you say, it's one of those things that's probably easy to say and much more difficult to do. To continue with the housing example, I think that you would need to do it in a way that avoided exactly that. Clearly you can end up with a very complicated spider diagram with everything connecting to everything else, and in a sense that's always going to be the case. I think that what you need to do is identify the kind of predominant links, where's it going to make the biggest change, the biggest difference. I'm sure that Gareth will have a view on that, but I guess my view on things, whether we're talking about outcome-based or performance-based or zero-based budgeting and stuff, it's not an exact science, and I think we can get a wee bit sucked into thinking of it as an exact science. I think what it is, is trying to shift ourselves along the road a bit from an incremental approach to budgeting and figuring out what we spent last year and we'll take 3% off it to getting better, getting closer, to trying to link what we're trying to achieve overall with the resources that we are using. It's never going to be perfect, it's never going to be that point that Gareth may tell me about the causality thing. We're never going to get there and nor should we try. I think you would just tie yourself in knots, but I think it's worth having a go. There is some interesting work that the committee will be aware of. The Royal Botanic Gardens of Edinburgh, I believe it or not, has been doing quite a lot. The Duch of Corporate Services has been doing a lot of thinking with Edinburgh University and others about exactly how you would go about doing that. In a sense, they're looking at it from an organisational perspective, which is probably a bit more straightforward, because it's about that organisation's contribution and doing that pathway map all the way up. In terms of a methodology and approach, it looks quite interesting. The second issue was touched on modern apprenticeships that came up earlier, just as an example of the sort of outcomes that we might look for. The view of Audit Scotland was that we were focusing heavily on existing performance measures, but there was little focus on long-term outcomes. Can you just expand on that? Imagine that it was purely your role alone to decide what measures there ought to be. You're the Cabinet Secretary and the director of in charge of it, and it's entirely up to you. Can you just give us, without being exhaustive, just some of the examples of the sort of measures you would mean and there ought to be in there if we're going to treat that seriously? I can't possibly imagine what it would be like to be such lofty positions. The challenge on that one that we gave back to the Government was, as I said earlier on, that the £25,000 number is a number, but what difference is that going to make? If the overall ambition for modern apprenticeships is done, I'm not going to get the exact wording here, because I can't remember the detail, but if it's to contribute meaningfully to the sustainable economic growth, how is having £25,000 as opposed to £20,000 or £15,000, how is it going to do that? The measure that you need to try and devise is not instead of, but as well as an input measure, which I have no difficulty with, is what is the net result and effect of doing those. That's really important, Mr Brown, because I think that what that leads you to is getting into much more qualitative measures about the nature of those apprenticeships. What does a good apprenticeship look like? What's the outcome of a good apprenticeship? Where does it end up? To what extent, once I've done an apprenticeship to those young people in the main, stay in employment and progress through employment for five, 10, 15 years into the future? If you start from the other end, it begins to ask some more challenging questions, not just about the number, as important as that is, but what is it about those apprenticeships that's really going to make the difference? Therefore, what activity do we need to put in place to support those? What's our methodology for that? What's the measure in the end? I can't off the top of my head think of the exact measures, but in terms of a process, I think that's how I would describe it. Thank you, Gavin. Malcolm? Well, I think that we're past our time, so I'll try and roll up into one question. I think that it's been a really interesting session. I've really got a lot out of it. I suppose that my question really is about the national performance framework at a national level, because everyone praises it, and yet I did take, in particular, of the improvement service paper, and I think that most of the comments I've called on Mayor to be quite a radical critic of it. That's certainly the way I've read the paper and the way I've read some of his comments. I suppose that my question really is what do you think we need to do with it? In a sense, you've almost redefined outcomes and said one part of your paper, you're saying perhaps sometimes what we're calling outcomes are really objectives. I take it that you mean that we need to have a more focused attention to perhaps a smaller number of outcomes. Perhaps you can clarify whether that is the case. I suppose that the related question, since I said that I was going to roll up into one question, is to what extent, if we do need to revise the national performance framework and have it far more focused on a smaller number of outcomes that are really about improving people's lives, and to my mind and probably to your mind, particularly the lives of those in our society who are more disadvantaged, to what extent do we have to drive that through into community planning partnerships and local authorities? There's always a tension between localism and national objectives that we're all committed to, so that's me trying to roll my thoughts into one question. If I respond, I didn't write the paper as a radical critique of a national performance framework, so if it's come across that way, that is an interpretation of it. I think the point I wanted to make in it really is that we have a framework there which is useful, I think it's shifted culture on, I think it gets people to focus out, so I think all these are good things. But if the national level wishes to make a contribution to change, and I would imagine you would, then the question is, what are your ambitions and expectations? One of the challenges to community planning partnerships is if they put down, and this comes through, I think the Audit Scotland working committee, the number of measures that