 Welcome to the 14th meeting in 2022, the Finance and Public Administration Committee. The first item on our agenda is to decide why we're to item 4 in private. Are members agreed? Members have indicated their agreement. The next item on our agenda is to say evidence on two nominations for appointment to the Scottish Fiscal Commission. As members will be aware, a Cabinet Secretary of Finance and Economy has recently written to the committee, nominating Dr Domenecal Lombardi as commissioner and Professor Graeme Roy as a new chair of the Scottish Fiscal Commission. Members have also received copies of the nominees application forms and CVs, along with a person specification for each role. We will first take evidence from Dr Lombardi and then from Professor Roy, and we have up to 60 minutes in total for this session. Welcome, Dr Domenicola Lombardi, who has nominated his commissioner to the Scottish Fiscal Commission for the meeting. We will move straight to questions. Felly, rhaid i'w ddodd Llanbarid i ni wedi'u bod yn cyd-dechrau'n cyd-dechrau, ac yn y cwmddianeth oherwydd mae'n ddigwydd o'r cyllid o'r ddefnydd. Felly, rwy'n symud i chi'n ddodd yn dweud yn ddifen i gwybod yn digwydd o'r cymdeithas. Felly, mae hi'n dda i chi'n ddegwydd o'r cyllid o'r cymdeithas? Fylltr, ddwych i chi'n ddigwydd o'r ddechrau i'n ddigwydd o'r cyllid o'r cymdeithas. First let me say that, you know, I have acquainted experience in the area of multilateral organisations, management of economic policy research institutes, most recently financial institutions. The interest coming back to your point, convener, the interest that has driven my career is first to better understand the complexities and intrigues of economics. And this is why I have an academic background, so I, you know, I did a doctorate in economics. I also published extensively in macroeconomics on both international academic journals as well as policy and professional outlets. But I've also been exposed a lot to policy decision making, policy processes, both at the national level as well as at the international level. And I've been exposed to the trade-offs that policy makers have to optimise, the constraints, the opportunities. The reason why I applied that for this job as a commissioner, if I were to be confirmed, is that I'm deeply interested in learning and understanding better the complexities of the Scottish economy as it relates to the broader UK, European and world context. And I think this is really what has driven my interest and this is what I've shared, I've been sharing also with interviewing panel and the reason why I ultimately am here, convener. OK, well thank you very much for that, that's very helpful. And how familiar are you with the Scottish economy and did the balance between reserved and devolved powers? So to be fully transparent, you know, there is, I'm not a Scottish economy expert, the value added that I hope to bring to the table and I'm confident to bring to the table is more in terms of bringing an international perspective, a comparative perspective. And also if you allow the method that have been learning by working in several national institutions, international organisations, as well as international think tanks that have been part of. So this is really, I think the value added I believe I could bring to the table rather than at the moment specialise detailed knowledge of the Scottish economy. But that said, I'm a quick learner, eager to learn and willing to catch up as fast as I can. OK, well thank you for that. And what do you feel will be the most challenging aspect of your role as a commissioner? I think there are several. First of all, the commission has a mandate in terms of forecasting macroeconomic and fiscal variables and as we all know forecasting is not the perfect science, is not deterministic. And therefore, you know, you have to use a sound method and eclectic approach. And you also need to exercise some judgement. So it's not a bottom up or top down, but it's a bit of everything. And in the end, you have to be confident that, you know, when you put your name, when you put your signature on a document, this is really, you know, the best you can do, you can make. And so I would say, you know, the most important, I think, relevant aspect is to make sure that forecasting follows the best practices, best possible practices, nationally and internationally. Independence is also a very key requirement, of course. I'm perfectly aware, deeply sensitive to that. And maybe also with my international background, I would be able to bring a fresh pair of eyes. And again, this is something that I do hope to be able to bring to the table, convener. OK, well, thank you very much for that and indeed your early responses. I'm going to open out the session to colleagues around the table and the first person to ask questions will be joined to be followed by Daniel. Thank you. Got one microphone. That's great. Thanks very much. So welcome to the meeting. The convener's already asked you a few questions. I mean, reading your CV, it strikes me that you've moved in quite high circles, the IMF, different things like that. So I just really wonder why you find Scotland interesting. We are quite a small country. There was only five million of us. To be perfectly fair, you know, I also lived in a much smaller country, which is called the Samarino, the Republic of Samarino. So when I was on the board of the International Monetary Fund, we used to represent a number of countries, including some very small ones, molten Samarino. But also, you know, I was exposed to the complexities of a very, you know, interrelated economic context. And so, you know, for instance, if you take the case of Samarino, just to come to the thrust of your question, you know, Samarino is not a member of the European Union, is not a member of the Eurozone. However, it has a custom union with the European Union through Italy, and it does rely on the Euro, even though it's not part of the Eurozone. So, you know, clearly, these are all fascinating issues, all fascinating questions, and intellectually challenging, and also, you know, interesting and relevant from a policy viewpoint. So I hope I've addressed your point. Yeah, that's fair. I was just interested, thanks very much. And I think my other question, and I accept the fact that you're fairly new to Scotland and you're still kind of learning, but from what you know of the Scottish Fiscal Commission, are the things within it that you think they've been doing well, or anything, particular areas of improvement that you would see? Yes, of course I have looked at what the Commission has done. I think the first of all, the way they present issues is something that I think is very helpful. And this is, you know, part of a broader trend that is now an emerging literature in economics that does point to the importance of, you know, making the broader public understand how policymaking is done, how to appraise economic policies. And I think, you know, the more you are effective in conveying information, even though, for instance, through infographics, making sure that, you know, things can be read and understood by broader public, not just a specialized economic stream of the public. I think this provides incredibly value-added, besides, you know, clearly fulfilling the institutional mandate that has been entrusted to the Commission. I mean, I'm interested that you say about the broader public. I mean, I think the broader public don't even know that the Scottish Fiscal Commission exists, let alone institutions. This is the challenge that all the young institutions have to face in a way. So do you think we can raise the profile a bit more? I think the, you know, clearly this is something that the Commission would need to look at, but I think, you know, certainly coming from my experience, especially in think tanks and economic policy research institutes, it's important what you do, it's important what you produce, the analysis that you perform, but it's equally important, you know, the dissemination of what you do. You know, it's not the result of an econometric analysis, but my subjective assessment is that each of those two components weighs roughly 50%, in the sense that if you don't disseminate, if you don't do outreach, if you don't let the stakeholders understand what you do, clearly, you know, there is room you can improve on. OK, thank you very much. OK, thank you. Daniel to fall by Liz. Well, thank you very much. I think I'll begin in contrast with my colleague John saying, I totally understand why someone would be interested in coming to a small country, but one with very strong links with the other countries in these islands and indeed with Europe. But I think one of the issues with small countries is sometimes they don't see far beyond their own borders. And I think especially when we're looking at the challenges that are in front of us right now, I think it's really important to be alive to the global economic issues. So with that in mind and very much looking at your experience with San Marino, what do you think the issues are? And indeed, how do you overcome those challenges seeing beyond your own boundaries when you are a smaller country? Well, I think, you know, as an economist would be focusing on Scotland and the Scottish economy, I think it would be important to appreciate macroeconomic risks, sources of fiscal risks, and how they would translate into forecasting, because after all, you know, really the hard mandate of the commission is to make sound and reliable forecasts. So, you know, clearly these are, there are a lot of constraints. Some of them can be explicitly modelled. Other do require some judgment. But at the end of the day, you know, I think the ability of a commissioner and of the commission as a whole is to make sure that these constraints and the intrigues and complexities underlying interrelations are translating into sound forecasting. So, and very much following on from that, you know, we only just had the last fiscal commission report back in December. It was very interesting, very revealing. Some of the issues there are ones that this committee has pursued very vigorously, but even in that short time a lot has changed. We've seen the war in Ukraine, the impact on energy prices and that fueling inflation, which was a concern but not, you know, but that's been amplified. You know, it strikes me that we are dealing in times where we are having lots of black swan events, you know, even going further back, you know, things such as the credit crunch just, you know, 10 years ago. So, these things seem to be happening more regularly, and given that the role of the commission is to forecast, what's your view about how you anticipate and accommodate these sorts of unintended risks? And indeed, once they've happened, how do you then revise forecasts and just give some thoughts on how you deal with those sorts of things? Sure. That's a very relevant question. So, this is why, you know, at the outset I was saying that forecasting is not a deterministic science. So, it does require an eclectic, multi-textured approach. And you were actually just referring to one key issue that we seem, it seems we are undergoing through a change of regime right now. Look at the energy global market, what's going on there. Let's look at the inflation, recent inflation dynamics. Actually, you know, we, until a few months ago, we had the opposite problem, you know, that there was low inflation, not just, say, in the UK or in Europe, but worldwide. So, clearly, you know, mainstream econometrics can only help so much this time. But this is why we need to bring it to be reminded that because there might be a change of regime, maybe some parameters that have been estimated in a completely different context may not be so robust when predicting, you know, future, future outcomes. And this is why, you know, one has to rely on, say, surveys, short-term, say, time series, modelling. And as to, at the end of the day, has to, you know, relying on his own or her own experience has to use some degree of judgment, be able to quickly recognize changing patterns. And in other words, try to try to be open and be able to recognize change. So use a lot of high-frequency data, while in other more stable contexts, less sort of less frequency data might be okay. Here we have to look a lot at high-frequency data, what people expect, how they see them reacting to what's going on right now. And I think try to bring those expectations back into modelling and making sure that at least what you forecast at this stage fully reflect efficiently. The information that we have on hand might not be perfect. There still might be, you know, forecasting errors, but at least from the point of view of the method of the methodology and of the rigor, you are offering a best practice approach. And just finally, I mean, do you think the fiscal commission and its approach does those things sufficiently in terms of monitoring those risks and indeed incorporating sort of the measures and techniques you were just outlining there to incorporate them in its forecast? From what I know, from what I've seen in the documents, they do use an eclectic approach. I've not seen into the detail sort of because I'm still not privy to their internal work. But from the outside, you know, I've seen that they rely on an eclectic multi-textured approach. So the ingredients are there. I would need to see if confirmed, how they sort of recalibrate or sort of reparameterize the different ingredients given the current context. Thank you, Liz, to be followed by Michelle. Thank you. Good morning. You very correctly have identified that forecasting is by no means an exact science, and I couldn't agree more with that comment. In terms of your international expertise and very considerable experience, do you believe that there are countries around the world where forecasting is a little better in terms of the accuracy of that? Forecasting because of the modelling that they're using, and would we be able to apply some of the best practice to what the Scottish Fiscal Commission does? Yeah. So clearly, you know, you need to be able to reconcile what the economic science and economics literature have developed, and you need to translate to contextualize those findings. So there is no one size fits all approach. So it's not a purely academic exercise, and I'm saying that very respectfully. So you have to sort of reinterpret the findings of the economics literature to the situation you have before you. I would say that, you know, in my experience, I've seen very sophisticated modelling, best practice modelling. And again, I'm confident I would be able to bring to the table, you know, at least some benchmarks, some comparisons, some maybe different or similar ways of working. Because, you know, one has to be to be honest and recognize that in economics, there is not always a straight way of doing things because the reality and the context you are trying to interpret to assess changes over time. We are just talking about that a minute ago. So whatever was working until say six months ago, maybe it's not working well anymore, not because the modelling was wrong, but the situation has changed. I was just asking the question because if you measure forecasting over a period of time, there are some countries that, to my mind appear to be more accurate, shall we say, than some others. And I'm interested to know why that is, but that's maybe for another day. I mean, one of the challenges that this committee comes across, as do many policy makers in Scotland, is that we are at the behest of two sets of forecasting, namely the Scottish Fiscal Commission and obviously the Office of Budget Responsibility ones. There is a time lag between them, which can complicate things, namely when we get one set of statistics, other things happen, and by the time we get the next set of statistics. Could you tell us a little bit about how you intend to address that issue? Yeah, sure. So clearly because OBR and the Scottish Commission are independent institutions, because they are independent, they are always going to process the ingredients, the input I was referring to before, in a different way. So it's always going to be likely that the two assessments are going to differ somehow because they come from two different assessments that are indeed independent. That said, however, I think it's important to have a strong dialogue with OBR, to have a strong dialogue between the two fiscal institutions because, you know, Exanti, you can better discuss