 Welcome to the second meeting of the local government housing and planning committee in session 6, and our first meeting together as a committee in person. Our first item this morning is consideration of whether to take item 4 in private. Item 4 will be an opportunity for members of the committee to reflect on the evidence that they have heard earlier in the meeting. Do members agree to take item 4 in private? Our second agenda item is consideration of whether to take item 5, consideration of the committee's work programme and future consideration of its work programme in private. Agenda item 3 is an opportunity for the committee to take evidence to inform its understanding of what its key priority should be for this session. It is also an opportunity for the committee to inform its pre-budgetary scrutiny. The committee will be taking evidence from the Cabinet Secretary for Finance and the Economy virtually, and then evidence from the Accounts Commission. I'd like to begin by warmly welcoming the Cabinet Secretary for Finance and Economy to the committee for this first time this session, and I'd like to welcome her officials, Andy Kinnard, strategic engagement and planning reform coordinator, and Bill Stitt, team leader, revenue and capital, local government finance. I would now like to invite the Cabinet Secretary to make some opening remarks. Thank you very much, convener, for inviting me to give evidence to the newly formed local government housing and planning committee today. I warmly welcome each and every member, and it's good to see the wealth of experience that members bring with them. I apologise for not being there in person. I'm really sorry to miss what would have been the first in-person appearance since Covid struck. Unfortunately, I was due to leave the Highlands last night and travelled to Edinburgh within about half an hour of heading to depart. I was not noticed from a close family member that they had tested positive, so I am now obliged to self-isolate. Sorry for not being with you in person. I nevertheless welcome the opportunity to discuss the range of issues that are falling within the committee's remit. It is quite an impressive range of issues from local government, planning, community wealth, building, recovery from Covid and so on and so forth. I look forward to hearing the views of the committee. I would like to acknowledge the pivotal role that the committee will play during these critical times. I look forward to building a constructive relationship with the committee as we continue with our work to control the virus to protect the most vulnerable and ensure that we can recover as quickly and efficiently as possible. As we look ahead to this session of Parliament, we need to combine efforts to deliver a bold and ambitious recovery to ensure that we tackle the levels of poverty within our society, to engineer a shift to higher value and fair work employment and to ensure that we deliver greater financial security for families. I am sure that the committee shares my vision to create an economy that delivers for families, for citizens, a society that thrives across economic, social and environmental dimensions. I am clear that Government and certainly I cannot deliver that vision alone, so hopefully we will be able to work across the committee and across the Government's work to support the public, the private and the third sectors as we deliver that vision and deliver the best recovery that we possibly can. I look forward to answering the diverse range of questions that members might have today. Thank you, convener. Thank you, cabinet secretary. We have a range of questions and we really appreciate you coming and also confirming that we will work together over this session. I look forward to the work that we will be doing. I will begin with the first question. I am curious about the policy areas that are key to economic and community recovery. It is a really helpful opening question because, if I tackle that in two ways, the first is that we are mindful, and you will be as well as MSPs, that many people are still grappling with the immediate impact of Covid. I am self-isolating. Other families are self-isolating. There will be financial implications of that. While we are looking at the long-term recovery, we cannot lose sight of the fact that many families are grappling with the here and now. The first answer is to support families as far as possible and to support the public, private and third sector organisations that are critical in that respect. Deal with the immediate impact, the immediate impact of perhaps insecure employment, the immediate impact of children's education born of the virus. The second part of the answer, which I think is what you are alluding to, is how do we deal with long-term economic recovery? It has been mentioned more times than I can count during the pandemic that we need to recover in a way that delivers for people. We cannot just recover the status quo. We must go further in tackling the inequalities that have been exacerbated by the pandemic as well as ensuring that we finally deliver the ways in which we were still grappling prior to the pandemic. To name just a few areas where I think the committee has a direct interest, housing, ensuring that we have warm, safe, secure housing for families up and down the country. That comes from our housing 2040 commitment. It comes from the significant spend on affordable homes. The second thing is local government. Local government has been a key partner during the pandemic, and we need to make sure that local government is resourced with sufficient funding but with sufficient levers of control and influence when it comes to responding. The last one is just on planning. I am referring to the three parts of the committee's name. On planning, we have an opportunity when it comes to the fourth national planning framework, which is obviously a long-term plan looking to 2045 to ensure that we have the development and the infrastructure needed to support sustainable and inclusive growth. I will stop there at the risk of going on. I think that, although we look long term, we cannot lose sight of the immediate challenges. Of all the committees in the Parliament, it is one of the most essential when it comes to supporting and delivering for families and communities. Thank you, cabinet secretary. I have a couple of supplementaries on that. Just to frame it around the role that local government has played in recovery from your perspective, what do you see them having done specifically, and whether local authorities have enough money to support communities through this time of recovery? I do not think that we would have been able to get through the pandemic without local government and local government employees. As the person who was overseeing the financial packages of support over the last 18 months, I cannot pay greater tribute to the local government staff and employees, many of whom sacrificed weekends, evenings, holidays week after week to get money out to families and businesses in need. Their names will never be mentioned in this committee or in Parliament, but they have been absolutely instrumental, and many of them are doing it from home in quite trying circumstances. Local government has been the means of distributing support directly to people in need, and we could not have done it without them. On the financial requirements of local government, obviously every budget I deal with the funding that is given to me and cut that funding in a way that tries to protect every part of our funding needs. Local government, for example, has been largely protected despite the fact that we have been dealing with very difficult financial circumstances over the last 10 years. I do not shy away from saying that those financial circumstances have been difficult. They are probably going to get harder in light of the fact that, as we look ahead, the outlook for our own financial settlement is quite challenging. Over the past year, we have had substantial additional Covid consequentials. They are largely now all spent. As we look ahead to the UK Government's budget and spending review, my impression is that the UK Government will be tightening up quite considerably to deal with the implications of the increase in borrowing. I think that the Scottish Government's financial package, where funding package is going to be very challenging in this upcoming budget, and our responsibility will be to try to protect the health budget, protect local government but also to try to remobilise our health service and our justice service. The needs will considerably outstrip the supply of funding, if that makes sense. For your confirmation of clearly what local authorities have been doing in recovery and the recognition of the need for support, I call on my colleague Megan Gallacher with another question. I