have no targets associated with it. So we want to make the place healthier, but we can't really say what by when. Well if that's a legitimate challenge at the local level, then it would seem to be also a legitimate challenge to parliamentarians as well. What is your ambition and your expectation of the public services you govern in Scotland as to how we go forward? So I would welcome us focusing down probably in a tighter number, I think almost the strategic objectives of the national performance framework where I would start that people get welfare, healthier, fairer, smarter, greener. Right, fine. What flows out of that then in terms of priorities you would have across a period of time, and how do those priorities you would have at that level sit with the various priorities you will politically have about inputs, outputs, service standards, et cetera, because all of that needs reconciled? Now that's what we're asking the local level, the community planning partnership level to do, and we're sometimes being quite critical if we don't think they're doing it, well ditto for parliament then, that you would have to have a view about key outcomes you want to achieve, timescales, targets that you're willing to commit to and be accountable for, and then how does that fit, pupil teacher ratios, never being able to close a primary school, whatever, and how do you balance off these different commitments you want to make politically in that way? So I am sympathetic, I think the fairer cuts across everything else, it's not a separate set of outcomes it is, we need to be greener in a fair way that people should enjoy qualities of environments consistently across Scotland, so on. We need to be wealthier in a fairer way in Scotland than we are at the present moment and so on. So I'm sympathetic to the idea that inequality would be at the heart of this. I think the second thing I say is that even if we forgot all about the national performance framework in this discussion, it has spawned a whole lot of things that are on-going, so there's big bits of working on educational attainment gap in Scotland. Why is it happening, how do we combat it? It's not explicitly referred to the national performance framework, unquestionably flows out of an outcome focus, there's a huge amount of work being done in health inequalities in Scotland as well. So in a sense I think the framework has actually driven quite a lot, a lot of that continues on an ongoing basis and will no doubt be reported back to various committees and parliaments in due course. So it was just these two points, I think we could be more dynamic. I think the national should make a contribution by saying well here's our expectations at least and we are willing to be judged accountable by our expectations for the system and I think the second bit is to be aware that a whole lot of stuff that's not formally speaking within the national performance framework has been driven by the national performance framework. That is exhausted the questions from members of the committee. I have a few further questions but I shall impose a self-denying ordinance given the time that has elapsed since the beginning of the session and we have a relief from the bill team behind you there as well. I see just what I want to say one other thing and that's just if any of the witnesses have any further points which have not been covered that they may want to touch on just to finish off. I mean very briefly I think it was touched on that I emphasise it and will happily copy the committee into this if they're interested. We're doing a bit of work just now looking at how councils and their community planning partners use their economic capacity, their capacity as employers, their capacity as procurers and their capacity as asset holders and we're doing quite a lot of measurement around that with a group of councils just now and then rolling it out to see is that a resource we're underusing to achieve outcomes? Could we use these capacities much more forcibly to achieve the outcomes we see our priorities for our areas? That bit of work is ongoing across the next year but the pilot stage would come to an end in about a couple of months time so if there is an interest we welcome your interest in this work anyway and we're very happy to send it into at that point in time but I do think that economic bit is one we should not neglect. Public services are big economic entities they should be partially judged by their economic impacts as big economic entities. Given the interest in the committee on some of the things that you've actually raised, Colin, you would be interested in that. Gareth? I'll try and keep this brief. Just to let you know that in a similar way to what Colin was saying, SIPRO is planning to work with the charity partner on developing a practical structure for an outcomes approach and outcomes budgeting and also for the assessment of preventative interventions. We, too, would welcome having the opportunity to keep your updates on that. I would just close by coming back to what I started with, which is, from SIPRO's point of view, an outcomes focus is all a part of good governance and I would sum up what the international framework says. If you don't want to read the whole document, which is possible you don't, I could sum it up in one sentence, which is, act in the public interest at all times. I think that if people have that focus and organisations have that focus, that takes a long way towards where we want to be, I suspect. Thank you, convener, and thank you again for the opportunity to give evidence to you today. One of the striking things for me about this session that is indicative of this whole debate is how much agreement there is. Colin and I were saying in the break that we need to find something to disagree about in this session today, but being less flippant about it, it seems to me that people absolutely sign up to the analysis of what the issues are and what needs to be done. I absolutely welcome the enormous amount of work that is going on to try and make it happen and happen more quickly. I think that that is really the key for us now. It is actually about putting the infrastructure and the processes and the systems and the people and everything else in place to really take it to the next stage for our part. Given that your continuing interests will be around the budget and the scrutiny of the budget, we will continue to push and challenge and support the Scottish Government and any Scottish Government in the future to do more to link outcomes with budget and spend, and