 Good morning, everybody, and welcome to the Education and Skills Committee. It's the second meeting of our committee in 2019. Everyone is to turn their mobile phones and other devices to silence during the meeting. Agenda item one is the decision on taking business in private and ask a members consent to take agenda items three and four in private. Gwenda item 2 is the draft budget for 2018-2019, and today we will hear from the Cabinet Secretary for Education and Skills and Government officials, and I welcome to committee John Swinney, Cabinet Secretary for Education and Skills, Eileen McKechnie, director for advanced learning and science, and Andrew Bruce, deputy director of learning and directorate at the Scottish Government. Very warm welcome to committee. I understand, Cabinet Secretary, of an opening statement for us. Thank you, convener, for the opportunity to attend committee today and to provide some opening remarks on the 2019-20 draft budget. As the finance secretary explained in his budget statement, our spending plans for 2019-20 are set against a backdrop of the UK Government's continuing austerity and the real risk of the UK exiting the European Union without the necessary safeguards to secure the workforce and programmes that we need for the continued success of our nation. In the budget proposals, education remains a top priority for this Government. Our ambition is to break the intergenerational cycle of deprivation and close the attainment gap to change lives and to change lives for the better. The draft budget delivers £3.4 billion in funding to deliver on our commitments in early learning and childcare and across the education and skills system. Working with and through local government, we will provide almost £500 million to expand early learning and childcare by supporting the recruitment and training of staff and investing in the building refurbishment and extension of about 750 nurseries and family centres. We will invest more than £180 million to raise attainment in schools and close the attainment gap. That includes £120 million that will go directly to head teachers through the pupil equity fund. We will continue to drive our ambitious education reforms with £4 million allocated to empower teachers, parents and communities to deliver excellence and equity in Scottish education. In line with the committee's views on education Scotland, we will increase its budget by £2.5 million to enable it to support the reform agenda. We will continue to protect the principle of free education and widen access to university for people from the most deprived communities to ensure that access to university is based on the ability to learn, not the ability to pay. We will continue to invest over £1 billion in our universities, which recognises the importance of teaching and learning and of our world-class research and innovation systems. We will intensify the promotion of Scotland's research excellence and international outlook around the world. We will continue to invest over £600 million in colleges, helping them to improve the life chances for our citizens and generate the skilled workforce that is needed for economic growth. We have increased investment to provide additional funding to support harmonisation of pay in terms of conditions across that sector. Skills Development Scotland will receive £214 million, which includes an additional £22 million in the coming financial year to continue the expansion of our apprenticeship programme as we progress towards the delivery of our targets of 30,000 starts by 2020. The success and diversification of our apprenticeship programme has demonstrated the different routes that young people can take in developing the learning and skills that they need to be successful in the workforce. With the development of graduate and foundation apprenticeships, more and more young people have access to widening opportunities and routes to successful future careers. Finally, I follow my statement to Parliament in October last year. We have made provision for redress for survivors of abuse and care. That includes making advanced payments to those who may not live long enough to apply to a statutory scheme. The draft budget makes provision for such advanced payments, but it must be clearly understood that those payments can only be made if the budget bill is passed by Parliament and the necessary parliamentary authority for that expenditure is obtained. I look forward to addressing the committee's questions this morning. I am going to go straight to questions from the committee and invite Liz Smith. Good morning, cabinet secretary. When responding to the budget proposals, Professor Andrea Nolan, on behalf of universities Scotland, said, and I quote, It is very difficult to learn that funding for universities is going to drop in real terms by 1.79 per cent, which reverses the trend of what she described as a slow climb back to sustainable funding from previous years. Cabinet secretary, given what you said about the priority in the Government's programme for education and obviously the desire to widen access and to ensure that universities remain wholly competitive, could you explain to the committee why you took that decision to reduce that real-terms funding? The decision that I took was to sustain the funding of the university sector at the level that we had increased it to in the last financial year. Obviously, there are many competing demands for government expenditure across a whole range of different areas. I have cited in my opening statement a number of areas in the education portfolio where we have allocated additional resources to expand provision and to put in place additional resources. Obviously, Government investment in the university sector is only one part of the investment income of universities. Scottish Government investment represents around about 40 per cent of total university income. The contribution that we have made and the commitment that has been secured by sustaining the funding that I increased university funding to last year is a strong foundation for the university sector to continue to make the contribution that makes to the wider achievement of individuals in Scotland. Can I just pick you up on the wider achievement in maintaining the excellence amongst our university sector that we have been able to enjoy for a long period of time? I do not think that it is any secret that the university sector in Scotland is very concerned about this real terms cut in funding. For the very simple reason that there are some statistics that are pointing of an international level that, when it comes to a clear pattern between the levels of resource available to university sectors and their performance, there is a worry that, if we do not have the same sustainable level of funding, Scotland will not be in a position to maintain that excellence that we have been able to enjoy. Particularly when it comes to the competitive advantage in research funding, would you be able to comment on the statistics that point to those international concerns? Particularly the fact that there are signs that, within some of the Scottish universities, there may be a falling down—nothing drastic—but there are falling down some of those world rankings. There are a number of points in there that I would address. On the issue in relation to international rankings, it would be fair to say that there will be volatility in performance of individual institutions on a year-by-year basis. I think that it is important to look at trends over a period of time. I think that the trends over a period of time demonstrate the continued and sustained success and profile of a number of leading institutions in Scotland in terms of the consistency of their performance over time, notwithstanding volatility in individual years. The consistency of the prominence of their position within those international rankings. I think that we have to look at that more comprehensively. The second point that I would make is to reiterate a comment that I made earlier on, which is that, yes, Government funding is important, and I acknowledge that, but for the university sector it is not the only source of income that they have. The latest data that I have available to me shows that Government funding represents around 40 per cent of university income. When I look at what universities are able to attract in terms of investment based on the foundations that Government contributes, I would not say that the Government creates all the foundations. That is a product of the excellence within the universities, but we are essentially creating financial strength and capability that enables institutions to attract further investment income. Then, of course, there are other sources of income that come from other parts of Government, notwithstanding the main line, which I know the one that Lewis Smith comments upon within the draft budget and education skills portfolio, but there are other income that goes to universities through, for example, the health service and a variety of other streams. Lastly, I would say that within the university sector, I am aware of the comments that Professor Nolan has made and I am aware of comments that Professor Muscatelli has made who said that, and I quote, even in tough times the Scottish Government has continued to strongly support our universities with substantial investment of over £1 billion in the draft budget. This core budget allows our HE sector to continue to punch well above our weight and leverage additional economic benefits for Scotland. I am absolutely committed to an engaged discussion with the university sector to make sure that we are able to support their aspirations. We share the aspirations. I think that when we look at the economic strategy that Mr Mackay has taken forward, the universities are key participants within that. The work that Mr Lochhead and I are taking forward with the university sector is designed to make sure that the university sector is able to make a significant contribution through much greater partnerships with the business community in Scotland, which I welcome and which I think are happening, and much more involvement, more close involvement in the international projection of Scotland. From my recent trip to India, which I undertook with a number of universities, I was thrilled by the strength of proposition that the universities were able to offer in partnership with businesses that were part of that trip. Do you share the concern, cabinet secretary, that when it comes to ensuring that we are broadening the appeal of Scottish universities, particularly