would like to refer to my register of interests, as I am a councillor in North Lanarkshire. I would like to ask you a question on ring fencing this morning, as ring fencing is an area of debate that regularly happens between the Scottish Government and local government, represented by COSLA. I would like to ask whether there are any plans to reduce Scottish Government ring fencing of local government allocations over the next few years. Megan Gallacher, I warm welcome to you. It is great, as I said at the beginning, to have that wealth of experience of the background of members. I hope to look forward to bringing that council experience to the chamber. In terms of ring fencing, it is something that I would like to see decreased further. It has substantially decreased over the last 14 years in particular. During Covid, there were, unfortunately, specific pots of money. I have already referred to, for example, the pots of money that went for businesses, households and education recovery. The nature of the pandemic required us to distribute money in that fashion. Opposition members in the chamber were holding me accountable for ensuring that those pots of money went for the purposes that they were intended. When it comes to the local government settlement, I was very clear that the bulk of the funding that we distributed was not ring fenced. When it came to additional Covid consequentials, the last thing that I did before Parliament went into recess was to increase the local government funding by over £250 million. That was very specifically not ring fenced to allow local authorities to tailor that funding for the greatest needs in their local areas. I agree with the premise of your question and also confirm that my goal is to try and provide maximum flexibility for local government. Having said that, there will still be some areas where, presumably, Opposition parties and the Government agree that, for example, there should be additional funding that is specifically for education, but that is the minority and the majority of funding is not ring fenced so that local government can use its discretion for how that is spent. Thank you, convener, and good morning, Cabinet Secretary. Can I also refer to my register of interests? I am a local councillor on East Lothian Council. Given the possibility of continued one-year UK Government budgets, is there a way that the Scottish Government could provide local government and the third sector with long-term budget certainty over the next parliamentary sessions, perhaps with indicative budgets? Thank you, convener, for that. Again, another former councillor with a wealth of experience, so it is wonderful to have you both in the Parliament and on this committee, and I look forward to working with you. In terms of the spending review, last year you will be aware that we had hoped that the UK Government had announced that it would be starting a spending review last year, and perhaps for understandable reasons that was delayed, we are really hoping that it will be delivered this autumn, but we wait and see what the UK Government might do. The Chancellor has signalled his intent to publish a comprehensive multi-year spending review later this year. The challenge for us is that, because local government is such a substantial part of the Scottish Government's budget over £11 billion every year, it is very difficult for us to provide that long-term security without having that long-term security ourselves. The way that the budget works for the Scottish Government is that, while we are given funding and it is gratefully received, that funding can be revised up and revised down. You can appreciate that if we commit next year, for example, a particular amount of money for local government, the risk for us is that our budget might be revised down, leaving a shortfall. If local government has planned on the basis of that funding coming to it, we are dealing with a gap. That is the challenge for us, but we desperately want to provide that long-term security. We desperately want ourselves that long-term security to make long-term plans, which is something that we have been unable to do because of that year-to-year budget. My sincere hope is that we will get the spending review this autumn, which allows us to embark on our own spending review and therefore provide that multi-year certainty to local government. Until we have that security ourselves, it would not be prudent to provide it because there are too many risks attached to being able to deliver on that funding amount that we might confirm. I know that local government wants to give that security, for example to some of the third sector organisations that they support, which often appeal to local government for a multi-year settlement. It is a domino effect. My hope is that that might change this autumn. Thank you, cabinet secretary, for that response around the multi-year funding and your intention to try to move more in that direction. I would like to call on Eleanor Wittam with a question. Thank you, convener, and good morning, cabinet secretary and fellow members. I would also like everyone to be referred to my register of interests. I am still a serving councillor at East Ayrshire Council. Cabinet secretary, there has been a vast amount of work undertaken over the past few years between the cause of the Scottish Government partners towards creating a new fit for purpose fiscal framework, indeed SIPFA, calling for a rules-based approach. Cabinet secretary, what do you think a functioning fiscal framework between both spheres of government could look like and whether that will be taken forward as part of the local governance review? Thank you, Eleanor Wittam, and at the risk of sounding like a broken record. Welcome to you as well, another councillor with a wealth of experience. I think that this is going to be a great committee. On the fiscal framework, it relates back to Megan Gallacher's question, because my view is that if we have a rules-based fiscal framework to support future funding settlements, we can maximise the flexibility for local government. We can enable local government, facilitate local government to use their discretion and to tailor both their financial support and their agenda to their local communities. We had obviously started that work prior to the pandemic. We had committed to undertaking that joint work with COSLA. Work was delayed during the pandemic, unfortunately, but we have recommended those discussions. I will tell you what I do not think a successful fiscal framework review is. It cannot be something that is imposed by the Scottish Government on local government. It is really important for me that local government can bring forward their own proposals for consideration about what a successful fiscal framework would look like. That could be, for example, in two stages. We could have a two-stage process with looking at, firstly, some tangible asks such as—to go back to Megan Gallacher's question—the approach to ring-fenced funding and how we consolidate funding for local government as part of the settlement. Then we could look, as part of a second phase, at the local governance review. What wider fiscal powers for local government could we consider? As part of the most recent co-operation agreement, we confirmed our interest in a citizens assembly on the question of wider powers for local government. That is just one suggestion, but to go back to my earlier point, success will be local government making their own proposals about what would work, rather than the Scottish Government starting from a position of saying that this is the rigid, inflexible framework that we think should be applied. I think that we started to see a little bit of this during the pandemic. Obviously, I took a series of asks from local government from COSLA to the Treasury around flexibility. Treasury agreed to some of those, not all of those, and we were then able to implement them and provide those flexibilities for local government. I would like to call on Miles Briggs for a couple of questions. Thank you, convener. Good morning, Cabinet Secretary, and to your officials. I feel that I should declare that I am not a counsellor after this morning's session. Can I ask a couple of questions to start off with? It is now a decade since the Government accepted the Christie commission recommendations to look towards a shift towards prevention. Notwithstanding Covid, I wondered if you could give some examples of where that has happened in practice. Thank you very much, Miles Briggs. It is good to have some company and not having been a former serving counsellor on the committee this morning. I think that there are quite a number of examples. Just briefly, before I get to those examples, one of the points that I frequently make on this point around preventative spend is how important it