the hypothesis you are relying on, compare the methodologies. some methodologies and maybe if there is some improvement without compromising independence, I think if there is some improvement to be made, one has to be humble enough to recognise that. So again, it's not the clear cut answer because I think there cannot be one. So as long as they are independent they cannot be perfectly overlapping. And in a way, this is also a test of independence. Ond yn gwybod, iechyd i ddweud ydym yn ei iawn i meteoroio'r sDelogaTH Cyfeirio, mae'n ddawr bywau ar gyfer y commisiwol oaf, ond, y vice versa. Os rydyn ni wedi'u gael. Mae'n digwydd, yn y prif yw'r iawn i gyfl cheese i'r lleolau o'r regrodd i'r siwr ddaeith Mae ein cwm datblygu cymrydau am y byddoch i'r holleg, a'u gwag ar hyn o'r cystafell arall, maen nhw'n byddoch iawn. Mae y cwm wirioneddres gan ein byddowach, ac yn mynd i'r holleg ac yn mynd i'r holleg, ac mae'n dysgon i'r swyddiadau ar y cwm byddowach ar hyn o'r holleg, ac mae'n cyllyddu i'r holleg ar hyn o'r holleg. Mae y gallu gynnwys ac mae hi'n i'r holleg i'r holleg. Fawr. Fawr. Fawr. Fawr. Fawr. Fawr. As I said at the outset, I decided to apply for the role as a commissioner because I'm deeply interested in the issues that would be exposed and the learning I would be able to generate for myself, hopefully also for others, but certainly for myself. So in terms of time commitment, and this is something that I had already told my interviewing panel, but thanks for allowing me to reiterate that because it really sort of underscores the reason why I have applied for this position. I have offered all the time that is required, expected, or simply, you know, deemed helpful. Likewise, I've offered my availability to come to Scotland every time that is helpful, required, or simply expected. And, you know, I would be doing so because I'm, as I said, I'm deeply interested in the role as a commissioner if I were to be confirmed of course. The Scottish Fiscal Commission's a relatively new institution has been commented, and in that respect its culture is still forming. But we have a challenge in Scotland in that the culture economically is often influenced by the gravitational pull of London, the south-east, the Bank of England and so on. And when I was going through your CV, I noticed you've written a couple of articles in which subtext you reference uncertainty, irreversibility and heterogeneous various investment dynamics. And perhaps that picks up on what Daniel was saying earlier. How then can you bring your international experience to try and influence some of the prevailing economic culture that resides in the UK? And if you look at the backdrop of where we've been financial class 2008 and so on. Sure. First of all, let me confirm that I have no links with UK institutions, whether in London or elsewhere, apart from some affiliation I share with my alma mater Oxford University. So that said, you were referring to some of my papers in which I assessed the statistical properties of macro econometric processes or statistical distributions. And what happened when you aggregate those micro processes into a macro time series? And so what sources of bias this aggregation entails and how you can correct for that source of bias. And so this is clearly, I think this is relevant because it shows that so there are some sources of bias that you can sort of investigate and appraise, quantify ex ante. And this is certainly something you have to introduce in your methodology. However, the limitation of that approach is that it relies on past data. And therefore you have also to be open to recognize that maybe those parameters do not fully or accurately describe the situation you have a time. But this is why you need the sound and eclectic approach. Clearly I've studied a lot of econometrics, I've applied a lot of statistics and econometrics to macroeconomic processes as well as to broader macro time series. OK, thank you. I mean, I suspect we can talk about this for some time yet. Thank you. I'd also wanted to ask, to what extent do you actually see that with your guidance, obviously yourself and the rest of the team, we could actually turn some of the outlook of the Scottish Fiscal Commission into some leadership and away from the prevailing view of the world in the UK, do you see that you will be able to influence that? Well, certainly I hope to fulfill all the expectations that come with being a commissioner, but I also, wherever I've been, I've tried also to bring some innovation to leave a sort of landmark on what I try to do. Certainly looking at what other fiscal councils do is always a good thing, provides always a good lesson. So my commitment would be in trying to assess the methodologies, try to make sure that the methodology can be rapidly adapted to the evolving circumstances we are going through, and also to establish, but this is something that we need to be agreed within the commission, also to establish strong links with other fiscal councils. I was referring to OBR before in terms of having a strong dialogue, but from a methodological point of view, I think the same could be said for fiscal councils in other countries. Just from what you've read so far, what do you think are the key challenges facing the Scottish economy at present? Yes. Clearly the Scottish economy faces a number of challenges because it's part of the UK. It has some policy levers, however those policy levers can only partially address the challenges it has to face. So clearly there is an issue with demographics, there is an issue with sort of devolved fiscal policy, and I think these are all aspects that need to be better understood and translated into sound forecasting. So clearly just to conclude, it's not a clear-cut case because there are a lot of interrelations that are not textbook-like, so the effort should be first in understanding accurately those interrelations, try to model those interrelations, and to make sure that the forecasting that follows as a result is defensible, rigorous and accurate. Well, that appears to have concluded all our questions for the moment, so I would just say that we will let you know, Dr Lombardi. I'm going to call a five-minute break as well, so that members can have a natural break, get coffee etc. Then Professor Roy will step up to play. Roy, who's nominated as chair of the Scottish Fiscal Commission, to the meeting, and as before we will move straight to questions. Professor Roy, you've made clear in your statement that you're passionate about the Scottish economy, so I'm just wondering why you want to chair the Scottish Fiscal Commission, and what would you change, introduce, improve to enhance the work of the commission? First of all, thank you very much for the opportunity to come along today. It's a privilege to be nominated, and it would obviously be an honour to take up the role if it was approved. Talk about being passionate about the Scottish economy. I started working in researching the Scottish economy and fiscal policy back about 20 years ago, when I started my PhD doing fiscal decentralisation before tax devolution was really a major thing in Scotland. In the last 20 years, I've had a variety of different roles, looking at the Scottish economy and fiscal policy issues, whether that be as a civil servant or whether that be as an academic. I think that that kind of longevity demonstrates the passion I've got for the role in seeing Scotland succeed. I think that the Fiscal Commission really is an important role in that landscape as more powers have come on to this Parliament to have an independent fiscal institution playing that role. Your point about what would change and develop is really important to note the success of the Fiscal Commission since it was established, as we spoke about in the earlier evidence session. Setting up new institutions isn't easy. Setting up a new fiscal institution when you've got new powers and you're developing the data and processes to be able to do those forecasting isn't easy. The first few years of the Fiscal Commission have been a significant success. Looking forward, the interesting thing is how you build on that success in the next few years and some of the issues that we've touched on about expanding and improving the forecasts. I think that there are issues around communication and what we can do more to improve the visibility of the Fiscal Commission and to communicate more broadly. With the Parliament and what information it needs in that context, that's not a criticism of what's gone on before, but it's an area where I think that we all collectively agree that improving information in these debates is really important. For me, that's largely where I think there are some areas where we can develop and I'd be really keen to work on and to prioritise. Okay, so what would those areas be to develop and prioritise? Obviously there's the work that's going to be coming ahead on fiscal sustainability and I think that's a really good area where being clear about how we communicate issues of fiscal sustainability and what they mean in a Scottish context is really important and I think that's something that will be a key part of the work of the Commission over the next few years. I think that thinking about the issues that we heard earlier about challenges in forecasting in the current time, I was coming through as a graduate in the period of great moderation where we had cracked macroeconomic stability, inflation was low, growth was high, fiscal policy was sustainable and we now live as the questions I've mentioned already in a world where it's just much more uncertain and much more challenging. And I think that thinking about how you communicate in a world like that where point forecasts are going to have to come with a significant margin of error about how you communicate and talk as much about the uncertainties and the variations around that just as much as you talk about the immediate forecast. So I think there's lots of really interesting areas that could be worked on and I think it would be really interesting to have that opportunity. OK, I mean you've talked a lot about communication for example in your statement you said and I quote, I'd be keen to use my networks including via the ESRC economic observatory to extend the profile of the Scottish Fiscal Commission so can you talk a wee bit more about that? Yes, so I think that there's obviously how you communicate and engage and position the Fiscal Commission in a leadership role within Scotland but I also think that there is a real opportunity again as we heard in the earlier session about how you do that internationally across networks and also across the UK as well. So the economic observatory is a good example of one where it's a network of academic economists across the UK who are trying to inform the latest policy debates, the latest key issues in an engaging way and I think there's a really important role to tap into that network. A, to showcase the work of the Scottish Fiscal Commission and the work that's taking place in Scotland but also use that network as a way to get fresh insights, fresh ideas into how we do the activities in Scotland and I think that with the Fiscal Commission being a leading economic institute not just in Scotland but across the UK I think it is an important opportunity where we can tap into these networks and use it to help inform the work of the commission. OK, now you talked a lot about instability and Dr Lombardi also talked about that when questions about the huge changes we've seen just since the last forecast etc. Data is obviously the fundamental building block of producing any forecasts and frustration has been expressed by the commission over previous years over data limitations. So what more can the Scottish Parliament, UK Parliament and outside bodies do to provide you with the data that you require in order to do your job to the absolute peak of efficiency and effectiveness that you would like to see? I think there's a number of things I would say in that. First of all there have been significant improvements over recent years to improve the quality of the data that exists at a Scottish level and a regional level so there has been steps taken there. There are still some significant gaps particularly around urgency and timeless of earnings data and employment data and the robustness of that which obviously make the confidence intervals, the bands of error around the forecast a bit bigger. I think there's also as well, there's work that needs to continue to be done to think about what we can do to continue to influence the core data providing institutions to produce the information that we need. I think there's also as well what's touched on in part of the earlier session about in a world of change and in a world of instability in a world where the economy is changing quite rapidly what new sources of data can you use and what new sources of information can you take advantage of. So there's lots of developments that are not just taking place here in Scotland but across the UK and internationally about now casting for example. So how can we take the current data that we're collecting to be able to update forecasts on a much more regular basis? What can we do around surveys and levels of confidence in the economy and how much can they, non-official sources, provide much more timely and robust information about what's happening here at the moment? We've just been doing some work in the academic world looking at online job adverts as being a much better, being a really timely indicator and in many ways much better indicator of what's happening in the job market because that data exists. It happens, it's updated daily. So how can you use that sort of information to help improve your intelligence and forecasting? So there's quite a lot of things I think that is developing more broadly about how you can use these different types of sources beyond maybe the traditional sources that we relied upon as official statistics to improve the quality of the forecasting. Okay, thank you very much for that. I'm now going to open out the session to colleagues around the table. First person to ask questions will be Michelle to be followed by John. Good morning, thank you for attending today. As you set out in your CV and you're well known to us in terms of being able to utilise the benefit of the extensive network you have in Scotland and also your long hinterland in economic understanding and supporting roles. I suppose it occurs to me that, although that is a benefit, it could also be a downside in terms of differentiating yourself in a leadership role at this level. What challenges do you see in being able to do that and how will you address them? So I think that in many ways I would say, and I would argue this, but the background experience that I have would give me a lot of strengths in this role. I think part of the role of the fiscal commission and why it's a broad group of people is that you bring in that diversity of experience. We heard from Dominique already about that international experience and having that into the commission becomes really important. That difference of opinion, that divergence, that international experience adds that sort of value to the work of the commission. I think that where I think I would be really keen to use and differentiate, I would say is that a lot of my experience in networks and contacts mean that the ability to improve communication and visibility is something which I'll be able to tap into relatively quickly. It's networks that I won't need to develop, it's relationships that are already there and I think providing that role in this different role so there will be the Graham Roy that was before the fiscal commission and the Graham Roy after into that and I think that that's something which I would immensely look forward to and I think that that would be something that I would say that I would really enjoy. On that, I'm probably on record here expressing my frustration in this place that quite a lot of people have a fundamental lack of knowledge around macroeconomic policy and what the focus tends to be particularly in a scrutiny perspective about what we need to count and account for and so on here. So how will you be able to bring your extensive knowledge going back to John Mason's earlier point about how we start to get more general knowledge in the populace of one the importance of macroeconomic framework and policy and of course as Dr Lombardi already said that the policy levers we currently have can only address some of that. So how can