if there is anything else that we can do to support the committee in that, we are delighted to do so. Thank you very much for that. I would like to thank all our witnesses for answering the questions so comprehensively today. For your time, it has been a very fascinating session. I would also like to thank colleagues for their questions. In order for witnesses to be changed over, I will have a five-minute recess. We are still waiting on Gavin, but we have had a reasonable recess, given the fact that time has been against us this morning. I apologise to the bill team for keeping me waiting so long. I am sorry that the previous session overran. I think that the technical glitch did not help. Our second item of business today is to take evidence from the Scottish Government Bill team on the welfare fund, Scotland Bill's financial memorandum. I therefore like to welcome to the meeting Callum Webster, Helen Carter and Anne McVeigh. Members have copies of their evidence received, so we will move straight to questions from the committee. That always happens in this committee. I will start with some opening questions and then we will open the session out to colleagues around the table. First of all, I just want to go on to paragraph 24 of the financial memorandum, which looks at the spend by local authorities between April and December 2014 being £18 million and the full year spend being estimated to be in the region of £29 million. Clearly, that is not the full allocation. I am just wondering if there are many discrepancies across Scotland in terms of how the money has been spent—in other words, some being significantly underspent, others hitting at the top of their allocation. What is going to happen to the estimated £4 million surplus? There has been an element of variation between local authorities in their level of spend. I think that there were three or four last year that actually provided some extra funding to the welfare funds because they used up their allocation. Again, there were some other areas that were below the level. I think that a lot of that was to do with the relatively slow start that the welfare fund had in the first three months of operation last year. I think that, subsequent to the first three months, the spend picked up the level that we would have anticipated. Even this year, our informal figures show that the spend is more or less in line with a flat profile across Scotland level. There is still some variation beneath that, but local authorities are spending what we would expect to spend across Scotland by and large. It is fair to say that. That includes the underspend from last year, which was carried over into this year for local authorities to spend. There has been a significant concern from a number of local authorities in terms of submissions that we have received with regard to the administration funding. For example, Fife is saying that only about half the amount of money that it requires has been allocated to it. How is administrative funding made up? I think that North Lanarkshire—we will get two colleagues around the table who represent North Lanarkshire—is saying that it gets 9.73 per cent of the national share of applications, but it receives only 8.96 per cent of the budget allocation, whereas Glasgow gets about 15.5 per cent of applications in the first four months of 2014, where it receives 23.4 per cent of the national budget. How is the funding administered in terms of the amount of money that is made available to provide the funds themselves for the claimants? I am going back to the point about distribution. In line with normal practice, the basis of the distribution of the funds across local authorities was agreed between the joint COSLA and the Scottish Government settlement and distribution group. With that group, we discussed when the Scottish Government became responsible for local welfare provision and ministers decided that the funding being transferred from DWP to the Scottish Government should be spent for broadly the same purpose. We started discussing through that group what the basis of that distribution across local authorities might be. We agreed that the admin funding should be based on the historical pattern of applications by local authority level under the old DWP scheme, based on the most recent data that we had available. For the programme funding, that would be based on the spend at local authority area under the previous DWP scheme, because that was the best proxy that we had at that time to assess the need and demand for the new arrangements. That was 2012 figures, but given the fact that we have more up-to-date figures on how the funds are being spent at this time, are there any plans to reallocate some of that budget across local authorities, given the difference in demand at present? We went back to the settlement and distribution group in June with a view to whether we should change the basis of the allocations for 2015-16. The original agreement would be to stick with the first distribution basis of distribution for two years, so that we could take time to assess what was actually happening on the ground. Last two months ago, three months ago, the agreement was that we should carry forward that original basis of distribution for a further year, because at the moment we only have formal stats for the first year of the operation of the scheme in Scotland, and that was felt that that was too soon to take a view as to how we might reallocate funding within or across local authorities at the moment. However, that was predicated on the basis that, for the next time that we discuss it, we will look at what is happening on the ground in local authorities and try to identify appropriate indicators to assess need and demand by local authority area. My own area at North Ayrshire Council, its submission said that, I quote, The Council projects for 2014-15, the total number of applications received will be around £12,954, compared to £6,445 in 2013-14, which is a doubling, obviously. Based on current projections, the council anticipates spending almost £1 million more in the current financial year when compared with last year. I have added, of course, a review of the current criteria that is required to money spend within available resources. How can the funds that are currently being allocated possibly meet the demand, given that there is no significant reduction in the type of application that is accepted? Of course, if the prioritisation changes so that only higher-priority cases are awarded grants, surely we will end up with more people going to