when it comes to research funding and when it comes to attracting the best students and staff? There are obvious challenges there because of Brexit, but one of the concerns that the university sector has is that the real terms cut this projection just now makes that much more difficult when there are ambitions to widen access, which has an obvious impact on the number of places that are available. When it comes to the financial transactions, there is an increasing tendency to have loans rather than Government spending in that category. Do you accept that there is a real concern about just how sustainable the projected budget is for the sector, given the ambitions that you espoused earlier? I do not have those concerns for two reasons. The first is to reiterate the point that Government investment represents a minority of university income across sectors. Obviously, the universities are very successful in attracting other income, so I do not have that concern given the higher platform that we are operating from, given the increase in the budget last year. The second point is that when it comes to instruments such as financial transactions, they are part of the financial framework of the United Kingdom. The Government in Scotland has to utilise those financial transactions in some way, but we are restricted in how we can use those. We cannot just distribute them like capital grant. I am going to say that we cannot allocate them to local authorities, and I do not think that we can ordinarily, because they have to be allocated to third-party organisations that are not part of Government. We have limited places where we can allocate those financial transactions. What the university sector is able to do is to use those to leverage other income, because they are third parties in public sector terms. I think that there are opportunities when you look at the round between financial transactions, capital and resource, the resources that are available to the university sector and the higher education sector are increasing. The final point that I would make on this is that Liz Smith raised the issue of the challenges that are thrown up by Brexit. I think that the challenges are and I am not making a partisan point here. I am deeply concerned about where we are going on freedom of movement, because our university sector in my lifetime—if I look at the University of Edinburgh, which I had the privilege to attend as a student over 35 years ago—the University of Edinburgh is a completely different institution to the one that I attended 35 years ago. In its international breadth and its reach, it is an institution that draws people together from all manner of backgrounds in studying and also in research. I am deeply concerned. To me, it is the biggest strategic threat that our universities face. It is about freedom of movement of individuals, because our universities need to be able to attract international talent not just as students but as researchers and academics. I am very concerned about where we are positioned on that question. I view that as the biggest strategic threat that our universities face. Thank you. My final question—I do not disagree, cabinet secretary—is what you have just said. On that similar theme, would you be able to give a commitment today that the money that is currently used from Scottish Government funds to support EU students, would you be able to give a guarantee that that money should be exited to the EU, particularly if it was a no deal situation? Would you be able to give a guarantee that that money would remain in the university sector? I think that I better get my ducks in a row before I answer this question. The first thing to say is that I hope that we do not leave the European Union. After yesterday's events, I think that the possibility of us avoiding leaving the European Union is now higher. In one respect, I am more optimistic. However, my next duck in a row is that the dangers of a new no deal have made a resurgence, which is why the events of today and the next few days are critical in trying to navigate a way to avoid a new no deal situation and to ensure that we get to my preferred outcome, which is our continued membership of the European Union. Obviously, there are a couple of pretty big questions there before I get on to addressing the very real question that Liz Smith puts to me. I cannot give that commitment today because it is a future financial year. We have given sustained commitments to the university sector in relation to the support for EU students. I will engage very closely with the university sector on that key question as we proceed. It is a material point for the finance secretary to consider in future budgets. You have made clear that you have confidence in the sustainability of the funding of our university sector going forward. However, Alasdair Sim, who is the director of University Scotland, in his letter to the committee, says, we have seen Scotland's number of universities in the top 200 drop from five to four. We need sustainable investment if we are going to keep Scotland's critical advantage as a place to study, research and do business. He clearly does not share your confidence in the sustainability of funding going forward. Why do you think that he is wrong? I think that there will obviously be points of debate here. I have cited the answer to Liz Smith, Professor Muscatelli, who obviously takes a very different view to the view expressed by Alasdair Sim and Professor Nolan. However, I reiterate a couple of points that I made to Liz Smith. Government funding, although important, represents a minority of university income in total. The number is between 37 and 40 per cent. Secondly, the Government increased the resources available to universities in the resource budget last year, and we have been able to sustain that this year in resource terms. That is not true in real terms, is it? They have fallen again in real terms. In resource real terms, yes, that is the case. However, if we put together the resource capital and financial transactions, it represents an increase in the higher education budget of £12.1 million over the budget in 2018-19. As a combined budget allocation to the higher education sector, the resources are £12.1 million higher between those two years. That higher platform and that increased global set of resources—again, I reiterate my point that I made to Liz Smith about financial transactions—are valuable mechanisms through which universities can then leverage additional income into universities. As a Government, we have limited destinations for that type of funding. I think that, as a package, it represents a strong foundation for the sector. While we are talking about additional income in their submission, University of Scotland identifies what they think should be around £18 million of Barnett consequentials as a result of increased research spending in the UK. I wonder if you could give a commitment that those consequentials would be used for that purpose. In Scotland, as we have seen, for example, in NHS consequentials, where that commitment was given. On that point, Mr Gray is familiar with the Government's position. Indeed, it has been the position of all Governments since devolution that Barnett consequentials come into our budget, with the exception of the health service, to be allocated across a range of public expenditure areas by the finance secretary. I know the importance that the university sector attaches to that particular grouping of Barnett consequentials. I can assure the committee that those issues and perspectives will be fully considered by the Government as we take decisions on any such consequentials. As you said, an exception to that rule is made with the NHS, given the importance of research to the economy and confidence in the sector and its competitiveness. Is it not an area where you could make a similar commitment? Yes, I understand the significance of it and that is why I make the point that the university sector has such a contribution to make in partnership with the business community to advancing the innovation agenda. Obviously, those issues will be considered by the Government as we look at the allocation of any consequentials. I will turn briefly to the college sector. The position in the college sector is that there is a real-terms increase in revenue funding in the college sector of around 1.3 per cent, but colleges themselves—I think that Mr Swinney acknowledged that in your opening remarks—are clear that that increase is entirely to deal with the costs of national bargaining and harmonisation that flows from that, which was the implementation of a policy in which the Scottish Government pursued it and supported it. That means, however, that in the college sector there is no prospect of them finding additional resource for any cost of living increase for their staff, which is why we find ourselves today facing another strike by college lecturers. Perhaps Mr Swinney could explain if the increase that the college sector is receiving is to pay for harmonisation, how is the college sector expected to pay, even within the terms of public sector pay policy, a cost of living increase to their staff without making cuts elsewhere? The college sector, the college employers, has made an offer to members of staff, which is in addition to the harmonisation of contracts that the Government has fully funded. The point that Mr Gray's question infers is that there is no offer on the table from the college employers to members of staff, because there is not any money available, but the employers have made an offer to the trade unions for 2017-18, 2018-19 and 2019-20, which is in addition to the harmonisation that Mr Gray is absolutely correct. The Government has properly and fully funded, so the resources clearly are there to afford a cost of living increase because the employers have offered that. If the increase in resource is to cover harmonisation, if the resources are there, they are going to have to come out of some other aspect of activity. The sector undertakes, is that not the case? The sector will be making financial choices on a constant basis. Every public organisation makes financial choices— Do you mean cuts? No, but choices about how to allocate money in particular areas. The college sector finds itself in a position able to harmonise the contracts of further education lectures across the country, which I am very pleased that the Government has been able to secure as a policy objective, which is now being implemented over a three-year period, fully funded by the Scottish Government. In addition