you help to heighten and broaden the thinking in the Scottish populace, not least of all the Scottish Parliament? I think it's a great question. I think when I've been here before the committee as well talking about issues of communication and beyond the narrow confines of say the fiscal framework or the budget into the wider debate we have around understanding the drivers opportunities challenges of the Scottish economy. I think that for me it's important to break down the audiences that we're speaking with as much as you and I might like everyone to have an interest in macroeconomics. That's probably not likely to happen. So there's a bit about how do we communicate with the Parliament and how do we make sure that the outputs of the Fiscal Commission fulfil the needs of this committee and the Parliament more broadly so that you have the facts and information in an accessible way that lets you do your scrutiny job. I think there's then the questions about how do we engage more broadly with the public sector community and the public finance community in Scotland and also the academic community and the types of information and engagement we have with them. And then what do we do more broadly to the general populations and how do we engage with the media, how do we engage in an accessible way, how do we make sure that we're visible and we're informing the debate as best as possible. So for me there's splitting it into different chunks and that way of communicating and trying to improve the level of macroeconomic acumen or fiscal understanding. I think we'll have different voices depending on who we're engaging with. OK, thank you. It's joined before by Liz. Thanks very much, convener. Good morning and probably I'm building on the questions that were already being asked. But if we take that point about communicating with the public, that interests me and it's not just the work of the Fiscal Commission, I mean it's the wider issues of tax and things that is quite difficult to get the public involved in that. I mean I fully accept you're a good communicator but I also thought Susan Rice, I've got huge respect for Susan Rice and I thought you know she was a good communicator but it is quite difficult. So I mean should everybody in Scotland know of the Scottish Fiscal Commission because I don't think they do at the moment, should they know what it does, you know where can we go with that do you think? I think it's a really good question and I think it's one of the areas that I'd be keen to look at and to think about what we can do to improve or at least improve the level of understanding about fiscal issues and macroeconomic issues of what the Fiscal Commission would have a key role there. I'm quite optimistic I do think that people do have an interest in issues around budget and tax and maybe not everybody but I do think that there's a genuine interest out there. Part of the challenge as you know is that it's very complex so people might have an interest but once we start communicating and explaining all the issues it gets complex very quickly so I think being able to think about who the audiences are that we want to communicate with and then how do we explain some of the complexities within the framework and not always perhaps always get into the weeds and the detail of the issues but what are the broader trends and things that we need to understand and people need to be aware of. I think that there's also quite a lot that we can do with particularly the younger academic community coming through so the people coming through universities and colleges to take an interest in the future of the Scottish economy to take an interest in debates around the public finances there and there has been lots of initiatives in recent years which I know the Fiscal Commission has been part of things like economic futures which supports young undergraduate students around Scotland to get experience in these sorts of issues. So I think there are ways that we can do more to try and improve the level of debate and understanding of economic issues in Scotland. Whether we can get everybody thinking about the Fiscal Commission I think maybe that's for future years. I get frustrated and I think you accept there's a big problem there because so many people and intelligent people in the trade unions and business and elsewhere keep demanding that we spend more on one thing but they say it's nothing to do with us where the money comes from and somehow I think and hopefully you can be part of that is get people thinking on both sides of the band street. The other point I had I mean you've made the point and it's been raised already that you you're very well connected in Scotland you've been a civil servant. I mean some people might say then you're not going to be as independent as somebody coming in from outside so I mean how would you answer that kind of statement. So a couple of things about that. So one is being a civil servant and I think the values of the civil service around honesty, integrity and partiality and trustworthiness I think is something that I think I've held on to and that's been something that's been fundamental to how I've approached not just when I was a civil servant but also in subsequent roles such as in the Fraser of Allander and my role here and everything I say is public and people can look at that and I think I stand by my record in terms of that independence and integrity. I do think there's an important role on people like myself and other colleagues who have that balance between being a senior civil servant and then also going into a senior academic role that you do give public service. You are someone who understands not just the latest research and academic outputs but also the wider public policy and political process issues and there's not many of us. And I think it's really important that that, that people like me and others have that role in there so I'm very relaxed about that. I think everybody knows me as you mentioned in a Scottish context and been around giving evidence to committees that I think that that independence and partiality is something which I hold very dear and I think I'm very proud of. OK, Liz, to be followed by Daniel. Thank you. You've spoken already about the fact that you think that communication is absolutely key. Included in that, would you say that there is still scope for better communication between the Office of Budget Responsibility and the Scottish Fiscal Commission? Are there areas of that communication which is obviously critical to a lot of economic analysis that could be improved? Obviously I've not been party to any of the internal conversations and engagement between the two institutions but again as an outside looking at it everything I've seen shows that Office of Budget Responsibility are more than happy to engage in the Scottish context giving evidence to the committee and I think that's again something I would want to develop and continue to maintain that relationship. I think the broader question picks up in your earlier question around things like timings and that's something which I think when you mentioned people of express frustration in the past about that I think I was probably one of those people giving evidence around timings. The Fiscal Commission responds to the budget process and has to adopt the timings that it's given but thinking about how we can explain where things have changed because of timing so being very clear about what's changed because of timing issues and what's different now. I think there's coming back to the point about communication. There's a point where you can think and walk people through why things have changed so it's not just two completely separate forecasts it's a bit about saying well look actually this is what we might have done six weeks ago, eight weeks ago and these are how things are changing and what's the story, how's the story evolving and that's the sort of thing I think would be useful to start to think about. Thank you. Do you feel that there would be scope if at all possible to reduce the timescales between two sets of extremely important forecasts that obviously have huge implications for economic policymaking? Would you like to see some effort made to reduce that? I think there's a question, and again I'm not part of the Fiscal Commission yet hopefully but so I don't think there's a role for the Fiscal Commission to influence that and that's quite important that that's for the Governments and Parliaments to decide the time when the budgets are timed and when they take place. I think the broader point I think about timing is a good example of one where there's a broader question around evolution of the fiscal framework and I know that review is going on at the moment but these are the sorts of issues that I think I've mentioned in the past. I think that we never really thought about when the fiscal framework was being designed back in 2016 but these things arise as time goes by and it's therefore important to reflect back on that and to say that situations where you get different flexibilities in the budget simply because of the timing of when budgets are laid in Parliament doesn't strike me as being the most efficient way to develop a budget process. So these are sorts of things that I think that they are not for the Fiscal Commission but more for the broader review. On from some of the lines of question, I think it's an interesting point around public awareness both of economic issues and rural road but I wonder actually if more fundamentally we need people to understand actually how the fiscal framework works and in particular block grant adjustments. I frankly am not convinced most people in this place understand that and actually how possible is that because it is a very synthetic beast it's not as simple as just counting up the tax receipts and that's how much money you've got which the UK Government does it's a very hypothetical system so I'm just wondering what your thoughts are about how we improve that awareness and understanding. So I think you're right and I think we've done some research into this with colleagues in Spice which was at a session with the convener talking about this on levels of understanding both in the public but also within Parliament as well around things like the block grant adjustments, the various mechanisms to manage forecast error and things and it's an exceptionally complex framework and I think in that instance I think there is really important to spend time explaining how the framework works and what are the core bits that you really need to understand about how this framework operates and yes you can get into lots of specifics and details and management all of that but the core questions but the core basics about you have your block grant and then your devolved taxis and it's that relative performance of the devolved taxis compared to the UK. Getting people to understand that these broad measures I think is a really important first step on that but again one of the things that I'd be really keen to do in this role is what more we can do to help support parliamentarians what we can more do to support general public in understanding these issues and explaining the core of how the framework works. I think in many ways with a lot of these issues people don't always want to put their hand up and say they don't fully understand it so what can we do to help work with colleagues in parliament to help improve that level of understanding. One of my reflections is that the basic principles relatively straightforward in terms of what you would have got under the block grant and then essentially the difference that policy make but the implementation of it is fearsomely complicated which is the tricky thing but just sort of moving on a little bit. I think one of the things that really strikes me and following on from my previous line of questioning is that we're now facing inflation for the first time in really 30 years that that's been a major component in what we're doing. Indeed your points around the context of the 1990s and the contrast now is well made but what difference does that make to the business of forecasting and especially when the anticipated inflation that's changing quite quickly. I mean six months ago I think we were going oh you know you know alarmed at you know the prospect of five to six percent inflation and now it looks like it may well hit higher peaks than that. I'm just interested in what difference that makes to the work of the fiscal commission and forecasting in general. Yeah so you're right so I think the fiscal commission we're talking about four between four and five percent in December now looking at that we're talking about nine percent. I think it's another example of noise in the system, noise in the forecast that is generating unpredictability in these movements of these macro variables so trying to pinpoint what's going to happen next is exceptionally difficult. In a Scottish context it's difficult as well because you're doing it within the relative position of the UK so it's about where might we have different effects of inflation relative to the UK and how might that then impact on the forecast. I think for me in these times I think the most important thing is to unpick the drivers of what's happening to that inflation and then be able to explain and then trace that through to what might be happening to the forecast. So to what extent is some of the inflation likely to be temporary and likely to fade out relatively quickly. To what extent might this be something slightly more structural and permanent if it's in the labour market and what does that mean for things like income tax revenues if it's been to faster wage growth. What does that mean to legacy effects of the resilience of the economy. So I think trying to unpick that and be clear about what the various components of that spike in inflation are and then to make assessments about what you think might happen to the different elements and then trace that through to the forecast. And again that comes back to the point about communication about being very clear about what is driving the uncertainty and how might the different components of that uncertainty impact on your forecasts. But the general point you're right is about the we're living in times where you're seeing continual change in our economy. There's legacy effects of Covid. We still don't know what the long term structural implications of that might be added on top of inflation. So it is a challenging time for any forecaster and I think the important point about that is just being really transparent about what we know and what we don't know. So leading directly on from that I mean again and similar to my previous line of questioning I mean it strikes me you look at the last 10 years you know we've had you know the credit crunch you know we've had Brexit, Covid, war in Ukraine. I mean it seems to me that our black swan events are turning into a bit of a flock. But having a look through the fiscal commission work to date I mean it has responded to these things but I don't necessarily see either in the body of his main forecast or more generally in terms of what it's publishing. Something that looks like a risk register or a kind of a forward look around contingencies and potential risks that's right there. Do you think that there's something that perhaps should be thought about in terms of some sort of counterfactual assessment and longer term forecasting? I think there's two things. One is obviously that the fiscal commission has a particular remit to make an estimate of income tax and GDP and there are point estimates for the nature of the fiscal framework. So there is a reason why gravity is to that particular point estimate but I think the broader point you're making in the question I think is entirely fair about how do you communicate the risks around that both positive and negative and how might they evolve over time? Clearly that has to be separate from the point estimate you've made but I think understanding about why things changed or the way things could change I think is really important so that people don't look and say well you said it was 4% in December now it's 9% are you just wrong and it's clearly strong reasons why things have changed and being able to unpick that. I think just one final point I would say that I think that's why it's really important that you have the evaluation of the forecasts too and again you look back about where you could have made better forecasts, where you could have made improvements but also where