review, because they will obviously know people who the previous year got a grant, etc. How do we square that circle? That is a very good question, and it is quite hard to square that circle. The way that the fund is a discretionary scheme is not an entitlement-based scheme. The guidance is written to give local authorities the scope to change the priority levels. It is a harsh fact that, at some points of the year and in some local authorities, there might be the ability to meet medium-to-low level priority applications, whereas it might be high in some others. That is something that, obviously, we will need to keep under review. Ministers will want to keep under review as a pattern of demand for the new fund. That becomes clearer. The issue of review—a number of colleagues will want to explore it, so I will not go into it in any great detail. There has been some concern, and North East Council, of course, raised the issue in its submission, as others have, about the SPSO hearing secondary reviews. They have talked about the fact that, if there is an estimated review case load of £400, with a running cost of £0.25 million, that is a unit cost of £625, which is more than the average cost of a community care grant in Scotland, which is £613 and does not demonstrate value for money compared to the service being provided by Scottish councils. What are your comments on that? I think that the first point to make is that we certainly expect, and COSLA shares this view as well, that we expect the number of reviews to rise quite significantly from the levels that they go at in the first year of operation of the funds. There are also the characteristics of the secondary review that we were looking for when we issued the consultation on the view last year. It was felt that the SPSO met the desirable characteristics and were able to deliver them better than some of the alternative options, particularly the requirement for being independent of the decision. That was quite a big factor that was considered when considering who would be best placed to deliver reviews. There is also the issue of estimated cost as well, and we have published a business regulatory impact assessment to support the bill. That looked into estimated costs of secondary reviews within the Ombudsman as a tribunal and within a local government panel. Even though the costings that you were quoting from local authorities here seem quite high per case, our estimates in the Bria suggested that the Ombudsman would be the lowest cost per case based on 2,000 cases a year. Is there a variety of issues around that? Obviously, there is an issue about secondary reviews being carried out by the existing local authority, but I suppose that they can always do a local authority to handle its neighbours' reviews and vice versa. Perhaps that might be a more cost-effective way of doing it. Surely, if the overall fund does not increase but awareness rises and prioritisation changes, as we mentioned earlier on, you will get more going to review, and we will end up with a higher proportion being spent on reviews than being delivered. I do not mean the bulk by any man there means, but we will end up with more money going into administration, surely, than delivering at the sharp end, ultimately. From the figures that we published in the Bria, I think that that would be an issue regardless of the secondary review route that was taken under the bill. As I said, the figures for tribunals and a local government panel were higher than the Ombudsman I accepted. They look in relation to the grants that are being paid out, and the costs do look high. However, in order to give people that opportunity to have a proper independent second look at the case then. In somewhat local authorities, more than half of all the reviews are being awarded to the applicants. Clearly, it is not an issue that some local authorities are perhaps not delivering what they should be delivering in terms of awards. Some of the high turnover rate is probably attributable to the fact that it is a new type of service for local authorities to be delivering. I mentioned that it is a discretionary scheme that is not an entitlement-based scheme, so I think that across local authorities there has been a period of time where they have had to feel their way into how to make these types of decisions and how to take into account the vulnerabilities of clients and special requirements that they might have. We are working to try to ensure that there is consistency of decision making across local authorities and that the guidance has been applied consistently, notwithstanding the discretion that local authorities have within the guidance on decision making. However, I think that a lot of the overturn rates are quite possibly related to the fact that it is a new scheme and it is a new way of working for local authorities that we are trying to help them to get to grips with. In terms of funding, why has it been decided to have fixed budgets, given the fact that in the first year there is bound to be less people aware of it and demand is bound to increase with time, surely? What is the thinking behind having £33 million a year for three years, rather than having a steady increase in the fund as demand increases, to allow a situation whereby local authorities do not have to continue to tighten the criteria as funding diminishes? Ministers took the view, and it is part of the budget process that is reassessed every year or re-appraised every year when the budget document gets presented to Parliament. It was a bit of a kind of unknown. In the financial memorandum, we set out how much was being spent under the old DWP arrangements. Ministers took the decision to increase the amount of money that was transferred from DWP to the Scottish Government and then onward to local authorities. It came to the view that £33 million would broadly restore what had been spent historically in Scotland under the old DWP scheme and to give a degree of stability that would be maintained for the first three years of the scheme, whether that is something that will be discussed and challenged through the budget process going forward. I know that Ministers put an extra £9.2 million in a year to try to provide that kind of cushion, but it seems that the cushion is up against it. Just one last question, because I obviously want to allow colleagues in on that, regarding the computer system in terms of IT costs. Argyll and Bute Council notes that following introduction of the interim Scottish welfare fund, each local authority has had to make its own arrangements