to that, the college employers are able to make a cost of living increase available to members of staff into the bargaining. Is it not both for those members of staff to expect a cost of living pay increase over and above the harmonisation change similar to other workers in the public sector? I think that a reasonable objective is to secure a cost of living increase that is affordable within the sector. I do not think that it is reasonable to discount the effect of pay harmonisation in the process. No, I do not. So you think that a cost of living pay increase for those staff should be reduced on the basis that some have benefited from the entirely separate national bargaining policy? I do not think that it is defensible to separate harmonisation and cost of living as two separate things. I was just going to ask one or two questions about additional support needs in schools. It was really just to find out when it comes to that what the benchmark is for success in your view when it comes to the monies that are being allocated in that area of the budget. How do you intend to measure whether that is a successful input? What we want to make sure is that the additional support needs of young people are met so that they can then progress on to the achievement of positive destinations. That essentially is the framework that we put in place. We look very carefully at the progression of young people through their education. We look at the points that they reach in terms of achievement of qualifications, the recording of particular achievements and then their progress on to positive destinations. The duty is then on individual local authorities to make sure that they put in place the arrangements under support that will enable young people to make that journey. Thank you, cabinet secretary. Are you satisfied that the data that you have available is consistently gathered over different local authorities or is that robust in your view? I think that we are getting to a position where the data and additional support needs are getting more consistent across the country. The changes that were made in 2010 to the collection of data around additional support needs led to a much more significant identification of the prevalence of additional support needs in our education system among young people. That has given us a more comprehensive picture around the country. There still is, within that, a degree of variation in local authority by local authority, and that is why I think that we are making progress in that direction. Equally, I think that some of the recording of information on availability of staff, which I know has been the subject of correspondence with the committee—indeed, I have responded to some of the committee's inquiries at this point—is an attempt to try to get to more consistently available information in that respect. I think that the data is improving to help us in that direction. To stick with the theme question from Dr Allan on positive destinations for young people with additional needs, the range of additional needs that we identify in Scotland is considerable. Does the Government consider disaggregating the data on the percentage of young people with additional needs reaching a positive destination? There is an issue with when you are using a single generalised measurement for a large group of young people who have additional needs that are vast, that you are missing important pictures within that. There are particular additional needs that young people have, but there seems to be an issue with those groups not reaching the positive destinations in the same number as others. There is obviously significant difference between those who are autistic, potentially to the point of being non-verbal and those with a mild emotion or behavioural challenge. I think that it is a very fair point that we are looking at broad ranges of data around additional support needs. The latest data that we have is that the 87 per cent of school leavers with additional support needs had a positive follow-up destination in 2016-17. That was a 5.1 per cent increase since 2011-12, but, in that, there will be particular young people with particular needs who will have been able to achieve more with particular support than in other circumstances. We have to remain very open to identifying how we can best meet the needs of those young people. A lot of that thinking comes back to the steps that we take through the agenda of getting it right for every child, whereby we try to identify what are the particular requirements of individual young people and how we can support them to fulfil their potential as best as we possibly can. If there are refinements to the data set that are required to help us to do that, I am certainly open to considering how that might be undertaken. That would be helpful. For clarification, at present, does the Government do any work to disaggregate that overall measurement of the percentage of young people with additional needs who are achieving a positive destination? Is there any breakdown of that by need category? I doubt it, but I think that I better reserve my position to write to the committee if that is not correct. I doubt that we will go down much below—let me just see what we have got here. There is some degree of it. We have disaggregation by categories that go to one specifically on dyslexia, but there is not one, for example, on autism, as I have in front of me. Oh, there is—oh, I am trying to miss that. There is artistic spectrum disorder, social and emotional and behavioural difficulty, physical health problems, mental health problems, interrupted learning, English as an additional language, visual impairment, hearing impairment. That is contained in table L3.1 of the additional needs data. The data is then spread across initial positive destinations, higher education, further education, training, employment, voluntary work, activity agreement, unemployed, seeking work, unemployed, not seeking work. There is a fair amount of—obviously, the categories there may require more disaggregation because some of those will involve substantial numbers. In terms of dyslexia, for example, in this particular data set for 2016-17, we are talking about 2,720 learners. There may be fuller disaggregation that could be undertaken, but I am happy to share that with the committee. Overall, do you believe that spending on additional support needs, which, as you have said previously, happens overwhelmingly at a local authority level, is keeping up with identified demand? Yes, because I think that an important change has taken place. That important change is that more and more of young people are having a broader range of needs identified, many of which would have been supported and assisted within the mainstream education system. We have the presumption of mainstreaming now well embedded within our education system. We have more and more of young people with additional support needs having their needs supported within that mainstream sector. We also have the identification of the needs of those young people in the meeting of those needs within mainstream education settings predominantly. Obviously, there are specific provisions that the Government makes to provide special education for some young people with additional support needs, but, fundamentally, those needs should be and must be met within the education system. There is a concern that the overall spend on additional support needs is certainly an issue of consistency and accounting for. I think that Spice has previously referred to the way that it is accounted for between local authorities is essentially arbitrary. There is a significant concern that the appearance can be given that spending on additional support needs is at the least staying steady, which would not be keeping up with demand given that demand is more than doubled. However, that is simply because of interesting accounting along the lines that you have indicated that pupils with additional support needs are allegedly having those needs met through mainstream education, through generalised spend. If we take co-ordinated support plans—for example, the proportion of young people with an identified additional need with the co-ordinated support plan has fallen. The percentage has fallen from around 6 per cent to around 1 per cent. I have previously raised that with you in the chamber and you said that you would be happy to consider the concerns that have been raised with ourselves at the committee that it may have been financial pressures that were causing that. Now, if that was the case, that obviously would not be meeting the requirements on local authorities under existing legislation. Has the Government done any work to investigate why the number of co-ordinated support plans has changed? Mentally, that is a statutory issue for individual local authorities. They have to exercise their functions in relation to the additional support for learning legislation, which puts a responsibility on local authorities to assess and meet the needs of young people. As I explained to the committee before, there is, of course, a set of interventions that are available for families concerned about those points, which can ultimately result in tribunal cases about those matters. Again, as I have said to the committee before, I am not an advocate for tribunal processes. There is a place of last resort, in my opinion. I would much rather say that there was a collaborative dialogue to resolve the issues that are of concern to families. Fundamentally, local authorities have to satisfy themselves and families that they are meeting the needs of individual young people. In relation to additional support for learning, on the most recent information that I have available to me for 2016-17, there was an increase in the resources that local authorities have spent on additional support for learning of 2.3 per cent in real terms in 2016-17. Per head, per child with identified additional needs, that would constitute a drop in spending, given the significant rise in the number of young people with identified needs. I doubt that between 2015-16 and 2016-17. The issue that I was trying to address in my previous answer to Mr Greer was the fact that, in 2010, we significantly expanded the data collection on additional support needs to cover a whole range of circumstances that would not merit the formulation of a co-ordinated support plan. The type of comparison that I am giving about finances is much more in that territory where there are specific additional financial requirements that need to be met in relation to the delivery of