there's just genuine noise that we're living in a time where there's significant structural and macroeconomic change. Thank you very much. It might not be able to predict the impact of Brexit to an extent but not necessarily what would happen in terms of other major global issues such as potentially a war in Ukraine so I do don't envy your task in terms of being able to predict events which will transpire in the future. Just to wind up though, are there any further points or comments that you wish to make before we end this? No, as I said I think it's been a privilege to come along and speak with you all this morning and if I was to be able to take on the role as chair of the commission it would be an honour and I would look very much forward to working with this committee in the future. OK, we want to thank you and indeed Professor Lombardi for coming along this morning and answering our questions in such a forthright manner. We will decide in private session later today whether to agree the appointments and we will then make a recommendation to Parliament so thank you very much and we will now have a five minute break to allow an exchange of witnesses. Are we all ready to rock and roll? Five seconds then. The next item on our agenda is today evidence on public administration in the Scottish Government. We are joined today by John Paul Marks, permanent secretary to the Scottish Government and Mr Marks is accompanied by Leslie Fraser, director general corporate, Paul Johnson, director general communities and Jackie MacArthur, chief financial officer. I welcome you all to the meeting and invite Mr Marks to make a short opening statement. Thank you, convener. Good morning. First of all, convener, I'd like to thank my team for their support and to colleagues and partners for the warm welcome to Scotland since I arrived. Convener, we'd like to make sure that we address some key areas in our session today. First of all, I'm grateful to Leslie Fraser, my senior information officer and will touch on propriety and ethics. Secondly, on best practice with record keeping, Leslie will be able to say a couple of words about our latest processes. Thirdly, on developing corporate capabilities, we'll talk about our plans to date. And then finally, happy to touch on the impact of the national performance framework and we can make crucial progress on outcomes for Scotland. Convener, three strategic risks dominate my perspective today. Firstly, Covid and the lasting impact of the pandemic as you were just reflecting on, particularly on the NHS and Covid recovery is a ministerial priority for this Parliament. Secondly, Ukraine, remaining vigilant to the risks at home and abroad. And thirdly, the cost of living, supporting our ministers to respond rapidly and a sustained way as you were just discussing as our forecast changed. We responded by a 6% uprating of social security benefits, further increases of the Scottish child payment for families, but as you were just discussing, 7% plus inflation impacts households with fixed incomes and it impacts our fiscal position. This puts a premium on the prioritisation in our resource spending review, which is due May for the long term. Convener, in terms of my role, first of course is to serve as the adviser to this Parliament's First Minister and the elected Scottish Government to deliver their programme for government and their boothouse agreement, giving the working arrangement with the Scottish Green Party. Second, as principal accountable officer to balance the budget and assure value for money. And third, leading the civil service within the Scottish Government, supporting partners and systems from local government to Scotland's private and voluntary sectors so they can thrive. Finally, convener, I seek to lead in the best traditions of the civil service, to be objective, impartial, accountable to ministers and Parliament, and I'm grateful for the opportunity to meet today. I hope we can make important progress in these years of recovery, all in the service of Scotland. I look forward to working with you in the years ahead. Thank you very much for that very helpful opening statement. The first point I want to touch on is with regard to the structure, effectiveness and working practices. The civil service is reserved under schedule 5 of the Scotland Act 1998, but devolved administrations operate as a single organisation designed to encourage cross-government working. When the devolution transpired, it was agreed that a new more flexible structure designed to focus activity on government on collective rather than department objectives would come in with a relatively compact governing structure. I'm just wondering if you feel that that's succeeded in the realise you've only been opposed in a number of weeks and you're still probably looking at things. I'm just wondering how different you feel it is from the UK structure and how you intend to further develop a distinct Scottish civil service identity. I do observe that if I look at our response to Covid, I joined right at the beginning of January with regards to the management of the peak of the Omicron variant. Then if I look at the response with regards to the Ukraine and also now on cost of living, the civil service and the Scottish Government has a real sense of collective coordination at its heart and can move rapidly and respond quickly to such events. I observe that in Cabinet every week. I observe it with my executive team every week as well. I think that collective structure of devolved government does bring a level of unity or focus and you see that through things like the national performance framework, setting a long-term strategic framework for performance for the country and then you see it through the programme for government and the way in which the government seeks to move together as a team. From where I have come from in Whitehall, I think that the separation of government into slightly more autonomous departments, if you like, makes some of those capacities to move at pace a line to local need a little bit more challenging. It puts a real premium on co-ordination across boundaries, whether it's with number 10, the Cabinet Office of Treasury. We seek to do that around the table as one team every week to get our response right. In terms of what I hope to bring, one of the things I've been talking to the team a lot about is a focus on delivery. Being clear within our national performance framework, we've got the long-term strategic intent and objectives and performance clear, but in the short to medium term, are we clear on the outcomes that we're seeking to achieve, whether that be driving down the drug death rate or achieving relative child poverty targets as Paul leads on or making sure that we're ultimately bringing down our prison population as we are managing to do over the last year or so. It's absolute clarity on supporting systems and coaching partnerships to improve outcomes. Thank you for that. You touched on delivery and I'm just wondering, because I'm quite intrigued by the idea, if you can talk us to us for a couple of minutes about the delivery executive. So this is something I've seen work well before. It is about a routine whereby a team come together and constantly talk about delivery. It might be a focus on a capability that we're seeking to improve, for example, our use of data. It might be currencies that we can use to understand whether we're improving delivery, like financial management or risk management, or it would be a particular focus on a short, medium, long-term road map to achieving a particular outcome. So if I take child poverty, Paul, who's the DG leading on this, we recently published our updated child poverty delivery plan. We're clear on the indicators that take us towards seeking to achieve our relative child poverty statutory targets. But on a regular basis, we are discussing as an executive team supporting our ministers, are we doing everything possible to enable that outcome to be achieved? Whether it be about early years and childcare, about benefit take-up, roll out of an improved Scottish child payment, or improving employment support, and there's many other interventions as well across that plan. But it is about the routine of delivery, constantly talking about it, looking at the data, and then being able to give our ministers the best possible advice on, is it improving, if not, why not, and what are we going to do about it? Yes, I'm very much intrigued by the direction of travel. Back on 8 March, Emma Congrieff of the Fraser Valley Institute said, and I quote, when it comes to the big decision that has been made in the budget and the spending review, things are still very compressed and a little bit too siloed. Prior to that on 9 October, Professor Jim Mitchell of the University of Edinburgh said, it's not clear whether government has yet moved on from what appears to be quite a risk averse approach in harnessing innovation and learning from failure. I'm just wondering, in terms of the collective working, which we've already discussed, how you would respond to that. I realise that, for example, Professor Mitchell's comment was before you were in post, of course, but I'm just wondering how you feel we can move on from what's being said there and perhaps have an approach that, although not, shall we say, how can we put it, not a high risk but is at least less risk averse and more innovative in terms of going forward, shall we say? I'd be very happy to meet partners and colleagues who've made those comments and reflect on what data or evidence they're deriving that judgment from. I don't start from a defensive position that assumes what's been said there is not got some validity, so I would be very happy to do that, convener, and reflect on any learning. I think if I look back to the Christie commission, the report, the recommendations around being user-led, focused on communities, understanding need, delivering based on evidence and experience, we are absolutely determined to improve outcomes in the right way and that is about system leadership, it is about understanding the needs of communities and it is iterating services so that we meet those needs and respond accordingly. If I take an example like child poverty, I was in Dundee with the chief executive of the local authority a few weeks ago, we met with flexible childcare Scotland, one-parent families, went to meet street soccer to talk about the role of the voluntary sector, met some employment providers. We're clear that if we want to reduce inactivity, reduce child poverty, in the community of Dundee, we have got to support an environment that empowers partners with the data, the information, the funding, the support so that that is achievable. We're doing some joint piloting work there, which has been very encouraging. For me, success, whether it's about delivering the promise, on youth justice, on health recovery, on education attainment, on reducing drug death rates, on climate change and achieving net zero, ultimately is about empowering systems, building capability, ensuring we understand what's going on with good data and absolutely innovation is at the end of the heart of that and that requires a humility to listen to feedback and respond to make sure it's being built into our policy process and into our delivery. I'm impressed by your enthusiasm for change and innovation. I'm just wondering how you feel because you have touched on it, on outcomes that the national performance framework is doing at the moment. We're obviously taking evidence over lunch on that from some government officials but you yourself said on 24 February to the Public Audit Committee that, I quote, we want to build on the NPF and integrate it with our accounts to give us a good record of how deliveries are translating into outcomes. So where are we on that pathway? I think you're meeting Paul at lunchtime. I hope that you can have a good conversation about that. I think this year is a very important chance to take another look at the national performance framework. I think your inquiry is timely. I will be really keen to ensure that any recommendations that come out of that inquiry we can implement. From my perspective, I mean I've got the framework here. We can see that a set of indicators where we're making progress, quality of children, services, energy from renewable sources is an example. We've maintained some of the performance on elements including access to justice where we've just announced the promise delivery plan with a £500 million whole family wellbeing fund. But clearly we've seen the impact of the pandemic on some of the underlying indicators as well including GDP although it has now recovered to pre-pandemic levels. So I think that the framework is revered actually and recognised as best practice but I think there's opportunities to make progress with it. So for example the data could be more real time that would make sure we had more current sense of progress. The performance by its nature is strategic and long term and although of course ultimately to shift systems and underlying structural capability takes time we do want to know in the short and medium term are we making progress. So that's one of the things I'm encouraging through the delivery executive and then as we put the performance framework reporting very clearly into our annual report and accounts can we use more data to show progress and you know on child poverty on net zero we've got statutory targets drug death rates we now have quarterly data which we report to show whether or not the £250 million that we're putting in over five years is it or not translating into for example more users into treatment to reduce the risk. Similarly on education attainments where the latest attainment challenge and using quarterly data there as well to understand are we seeing the gap close and raising the bar on education standards or not and I think we should embrace transparency and data at the heart of a performance framework use it to empower systems understand what works and then take that evidence to coach others and to build system capacity for the long term. Okay thank you. Scotland's open government action plan published on 25 March aims to and I quote, promote open government values of openness, accountability, transparency and involving people. You said earlier on in response to another answer that you didn't take a defensive position but as you'll be aware the committee wrote to your predecessor Leslie Evans on 9 March expressing disappointment that she'd failed to engage with the committee regarding its invite to give evidence and to be fair I believe that the response from yourself in terms of that was quite a defensive position. I think that view is shared by all members of the committee. So for example you said as civil servants and I quote on quoting you we must always appear on behalf of or to represent the views of our ministers and not in a personal capacity always consistent with the civil service code. However the protocol between the Scottish Parliament and Scottish Government in relation to our committee business notes that a committee may invite officials alone without a minister to attend a meeting for the purpose of giving oral evidence on any relevant matter which is within the officials area of expertise and for which the Scottish Government has general responsibility. So do you accept that later comment that I've made and do you not feel that it would have been probably better in hindsight if indeed Leslie Evans had come along and given evidence not on what was discussed at committee last year but basically on how giving her many years of experience we could have reflected on some of her successes in the job and indeed have some point as to where perhaps the civil service could go in the future. I understand the point of your question and the frustration and I can say that I am here today at your disposal convener to answer any questions with regards the leadership of the civil service and the Scottish Government. I've made sure I've brought some colleagues along who have supported me through this transition not least because if there are questions for example around propriety and ethics Leslie with thanks is leading our continuous improvement programme as you know new procedures published recently similarly on record keeping where we as you say my predecessor started a set of reforms and improvements which are making good progress we've got more to do same on open public sector accounts and reforming and improving our budgetary process Jackie with my chief