for computer systems. There are now four main systems in use, and it is on to state that there is an opportunity commission, a single hosted national system, to support the new permanent scheme of the single set of parameters. That would be consistent with the national public sector ICT strategy. Are there any plans to take that forward? The improvement service has been examining that issue on behalf of the local government ICT board, and they have just recently completed the first phase of that work. They concluded that a single IT system is probably unworkable due to set-up costs and integration issues across local authorities. They moved on to a second phase now, which is considering how procurement could be taken forward and the requirements that local authorities have for integration issues and the way they can work across within their local authorities. Part of that would potentially include taking forward procurement arrangements for each of the four main providers, but that is an on-going piece of work. We could keep you updated with that. I appreciate that as that comes forward. It was just to add that the four IT suppliers that we are talking about are the four IT suppliers that provide a range of services to local authorities. Those are IT suppliers that are already providing services to local authorities. Going with the same IT supplier gives the individual local authority the ability to embed the new system within other services within its council. It is not for new IT suppliers that are completely unknown to the local authorities. There are certain advantages to buying in a new module from an IT supplier that they are already working with. Thank you very much for that. I am going to open out the session now, and the first person to ask questions will be Jamie to be followed by Michael. Thank you. As a member of the welfare reform committee, I will be able to follow up some of this, but in relation to the financial memorandum and the area that the community has touched on a little, the second tier review issue, the local authorities have expressed some concern about the ombudsman taking on this role. We heard a little bit of that at the welfare reform committee. I wonder whether there is an issue here with an individual local authority, particularly Scotland's smaller local authorities. They would be handling such a small number of secondary reviews that if it remained with them, would there be an issue with them having such a small case load that they would be able to maintain the expertise to deal with it? I think that that is part of the issue, and being able to bring in independent members for secondary review panels was potentially a difficulty for local authorities. That is a fair point. If the numbers did stay so low, then maintaining that expertise and getting into the mindset of the decision making that is required under the scheme could be difficult. I mean, even with your assumption that I want to turn to the assumption of 2,000 reviews per year, it could even still be an issue for some of the smaller authorities. I would have thought, but turning to that figure, why have you arrived at the assumption that there will be 2,000 reviews per year? That is a very good question. That is why I asked it. The short answer is that we had a lot of discussion with the local authorities with the independent review service that used to provide the same type of service under the old DWP scheme. It is not quite finger in the air, but it seemed a reasonable number. The numbers for this year have been very, very low. I think that we had 120 secondary reviews for community care grants and only 24 for crisis grants, which was very low, probably lower than we expected. The informal feedback that we have had from local authorities this year is that already we expect that that number will broadly have doubled by the end of the second year of the scheme. We took a view that 6,000 seemed far too high in relation to the experience of what was happening in Scotland now. We arrived at a figure somewhere in the middle at 2,000 in consultation with stakeholders. I recognise that it is difficult, given that this is uncharted. It is all pretty new for the Government and local authorities, so I get that. Nonetheless, we have a lower end estimate of 400 reviews. I think that the convener has made the point that, at that level, the funding that would be involved per case should be spending more to administer the case than the award itself would have been, which seems rather cost-effective. I am not advocating that position for obvious reasons, because you would be at the position where you would be better paying the person the money to be more cost-effective. I am not advocating that for obvious reasons—at least, I hope that they are obvious reasons. You set out, Mr Webster, that this was the most cost-effective option, going to the ombudsman. I wonder if you could just give us a bit more information. What were the other options and what were the costs involved there? The constitution that we sent out last November on the draft bill included a specific section on reviews, because that was one of the advantages of moving to the bill is that we could have an independent second-tier review panel. It covered, or suggested, the Scottish Public Services Ombudsman as one option, a tribunal as another and a local government panel with independent representation in that. We worked with COSLA to work up cost estimates for local government panels. We had discussions with the tribunal service and the ombudsman around set-up costs and estimated annual costs of that as well, which we included in our rear that supported the bill. The estimated cost per case, based on 2,000 cases a year for the ombudsman, comes out at £202. The tribunal was £413, and a local government panel was somewhere between £420 and £520 per case on that. The other options were significantly in excess of the ombudsman then. Speaking to local authorities, it has been pointed out that the administrative cost of the new fund is in addition to what they did before. That is something that local authorities did. That is not the upgrading or the stepping up of something that was already in place, entirely new. The costs are new costs. If the funding for the administration falls short, then local authorities have to find the additional costs from within existing budgets. The evidence that we have taken at the welfare reform committee so far shows that what has happened is that staff who are doing jobs in welfare departments, benefits departments of local authorities