additional support for learning services. Cabinet Secretary, I accept that each individual support plan is a matter for the local authority in relation to the family and the child with additional needs, but there is clearly a national pattern here, as I have raised with you previously. Does the Government not have a responsibility to look into what appears to be a national pattern of a reduction in the number of co-ordinated support plans? Is there significant feedback coming from parents, families and often from teachers anonymously that they believe that that is because of financial constraints? Surely the Government should be looking into why that is the case? Some of those issues are being looked into as part of my dialogue with the organisations that have raised concerns through the not included report, which was published back in September, if my memory says me right. I have taken part in a parliamentary debate on the question in which I have set out the steps that the Government has taken to respond to that report. Indeed, I will be convening around table on those questions with many organisations and stakeholders. I think that it is sometime in the near future. I cannot remember exactly the date, but it is certainly now arranged. As part of my dialogue with those organisations to address the concerns that are included within the not included and education report, which has been subject to consideration by the Parliament and the committee. I understand why you have delayed the publication of the Government's research based on that report's publication. Do you now have an indicative timescale in which you intend to publish your research in conjunction with a response to that report? I would like to move at pace on that. I cannot recall when the round table session is, but I have had a meeting already with the autism organisations, and I want to take forward that round table discussion. I want to do it as quickly as I possibly can, but I hope that the committee appreciates that I am trying to do it in a holistic fashion that brings together the research and the actions that flow from it. If I feel that the timescale has taken a bit too long, then I will move to publish the research evidence at an earlier stage. I want to set out the advantages to the Government for using ring fencing as a mechanism, for example, on the pupil equity fund. The purpose of pupil equity funding is to put resources into the hands of individual schools to make decisions about how, in their judgment, they can best meet the needs of individual pupils to close the poverty-related attainment gap. I would judge that to be a different type of financial arrangement from what we would consider to be traditional ring fencing because we have taken a deliberate policy decision to put those resources in the hands of individual schools to enable more focus spending on individual pupils and their needs, but also to empower schools with greater discretion in the utilisation of resources. On more traditional ring fencing, if that is also part of the question that Mr Scott raises with me, there will be occasions where the Government has a policy priority that it wishes to advance, and therefore enters into what we would call a traditional ring fencing arrangement, but that represents a very small proportion now of local authority expenditure. I was just looking at the briefing for today's meeting from our spice services, and they report that there is £120 million for pupil equity funding. There is £4.5 million. I have appreciated the small amounts of money in the context of the overall budget. As you have said, £4.5 million on garlic and £262.2 million for early years and childcare, and then there is some capital on that as well. However, those are all as spice descriptors as grant funding that is ring fenced. Is that fair? I think that it probably is fair. Although I would make a distinction, which I was trying to do in my other answer, between pupil equity funding and other ring fenced grants, because pupil equity funding is going to a different set of decision makers, it is not going into what I would call traditional local authority ring fencing arrangements, but it is ring fenced for the purpose of closing the attainment gap, but the decisions are taken by schools, not by local authorities. Can you clarify the difference between this and the attainment Scotland fund, which I think is described as targeted funding, if I read my briefing correctly? With the attainment Scotland funding, there is also a difference of timescale that attainment Scotland activities started earlier than pupil equity funding. The attainment Scotland funding has two elements about it. One is essentially a programme that involves local authorities and then a programme that involves individual schools. The work with local authorities is about working with a number of local authorities in whose areas we have the greatest challenges in relation to the attainment gap to support them in the collective activity that is required to close the attainment gap. Then, through the second part of the attainment Scotland fund, focus expenditure on individual schools where there is a real prevalence of the attainment gap. What pupil equity funding does is take some of the rationale of the schools programme and spread that more widely to recognise the fact that poverty does not just present itself in big groupings, which the attainment fund generally recognises. Poverty presents itself in a range of different areas around the country and, as a consequence, about 95% of the schools receive some allocation from pupil equity funding. On the attainment Scotland fund, nine local authorities receive funding under that. We've discussed this before, but have you given any more thought to that to the very point that you make about the poverty indices, the mechanism by which you collate data that therefore leads to that allocation of funding? There is work going on within our analytical community to try to devise more fine-grained mechanisms that would enable us to recognise poverty so that that work is on-going just now. We are talking to individual local authorities who have particular thoughts on that question and we are also discussing it with the analytical community. As I think I have gone through with the committee before, we have used what is the mechanism that provides what I would call the longest reach into the country through eligibility for free school meals. Whereas if we used one of the other core identifiers of the Scottish Index of Multiple Deprivation, we wouldn't be reaching as far into the country as we are reaching with Peth. Therefore, by next year's budget, would you assume that there may be a change to the mechanism for allocation in this area? I certainly would want the work to be completed, whether it will lead us to a different mechanism is a different question, but I would want to have that completed. I am happy to update the committee on the progress that we are making in that respect. Good morning, cabinet secretary. The Government is making a huge investment in early years and childcare. Can you clarify how local authorities will be held accountable to ensure that the funding to support this expansion has been spent for this purpose and has been shared appropriately between public and private providers? Essentially, we have an implementation board that looks at the delivery of the early learning and childcare expansion around the country. That is a board jointly chaired by Marie Todd as the Minister for Children and Young People and Councillor Stephen McCabe, the COSLA education spokesperson. That grouping is designed to essentially monitor the progress that is made against the plans that were submitted by local authorities. In those plans, that body will look at the progress that is made and to be satisfied that sufficient progress is being achieved. Within those individual plans of local authorities, there were expectations set out and funded on an agreed basis between the Convention of Scores Local Authorities and the Government about the mix of private and public provision that would be envisaged within early learning and childcare. We will monitor the progress that is made against those expectations as we implement the programme. It has been quite a variety of different practices between the local authorities. We have to make sure that two things are happening. One is that sufficient progress is being made on the delivery of early learning and childcare over the period to full roll-out in August 2020. Secondly, we are able to see that the expectations that individual local authorities signed up to about the balance and the nature of the delivery would be reflected in what happens on the ground. We look at that closely because I am aware of the concerns that have been expressed in different parts of the country about whether or not the private sector is securing quite as much of a role in the expansion that it may have considered that it should be able to get. Can you explain the process by which the new multi-year funding agreement between the Government and COSLA was agreed and how the yearly amounts were determined? What happened here was that each local authority was invited to prepare a plan in relation to its resource and capital requirements to achieve full roll-out by August 2020. Individual local authorities produced those plans. We went through a process of discussion and dialogue between the Government and local authorities with the support of the Scottish Futures Trust in testing the approaches that were taken forward. At the end of that process, we essentially got to a set of plans that had originated from local authorities being tested in dialogue with the Government, which we all agreed. From that, that was constructed, the amount of money that was required to implement the policy proposal. Obviously, that is phased over a number of years because we are building up to August 2020 at different paces and different stages around the country. Once we agreed that global sum, we then left the question to local authorities as to whether that funding would be distributed by the habitual distribution formula that is used within local government or whether it would be distributed on a needs basis—essentially on the basis of what each individual local authority had said that it needed to deliver. There are differences between those two numbers. For some local authorities, the plan may have, for example, said that it needed £5 million, but the distribution formula might have given them £4 million. Local government took the decision itself that it would