financial officer. So I think the point I'm trying to make is the team that have transitioned from the past to where we are today we're available to answer any question for this committee on behalf of our ministers and the Scottish Government and if we can't do today please do let us know in writing and we'll respond in full in terms of my predecessor you know she left her role as permanent secretary to the Scottish Government on the 31st of December 2021 and so when a civil servant is then called before committee they do so to provide evidence on behalf and to represent the views of ministers and not in a personal capacity which is why I'm here rather than my predecessor now well clearly I think you're at odds with the committee which actually represents four different political parties on this particular issue you know I know that colleagues are going to want to explore that in greater detail so I'll allow them to do so I'm just going to ask one other question and obviously Leslie Fraser was here last week I'm sure she can probably guess what I'm going to ask it's just that Mr Swinney said and I quote that the permanent secretary is not an individual they are an office holder is that something you would agree with? It is, I mean I am the existing permanent secretary of the Scottish Government as a civil servant there will be a future one at some point and we are appointed to represent our ministers I talked about the point of my role at the beginning of the committee hearing so the first in terms of being that policy adviser attending cabinet to the elected Government and that includes the working arrangement of the Scottish Green Party being the accountable officer both to ministers and Parliament for the budget and leading the civil service in Scotland in the Scottish Government I mean clearly I will seek to do that I hope appear before this committee very regularly build relationships happy to answer questions as we go and share my sense of what my own individual objectives or priorities are within that and I've just talked about one with that particular focus on delivery and outcomes that I have I think started to bring to this but obviously I'm just getting started but clearly the Deputy First Minister is right in terms of the constitutional role that the civil service plays in supporting the Government of the day and that includes the role of the permanent secretary and the office Well thank you for that clarification colleagues are champing it a bit so I'm going to open out the session now First to Daniel to follow by Liz I don't want to concentrate on this but just following on from the convener's line of questioning there do you accept that as an office holder you do not inherit all your predecessors knowledge and experience it's not as though your doctor who in that regard so do you accept that it is relevant to ask someone in to ask about particular circumstances and their reflections on them so for example Mr Johnson sitting next to you hasn't always been in communities previously in education and justice and if there was a particular decision that took place regarding education even though he's now working in communities it would be relevant for us to speak to him and ask him about that decision in education I don't have anything in particular in mind do you accept that sometimes it is relevant to ask previous office holders about the decisions and experiences that they had while they were in office rather than the current incumbent if I take your example with regards education if the education committee wanted to now ask questions around education they would speak to Joe Griffin my DG for education and justice if they wanted to get a perspective on decisions previous to that they might speak to a colleague who had worked on it at the time which is partly why I've brought for example Leslie who is working and leading with me on now propriety and ethics continuous improvement, record keeping data and assurance and corporate capability but if Paul had retired from the civil service then he wouldn't appear as a civil servant to represent the Scottish Government to give opinion on education delivery on behalf of this Government and that's what's different my predecessor retired at the new year and I started on I think January 3 and I've made clear that I'm happy to appear before any committee at any time and this is my second one to date but I absolutely agree with you that I do not inherit of the past there may be some advantage in all of that of course as well and it's incumbent on me to make sure I've learned as much of the lessons as I can and I have read for example of course the parliamentary inquiry into into Ferguson's the Audit Scotland reports they're both robust the recommendations are clear and we need to make sure they're implemented in full but in terms of continuity which I do agree we need to make sure that we maintain our knowledge and continuous improvement I look to my team now to do that rather than my predecessor and I find that in my chief financial officer my executive team and the partners who've been very supportive since I've arrived and I think that's the right approach that I should take learn the lessons from the past look at all the evidence make sure we're organised for the future and if I can say part of what I hope to do I appreciate it will take time is to build confidence and capability and hopefully look forward from as you were just saying in your previous hearing some very very challenging events two years of pandemic the experience for colleagues in the NHS in local government and business in schools across households we want to build a recovery that delivers better outcomes balances the budget tackles a cost of living crisis and I want to build confidence in the civil service in the Scottish Government so that we are responsive, professional organised and absolutely that does include and particularly includes building the team thank you very much for that I guess the key point of contention is what your status is while you are working at your notice and whether you continue to be a civil servant or an employee regards to the organisation but I'd like to move on because I think there are some important things that we've already hinted at this morning I think we need to concentrate on your point there about people having confidence in the service probably one of your most important roles and duties in your office in a parliamentary democracy having an impartial and independent civil service is critical in order to maintain that in its simplest form what's important is that ministers decide in civil servants act and the way that you preserve that distinction is by having clear roles and importantly and it's been hinted at accurate record keeping do you agree with that principle and do you think there are any issues that cause you concern and you need to review and reform that record keeping and that clarity of decision making I agree with your description about the importance of the civil service I tried to say in terms of our role within the constitution and within governments I made the point in my opening statement about trying to ensure that I lead and encourage my team to operate in the best traditions and values of the civil service, integrity impartiality, honesty and absolutely getting our professionalism right every day and record keeping is part of that I want to see a real rigour in our delivery and we've been making some important changes here which my predecessor started but there's more to do to complete on that continuous improvement programme around information management, our record management plan is submitted to the keeper of the records there were a set of eight recommendations that came out of the 2021 review of corporate information management but if it's okay I might just ask Leslie just to say one or two minutes on where we've got that to and what's ahead because I think you're right in terms of your point to me around assuring myself that it is absolutely embedded at the level of professionalism that we all expect to see every day I think a lot of progress has been made but I note the Audit Scotland report, the First Minister's point that she made to Parliament around it being regrettable that there is not a record of further more detailed ministerial considerations from I think it's 2015, so seven years ago but what's important to me as you state is have we got the processes organised, embedded, assured and working every day so that I can give confidence to you, to Parliament's ministers myself that we're where we need to be I think a huge amount of progress has been made the systems are very robust now in terms of being able to search for all records around the recording of all decisions but you'll appreciate in early days in the role I want to assure myself on that and I'll continue to do so You've highlighted on this specific idea and before moving on to the if I can just and indeed I think characterise what happened was in the Audit Scotland report if you look at it across paragraphs 20 or so onwards a preferred bidder status was awarded on the basis that that the ferry contract would be a standard contract where the constructor assumed the risk they then revised that so that a 25% risk was assumed by essentially the public purse that was flagged and apparently Scottish ministers approved it but there is no documentation of that approval that's not acceptable is it that is a I guess the critical question do you agree that that is a critical decision that when a contract is altered where a preferred bidder status is awarded on one basis and then a contract is altered in that way that that is a ministerial decision and that decision should be recorded so the decision should be recorded I think you're talking about events from seven years ago for which 210 documents have been published on the website and I've read a number of them and the documents they do document precisely that advice went up to ministers setting out the risks and that ministers and then that decision is communicated to and the contract awarded the point that the First Minister has made that's regrettable is there are more documents that show the ministerial considerations back in 2015 but in terms of advice on as you say the contract at the time and then the decision being made that is in the documents that is published on the website but look I agree with the robustness of the two detailed inquiries that have taken place both on the award and the development of the contracts I think the recommendations from Audit Scotland are right I visited the shipyard a couple of weeks ago met the new chief executive I think the recommendation from Audit Scotland that we need to get 801802 delivered and then look at what further learning can be derived from this experience is a sound recommendation significant governance procurement and improvement have been undertaken within the government just to give a couple of examples improve robustness of information management which Leslie can touch on in one moment we updated our business investment framework which we've now published and I think we need to continue to also ensure that we're developing the right strategy long term ferries network and we have both the connectivity and Neptune projects and reviews ahead of us the opportunity to ensure that not just 801802 but the two more recently procured ferries for the island network are delivered in 2425 and that we are getting the fleet and the capital investment right for the long term is one of the things that I know in Parliament and of course our island communities quite rightly will expect to see and I know ministers will want to deliver on but what is in Leslie just to talk about the latest progress on information management and I agree 100% with your point that this needs to be robust consistent professional and assured and that is the intent of the continuous improvement plan because like every other government and indeed this organisation we're facing just the kind of exponential rise in information particularly data and digital information so in response to that we did the previous permanent secretary commissioned a review of our corporate information management processes improvements as a result so we've improved the strategic governance and I now oversee a board that meets regularly that looks at how we're training our staff at the business practices that we put in place at the arrangements for managing risk and assessing the particular risks in different parts of the Scottish government and indeed at our systems as well improvements to our systems we've also published an information management strategy which pulls all of this together and just clarifies for our own colleagues as well as for colleagues in other public bodies that draw on our information management practices how this is brought together we are yet through the information management governance board as I said we're auditing and have been auditing director general family by a DG family every aspect of information governance management just to look at where best practice sits but also at the particular areas where there would be room for improvement depending on the different areas of business and that has resulted in real encouragement I think for colleagues to become much more expert and aware of the importance of information management and governance which of course is absolutely at the core of civil service craft at the moment we are implementing some system changes as well which help us with this as well so we're reviewing the different electronic systems that we use for information management and I have no doubt this is very important absolutely in the information age managing information is incredibly complicated especially in an organisation as large as the civil service but this isn't about information this is actually about decision making and making sure that it's recorded correctly indeed the British Civil Service has a reputation and a heritage of meticulous record keeping and that's about recording specific decisions saying what was decided by whom and by when and that's what has gone wrong here now I accept Mr Marks that there is a lot of documentation about this but I've got two specific questions to accept that this variation was a clear material change to the contract and that would require not just a ministerial decision but that specific decision should have been documented and indeed Mr Boyle evidence to the Public Audit Committee suggested that documentation of that really would be required by the Scottish Public Finance Manual indeed I think there's questions about whether or not it would also be required by the Public Finance Act of 2000 I believe and also the Civil Service Green Book so do you first of all accept that point because it was a critical decision and it should have been documented and secondly that there may well be a legal requirement to have done so I'm happy to take away your last point because I want to make sure I'm very precise in the legal requirement I mean like I've said with regards to Ferguson's there are 210 documents published on the website today and there's been one inquiry one audit Scotland report I understand the focus on the events from seven years ago I think what I can do now as a new permanent secretary arriving is look at the evidence from those reviews make sure that the lessons have been learned and focus forward on ensuring we're doing everything we can to support the delivery of 801 802 and then the future ferry procurement process the decision back in 2015 the submission that went to ministers is on the website I've read it it sets out the risks it sets out the mitigations and then ultimately a further document follows which then records the ministers have agreed to award the contract so there is documentation that tracks the decision making process but I agree with you it is regrettable and this is the point that Leslie was making that we need to be confident and ensure that the recording I agree with your point around the traditions of the civil service the miniting of those ministerial considerations is consistent and robust and the First Minister has already said to Parliament is regrettable that in 2015 that did not occur I mean I think given that you've acknowledged that there is a requirement to look at whether or not what the legal requirements were it may not just be merely regrettable it may be a legal requirement I thank colleagues for their forbearance it strikes me that this is not necessarily isolated if we look at other commercial