is for Government to go hand in hand, as it were, with Parliament in doing this. Every year—we are going to get into this again in the next few months— every year, Parliament quite rightly scrutinises budget lines going down as well as budget lines going up. The problem with preventative spend is that, as you will know from your years as a health spokesperson, in order to get additional spend in one area, which is prevention, you have to see often an equal and opposite decline in other spending areas. I have been at this committee before, previous members, who would ask, for example, why do not you spend more on environmental measures in order to reduce the health harms at a later point? You will know, as well as I do, that if we reduced spending in acute areas of health and moved it into more parks—I am not being facetious, but you understand what I am saying—there would be a bit of an outcry. When it comes to preventative spend, we have to do that. One example in that space would be what we have spent on active travel and the low-emission zones. Those directly have an impact, as you will know, on long health, to use one example. That is a spend in the transport line. Transport has to accommodate that, but the benefits will be seen in the health budget. We need to get into the spirit of scrutinising overall budgets. It is perhaps an area that the committee could take up, because you have such a diverse range of subject areas. We have to get into the spirit of seeing what is happening in one budget versus another. That would be one example, but another area where the committee might take an interest is things in community wealth building. Where we are investing in local economies, we are investing in community economic development, rather than perhaps big national economic development, knowing that when you invest in local communities and you are creating jobs on a local level, that inevitably has a bigger impact on, for example, the amount of spend on welfare support. If we are spending on creating jobs, we are not spending on welfare support, because we know that the individual is earning sufficient sums of money to support them and their family. There are two examples. There should be more. In order to get more, we need to take a more holistic approach to me setting the budget, but also secondly and more importantly, budget scrutiny. One of the most pressing issues at this moment in time is about pay settlements within local governments. I wanted to ask specifically to go back to some of the ring-fenced questions that you have already faced this morning. Where the Scottish Government's thinking is on that, do you accept that the £188 million bill provided £94 million of non-ring-fenced funding for councils in the agreement put forward? Do you accept that that will mean that councils have to make cuts of eating to their reserves? No, but I would also say that I want to take those two issues in turn, because I think that it is important that I talk about local government pay and then I will go back to talking about flexibility and ring-fencing. As the member will know when I have said this repeatedly to COSLA, I have said it in public and the First Minister has confirmed this to COSLA as well. Our budget has been fully deployed and there is no additional funding available for additional spend. I am hugely grateful for the heroic efforts of all key workers, including local government, but matters of pay are a matter for local government itself that is negotiated between the trade unions and COSLA through the Scottish Joint Committee. We have never taken part in paying negotiations and I do not intend to do so now. That point about managing budgets is a question for COSLA and local government. On flexibility and the local government funding settlement, as I said a few moments ago, in last year's budget I was very explicit and very clear that we were maximising the amount of non-ring-fenced funding for local government. At the moment, it is the vast majority of that £11.7 billion that local government gets. That includes some capital in terms of £617 million, but the vast majority is for day-to-day services and the vast majority is not ring-fenced. There is a general uplift. The last thing that I did before Parliament went into recess was to provide an extra £275 million of non-recurring funding for Covid-related matters and that was not ring-fenced. The vast majority is not ring-fenced and it is for local government to make those decisions. The irony in your question is that, on one hand, there is a general ask for us to intervene in local government pay and at the same time to provide maximum flexibility and discretion for local government. I intend to provide that maximum local government discretion without getting involved in matters of pay and how local authorities spend their budget. I wanted to ask a question with regard to the SNP-Green co-operation agreement. That included a point towards council tax reform and I wondered what your thinking was around that and how that will affect potentially the work of this committee but also council tax reform being brought forward within this Parliament. You will know that, over the past two years, I had chaired a cross-party group looking at reform of council tax and, unfortunately, that had to be suspended due to Covid. The commitment is to look at council tax more generally and, hopefully, to invite a citizens assembly to consider reform of council tax. It probably needs to be seen in the wider context of local government flexibilities and taxation but the commitment is to do a review of council tax as part of a wider consideration of local government fiscal powers. It goes back to Elena Whitham's question about what a reform of the fiscal framework review would be. I think that we need to see council tax as part of that wider conversation. It touches on your comments earlier about community wealth building. As you will be aware, the Ayrshire growth deal included £3 million from the Scottish Government to directly support a regional community wealth building model. Can you ask yourself how the Scottish Government will support councils and other anchor organisations to take community wealth building approach and aid our co-ed recovery with it and move to a wellbeing economy model with that? Thank you for the question. There is certainly a growing understanding. I do not think that it is a universal understanding quite yet on the role of community wealth building. In some ways, we in Parliament or in the public sector start using those terms without necessarily explaining what they are to the wider public. I think that there is a growing sense of that. In terms of the importance within the Scottish Government, we have seconded part time Neil McEnroy, who was previously the chief executive of the Centre for Local Economic Strategies. He is now a strategic advisor to the Scottish Government as we develop our programme on community wealth building. We will know that there are five pilot areas right now where we have worked with local authorities to produce individual community wealth building action plans to reflect both their economic challenges but where we think that there are opportunities. Three of those plans are being published and there are still two in draft. The five pilot areas are Clackmannanshire, south of Scotland, Western Isles, Tay City's Fife and Glasgow City region. You have already referenced the £3 million across the Ayrshire region. There are lots of good examples. The key with those pilots and what is happening across the Ayrshire region is to get best practice and roll it out. We are working with COSLA, SLAID and the Improvement Service to try to use community wealth building as a vehicle to deliver more locally bespoke, unique and inclusive economic solutions. Rather than me, as the economic secretary, saying that one size fits all, we blatantly know that that is not the case and it is good to see that bottom-up approach. As part of that £3 million in other pilot areas that you are referencing, there is some money there to support local government in terms of the creation of community wealth building officers. When we are looking to passport that across the country, the learning of the best practice, will there be support from the Scottish Government to make sure that all local authorities will be able to avail themselves of the creation of such posts within their services? Yes. There will be on-going support if I can be a little bit tongue-in-cheek here. I think that this is one of the core questions for the committee and I look forward to the committee's steer on this. Again, going back to some of the questions on ring fencing versus questions on maximising local authority discretion, we will certainly provide on-going support, both financial support but support in kind. As we develop that in terms