allocate on the basis of need, as opposed to the distribution formula. In my experience, that is more of an exceptional decision for local authorities to take than to use the distribution formula. However, that was done because local government took the view that the estimates had been constructed authority by authority so that they should be paid authority by authority. Of course, there are mechanisms in place for an annual review to assess the progress that is being made and the appropriateness of the plans that are put in place by individual authorities. On that sort of point, can you confirm that the Government will evaluate the expansion and, if possible, how would you do that with regard to child development and increased parental employment and studying, etc., which was one of the aims of the expansion? There is monitoring and evaluation in two respects. One is that we are in a delivery phase, so we are looking at the implementation of the programme, and we are looking at that stage by stage to determine whether sufficient progress has been made in the roll-out of the programme. There is that evaluation that is undertaken. We have commenced essentially an evaluation study, which collects baseline data from 600 families around the country prior to the commencement of the programme. We will work our way through those families through the implementation of the programme until the full findings are available in 2024. We will look at the experience in relation to the development of children, which will look at their preparedness for formal education, it will look at their progress in relation to the early level and it will also look at impacts on families in relation to some of the wider questions about employment and other factors that Ms Mackay raised with me. What I would say anecdotally in relation to early learning childcare—I think that this has been the interesting experience in this school year, or this academic year, I should say—is that we are seeing pupils coming into primary 1 who have had the benefit of at least one year of 1,140 hours. My dialogue with primary 1 teachers tells me that young people are really coming into school very significantly strengthened by their experience of 1,140 hours. The evaluation study will tell us in more detail and with more scientific analysis of the benefit that this has had for young people and for families. Can I just ask a supplementary on that, cabinet secretary? I have heard about some of the issues around whether childminders have been included in the delivery models and trials that have been put forward. What does the funding follow the child's model and the principle behind that mean for parents in terms of flexibility going forward? I certainly—our advice and our guidance is very clear that childminders should be very much part of the process. Those aspirations are shared with local government and signed up to with local government, but it is very much a local authority-led dialogue that is taking place. What ministers have made clear is that if there are concerns in different parts of the country about how the dialogue is taking forward, we would want to hear that so that we can raise that and pursue it, but I would certainly want that to be the case. Under the funding follows the child model, what we are trying to do is to maximise flexibility for parents to meet their needs, which is why we need to have a mixed economy of public sector provision, private provision and childminding provision, to ensure that we can meet the needs of families by providing high-quality support to children in different settings and to ensure that the arrangements for supporting children are as seamless as possible for the benefit of children, but also to try to deliver flexibility for parents. I would like to go back to Tavish Scott's line of questioning, specifically with regard to the pupil equity fund. I appreciate that the cabinet secretary had written to the committee in advance of today's meeting. With regard to that underspent, 40 per cent of pupil equity funding was underspent last school year, and it was reported in the times educational supplement that that amounted to almost £50 million. East Dunbartonshire was spent the most by local authority, which was spent by 82 per cent, but some schools did not spend any. Can you see how I was cited as an example of a school that did not spend any of its PEF money? In your letter, you said that the PEF fund was introduced at the start of the financial year, so two thirds through the school year. I wonder if the Government has identified any specific problems locally at a local authority level, because there seem to be regional variations about who is spending what and at which times, and who is able to use the money? The first year is a bit of an exception for the circumstances that I narrated in my earlier letter to the convener. I certainly would not expect it, and we are not envisaging in our financial management of the year to see a particularly significant underspend on pupil equity funding. There may be some underspend, but because, obviously, we have got the ability, schools will not lose any ability to spend as a consequence of not proceeding swiftly in this respect, but they will retain their full spending power, but we would imagine that that is a much lower level of underspend later on. I think that what we are seeing is a very good level of participation in pupil equity funding around the country. I think that the arrangements are now becoming much more embedded. Some of the early tension, if I might use that word, between schools and local authorities has settled down, and I think that there is now a much better approach to how the decision making is undertaken. Obviously, some schools have opted for long-term programmes. They have heard the financial certainty that the Government has given around pupil equity funding for the remainder of this parliamentary term, and they have taken decisions that essentially lock in their spending plans for the duration of the programme, because they judged those to be the most sustained interventions that they would require to make. Other schools will have judged that they may change some of their plans in the duration of this parliamentary term. The general pattern of plan formulation and implementation is now proving to be pretty robust around the country. We will have an experience where some of the work that is undertaken is not successful and that we have to accept that and live with that fact and understand from it why it has not been successful. However, we are also beginning to see—I think that I am hearing this at a discussion a few weeks ago, before Christmas, with all of our inspectors—how they are seeing in relation to the pattern of activity around the utilisation of pupil equity funding. I took a great deal of encouragement from that dialogue that they are seeing emerging evidence of interventions that are very successful that are worthy of being shared across the education system so that we can identify what are the core propositions that will make a difference in closing the attainment gap. Your letter points to an increase of nearly 300 teaching posts through primarily the attainment Scotland fund of which most have come from PEPF. Obviously, the cabinet secretary will be aware that when advertising those posts, some local authorities, including Fife, siphon off a percentage for HR administration purposes. Has the Government looked at how that has done at local level to ensure that there is greater consistency of how much of that fund has been taken by local authorities to advertise teaching posts, for example? We are looking at those questions. I have to say that I am in the perspective of part of my earlier answer. I think that we are seeing a situation in which there is a good and productive climate between local authorities and schools in taking forward many of those questions. At an individual school level, I hear from schools that they do not want to be encumbered with all sorts of processes that they are not habitually organised to do. If the local authority can deliver that for them in a seamless way, that is helpful. I completely accept that argument. I do not detect much difficulty for schools in making the choices that they want to make about the spending of those resources. I think that that is an evidence of a collaborative education system that enables schools to take those decisions on an empowered basis with local authorities providing support where it makes rational sense for local authorities to provide that support. Thank you, convener. Just following on from those questions, what percentage of underspend would you expect to see if you have done any analysis of what you are expecting next year? I cannot give Mr Mundell a specific figure at this stage, but I do expect it to be significantly lower than 40 per cent. I then look at the attainment Scotland fund figures that we have, and there is still an 18 per cent underspend there in 2017-18, and that is excluding PEPF. Is that a bit of a cumulative carry-forward from essentially the same issues of it takes a while to get expenditure out of the door when a programme starts? It is essentially a cumulative impact of that slower start, which is still working through the system. However, the Government has said that we will spend £750 million on the programme, and that is what we will do. Does that mean that schools can be confident that it is a multi-year roll forward and that it will keep going indefinitely until it is spent or until the end of this? Well, it will continue until the £750 million is spent. Yes, so schools can be confident that, with the line of sight of that financial allocation, yes. Okay, and just for clarity, who holds on to that money of wallets not being spent? Where does that sit? It will either sit with the Government or it may sit with local authorities. I suspect that it probably is distributed to local authorities. PEPF is distributed through local authorities, so any underspend will sit with local authorities but then be accessible by schools, and attainment challenge underspend will sit with the Government and then be allocated through that mechanism. That leads me on to my next question, whether there has been any progress in expanding the fund further or just looking at how it is distributed in small rural schools. My question is whether there is a fairly significant underspend and that is going to continue in terms of time lag, whether any money can be found for those 4 per cent of schools, many of whom are facing serious challenges and who have not had