engagements that the Scottish Government have had I think there are similar concerns around the processes and decision making that surround them so whether it was the environmental cleanup indemnities extended regarding the Liberty Steel site through to the guarantees provided regarding the Loch Arbor smelter there are a number of these key decisions where it is frankly both unclear as to who made decisions and on what basis and indeed there's been a significant reluctance of the Scottish Government and the administration to reveal those things even when they knew that they were likely to have to reveal those things and there's the financial times have revealed the email trail regarding the smelter guarantees so do you agree that there's a broader point around how decisions are being made how they're recorded and then frankly the openness regarding those decisions when people are asking what records the Scottish Government called one of the things I was alluding to earlier was the publication of our revised business investment framework at the end of March which was something I committed to ensuring that that was done and it sets out a set of important improvements that you're alluding to with regards the management of private investments including the overarching principles for which any investment is supported by Scottish ministers there's further guidance on commercial risk and an updating of references to interventions including where we've brought that together in the strategic commercial interventions division so we've tried to make sure we've got the framework here we've captured and brought together what you can expect to see what Parliament should expect to see and ministers should expect to see in their advice around when engaging in key considerations of last resort of subsidy control on governance security investment return risk and other factors and I think I'm visiting Presswick on Friday as I say I was at Ferguson's a couple of weeks ago I'm determined to ensure that we get that business investment framework delivered well including in our advice to ministers and in decision making as well so that ultimately we can show confidence that on Macabre actually it's managed to create jobs it is a going concern that is generating a return and we've not had to call down on that guarantee so I can absolutely understand the objective of securing the aluminium smelter in Scotland as I can the decision to seek to develop shipbuilding on the Clyde but clearly we want to ensure that on all these investments we've applied that framework consistently robustly so that ministers I note Ms Forbes' statement was only a few weeks ago updating on the latest with regard to Ferguson's to Parliament and we continue to provide regular updates on their performance Thank you three questions if I may permanent secretary and they're all very much on the theme of transparency that we've just been discussing you'd be very upfront about the fact that you believe that what happened is incredible and you've outlined and so has Ms Fraser about what steps are being taken to ensure it doesn't happen again from what you've read could you tell us why you think there was that problem of missing documentation I thought quite a lot about questions along these lines because I appreciate it is a sort of intriguing line of inquiry what would you have done in 2015 what do you think went wrong et cetera I mean this with respect but I do think my arriving seven years later and in retrospect with the sort of gift of hindsight and some very detailed audit opinions and parliamentary inquiries I have a lot of information that colleagues in 2015 did not have and when I observe and read the documentation from the time you can see that within the portfolio a procurement took place that was managed by Seymal Ferguson's competed was successful and was awarded the contract in a in a proper way in terms of how and what commercial processes were expected to be at that time now there was then as Mr Johnson was alluding to the change in the risk guarantee the guarantee which created the refund guarantee which created a new set of risks those risks were documented they were put in writing they were put to ministers and then a decision was communicated in writing by the accountable director so on the one hand it is a portfolio decision taking place at the time in a complex environment but for the procurement of ferries for which Seymal was leading that process clearly seven years later we can all look back and say we should have done this should have done that should have done this but actually it isn't a process that has that opportunity of hindsight so I don't think it's fair for me to judge those that sought to do their best at the time either in terms of the information they had at the time or their integrity or competence to to manage a commercial procurement but clearly lessons have been learned and we need to make sure they have been applied consistently now and I wasn't asking for you to reflect on the individuals concerned what I am asking about is if we are going to ensure that this doesn't happen again and the processes that are now being put in place are much more robust surely it is important to understand exactly what went wrong in terms of not just in the ferries situation but to the other issues that Mr Johnson referred to because Audit Scotland have been on this trail for quite some time saying that there's not enough transparency within the Scottish Government and one of our regrets is a committee which I hope you can understand about why we did want to interview your predecessor was to get to the hard facts about why this happened not the implications of what's happened since but why it happened and I hope Permanent Secretary that you can understand that that's a very important part of moving forward and understanding of why there was missing documentation and what can be done about that to ensure that it never happens again do you accept that? No I think it's I absolutely understand the frustration that you're articulating I do accept it's important to ensure that it cannot happen again and you know Leslie was setting out some of the detail changes to follow as well and your point about why events occurred as they did seven years ago I derive my the best I can derive my understanding on that is by reading the documents that have been published reading the parliamentary inquiry and the Audit Scotland report and following those recommendations through but be assured we'll be very happy to meet privately and talk about this much more my determination for rigor in our leadership and delivery of the civil service spans across a number of important factors which we may discuss a bit more propriety and ethics with the new procedures now published we now need to ensure that they are understood, embedded, work well aligned with our culture and values on record keeping to ensure that as you say confidence is built which is what we all want to see in the best traditions of the civil service on our corporate capabilities more generally which I do think talks a bit to your question about why I think that we need to properly invest in the underlying capability of the civil service in Scotland in terms of our systems whether it be about record keeping or on financial management on human resources to ensure that they are of a modern standard so we have a precise corporate capability plan there and when all of that is said and done ultimately then ensuring that our focus is on improving outcomes in Scotland so that it translates into child poverty down, the drug death rate down education standards improving and our health service recovering from the pandemic. Just to clarify on that point before my final question are you suggesting that the civil servant is requiring additional resources to ensure that it can do its job properly and effectively you mentioned just now that part of the inquiry as to why these things happened may reflect institutional issues Is that correct? Leslie, can you maybe just say a little bit about the institutional investment that we've made in our systems with regards to record keeping since 2015 because the systems are improved but nonetheless we have further system transformation ahead of us particularly around our finance and HR systems which our two finance officer can say a bit more about but for me as a new leader of the civil service in Scotland I want to know that the fundamental capabilities and systems are in place for the long term and I observed that as work in progress actually it's not complete but Leslie do you want to say a bit on the system change? Absolutely I think it's fair to say that a lot of the fundamental processes that we've put in place were really embedded at the level of devolution and they have evolved particularly in the context of, for example, a new social security system and then again the rigours of Covid and the impact that that has had on the organisation we have been making investments but when we look at all of the complexity and the challenges of government now there is definitely a need for investment in some of our underlying systems as well as in the culture of the organisation and in training in the capability, professionalism capacity that we need in order to be able to manage all of this as well as we can and to serve the government of the day to the best of our ability My final point is about the relationship between government and civil service and permanent secretary I've got very good knowledge of the Westminster situation and you're well aware that there were issues about that relationship down south and had it not been from Covid there would have been further investigation into that relationship which is absolutely critical in Scotland there are now question marks over the relationship between government and the civil service and as you're well aware just a few weeks ago I sent out to the media to bat on behalf of the Scottish government ministers about a particular issue and that draws into question whose job it is to defend or to promote in some cases particular government policy do you think it is appropriate for a senior civil servant to be sent out to the media as was the case for Dr Jason Leitch to defend a particular decision that was a question mark over a ministerial action I understand the point you're making and let's be clear the civil service needs to be impartial and it needs to lead with integrity if I take your example our clinical director Jason Leitch has been a huge force for good through our response to this pandemic in Scotland as you say pre-pandemic when he was considering this type of role he wouldn't have expected to become a household name and find himself regularly on the media Jason is a civil servant of huge integrity and he was due to do media rounds because on that Monday happily we were removing the legal requirement to wear face coverings as we unwound our restrictions from this pandemic which is still with us but nonetheless we see rolling and Covid hospitalisations coming down so I am with you on the consistency and standards of integrity that I will always encourage and support and require from my teams in terms of rigor and delivery but I do think in that instance what Jason was trying to do was encourage the Scottish public to continue to be vigilant to the pandemic to continue to reflect on the role that face masks can play but he was also doing the media ahead of a change to the regulations as he's been doing for the last couple of years so well Thank you I'm interested in the question of information perhaps especially fiscal information the concept of it being more understandable rather than us getting more information and I think you had written to the public audit committee talking about the need to improve the accessibility of information about public finances more broadly so I just wonder if you could say a little more about that where you see us going in that I'm very happy to and Jackie my chief finance officer might add a bit more to that if that's okay because the committee is leading a lot of this work so we had a good conversation at the last committee around transparency around public accounting I was listening to your previous inquiry just now with regard to your witnesses and the Scottish Fiscal Commission and the way in which our long-term forecasts are derived how we manage for uncertainty and the impact of inflation I would like us to be as transparent as possible in sharing for example from my perspective as an accountable officer when I see inflation rising as quickly as it has been it gives me serious concerns around our fiscal sustainability because I reflect on the impact it will have on tax revenues economic growth and unemployment all of which of course impact our budget in significant ways I think we are continuing to improve our annual report and accounts every year we've been talking about adding more data into those including this concept of whole public sector accounts and I think the intent is to iterate those stage by stage given the data that's available to us including with regards to this Parliament and spend and expenditure local governments, the NHS and others but maybe Jackie could just say a little bit about the programme of work there thank you Jackie if I could start by flagging the improvements that we've made to date so as the permanent secretary flagged we did within the 2021 consolidated accounts put considerably more information particularly around the Covid expenditure and as this committee knows also in terms of the guide to the spring budget revision this is the first time that we've put such a level of detail into that guide and I know that it was noted by the committee but we are continuing to look at how we can increase and improve our transparency in this area and in particular the provisional outturn statement for 2021-22 will be the next opportunity for us to do that so we're continuing to talk to Audit Scotland to look at the improvements that can be made in terms of the public sector accounts the permanent secretary is absolutely right we've got a timetable agreed with Audit Scotland on this we have produced the first phase of that and sheared it with Audit Scotland but it will be an incremental approach we want to make sure that we are producing something that adds value that is increasing transparency and as you say not just information and it's not duplicating what's already in the public domain so thank you I mean given that some of this information I mean some of it's for parliamentarians some of it's for experts like Audit Scotland and some of it's for the general public to get something that will satisfy all of them I think my perspective on that is that transparency doesn't always mean simplicity and I think we need to get the balance between the level of detail and really being able to explain the narrative and of course particularly when I think about the public sector accounts when you produce an aggregate set of accounts you actually lose some of the detail because the inter-organisational action, does it where, are removed so yes I think it is a fine balance and that's why we want to do it in phases so that we can take stock after each phase get feedback and think about how we take it forward further okay thanks very much on a separate subject I just wonder if you could say anything about workforce diversity within the civil service you know I've heard the accusation not about the civil service as such but some parts of the public sector that you know they're so risk averse about favouring one group that in fact sometimes there's not always representation right across the board so I just wonder how you're feeling about the civil service in that regard so just a bit of the data points that I've been looking at with regards to improving our diversity of our workforce in Scotland I think across the workforce if I look at data from 2019 compared to 2021 in terms of I start with gender from 53.4% to 55.8% in terms of representation within our workforce so some progress on gender on LGBT up from 4.4% to 5.4% so some progress as well but not as much as we would like to see and we're continuing to work with our fabulous LGBTQ plus colleague network to encourage disclosure at work in terms of the way in which we record this but to encourage a culture where everyone feels comfortable to be themselves in the civil service in the Scottish Government and then on minority ethnic colleagues within the Scottish Government end of December 2019 2.4% up to 2.8% so some progress but not representative of