of helping to facilitate providing expertise and guidance, but when we are developing new strands of work, the big question for us and the big question for committees is whether you ring fence that are not for specific outcomes and specific purposes, including when it comes to community wealth building. The role that that will play in a wider economic strategy is really important. I want there to be a very strong local dimension to our economic strategy and that will require local authorities to think creatively about what their role is in helping to develop those local economic strategies. We will continue to provide that support, yes, and my encouragement to local authorities to keep doing what they are doing, which is to work with local communities to develop local bespoke economic strategies. As a member that has been here for a number of years who has served on local government but no longer does some, perhaps, delighted to be a part of this committee once again in looking forward to this session ahead, I wonder what could I pick you up in a point that you made earlier in your opening remarks? You were talking about the recovery process and will no doubt be hoping that our local government colleagues drive us through much of the process, but you said something that was really quite interesting that we cannot go back to the status quo or we should not think that we are operating from the status quo. What did you mean by that? Could you expand a wee bit more on that for us please and how do you see local government leading the line in the recovery, particularly for our town centres? For many families across Scotland, the status quo was pretty tough and pretty grim. When it comes to recovery, I do not think that we can be content to go back to the way things were. I think that we need to resolve some of the structural challenges in Scottish society and in the Scottish economy. One example being that work needs to pay. You cannot expect families to make ends neat in insecure employment. That would be one example where the fact that there are so many children in poverty in working households should be a huge incentive not just to recover to the way things were, but to do things differently. Another example in the economic space, as you said, is town centres. Prior to the pandemic, we were already grappling with the way in which our town centres have changed. People shopping online, perhaps local town centres struggling to compete with some of the bigger urban centres. That has only been exacerbated during the pandemic, so more people have started shopping online, more people are digitised and our town centres are struggling more than they were, even with the big emphasis on shopping local. Those are two examples where to go back to the status quo is not an improvement. That should be an incentive to act. Your question about what role does local government play is so important. What we saw during the pandemic, and if I take homelessness as a good example, is that the need to act was so urgent. It was an emergency that we did not get sucked into process and bureaucracy, we focused on outcomes. To go back to Miles Briggs' question about preventative spend, to think about what our national performance framework is that caused that and we are joint signatories of. The focus on outcomes, rather than the focus on process, is what we need to do to fix those issues. Rather than getting bogged down in the process of ending homelessness, we just decided together to end homelessness and ensured that everybody had a home. That is the approach that we need to take to every problem. Rather than getting focused and fixated on process, we need to have the outcome in our minds and deliver it against that outcome. It is easier said than done, but there are no more excuses because during Covid we did focus on the outcome rather than on the process. We expect local government to be the recipients of the UK Government's levelling up fund as part of this process, but we do not understand what the role the Scottish Government has had in that or will have in that or indeed what this committee's role may be in scrutinising that. How does the Scottish Government see that process going forward and what role and participation do we have in it? I am quite concerned about the levelling up approach for two reasons. One is the complete lack of clarity. If you, as a member of the committee, are not sure how it works, it is doubly concerning that I, as somebody who is responsible for appropriate funding of infrastructure and local government services, do not have much of any clarity on how it will operate. That is concerning because we have to make decisions and we are trying to use our money as prudently as possible to make it go as far as possible. The problem in my engagement with local authorities is that it feels like a complete lottery. They are bidding for funding and they do not know whether they will secure that funding. If they have to make decisions for the benefit of their communities and yet it feels like a lottery is going to get this money, that feels quite unfair and it is also quite concerning in terms of the lack of clarity. For absolute clarity, we have had no input to the fund and we have no evidence of how it will meet the needs of Scotland's people and Scotland's places. My second concern is that I have had no clarity that there will not be an impact on the Scottish budget. With the increased use of the internal markets bill, with the increased unionisation of spend, i.e. the UK Government leapfrogging the Scottish Government or leapfrogging normal processes, my concern is that that money has got to come from somewhere. That money will then be taken from the Scottish Government's budget and used elsewhere. We saw that in last year's budget where, on one hand, the chancellor was talking about an increased capital spend, on the other hand, the Scottish Government's capital was reduced by 5 per cent. That may sound like small fry, but that is the money that goes on schools, hospitals and public infrastructure. Those are my two concerns. On the one hand, there is no clarity for local government or for ourselves and on the second hand, it might not actually be additional funding, it might be redistributed by alternative means. On that point, the members are talking about flexibility versus ring fencing. Has there even been a discussion about those topics within the levelling up agenda? Yes and no. With the levelling up, local government and local authorities are bidding for money with no clarity on whether they will receive it. One of the core principles in COSLA's distribution methodology is fairness. In other words, when it comes to methodologies, whenever we announce packages of spend, their constant and understandable response to me is that that should be equally distributed across local government as per the methodology. Levelling up completely moves away from that, so it could be that one local authority gets substantial capital funding through the levelling up fund to invest locally for reasons that are unknown to me right now, whereas other local authorities are left behind. Where does the fairness inherent in COSLA's distribution methodology come in? Does that mean that the Scottish Government should give more to those local authorities that have not received through the levelling up fund? Is that fair or should everybody get an equal amount and that it is up to the UK Government to decide who is a more worthy beneficiary of that additional funding or not? It completely undermines the concept of fair distribution of funding. Thank you, convener. I would like to come back to Eleanor Whitham with a couple of questions. I would like to ask the cabinet secretary how regional planning issues have been accounted for in the development of the national planning framework for, given that planning authorities have not yet had time to develop their full regional spatial strategies and the pandemic has exacerbated that a little bit. Thank you very much, Eleanor. I may ask Andy Cunier to come in on that, just because it is a question about process and development, but right now, in terms of the national planning framework, as I said, it is a long term, it is a national plan. I would like to come back to Eleanor Whitham with a couple of questions about how we create liveable places, wellbeing economy and better green places, sustainability places that can be invested in and inhabited places. I will ask Andy Cunier to come in on the process and the role of local consultation and local government to be able to feed in. Thank you, cabinet secretary. In terms of the regional spatial strategies, a new provision that has come through the 2019 planning act is a key element of feeding in both to the national planning framework but also to local development plans produced by authorities. We have