have been transferred across to take care of the Scottish welfare fund. That means that those jobs are not being done any longer that were being done. Somewhere along the line here, local authorities are being burdened one way or another. Either they are finding the staff to administer the Scottish welfare fund from existing staff, or they are trying to run the Scottish welfare funds without the required amount of staff to do it. Have any indication at all of those additional costs and have they been factored into the considerations? We have obviously been aware of the concerns that local authorities have raised with the committee on admin funding. They recognise that it is new costs. We have provided set-up costs to local authorities of around £2 million to help them to get themselves ready for the start of the funds. The admin funding that we provide is roughly 15 per cent of the programme funding for the scheme, which we think is a fairly generous amount for administering a scheme of this type. Ten per cent is the typical amount that we would use in procuring administration systems throughout the Scottish Government. That ranges from loan schemes that might be 78 per cent to the lower end up to 15 per cent for complex projects that require quite a lot of reporting. We think that the admin funding is fairly generous on that basis. We realise that local authorities are obviously making a case that it is not sufficient for them to deliver the scheme and that there has been correspondence between Councillor O'Neill and the Deputy First Minister on the admin funding. I think that that came up yesterday at the welfare reform committee that COSLA has undertaken a benchmarking exercise at the moment to look at what the true costs are and where some local authorities are performing delivery within their admin funding, what might others learn from that and where are the areas where the costs are not being captured, maybe quite as they should be. DFMs say that they should be willing to consider the evidence that comes from that benchmarking to look at future admin funding going forward. That is really helpful. We have heard the convener and Jamie Hepburn commenting on the costs of the SPSO doing the second tier assessments in comparison to local authority doing it and in comparison to the amount that has been awarded. That has been interrogated, but what has not been made clear is whether—and we have heard evidence to this effect—is that the burden that would be placed on the SPSO, regardless of whether the figures are right or not, appears to have been underestimated in exactly the same way as it has been in the arguments of the local authorities. The burden that is going to be placed on the SPSO is going to require either more staff to be recruited to take care of this, or for staff to be transferred from current responsibilities to these additional responsibilities. The evidence that we have heard so far is that people think that there has been an underestimate of what that cost is going to be. Would you like to comment on that? We have been in discussions with the SPSO for quite some time. As I mentioned, we were discussing this with the tribunal service as well as the consultation was going on in the bill. They have been in discussions with their counterparts in Northern Ireland who administer a similar process over there. That is where the cost estimates have really stemmed from for the delivery of this, so they have been looking at an existing service. There would be differences here, as it was implemented. I think that it is a reasonable basis for assumptions to be made on or estimates to be made of how much it would cost them in their running costs for that. You do not believe that there has been an underestimate overall of the burden that is going to be placed on the SPSO? I do not think so. We have been engaging with them for quite some time. We have a range of potential numbers of cases that they have considered and factored into the running costs. I think that it is too early to tell what level of reviews we will end up with, but I think that, on the current figures 2000s, it is probably quite a good estimate, and that is what they have based a lot of their thinking on. Okay. We will obviously have to interrogate that elsewhere. Thank you, Michael. John, to be followed by Gavin. Thanks, convener. On reading the papers, my initial reaction was how on earth can we be spending £5 million in order to hand out £33 million? That is 15 per cent, as I think you have said. The public sector generally gets criticised for being bureaucratic and inefficient and all those kinds of things. I just feel figures like this absolutely underline that. Surely somebody can hand out £33 million without it costing £5 million. Could you clarify then what is involved in the administration and especially the second tier reviews? I think that initially you have obviously got your first level of call, handling and taking applications is the simplest element up front, I guess, of the administration and beyond that. I think that areas where local authorities are finding they are incurring quite significant costs is taking forward the awards and in cases where local authorities are providing goods, for instance, there are issues around reciting that and arranging deliveries and making sure that those things are followed up and they are happening as they should be and then reconciling all of that at the end of the process. That is adding on some cost to local authorities. They are the other element where local authorities are suggesting to us that they are using time and resource to fulfil the holistic nature of welfare funding and passing applicants on to other areas of the local authority that they might be able to help them or signposting them to third sector services that might exist in the local authority area. That is, hopefully, a reasonable summary of where the admin costs are. Part of me wonders whether we are not going about this the wrong way. It seems like we are saying that that is a good cost and that is a good cost and a bit of advice and a bit of this and a bit of that and it just all builds up and builds up and builds up, rather than saying that if £600 or thereabouts is the amount to be given, the other way of looking at it would be to say that £50 would be a reasonable amount for admin, do what you can for £50 and that is it. Would that not be another way of looking at it? I guess that is another way that you could approach it. I think that the idea behind the fund is to try and focus as much as we can on the applicants