the population as a whole but moving further in the right direction we want to continue to sustain that trend recruitment of course is one key enabler to that but we're having a good conversation with the executive team the other day around the data we use and how we capture to understand the diversity of the workforce, for example we had a conversation about mental health and addiction and the way in which hidden disabilities and the way in which we encourage that disclosure that sense of confidence, the civil service is a very modern diverse workforce where everyone is welcome to join and apply for roles and hopefully in this environment where people could thrive in fact one of the perhaps the indicators that gives me most confidence is if I take bullying and harassment and discrimination 11% to 9% respectively in 2019 down to 7% and 6% in 2021 colleagues made reference to my experience, Whitehall my leadership in various departments but these numbers compare very comparably well for the civil service in Scotland and in the Scottish Government and I think you know my predecessor and this team should take pride in the progress that's been made and I hope that on propriety and ethics on a culture that encourages colleagues to speak out to seek support to feel safe at work we will continue to make progress I'm 100% determined to do so you mentioned gender and the numbers sounded quite good can I ask you about the gender pay gap is it still the case that more senior positions would be held by men? It is the case that gender balance is better at lower grades generally in the civil service but actually in the Scottish Government I think now for our senior civil service we are we've gone beyond the 50 plus percent for gender balance which is good to see I think at our director, Cardra I think that as we were talking about this a month or so ago we still got a bit of more progress to make but it's not without a desire or a determination to do so and certainly across my executive team at the moment I think we're perfectly gender balanced so we seek to role model that and continue to ensure it's consistent through the organisation clearly this committee now has a public administration remit which we did not have before and I think to be honest we are still finding our way into that do you think this committee has a role in looking at the civil service and maybe suggesting improvements or anything like that I genuinely would be absolutely delighted if the committee wants to perform that role I genuinely believe that we have a fabulous group of colleagues in Scotland I've been here now just over 100 days I've been able to get out and do a lot of visits meet 50 odd stakeholders various voluntary sector organisations businesses universities colleges and it's clear that there is a huge public purpose in public service purpose in Scotland people want to achieve change they want to deliver for the community they serve and they're very proud of devolution and what it could achieve and we want the civil service to be a confident institution that serves our ministers serves parliaments and of course serves the communities in which we live so if this committee would like to support us in that endeavour whether it be about diversity or propriety and ethics or record keeping or data and digital transformation multi-year workforce plans outcome frameworks and how we assure performance I'd be delighted that is the mission and the objective I think we have a great team who are up for that challenge and as I say we really want the opportunity to look forward and deliver a recovery from this pandemic that is lasting sustainable, fair and impactful okay thanks and my final point would be I mean I get the point that has been raised by others that civil servants are speaking for ministers as I understand it the permanent secretary is also the principal accountable officer and has some direct accountability to parliament I think is it to section 14 of the public finance and accountability Scotland act and I think you mentioned that yourself especially in relation to the economic efficiency and effectiveness of the Scottish administration do you see any tension between these two responsibilities for yourself? I don't necessarily describe it as a tension but it is absolutely a core part of my role as I said in my opening statement I hold three things in almost every conversation one the delivery of this government's programme for government including the boo house agreement and advising our ministers accordingly two, your point being the principal accountable officer to ensure that as we do so the budget and seek to optimise value for money in all that we do and of course both of those things almost always are happening through systems and the civil services key to that but it includes of course partners across the country so I'm always thinking if that's the policy objective if that's how it is affordable passes accounting officer tests or other be regards to priority regularity value for money and then arrive pretty quickly at is it achievable is it feasible can we actually affect this change well across the systems that that we are sponsoring supporting in Scotland so whether it be justice or educational health in everything we do there will be a policy intent as a budget and then there's a delivery mechanism and I'm seeking to make sure all of those are aligned actually rather than intention so that they are optimised to be effective okay, thank you very much Michelle to be followed by Douglas good morning everybody I thank you for setting out so clearly the accountability that you'll specifically respond to this committee on and in that respect I would also put on record my surprise that Leslie Evans didn't want to appear to talk about her accountabilities which broadly mirror what you've set out however I wanted to move on my only question is what assessment have you made for the potential of a conflict of interest between the Scottish Government and the Westminster Government can you just more generally just general conflict between the two or is there a particular issue in mind just a general principle of conflict I'm quoting I think it was a public administration committee in Westminster in a report from some years back who said it was a constitutional fiction that officials in Edinburgh London are part of a unified civil service so it's a general consideration of that what assessment that you have made no other thank you for clarifying I appreciate that so I am trying to use the language around pragmatic collaboration between UK Government departments and the Scottish Government because ultimately and this almost comes up every day where there is a co-ordination or an impact between what is devolved and the powers of the Scottish Government and what is reserved and the powers of the UK Government examples of that in my first few months have included things like green free ports, the shared prosperity fund response to Ukraine and sanctions refugee super sponsorship which Paul is the accountable officer on which we're very focused on at the moment and I am involved in dialogues with colleagues in Whitehall departments every week and I do so coming back to the point I was making to your colleagues earlier with that focus on if we're going to get the best policy objective are we clear how we can leverage all the opportunities and so often that collaboration gives us that chance to get those levers a lot of our budget and Jackie is happily the expert here but a lot of our budget as you were discussing earlier has a significant level of complication to it particularly where we receive late consequentials due to UK Government changes which will impact our budget and obviously because of the nature of our annual accounting process the fiscal framework review is looking at that and so throughout since I've been here my objective is to build those relationships and certainly if I take Ukraine given the horrendous events with war in Europe our capacity to engage with the foreign office the Ministry of Defence Home Office on Asylum and Immigration now the department for levelling up is an essential part of our role and colleagues here will be doing that all week in different ways depending on the subject what you're describing to me is identifying where there are different perspectives and so on and it may well allude to processes as how you're going to sort them assessment for the potential of conflict of interest and whether therefore you have any formal policy of how you're going to address that so for example a lawyer will have a clear policy of how they address that because what you're telling me is how you're actually going to manage things rather than specifically addressing your assessment for the potential of conflict of interest and your specific policy therein. Do you have one? I'm happy to take it away to come back to you about whether there are specific elements whether I'm thinking about things like the intergovernmental review that has recently taken place so on the one hand yes we have a policy which ministers have led out with UK Government ministers to seek to define with a level of precision how that collaboration will work so yes there's a policy that did indeed seek to define that but then across different policy areas there are also collaborative structures that are used depending on the issue so through Covid for example our health department and our chief medical officers quite very regularly engaged in a sort of four nations framework and we had our own four harms framework with response to the pandemic and they operated in that joined up collaborative way around things like the Covid response similarly on a four nations basis the first minister very regularly will be engaging with other devolved governments on particular urgent issues and Paul could give us an example with regards what we're doing at the moment on Ukraine refugee sponsorship where again a lot of detailed engagement on data on eligibility on flows of refugees I think you've given us lots of examples of what you illustrate from this kind of pragmatic working together but again it's about the specifics for the assessment of a potential conflict of interest in other words are you Minister's man in the Scottish Government or are you the Scottish Government's man for Westminster that's really what I'm asking about because it clearly has been the potential conflict of interest and so in that respect I was surprised when you outlined your kind of three challenges I wasn't surprised by the challenges but you mentioned Covid obviously cost of living and Ukraine but I was surprised that you didn't mention Brexit for example because I would assume that you organisationally may face similar issues to other organisations in terms of access to labour the particular type of skill sets you need and we know from a previous session that the Scottish Parliament corporate body has had to recruit additional resources to specifically reflect on the impact of EU laws being enshrined in the Scotland act and I'm thinking about an example for example of the UK Government taking the Scottish Government to court over not to being able to incorporate the rights of the child so is all that done and dusted and you no longer there will be no future examples like that there will be no further consideration of Brexit as a priority for the Scottish Civil Service well so you raised a lot of issues in there which I can try and unpack a bit I think there are conflicts right now that are being managed carefully on behalf of our ministers in the Scottish Government UK shared prosperity fund is an example with regards to replacement for EU structural funds our ministers have been clear with UK Government with regards the quantum of resources being less than what was expected and the governance of those funds being from Scottish Government ministers perspective not respecting devolution and those messages very firmly communicated at a ministerial level and an official level and we are clear on our accountability and I made it clear in my opening statement that I am the permanent secretary of the Scottish Government serving Scottish ministers to deliver to the Scottish Government and that is absolutely clear to me but to enable them to do so given the devolution settlement and the nature of the constitution we collaborate pragmatically wherever we need to to seek to access the data we might want to do or with regards green free ports access £52 million of additional resource funding for Scotland's ports or on refugee sponsorship with regards to Ukraine where our ministers quite rightly set out their intent to deliver a refugee scheme that was different but for us to do so we have a huge dependency on the home office for their systems and processes so I am pragmatic about the reality of succeeding in delivery that requires us to collaborate but is there going to be lots of conflict ahead with regards to the UK Government and the Scottish Government? Let's be honest, we see it every week in different moments whether it be in regards to the cost of living whether decisions around the ending of free lateral flow testing or in terms of choices that our ministers would like to make but they find themselves unable to pull all the levers in the way that they might wish and that ultimately moves us towards constitutional reform which again is set out in the programme for government My last question is you mentioned before Roosevelt the first 100 days it's off quoted so within the first 100 days you've obviously done some things and I think we've talked about the strategy in external affairs and relentless focus on outcome what do you see as both your key challenges in your role as permanent secretary and I don't mean in reporting to ministers I just mean organisationally what you see as your key challenges because a fresh perspective is good and what do you see as your key opportunities? Well I'll start with well let's start with challenges as you say sorry I tried to set it out in my opening statements in my first four months here the first month I think there literally was a resilience contingency call every week for storms in Scotland it seemed like slightly relentless January and everybody across the transport network across resilience networks local government working flat out to respond well we then launched into the Omicron peak so I actually saw a highest infection rate for the whole of the pandemic then war in Europe and now inflation above 7% and a cost of living crisis so I must confess the risks and the strategic operating environment are significant and the headwinds that are impacting recovery give me real cause for concern and that of course then translates into things like long-term fiscal sustainability the impact of those risks on our public finances and the impact of those risks on the resilience of our systems to recover well so we reflect quite a lot on how we're building the resilience and the wellbeing of the team to manage concurrent crises with confidence calmly using good data and evidence and making sure we're giving our ministers the very best advice that we possibly can whilst we manage current events with as much grip and care as we can whilst at the same time on to your point on opportunities focusing on the long term can we do the fundamentals in Scotland now to deliver a recovery whereby we tackle that cost of living crisis we do indeed see child poverty falling through this parliament we get the drug death rate down we close that attainment gap we reduce the prison population and we absolutely give our health service the chance to recover so that we can return to those pre-pandemic levels of performance and finish the parliament with our health service with the resilience it needs all of that whilst making progress on things like net zero to 2045 the ambition the opportunity is significant to ensure Scotland fulfills its potential but I'm acutely aware that we're doing that in the context of significant risk that is impacting on our economy impacting on our systems and institutions and workforce and we need to look after them as best we can so my last closing remark would be I'm a bit surprised that you haven't included more around organisational challenges of which someone brought up silo working, culture, risk appetite innovation, use of technology and so on so just a very brief answer because I'm conscious of time for other people to come in will you be writing an overarching strategy paper because what you're describing is operational sort of stuff I'm talking about systemic