been working very closely with authorities right across Scotland to have clustered themselves into particular groups to produce what are indicative regional spatial strategies. There has been a lot of work done within all of those groups that have been feeding into the current drafting of national planning framework for. That work will be recognised and represented and I am sure that you will see some recognition of that when you see the draft of the NPF4 come to Parliament towards the end of the year. Thank you very much for that answer and can I just ask one other question on that. How can we ensure that the spatial strategies and the planning policies to be set out in the NPF4 will help deliver on Scottish Government's emission reduction commitments? Perhaps if I answer that. Andy, if you want to bring in anything else, please do. The climate emergency is the overarching priority for NPF4. It will include a fairly urgent and radical shift in our spatial plan and policies to meet our targets and it will prioritise the reduction in emissions in a way that also responds to the nature crisis. For example, it will play a key role in integrating land use and transport. It will focus on place-based outcomes when it comes to the climate emergency. It will support green economic recovery. It will support or promote rather nature-based solutions and also apply the concept of 20-minute neighbourhoods. All of those things are geared towards responding to the climate emergency. There are key themes in it, but if you want one overarching priority that brings everything in, it is responding to the climate emergency. Planning has such an important role to play. We have a choice with every planning application. Do we improve the way that our communities live and work together or do we hinder the way that they live and work together in a way that increases emissions or reduces emissions? Andy, do you have anything else that you wanted to add to that? Probably just one small point to add is that what NPF4 will do that its predecessors have not done is that it will come with an enhanced place within the planning system as a part of the statutory development plan that the 2019 planning act is adding that in there. The policies and the drivers behind NPF4 will have a stronger position in the decision making on planning applications in the future. Thank you for those responses. It is great to hear the importance of the climate emergency front and centre in the national planning framework. One of the things that I have been hearing over the summer and colleagues as well is the challenges facing our local authority and national park planning department. I have been keen to hear about how the Scottish Government intends to tackle the resourcing and workforce issues facing the departments. In specific relation to planning? Absolutely, yes. Planning departments, yes. We will need to ensure that the national parks or local authorities have the resources that they need to implement and deliver NPF4. There will be a programme to ensure that we are engaging with local authorities to understand the needs for delivery and implementation and then responding to those. I do not think that we can divorce the policy from the delivery of it. Planning is perhaps one of the most obvious policy areas that only works if it is actually delivered and implemented. It is a very front-facing department, front-facing policy in terms of engaging with the public. I do not think that Andy has anything else that he wants to add specifically about the process, but it was just to put on record and to absolutely confirm that we will be engaging with and are already engaging with planning authorities to ensure implementation and delivery. Andy? Just on some specifics, pre-pandemic we had carried out a public consultation looking at fees and performance of the planning system very much with the intention to increase the application fees that are coming through to planning authorities. Also, to implement the provisions in the 2019 planning act that will give authorities more discretion on what they may be able to charge for. Our intention had been to implement all of that by last summer. Obviously, the pandemic came along and we paused that work, which I know we had discussed and was understood by COSLA and other local government representatives in terms of what that might have meant by putting a greater financial pressure. The pressures on business at that time when they were taking the hit early in the pandemic. That work was paused. We do appreciate that the pressures on local planning services are continuing and perhaps have been exacerbated since that time. We have just recently restarted the work towards the increase of planning fees and are working on the back of that previous consultation to produce a set of regulations that will bring that through shortly. We are doing that very much in consultation with the planning profession and with COSLA and Heads of Planning Scotland. We are taking further information from them as we go. This is something that is going to be discussed in a bit more detail in two weeks' time when the High Live on Group On planning performance gets back together. That is a group that is co-chaired by the planning minister and by the COSLA planning spokesperson. They are meeting in the middle of September just really to try and finalise some of the thinking towards the regulations that will be needed to increase the planning fees. We are looking to get that increased finance coming into planning services as soon as we can. I think that we have time for one more question, Megan Gallagher. Thank you very much, convener. I would like to ask about brownfield sites in particular as an area that I have an interest in. It not only regenerates an area but also helps to protect our greenbelt land. The following is what the Scottish Government is doing to support the development of brownfield sites, including support for site remediation and land assembly, where sites are in multiple ownership. Thanks for that, Megan. I am very happy to follow up with a little bit more detail. This is an area of focus as part of the economic strategy. You will know about our derelict land fund, which was announced as part of this year's budget, to try and incentivise the use of brownfield sites and derelict land when it comes to economic development and regeneration. The great example of that, which I had the privilege of visiting last week, was at Ravens Creek, where there is a substantial investment being made by private and public sectors to regenerate an area that perhaps is emblematic of a really challenging period. That is the kind of thing that we want to do. My question is, how do you incentivise the use of brownfield sites for the purposes of economic regeneration and economic development? If there is more that we can do, I am always looking at things like what ways can we use our tax system? It is limited because it is really only a property tax that we have in terms of non-domestic rates. How do we use that? What funding might be available to unlock the potential use of those sites? My offer is, if there is more information that I can provide you with that is specific to your local circumstances, I would be very happy to do that. Secondly, if you think that we are missing things in terms of enabling the use of those brownfield sites, I would be very interested in hearing more, particularly in advance of setting this year's budget. I am going to slip in a supplementary question from Mark Griffin on local government pay. If I could just bring it back to that subject. For me, there does not seem to be much of a tension between ring-fenced support or local discretion since COSLA, local government leaders, trade union representatives have called for government intervention on the specific issue. I wonder if the cabinet secretary would understand the feelings of local government staff when they see public pay policy being disregarded to give NHS staff a welcome, more generous settlement that previously government have intervened in negotiations with teaching staff that the cabinet secretary would understand why local government staff are on the brink of industrial action. The impact that that could have on our schools and public spaces that have already seen severe disruption and asked the Scottish Government to reconsider providing additional support to local councils and to get involved in those negotiations to reach a conclusion that means local government staff feel as valued as the cabinet secretary set out in our opening statements that might avoid some of the disruption to schooling and other things that we have seen for the past year and a half. I absolutely take on board the points around valuing local government staff. I am sure that all of us have been engaging with some of those employees day in, day out