those opportunities that have been afforded to most other schools? I think that the answer to that is in two parts. One is in relation to the points that I explained to Mr Scott in his question about distribution mechanisms. The point that Mr Mundell raises is a fair point about small rural schools where it is perhaps more difficult to identify instances of poverty that have driven our distribution in this area. I am keen to conclude that issue as quickly as I possibly can do. The second point is that there really is not an available underspend if I could use that terminology here because of the answer that I gave Mr Mundell a moment ago, which is that the resources that are spoken for are allocated to individual schools or to local authorities. The fact that they have not been spent does not mean that the commitment to those schools evaporates. That remains in place, so we would need to find additional resources to supplement the programme if that was what we were going to do. My next question was just on the differences between local authorities. I looked down some of the figures and I would not say that there was a definite trend, but I do accept that there is a possibility that it is more difficult for rural local authorities or schools in more rural areas to find services that they can commission than those in more urban communities. Is there anything that has been done centrally to help to support those local authorities and individual schools with understanding more creative things that they can do with the money? One of the challenges will be about if a school is deciding to recruit extra staff in a rural area, that will be more of a challenge than it will be in urban central Scotland. I would have to accept that the patterns of school vacancies tell us that that is a greater factor and that the filling of school vacancies is a more challenging factor in more rural schools than it is in more urban schools. If a school is deciding that all vacancies can be achieved in an urban setting, it is perhaps more challenging in rural areas. If a school has decided to take forward a staff expansion approach, it may find it difficult to spend the money. On other interventions, I do not think that it should be any more challenging because a lot of the interventions that have been deployed by schools involve partnerships with third sector organisations. From my experience in representing a part of rural Scotland, the third sector is particularly strong in rural Scotland and is able to provide some of the support and assistance that schools would be looking for. From our point of view, we hold regular dialogue with local authorities about the implementation of pupil equity funding. We will be having, in the course of the next few weeks, a range of gatherings around the country of headteachers, where we will be reviewing their experience of pupil equity funding and identifying if there are any trends in that analysis that we need to take action upon. That will be a material part of the discussion that we take forward with individual schools. Is that information that you will be able to share with the committee once that process is presented? If there is anything that emerges from that, I would be happy to share that with the committee. Can you tell us how the care experience children and young people fund will be evaluated? The fund will look particularly at the way in which public services have met the challenges and the issues that care experience young people face. One of the principal elements that we will be looking at will be the experience in relation to achievement of positive destinations and to identify the way in which young people have progressed through the system. Local authorities will also be required to report on their particular spending profile and on outcomes that are achieved for young people. The measures that we will be looking at will be a range of nationally published data. Some of that is contained within the annual educational outcomes for Scotland's looked after children statistics and other measures such as improved school attendance and school participation, which are part of the framework that we will look at in relation to the national improvement framework, which was the subject of consultation and which we updated the Parliament about in December. In your opening statement, you mentioned that there is funding to create a statutory financial redress scheme for survivors of child abuse and care and to make advance payments to elderly and ill survivors. Can you tell us how much has been budgeted for that? It has been an allocation of £10 million made for this particular element within the budget. I am anxious to fulfil the commitments that I made to Parliament and to survivors back in November—sorry, in October—where we want to move at the earliest opportunity to create a scheme that would be accessible by survivors who are likely not to survive long enough for a statutory scheme to be legislated for. The statutory scheme will take some time to go through the legislative arrangements of Parliament, but I am keen to have a scheme up and running for those who have a life-limiting circumstance. We have allocated that resource. We are in dialogue with survivors groups on how that will be taken forward and what sums will be available to survivors. However, it is crucial that the only way that I can make any payments of this type is if I use the common law powers that can be secured through—sorry, if I use the common law powers that are available for me, but I need Parliamentary authority to take that forward and that arises from the passage of a budget act. That was my next question. In the absence of a successful budget bill, could that money? I have no authority to spend that money, no. Thank you, cabinet secretary. I know that there is interest in that area. Can I take you back just very slightly to Oliver Mundell's question? You used the word commissioning from headteachers, but you also talked about how important the third sector is. Anecdotally, I have been approached by a couple of organisations who are finding it difficult to participate in pupil equity funding because the local authorities have approved supplier lists. Are you aware of that practice and do you think that that would limit the opportunities for headteachers to be as innovative as they could be in terms of what they might want to use the pupil equity funding for? My answer to that question comes back to some of the material that I covered in my answer to Jenny Gilruth earlier on. At the start of pupil equity funding, I think that there was an awful lot more of this. This is a local authority. We have our approved list. This is what you should do. I am picking up much less of that. For the sums of money that would be involved in some of the expenditure that would be envisaged by individual schools, it is of a level that some of the requirements of procurement would not necessarily kick in to go to an approved supplier list because of the individual sums of money that might be commissioned by individual schools. I am aware of the risk, and I have dealt with some of those questions in the past, but I have not heard enough or lot about it in the experience of pupil equity funders. As I said in my answer to Mr Mundell, we have the follow-up events on pupil equity funding with headteachers around the country. We did that in the spring of last year and we are doing it again this year. We will have the opportunity to pick up a lot more of the feedback from individual headteachers about what their experience is like. Thank you, cabinet secretary. I move on to Ms Lamont. Just briefly on the question of compensation for survivors, are you aware that at least some survivors are very concerned that the £10 million announcement won't be immediate enough for some people who are elderly and vulnerable? Do you have any proposals to bring that even further forward? Do you share some concerns about the money that is identified that it is not sufficient? Perhaps you can indicate how you assess need in order to come up with a figure of £10 million? In terms of speeding up the process, I have no means of speeding it up. I have no parliamentary authority to make the payments because of the nature of those payments. I am essentially using common law powers to justify the payments to individuals that would normally require specific legislative authority to do that. I am advised that I can do that on the basis that legislation is proposed to provide for a statutory scheme. In the current financial year, up until 1 April, I have no means of making those payments regrettable, although I totally understand the point that Johann Lamont makes. I am conscious of individuals who have died while waiting for a scheme to put in place. I deeply regret the fact that we have not been able to put that in place. However, we are very focused on making sure that it is part of the budget bill, and we have put in place the financial arrangements to make it possible. On the estimating of what might be a reasonable sum, I have secured the commitment from the finance secretary as part of the budget process, but we are making the best estimates that we possibly can do of what resources would be available. However, once we conclude our discussions with survivors, which are currently on-going about the eligibility arrangements, the evidencing arrangements and the payment levels that might be required, which are essentially the three key components of the discussion, we will be establishing a basis for payments, providing we have parliamentary authority to make those payments. If we find ourselves later in the financial year that we are coming up against the £10 million ceiling, but we have people who have a legitimate eligibility, then I cannot see how the Government could not fulfil those commitments to those individuals. I am saying that if we found ourselves in a situation in which the £10 million fund that we have put in place was exhausted during the financial year, I do not think that the Government could do anything other than make further provision for individuals. I think that that is reassuring. We are concerned that people will end up applying too late and that the fund is closed. You can see that that would be unacceptable. I also think that you would want to recognise this cross-party commitment to this fund working, so we would not want it to get embroiled in any broader arguments around the budget process itself. On that point, I have welcomed the contributions that a range of members of Parliament have made from across the political spectrum. If I may