organisational change of which many of these challenges are inherent in business organisations or public sector organisations particularly the use of AI for example do you produce something like that is that published in your role as permanent secretary so we were having this conversation in terms of how we build on in the service of Scotland which is our sort of corporate strategy and bring more definition to that as we emerge from the spending review and I referenced corporate transformation earlier and I think we absolutely can and the point that was made earlier around our work with this committee on our digital strategy our estate strategy our multi-year workforce strategy for the parliament our public body sponsorship and how we make sure we embed best practice and ensure that's working very well, propriety and ethics make sure that is working very well I ultimately see the civil service and our service of ministers as being a function to achieve those outcomes and as you say use the word operational that is a lot of my background is in the leadership of major projects and services at scale and so I am looking to see through each of my teams have you got the data understand what's going on have we got the right strategy have we got the institutional alignment are we delivering the changes well are outcomes improving and that's a focus on delivery or a culture of delivery excellence that I want to coach and support across Scotland and we have lots of strengths to build on there but it's that rigor in delivery to improve outcomes that I'll be focusing on Douglas when you think about the missing records over the Ferguson marine contract how can we be assured that lessons have actually been learned and improvements made when it comes to record keeping and recording decisions correctly I absolutely understand the importance of providing that assurance to you and as we try to do to set out earlier a lot of changes have already occurred to ensure that our governance and procurement processes are robust including our information management practices but I think Mr Lumsden if it would if it would help the committee given the time as you say for us to take that challenge away and provide something in writing just around what assurances can you give us now about where the continuous improvement programme has gone to on record keeping and the next steps and we can keep the committee up to date on how that continues to progress because like you I'm seeking that assurance to be confident that we're where we need to be that would be good but would we not really get that full assurance once there is a proper investigation done on the decision making around this contract I think there's been two inquiries to date a parliamentary inquiry and the Audit Scotland report the documents have been published on the websites and for seven years this has been spoken about I think that the lessons on information management have been very clearly understood by by my team and by ministers which is why my predecessor put in place the continuous improvement programme I think it's made good progress the systems are much improved the disciplines are much improved but like you I'm assuring myself new to post that all is well and I'm very happy to appear before this committee as regularly as you wish to update on progress and hear any further feedback I guess a full investigation would actually bring all those things together show what's happened, what's went wrong and also show the lessons learned the improvements that have been made so we can actually be as a committee assured that everything is well I think that the parliamentary inquiry did that and then I think Audit Scotland did that in their report and I agree with the I mean Audit Scotland make the recommendation around you know, once 801802 are built and launched we should also take stock then of further learning as I said I visited the shipyard the other day I appreciated the new chief executives leadership I think he is pragmatic, focused, it was good to see his public comments and the media last week and we will make sure as we spoke about earlier in terms of public investments and applying the business investment framework we do that consistently I think there has been a lot of scrutiny of the past and quite rightly the recommendations from the inquiry in Audit Scotland report are clear we've accepted them, we need to make sure they're delivered consistently Moving on to Leslie Evans I had another question around that so you mentioned she'd retired at the end of the year but she was still actually paid until the end of March, is that correct? So she retired at the end of excuse me she left role on 31 December at that point she no longer holds the authority, accountability or responsibilities of the role which transferred to me she had some contractual agreement with regards to leave that was in lieu but she finished and retired on the 31 December but she was still paid up until the end of March that's my understanding, is that correct? I'm just trying to think that she was still an employee why, what she was doing that meant she couldn't come to the committee that's what I'm trying to get my head right As I've tried to explain I've appeared before two committees now since that date because it is for the office of the permanent secretary and for me in the role to appear Leslie retired and therefore is no longer accountable to ministers because she does not appear as the permanent secretary for the Scottish Government after the 31 December and that is why I'm here instead Of course, from our point of view Leslie Evans was still employed she still had relevant experience that this committee could have learned from and she didn't come and when we talk about openness and transparency we have the missing records at Ferguson's we've got Luc Arbor with question marks the guarantees and the legalities Leslie Evans refusing to come to committee we've got the information commissioner ruling that the Scottish Government is withholding legal information that it can be so do you accept that there is a perception around openness and transparency that there's something wrong and something needs to be fixed quickly I've tried to set out some perspectives today of the things that we're doing to continue to improve in the delivery of the leadership of the civil service and in service of our ministers and Parliament in Scotland so we've talked about information management, continuous improvement we've talked about whole public sector accounts, Paul I know is looking forward to lunch where he'll be talking about the improvements that we're making to the national performance framework and the opportunity for that consultation your inquiry to improve that as well so I'm very committed to the concept of delivery excellence and continuous improvement and rigor in our leadership of the civil service but what I observe in Scotland as I reference with regards the people survey results is a healthy democracy and good governance in terms of the empowerment of all at Scotland it is clearly Stephen Boyle and I've had a number of conversations with expert, it's challenging, it's robust the engagement is positive the recommendations as I've said we've accepted with regards Ferguson's that you referenced but in 2021 we handled 4,000 freedom of information requests that's 25% more than the year before you referenced the information commissioner and when I have worked for over two decades in the civil service the convention that's legal advice is protected for ministers to create that private space for consideration of legal advice is a convention that is well established so this is not something unique to Scotland that somehow is being done here this is a convention that is well understood but we note the information commissioner's judgment and we'll respond ahead of the deadline and ministers are giving it careful consideration we want to continue to improve we will absolutely keep focusing on the feedback we get making sure that we are putting rigor into delivery of that thank you that's almost exhausted questions but not quite but one or two left, one from myself and one from Daniel and I note that this morning we have discussed myriad issues from the maintaining and improvement of ethics, openness, transparency, diversity structure improving data collection retention culture behaviours record keeping outcomes policy decisions relationship with the Westminster and indeed giving evidence to committee but one practical issue which exercises all MSPs that we haven't touched on is responding to ministerial correspondence many MSPs across the party divide have expressed great frustration and we realise there's been staff issues with Covid etc in recent years but it wasn't great before the pandemic about the time taken to respond to these letters which are of extreme importance to our constituents on an individual basis as you can imagine so I've noticed for example and I've spoken to civil servants to deal with some of these and understand there's a fairly rigid process that has to be undergone before the letter goes to a minister for sign-off and I appreciate there can be a delay at that point but what can be done to expedite that process and secondly what can be done to ensure that the response to a ministerial letter is actually related to the question that's asked because I've waited sometimes six or eight weeks for letters and frankly I've been too embarrassed to actually send them to a constituent and the other thing I would ask about that is how do you when I send a ministerial letter which is urgent it doesn't seem to be treated any differently from any run fairly straight forward letter which may not be time stressed so I've recently had to chase up the ministerial correspondence unit on issues of which I consider to be of major significance not to an individual constituent but broadly to my constituency when I've not even received an acknowledgement after six weeks so I'm just wondering I know Liz is nodding fiercely on that I'm just wondering what can be done to deal with that very practical and pragmatic issue which of course affects all of us I completely understand that frustration I used to lead a ministerial correspondence unit over a decade ago when I was PPS to write honourable of Ed Cooper and then the right honourable Ian Duncan Smith after the 2010 election and I absolutely understand well one there's a desire to make sure you get the response right so back to the point of accuracy and rigor which of course is right but timeliness matters and your constituents and their needs matter and we want to respond efficiently and in a comprehensive way that answers the question so convener if you're with your permission maybe I could take that away look at the latest data on the performance and then write to the committee with what steps we think we can take to improve it further because I share your desire to ensure it's the best it can be the pandemic impacted everything including the resourcing of our teams but we want to ensure our correspondence ministerial correspondence is I'm not going to ask you to detail the process at the moment because you've given me a commitment there but I understand there is a process whereby you have several days to look at it and then several days for a manager to look at it this process I believe can certainly be truncated because we all have situations where constituents contact us directly not involving ministers but dealing with for example local authority health board and we're trying to deal with these I certainly try to deal with them at the same day frankly I mean I'm not suggesting that that's a possibility given the constraints that you have at this point but there must be a way of actually expediting that and I would just say one further thing which is in terms of written questions I used to for many years I get sent to some website or something like that a link to this or a link to that you know or if I want I can look at a table which is sitting in space well if I wanted to look at a table sitting in space I'd be down looking at a table sitting in space when people ask questions they ask for a specific purpose and really I think there's a you know if I asked it in the chamber I wouldn't be totally going look at a table in space I'd actually be given an answer of some sort so all I'm saying is that I think these things have to be considered much more just as we've discovered all looking at you know broader issues of diversity, openness transparency, structural risk I think these are very important issues because if there's 129 MSPs I'm sure we've all been in that position and Daniel Well thank you very much I'm almost tempted to leave that as the final word because it's so important but nonetheless I did just want to fall up on some of the points made regarding freedom of information requests and really just to challenge one of the points that it's about you know legal advice and the importance of that because I don't believe it is limited to that so on the 8th of April the Financial Times published an article which resulted from freedom of information requests regarding the communications of their original FOI request regarding the gupta guarantees within that there was an email on 9 September between civil servants and the Scottish Government and I'm going to quote directly here the following was stated here is the long awaited decision in the Loch Arbor Smyltyp here unsurprisingly the commissioner has not upheld our section 31 subsection 1b arguments as we have been predicting since at least the review stage that said I imagine this is not what economic development colleagues were hoping for about what we say to them the point here is is very clear that officials within the Scottish Government were knowingly withholding information following requests when they knew that it was highly likely that it was going to be overturned by an appeal and furthermore I would suggest that those final sentences would seem to suggest that there was internal pressure on them to do so now there is one thing to up hold a principle it is one thing to defend that upon request but when you start knowingly withholding it knowing that you are highly likely to have to reveal that information on appeal are you not into slightly different territory are you not actually knowingly withholding information and is that not suppression honest truth is I've not read that email but I'm very happy to respond to you because I do appreciate a very complicated transaction with a lot of complicated factors not least what was reported in the media recently with regard to investigations there so but your sort of underlying points, the sort of cultural points rather than the transaction itself I've talked about us leading in the best traditions of the civil service and rigor in delivery and I expect us to lead with integrity and with honesty and of course where there are very complex transactions and you can imagine the legal and commercial advice is also very complicated there is a judgment and advice provided around what to release to ensure that we're protecting investments, protecting shareholders being legal in our own management of information and it needs to be handled very carefully it again on freedom of information and our approach more generally I referenced assuring myself on record keeping I am doing the same on freedom of information so I'm looking at the end-to-end process the checks and controls to assure myself that they are robust and I'm very happy to meet with you either separately Mr Johnson or to write to you with regards to that I'd be very keen to correspond to our meet on that and just very finely I think you've agreed to come back with an outline of your approach regarding record keeping can I just confirm that you'll include your understanding of the requirements of the Civil Service Green Book the Public Finance Manual and indeed the Public Finance and Accountability Act 2000 in terms of the requirements that they have for record keeping on these sorts of decisions and indeed others thank you okay well on that note I'm now going to end the session which has been a long one and I do appreciate the responses that the PM has given to committee today we will of course continue to explore issues relating to public administration Government on an on-going basis and that concludes the public part of today's meeting so the next item on our agenda is in private which is consideration of appointments and reappointments to the Scottish Fiscal Commission so we now move into private session