when it comes to case work. I could not have done what had been done over the last 18 months in relation to financial support without local government staff and they have been truly and absolutely heroic. When it comes to pay, there is a fundamental difference because we are the direct employers when it comes to the NHS, so it makes sense for us to have a direct involvement there. When it comes to local government pay, historically, traditionally and currently, it is negotiated between the trade unions and COSLA through the Scottish Joint Committee. We are not a member of the Scottish Joint Committee. We have never taken part in those negotiations. I have been crystal clear that I do not intend to change that now. We are not the direct employers. COSLA, local authorities, are the employers. Quite clearly, I am meeting with COSLA regularly to discuss all manner of financial issues. The First Minister has also met with COSLA. On each occasion, I have been explicitly clear that the budget is fully deployed. There is no additional funding. I am not sitting on central pots of funding. Right now, our biggest risk to the budget is the fact that, without a guarantee that we have last year, our budget can go up and it can go down. It can be increased, but it also can decrease. Our budget is fully deployed. There is no additional financial support available. It is for COSLA to negotiate the pay deal for local government staff, who I agree have been absolutely heroic during the pandemic. I know that we have crammed a lot in this morning, but I wanted to ask specifically a question about what is turning out to be probably the Government's flagship policy with regard to the national care service. When the consultation was published, COSLA President Alison Everson described it as an attack on localism. I know that there are concerns about what that will mean for local government budgets, potentially seeing them having 40 per cent of their budget taken out of their control. I wondered what your view was on that and whether or not those concerns are founded and something that you would make sure local government would be defended so that their budgets are not seeing more taken off them. It is a really important question, and it is one that I imagine we will return to over the next few months, particularly in relation to the budget. Every year, when it comes to budget negotiations and budget engagement with COSLA, as you will appreciate, care forms quite a key part of my interactions with COSLA. I do not imagine that that will change. I imagine that this year, as part of the budget talks about the financial support that they need to deliver that. There is a much bigger process of consultation and engagement. We have had the FELE report. That is not the end of the matter. There is still a process here for considering what is the optimum way of delivering care for the user, for our elderly residents, for those who need additional support. My view is that, going back to the answer that I gave, I cannot remember who it was, we can either focus on process or on outcomes. We have got to focus on outcomes for the person who requires care support. To do that, we have got to bring everybody with us. My engagement with COSLA will continue on the financial settlement. Absolutely committed to continuing to engage with COSLA on the financial settlement. There is a big process of work going on within the national health service too, led by Kevin Stewart. The committee will need to have an input as well. The committee will need to be excited on that work, and the committee will need to give a view on that work. I take on board the concerns that you flag. I heard them from Alison Evison at the time. I think that all of us recognise that, after Covid, we need to improve the service that we provide holistically to the people who rely on that service. My sincere hope is that we focus on the outcome of improvement and care, rather than focus on process. However, there is a lot of moving parts, and we all have a role and a duty to consider how we take everybody with us. This service has got to be local. You have got to have a local service. Localism needs to be at one of the centre of the service. We need to build blocks of our national care service. Thank you for that response. We are glad to hear the emphasis on the local input for the national care service process. I would like to thank you, cabinet secretary, and your officials for your very helpful evidence this morning. We have covered a lot of areas and it has given us a really good foundation for going forward in our committee work. We look forward to working with you over the course of the session. I now briefly suspend this meeting before we move to our next panel of witnesses. We now move over to our second panel of witnesses this morning. We will be hearing from the Accounts Commission and I would like to welcome Elma Murray, interim chair of the Accounts Commission, Anthony Clark, interim controller of audit, Brian Howard, audit director, Carol Calder, interim audit director and Blyde Deane's audit manager. I would now like to invite Elma Murray to make some opening remarks. Good morning, convener and committee. On behalf of the Accounts Commission, I welcome the opportunity to discuss with the committee our recently published local government overview reports. We publish two each year and they provide a comprehensive view of what our audit work has found. One report covers the financial position and the one that we sent to you for today was the 2019-20 position and the other, the performance and challenges being addressed and faced by councils and IJBs. We have made findings that cover a range of themes such as funding and governance, inequalities, communities, recovery and transformation, and I will address my comments mainly through those four lenses. First of all, in the past 18 months, the world has changed with the Covid-19 pandemic. There is therefore a need for clearer focus on where and how we spend our public funds in Scotland and how we ensure that we support and enable those who need it most. The pandemic has created a unique and challenging set of circumstances for local government and will have a profound impact on everyone's life in the years ahead. We have seen clearly that public services have adapted, in some cases transformed and will certainly continue to change. The financial impact of the pandemic on our public services has also been extreme. Looking first at our communities, we have seen the strength and resilience of many communities highlighted as they have worked with public service partners, including the third sector, to provide invaluable support to those who need it most. Those local areas where partnership working was already strong and embedded were able to respond and react more quickly to the developing needs caused by Covid-19. In many cases, individuals and groups of individuals in our communities have been absolutely heroic and their efforts over the period of the pandemic cannot be in vain. Our audit work over the past year has focused on local government's initial response to the pandemic, and we intend to move on to consider the impact and lessons learned in more detail in future reports as councils move towards recovery and renewal. That must recognise and build upon what has been achieved within Scotland's communities so far. The pandemic has laid bare, deepened and broadened existing inequalities such as health, work, income, housing and education across Scotland's communities, so that more people are affected and, for many, it is more extreme. The intersectional nature of those inequalities is now better recognised but has the greatest effect on the most vulnerable minority groups and women. There remains a risk that the on-going impact of the pandemic will have further negative consequences on inequalities in the months and years ahead. It is therefore crucial that, in order to build forward better, councils' recovery and renewal plans are robust and reliable and include clear detail on how inequalities are to be tackled. The early signs are positive, and it is clear that councils are trying to achieve that. However, there is recognition that much work lies ahead. Pandemic restrictions and suppression measures such as lockdowns, social distancing and working-from-home have had a profound effect on key council services. Very few of any council services have been unaffected by the impact of the pandemic. Councils quickly pivoted to new digital delivery models, and we saw many examples of change in innovation, including staff flexibility that were introduced that were previously considered not achievable or almost impossible. This new way of working needs to be harnessed and consolidated with lessons learned, shared and improved on. It is also vital that councils do not default to previous ways of