convener and update the committee, we are actively involved in dialogue with survivors about those three key questions, about the design of the fund. What we have found in those discussions is that a lot of discussion is required to make progress on those questions. However, I have indicated to my officials that we will reach a point where if we want to have a scheme in place for the start of the financial year, I will have to come to some conclusions about what will be the essential elements of the scheme. I want to assure the committee that if I feel that my absolute commitment is there to have a scheme in place for the start of the financial year in April, I will have to bring some discussions to a conclusion earlier than people might wish. I will have to do that to make sure that we have a scheme in place. Thank you very much. I will ask a question about Education Scotland, in particular, although there are issues around key bodies more generally. Forgive me, I do not have the figure with me today, but what we did identify in the committee over a period of time was in-year transfers from Government to Education Scotland, which seemed remarkable similar for each of those years. You explained that in your response to us that it is therefore common for further funding to be transferred to Education Scotland in response to changing circumstances. Can you give me an example of what those changing circumstances are that each year merited almost the same amount of money being transferred in year rather than identified in the budget? The type of circumstances that I would cite is that the Government is looking at a range of priorities that may emerge within the education debate, where we may need to put more emphasis on particular elements of the work in education, and more specifically in Education Scotland, where we might decide to enhance investment or scale back investment, depending on the nature of where the educational debate is happening. We often face some of those challenges around some of the digital literacy activities and some of the steps that we have taken to as we have gone on the journey to design the national improvement framework, where what we now have in place is different to what we started out with a couple of years ago. Essentially, we are discussing and consulting with relevant stakeholders what might be the best way to utilise investment resources that we have, and we end up spending them perhaps through Education Scotland. We spend the same amount every year unplanned. We do not think that it would be better if it was a bit more strategic that there was more rigour around the level of moneys that Education Scotland would have each year. Perhaps the cynic might suggest that money is held back in order to make announcements to deal with political challenges, and I am sure that he would refute that, but can you explain to me why? I just do not understand why we know the context. We know a lot of the challenges. Each year, uniquely, Education Scotland gets an in-year budget transfer that is the same as two or three years before. How does that fit with long-term planning? Is there another example in another bit of the budget where you have done the exact same thing? If I go back to my experiences as finance secretary, the finance committee quite regularly used to question me about why you do budget revision times—autumn and spring budget revision times. We make a number of transfers—I talked about some of them earlier on to Liz Smith—where we make budget transfers from the health service to the higher education line, for example. They are essentially part of the accumulated structure of the budget process. John Lennon makes a fair point. There may be a year when we just have to say, look, let us change the structure of the budget document and process and make all the in-year transfers that we know we are going to make at the outset. Obviously, that can affect the— Does that mean that you know that you are going to make these in-year transfers to Education Scotland? For some of those budget lines—I am talking about the finance secretary's experience. For some of those budget lines, such as transferring from the health service for nursing education, for example, we know that we are going to make those transfers from health to the higher education sector, and they are quite predictable. In other circumstances, they will not be as predictable. I am simply making a point based on my experiences with the finance secretary that there may well be an argument for reconfiguring some of those budget lines at different stages, but parliamentary committees would have to be comfortable with those changes. It is predictable and unpredictable. We have an education budget in the Education Scotland budget. We know that there is going to be a year transfer of the same amount of money every year, and it is explained by changing circumstances, but it is also highly predictable. The concern would be that what we are scrutinising is budget may not be what happens. We are interested in the gap between two, but I ask you about the performance of Education Scotland. We are told that the performance of Education Scotland has been measured and there is going to be a move towards regional delivery. How is that going to be assessed, and to what extent do those involved in education teachers, support staff, parents and carers have a role in that assessment of the performance of Education Scotland? Obviously, Education Scotland has its own published plans that will set out the performance measures that are expected of Education Scotland. That is all publicly available. I can see that it is perflate within the scope of the committee to decide to look into the performance of Education Scotland and to examine its performance against its corporate plan or its key performance indicators. Part of what I have asked the chief executive of Education Scotland to do is to ensure that the organisation is much more accessible to a range of different interested stakeholders around the country. That is why it has got such a key role to play in the regional collaboratives, which are crucial to working to fulfil the recommendation of the OECD about encouraging more collaboration within the education system. Education Scotland will be working with local authorities and individual schools to create the culture of improvement that we want to see within education in Scotland. Fundamentally, the performance of the organisation will be judged against the key performance indicators that are contained within its plans. Is there a role for education staff, parents and carers in feeding into that process? I will give you an example of where there may be a gap in perception. Education Scotland argued very strongly when it came in front of the committee that evidence of its improvement was employing more staff. If it went into any school and asked it, how do we address the problems that it is facing, whether it is a member of sport staff or a teacher? To what extent do you think that having more staff working for Education Scotland is a good thing or a bad thing? I am not sure whether it would think that that was the best use of money. I wonder whether there is a role for the groups that I have identified in informing your view or our view of the benefits or effectiveness of Education Scotland? Of course. I listen carefully to feedback in the education sector on a whole manner of different issues. The performance of Education Scotland would be one of the issues that I look carefully at. As the committee will be aware, I have established the Scottish Education Council, which enables me to bring together a whole range of interested parties in Scottish education to focus on common priorities. Within that, we discuss the performance of different organisations and the performance of key parts of the education system in meeting the needs of young people in Scotland. I wonder if you can outline how your strategic priorities are reflected in the different settlements for different public ages that are involved in education. The change in the budget to Education Scotland, I note that the SQA is stable in cash terms, so I presume that that means a reduction in its budget, while Skills Development Scotland has an increase of 9.1 per cent in real-time. I wonder whether you can outline why you have decided to meet the allocation priorities in the way that you have done. As John Lamont correctly indicates, the SQA is at a mature point in its delivery of its requirements. My judgment was that the resources were appropriate and adequate for the SQA. The mature point was identified by the SQA. Did the SQA say that it was at that mature point? Is that a decision that you have made? That is my judgment, but the SQA probably would corroborate that point in terms of being at a mature point in the development of its activity. Education Scotland has asked Education Scotland to make a range of interventions to build up capacity in the education system. I have made no secret of the fact that there has been a diminiation of the central capacity for improvement in our education system. I do not mean that just in terms of central government. I mean a common area for improvement in our education system, and I want Education Scotland to make a contribution to that, which is why there has been an increase in resources there. In relation to Skills Development Scotland, the Government is committed to further expansion of the modern apprenticeship programme, so we are putting in the additional resources that are required to support the continued expansion of the modern apprenticeship programme as we make further steps towards the achievement of 30,000 modern apprenticeship starts by 2021. Will some of that money be used to address some of the inequities in the modern apprenticeship scheme, where people with additional support needs, disabled people, disproportionately women, and other groups have had less access to modern apprenticeships? I would like to see that being the case, yes. Is there something in place to do that? The letter of guidance that we will issue to Skills Development Scotland will make provision for the type of requirements that John Lamont has raised with me. John Lamont highlighted Education Scotland and spoke about teachers and schools perhaps not seeing the advantages of the work of the organisation. From personal experience, I was a Secondi in Education Scotland. Perhaps there is an opportunity to look at the Secondi model, which empowers teachers to go into the organisation and to take that learning back into schools. I note that there is an extra £2.5 