and try to help them to move on from whatever crisis they might be in. A crisis grant in itself will not necessarily do that, it will meet their immediate need, but if you can have that extra function within the welfare fund that signposts them or refers them to another service that helps them to manage their lives more effectively and avoid crisis again in the future, then that is one of the functions that we hope to fund though. I realise that I am the welfare committee and I am sure that I have looked at this or whoever has been looking at the thing, but I am coming at it afresh. I just find it still quite strange. I mean that we have got citizens advice bureau, we have got loads of organisations out there that are meant to be pointing people and I am sure that it is the same people towards where they can get help and assistance and advice and all of these kind of things. The way I am looking at it is that £5 million for administration is £5 million less that could actually be helping people who are having a crisis. We seem to have the evidence from Glasgow that they are only helping the most desperate people and any pound that we could get out of that £5 million would be a pound that would be going to actually help real people in real struggles. I accept that that is not your decision, but I am just indicating what my reaction to it is. Thank you for that, John Gavin. I was interested in Mr Mason's remarks. Following on from that, would it be correct to say then that the £5 million, while it is classed as administration funding in the financial memorandum here, from the description that you just gave, some of that money at least, is not really being spent on processing forms where there is an advice function as well? Did I hear that correctly? It is not. I would not necessarily class it as an advice function. It is more referring or signposting people to other sources of advice that might be able to help them with any other issues that they might have when they are presenting to the fund would be the way that I would see it rather than offering advice at that point on the issues that the claimants might have or the applicants might have. I want to come to the memorandum itself. Can I refer you to paragraph 19 of the financial memorandum and more specifically just the table sitting just underneath that? Just a couple of questions about that. The first column with actual numbers on it, the first column at the left, is described as programme funding. For each of three financial years, the programme funding is down to £33 million. If I heard your answers to the convener correctly, for 1314, the actual outturn was approximately £29 million, is that correct? If I heard you correctly then, does that mean that the programme funding for 1415 then becomes £37 million? Yes, our money was carried forward within the local authorities to be spent on the welfare fund. The entirety of the underspend for 1314 goes into 1415. Secondary, if you go to the next column, which is administration funding, for the first two years it is £5 million, for 1516 it is down to TBC. For some reason, I thought that I read in the summer that it was probably going to be £5 million, but I cannot find that reference. Is TBC effectively going to be £5 million, in that ballpark, or are you unable to say at this stage? I cannot say exactly whether it will be £5 million. We still have to go through the budget processes. I understand that there is funding available to meet that sort of level, but the actual amount will remain to be seen. I think that that will possibly be influenced by the benchmarking work that the causes are undertaking at the moment. You cannot give an exact answer, fair enough. Would it be fair to say that it will not be significantly higher or lower than £5 million? I do not want to put words on your right hand, so do not just say no if you can. I am just trying to get a feel for what the financial memorandum is most likely to be. I cannot say, obviously, what it would end up as being. I cannot imagine that it would vary significantly, either way, but that is subject to discussions between Scottish ministers and cosla around admin funding for next year and the outcome of the benchmarking work. I think that that answer is fair enough. Just the last one, convener. The next come-along is secondary review funding. You have clearly had a number of questions in relation to that. Obviously, you are going on not many years figures, so you are trying to work out what you think the most accurate figures are likely to be and you put those two figures down for each of the two financial years. Given that the financial memorandum was published on 10 June and the work leading up to that you would have done your homework in the weeks and months leading up to that, has anything happened in the, I guess, almost four months since then that changes any of those figures at all for secondary review funding or does that still remain your best estimate for 14, 15 and indeed for 15, 16? I think that the figures still remain. As you see the best estimate for that, we have some understanding of an increase in secondary reviews in the early part of this financial year, which suggests that there is a unit within SPA, so it will be viable. There will be enough numbers of reviews to make that viable for them to run that unit, but beyond that there is nothing to change the figures that we have in the memorandum. There is quite a lot of talk about linking with other services. Is that really partly to ensure that no case that meets the relevant criteria slips through the system or is it really just to make sure that additional help is given for the people that apply? I think that it is to make sure that the people who apply get the help that is available and that they can get it. I think that that is potentially the way the scheme works is why we are seeing fewer reviews than we might have seen under the previous DWP scheme, because if an applicant is refused here, the hope is that they would be referred or signposted to another service either within the local authority or within the local area that would be able to help them. They are not just getting a flat refusal, so hopefully the applicants are getting a better experience and a better outcome from the scheme. That is interesting about the reviews being down. There is obviously a lot of interest on the Ombudsman. There is not that big a variation in terms of the administrative costs for a high number of appeals or a low number, but has any thought been given to whether the nature of the decisions from