working in areas where new approaches are having positive outcomes. Recovery and transformation plans must be aligned and integrated, taking account of other critical areas such as climate change, net zero and supporting a green economy. Effective long-term financial planning is vital for councils as they transition from response to recovery and transformation. Councils have worked with reducing funding over a number of years and faced an increasingly challenging financial outlook, with little financial certainty beyond the current financial year. Those councils, with strong medium or long-term financial plans, were in a stronger position to respond to the pandemic. The Accounts Commission has regularly reported on the importance of long-term financial planning for councils, and they need the certainty of a multi-year financial settlement to do that. Councils have experienced significant loss of income and additional costs as a result of Covid-19. That will undoubtedly have a consequential impact in the coming years. However, substantial additional funding to support councils in their pandemic response was provided by the Scottish Government in 2020-21 and beyond, with total funding to local authorities and communities by April 2021 of more than £3.3 billion. Further support will be needed to allow councils to take a comprehensive and holistic approach as they look to stimulate economic recovery, address inequalities and empower communities. Our reports set out that the context in which councils are operating is increasingly uncertain, complex and challenging, and the strain on budgets continues to intensify. It is likely that the scale and complexity of the challenges that will be faced will continue to grow. Therefore, the role of senior officers and elected members in creating a strong culture of collaborative leadership is imperative. Our reports therefore emphasise the importance of strong leadership, effective governance and good financial management for all councils. That will help to set the tone for the organisation and encourage effective and sustained partnership alongside clear alignment between vision, strategic priorities and the delivery of crucial services as they look ahead to recovery and renewal. As the committee determines its priorities and work programme, I would be very happy to meet regularly with you to support you in your deliberations, both in public and if you wish in private. Finally, convener, myself, the controller of audit and my Audit Scotland colleagues here today are very much looking forward to answering your questions. Thank you. Thank you, Elma, for laying out the perspective of the Accounts Commission. In your opening remarks, you took a broad stroke on various issues facing local government. I am interested to hear from you. As we have spoken before, I need to see those highlights. What are the biggest challenges that you think are facing local government over this new parliamentary session? We are going to suspend the meeting briefly, because it seems to be a communication problem in our audio. I do not think that Elma is hearing us. She is now. We are okay now. I will ask my question again. In your opening remarks, you outlined a range of areas that are challenges facing local government. I would love to hear from you and your perspective on what the biggest challenges are facing local government in this coming parliamentary session. Thank you for that, convener. I will maybe say a few words and then ask the controller of audit if he wants to say a few words as well. For me, the first one is the fiscal framework in which local government works. It is increasingly difficult for them to plan ahead. If they are unable to plan ahead, then they are unable to do the very best for the communities that are sport. The second issue is how communities can tackle inequalities. What we have seen through the pandemic is that not new inequalities are emerging, but inequalities have got much worse. They have deepened in terms of how they affect people who were affected before the pandemic. I heard the evidence from the cabinet secretary earlier, and she clearly recognises that. They have widened so that many more people are now impacted by those inequalities. Councils need the ability to look at those inequalities and how they are affecting people in a local dimension, because it will not be the same across Scotland, so they need that local flexibility to use their resources in different ways. I think that the other issue for the commission for local government will be for them not to return to the way things were. Again, as the cabinet secretary said earlier today, for a lot of people in Scotland, the way things were before the pandemic was not nearly good enough, so we cannot go back. We need to go forward, and we now need to look at how we eradicate many of those or reverse many of those inequalities that were in place to try to give everybody in Scotland a much better quality of life. I will pause there, convener, and invite our controller of audit, Anthony Clark, if he wants to add a few words to that. Thank you very much, Elma. Good morning, committees. I agree with Elma that the fiscal framework is an important issue. The whole notion of local autonomy and the way in which local government works with central government will be key to taking forward effective progress in the longer term against the Covid-19 pandemic. For me, the issue of inequality is fundamentally important, and I agree with Elma that that has to be at the front and centre of how local government works with central government, the third sector and communities, to feel about better. That will require strong leadership and collaborative leadership. One of the risks around the next phase of the pandemic is people drifting back into old ways of working and focusing on their own services, such as the health service, the police and the fire, and not focusing on how they can better work together to meet the needs of communities. I will add one further thing to the list, which is digital. We have seen an amazing way in which local government has pivoted across to digital service delivery, but when the commission reported in January this year on digital progress in local government, we were still highlighting some quite important digital leadership and capacity and skills in local government. There will be issues in and around that. Finally, I think that it is bringing this all together. We have heard the cabinet secretary talk today about the green economy and the fairer work. There is still more work to do to clarify what exactly the new models of greener fairer work will look like and what role local government and partners can play in that. I am optimistic that local government has done a fantastic job in the past 18 months. We should give credit to their staff and their colleagues. I think that the issue of community involvement will be fundamentally important, as Elma said. If we can maintain the energy that we have seen unleashed through communities working with councils, the third sector will be well placed for moving forward positively, but it will be hard to win this for the long haul. Thank you both for your perspectives and for absolutely celebrating the work of local government and every single person who works there. I would like to move to Eleanor Wittam with a question. Thanks for that, convener. Good morning, Elma and fellow members of the commission. It is just touching on what you have already spoken about this morning. We did see a huge shift in focusing on outcomes as opposed to processes. There are lots of lessons that we have learned over the past year and a half in local government. Local government has significantly changed practices and has responded and adapted very quickly. You touched there, Anthony, on digital. That is one example, but could you give us some more examples of how local government adapted and changed quickly and whether we are going to see the spirit of innovation and partnership across local government and other partners and sectors continue as we go forward, so that we are not slipping back into those old ways of working. Thank you very much, Ms Wittam. It is lovely to see you here again today. We did work together when I was in North Ayrshire, so it is good to see you at the committee. Thank you for your question. I will ask Anthony to come in in just a moment, but one of the other areas where we have seen significant change during the pandemic was the speed with which councils moved to do things in a different way. Digital was one of those, and they were able to implement a whole range of digital solutions, not just for staff to work at home but for communities to get access to services. The speed and flexibility within which staff pivoted themselves into providing different types of services. We saw a whole raft of community hubs