million increase going into the budget for Education Scotland specifically. In today's evidence, resources will be focused on tackling the equity and excellence agenda. We are looking towards the regional collaboratives. Is there an opportunity to look at the Secondi model, or perhaps at how we empower classroom teachers to learn from that expertise at Education Scotland to get a breadth of learning there, so that it is not a division between them and us in the school and the organisation centrally? Definitely. I am very keen on that model being the case. There is a really good development that Education Scotland takes forward of some staff's conments. In the example that Jenny Gouldith puts to me, there are also the associate assessor opportunities where practising teachers are part of the inspection teams that are taken forward by Education Scotland. Having spoken to some of those associate assessors, they find that some of the best professional learning they undertake because they are seeing educational practice in other settings that they can then learn from and consider that is relevant to their own educational practice within their own schools. I am keen to encourage what I would describe as a more fluid model where individuals may be involved in such conments to enable that development of professional capacity to take place. I turn to the local government settlement for a moment. Do you believe that local authority spending on education will increase, decrease or stay roughly the same in this coming financial year? I would imagine that it will increase. Do you take out the various specific funding programmes? Core spending on education has obviously decreased significantly over the past decade and has resulted in wider financial pressures and decreases across spending areas. The Government has introduced a number of specific funds to tackle specific areas, but they are not core funding and they are not meant as a replacement for the funds that have been lost through core funding. Do you acknowledge that and do you acknowledge that core funding on education is likely to decrease? What I particularly look at is what is the experience in relation to funding as a whole within education and what the most recent information that I have available to me shows in 2016-17, 2017-18 and in 2018-19, we are all predicting, sorry, either delivered or predict, an increase in education spending by local authorities. I think that that gives me confidence that local authorities are putting the necessary priority on to education investment in schools and supporting that process. Is the increase that you are looking at there, if we are to exclude the money that is for specific funds that can only be spent for those specific purposes, if we go back to the core funding that they are allowed to allocate as they see fit, is that increasing? I do not believe that that is why I answered the last question in the way that I did. I am interested in what is the overall position that is looking like, because that is what schools feel when the experience is spending. The school level spending in 2016-17 was a 1.3 per cent increase compared to 2014-15. We are seeing that improvement in education expenditure at local level. That is the pattern that I welcome to ensure that education is supported properly at local level. Staff that have been brought on teaching have been brought on through the attainment funding. It is just short of 1,900-ish teaching staff who have been brought on. Those staff are not by the requirements of those funds and what they can and cannot be spent on. Those staff are not a replacement for core classroom teachers who have been cut in previous years. Do you understand the concern from teaching staff, from schools, from parents and from pupils that their core capacity is being reduced? While those staff are very welcome and make a significant contribution, they are not a replacement for classroom teachers, for support staff who have been lost from cuts to core budgets over the past few years. We have seen teacher numbers rising. Teacher numbers are now up at 51959 in the last census, which was 447 up on the previous year. The teachers who have been recruited using those specific funds for those specific purposes though, does it not? That is where I am trying to respond to Mr Greer's questions. We are trying to ensure that the school system is well resourced and supported. We are now seeing a rising number of teachers—more teachers than at any time since 2010. I appreciate that Mr Greer will appreciate that. There have been challenges in the public finances. We are trying to ensure that we, within the very constrained public finances, do all that we possibly can do to strengthen the resources that are available in education, and we are now seeing our teacher numbers up at nearly 52,000 as a consequence. You yourself have made the case very clear. When there were questions about what local authorities could or could not spend this money on, you are very clear that those attainment funds are not a replacement for core funding. Therefore, can you really count a teacher who has been recruited under attainment funding? That number is simply being used to mask the fact that the number of core classroom teaching staff has reduced. As you have said yourself, those staff who are being recruited under those ring-fenced funds are not replacements for or equivalents to classroom staff who have been cut. If we took out the teachers who are funded by those mechanisms, we would still have an increase in the number of teachers. They are additional. If we took them out, we would still have an increase in the number of teachers. If we took them out for last year, for example, if we took them out of the 447, if we took out the teachers who have been recruited under the PEF and attainment Scotland fund, the increase in teacher numbers would have been 151. Do those teachers are additional to those who are coming in? The point still stands, because that is over a single year. Over the last decade, we have lost thousands of teaching staff. The point still stands that the Government has repeatedly used the higher number to talk about the increase in the number of teaching staff without acknowledging the fact that the overwhelming majority of those additional staff, including over the past year, have been recruited using those ring-fenced funds for specific purposes and are therefore not replacements to the core teaching staff who have been lost over the last decade. I have acknowledged the challenges in the public finances that the Government has had to face up to, but what I am saying is that in each year, since 2013, I do not have the full list of numbers in front of me. Since 2013, we have seen year-on-year increases in the number of teachers. In the previous year, even if we took out of the equation the teachers funded by PEF and attainment Scotland funding, we would have had an increase in teacher numbers in both last year and the year before. I think that we will continue to revisit that throughout budget negotiations, I am sure. One last question from me. The EIS has expressed concerns about investment in education and in teachers pay. How will the teachers pay settlement in any backdated pay be funded from the budget proposals? I understand that we have made a further offer in the last period, so presumably even more money has to be found. Can you direct us to where that is in the budget? We are obviously still continuing with discussions and dialogue with the teaching trade unions to try to get to a solution. The Government has committed itself to providing additional resources to that effect, and the French Secretary has given a commitment to ensure that that is the case. That is what the Government will fulfil through the negotiations, but we are obviously not complete. Where is the money coming from to meet that commitment? The Government will put in place the mechanisms to enable us to fund those resources that are required. You already said earlier that you could not fund a compensation scheme of £10 million because you needed budget authority. Are you now saying that in terms of teacher settlement, you will find the money and you have made the commitment, but you are not able to tell us where it is going to come from? There are two very different points here. This is a point that I have to make to Johann Lamont so that she clearly understands it. I have no legislative authority to spend on the £10 million. It is not a case of availability of money. I have no legislative authority. I have to labour this point with the committee. I cannot make those payments if the budget bill does not pass. That is why we clearly understand that point. Where is the money coming from not only to fund the pay settlement and back pay, but the offer that we are now told is a commitment out with the budget process? The resources would be in addition to the local government settlement that is proposed within the budget. The Government will put in place those resources. Who would it come from within the education budget? That is something that we will be discussing on an ongoing basis, but the resources would be additional to the local government settlement. I am working on the assumption that you must have already had this discussion if you are making an enhanced offer. Is it going to be helpful to the committee to know whether the pay settlement is going to come out with the education budget? Does that change our consideration of the provisions for education in the budget process, or is it coming from somewhere else? Where is it coming from? We are in a continuing negotiation with the teaching trade unions, which is not yet concluded. Once that is concluded, we will make the financial provision for those arrangements. You must surely know where that money is going to come from. We cannot go to a negotiating table with an offer. If we have not a lease, we can hint for ourselves where the money is going to come from. Those are discussions that the finance secretary and I have had. Have you sought reassurances that the money will not come out with the current education budget? Yes. It will not come from the education budget. That concludes questions from the committee this morning. I thank you, cabinet secretary, for your attendance and attendance of your officials. Before we finish, I would like to put on record that we received apologies from Gordon MacDonald's for today's committee. That concludes public session for this week. We will continue your evidence and standardise assessments next week. I now suspend before we move into private session.