the Ombudsman may well be different from the nature of the decisions from the local authority. Presumably, the Ombudsman will be administering national criteria across Scotland, whereas, when local authorities have been reviewing, they have been doing it very much within the context of the money that is available to that particular local authority and the demand that they are facing. I think that you yourself said earlier on that sometimes money might just not be available because of high demand or the time of the year, whereas presumably the appeals system will not consider such factors at all if it is done on a national basis by the Ombudsman. I think that the intention is that the Ombudsman would take into account the local conditions and the priority level that the local authority was operating under when they were considering a review application, so they would not just be looking at the case from a central point that they would be taking into account the conditions that were in place in the local authority at that. You do not envisage the nature of the decisions being fundamentally different from what they would be under a local authority system? No, I do not think so. I think that you have said that the money can be carried over from year to year. I am just wondering what happens if a lot of appeals are granted and there just is not money available in that year's budget. Is the assumption that you would just have to dip into the following year's budget or how would that work? I think that the assumption would be that the local authority would have to dip into the following year's budget, but hopefully that would be a very, very small number of cases. As Callum said, the Ombudsman will be expected to take account the state of the budget in that particular local authority when they are remaking the case. Thank you for that. That has concluded the questions from colleagues around the table. I just want to touch on one thing, because it has been raised so far in the questioning, and it is the submission from the Scottish Council for Volunteer Organisations, which has put on a fairly interesting submission, different from any of the others that we have received. They say in a quote, that we are concerned about the relative speed at which the bill is being taken forward. They are actually suggesting that the bill will be delayed to review options. In terms of a section that they call rationale for legislation, before the bill begins to undergo parliamentary scrutiny, we need to be clear about the rationale and necessity of the legislation. Is there a threat to the continuity of the fund? Will the legislation help applicants to be better protected and is legislation absolutely necessary? I think that we have approached the introduction of the bill and looking at the three-fold benefits that would come from it. Potential applicants would have the certainty that the welfare funds would continue, because at the moment they are only delivered on a voluntary agreement between COSLA and Scottish ministers. The other elements are that we could allow for independent review by SPSO, which would not be possible under the current arrangements. The third option is to allow the option for the funding to be ring-faced for the welfare funds going forward. We think that there are definable benefits to be had by bringing the bill in at the moment. A lot of submissions that I have seen that have been sent particularly to the welfare reform committee have looked at operational issues and things that are affecting the day-to-day running of the scheme, which do not necessarily impact on the bill, but they will have much more impact on the regulations and the guidance that will sit underneath that. That is something that we will continue to take on board learning from as we go through the process of introducing the legislation now and, hopefully, we can reflect that learning in the regulations and the guidance when they come into effect after the act is passed. Michael Wharton wants to come in at this point. That is a very small question. It is more astimable. I will ask it as a question to see whether you agree with me. Another point that was made yesterday by witnesses to the welfare reform committee as a justification for having the Scottish welfare fund enshrined in legislation was that, with the certainty of the welfare fund existing, it will allow local authorities to retain staff and build-up expertise in the delivery of the fund as they move forward. Do you see that as a valid reason for justifying the legislative process for that? If local authorities see that as being a big advantage, I am not well enough versed with their HR procedures and processes and how they recruit and retain staff to comment on it. That has certainly convinced me. That is something. There was an issue about training, which was raised as well. There have been concerns raised in terms of some of the submissions regarding the amount available for training of staff. What is the level of funding that is going to be available as we move forward? Obviously, you have turnover in staff in any organisation. Is that something that you expect to be self-funding from by local authorities? I guess that dealing with issues of turnover would be something that local authorities would have to deal with themselves. However, even before the fund was established, we have put, I think that I mentioned the £2 million set up funding, some of that was used to provide training materials and courses for decision makers. Before the fund had even started, we have run some seminars as well over the course of the past 18 months that the funds have been running to look at specific issues of decision making and prioritisation of those types of things. We will continue to fund our quality improvement officer who tries to take a view across cases and spread good practice and help people to develop their understanding and their abilities to take decisions. We are doing things across the piece to try to support and help people to develop their skills within the fund. However, I think that for individuals who have turnover within the local authorities, it would be down to them to manage that. Thank you very much for that. Are there any further points that you want to make now that we have concluded our questions or anything else that we have not covered that you want to say to the committee? No, thanks. Thank you very much for answering all our questions and thanks to colleagues for other questions. That being the last item on the agenda that concludes the finance committee for today.