getting set up right across Scotland where staff who had never been in that type of role provided support to local people in a very different way now, whether it was support for people who were shielding, so that might be medicines or food being delivered, or whether it was support for people who were having really struggling to get by just on a day-to-day basis. They did lots and lots of different types of work. That was not just councils. That was also working with health partners, with the third sector, with volunteers from communities as well. I would say again that volunteers from communities played an absolute blinder of a role during the worst of the initial phase of the pandemic, and then through the second phase, a second wave—absolutely incredible efforts. We need to recognise that that can't continue. They need to be congratulatory, but we need to put in place more support for them. Certainly those are some of the things that we have seen through our audit work. Our most recent report that was published at the end of May highlights a whole range of examples across Scotland. We took a lot of time to identify and find really lots of good practice that we could allow to be shared right across the country. Antony, I don't know if there's anything that you want to add to that as well. I'm not much to add to what you say, because I think that you've captured very well the kind of main spread of the things that we've seen that have been innovative over the recent period. I would just say that one of the observations that we have is that we've seen people ask themselves some quite searching questions around some issues around governance and accountability, around acceptance of risk, around what people are willing to do and are able to do when they're faced with exceptional circumstances. As auditors, we obviously are interested in governance and accountability, but what we've seen over the past period has been people being a bit more pragmatic about those things. I guess that we're hoping that, as people look forward, they'll be able to have more agile decision making and that they'll be able to perhaps keep it a bit more differently about what risk, appetite and the answer are. What times call for exceptional approaches? I think that we want to keep the exceptionalism but also have a degree of structure around things moving forward as well. Thank you for your responses. I'm going to move to Megan Gallagher. Thank you very much, convener, and good morning to all panel members of the Accounts Commission. I would like to ask a question more specifically on allios, as councils and their allios have been under financial strain for quite some time due to budget pressures, but this has been exacerbated by the pandemic. We'd be interested to hear from the panel if they have carried out any research on the pandemic's impact of arms length external organisations, for example Glasgow Life. As we've seen, jobs have sadly been cut and venues are set to close. I can imagine the devastating impact that that will have on local communities. This is just one example, but local authorities are now in a very difficult position, so we'd be interested to hear your views on that. Thank you very much, Ms Gallagher. We haven't done a lot of detailed work, but it was one of the areas that we picked up in our most recent report, because we recognised the extent to which allios depended on income to ensure their financial sustainability from one year to the next, as well as the grant funding that they would receive. However, the projected loss of income across allios in 2021 was about £39 million, which is very significant. There are a range of different allios across Scotland, from the likes of Lothian buses, Edinburgh trams, to Glasgow Life, to a range of cultural and leisure facilities as well. We plan to do more work on that. We are planning to undertake more review and audit work in relation to allios, but one of the things that I think is quite interesting is that if we look at some of the services that are provided by allios, they can be about transport, they can be about culture, they can be about leisure. How do we view those in terms of the overall approach to economic recovery and also health and wellbeing in local communities? Our view is that we would be looking to see in the coming years and months more of a holistic view of all of those services to ensure that those communities that most need them and most rely on them would not be those that receive less of them in the future. Antony, do you want to add anything to that? I want to let the committee know that we are all in the process of auditing local authorities accounts at the moment for issues set of financial statements. As part of that process, we will be looking at the issue of allios and how they feature. We know that there are many local authorities that have been issuing letters of comfort to allios to tide them over the financial disturbance that they are experiencing at the moment. Many other local authorities have given additional funding to allios to make sure that they can sustain themselves through what is a transition period as we move through the pandemic. It is quite likely that the next year's local government overview will pass some comment on the role that allios play, not just in terms of the period that we are going through but also in the longer term, the issues that Alma talks about and the contribution that they can make to social wellbeing and economic growth. It is something that we will be reporting on in the future and we will be happy to speak to the committee once we have done that work. Thank you for your responses. We look forward to hearing the outcomes of that work that you are going to be doing. I am going to move to Mark Griffin. We have touched on this issue already. I am already covered some of that in an opening statement. I just wanted to ask about how certain communities, how certain sections of society have been impacted more greatly by the pandemic. You talked about women, ethnic minority communities. Beyond that, are there any particular sections of society or communities that have been impacted the greatest? What evidence do you see of local authorities directing resources and funding to support those areas in particular, rather than sometimes going to the areas or communities that shout loudest? Thank you for your question, Mr Griffin. You are right that there have been a supposed couple of points. There are specific groups of people that have been impacted. If we take women, for example, women are impacted in a number of ways. In terms of many women who are in low-paid or vulnerable or fragile work situations, they also tend to adopt caring responsibilities within their families. Managing and juggling all that has been particularly difficult and remains particularly difficult. Many women will have lost their jobs. I think that ethnic communities are also impacted significantly in relation to the type of work that they have as well, whether that work was local work or whether it was part of a large organisation. We have heard anecdotal evidence of many, many people losing their job or not being able to be furloughed, for example, so that has been extreme. It is important to remember that children and young people have had an incredible 18 months. The mainstay of their weeks, the structure of their weeks, has been entirely upended. As schooling was stocked, they had to work from home if they did not have appropriate digital facilities or a place to work, not even a table to sit and use a computer app, for example, then their schooling will have been significantly disrupted, and that could have a lasting impact for years to come. Young people and young adults looking for work have been significantly impacted as there has been very little work around. The other aspect that I think about all that has become much clearer through the pandemic is the way that all of those issues interrelate, and it then becomes almost personalised. While a range of women may be affected in a particular way, depending on their ethnicity and whether they have caring responsibilities or what type of work they did, it becomes very personalised. That is where local governments have a good role to play in supporting those people, because they are closest to those communities and closest to the impact that that has had and who needs the support and the type of support that they need to build a better future. I will pause there. Do you want to add anything to that? Obviously, the impact of the pandemic on young people and their education, which has been very badly disturbed and alluded to that. We know that local authorities have done a great deal of work to try to address the challenges around people's mental health and wellbeing. What we are seeing already in local authorities recovery plans is an increasingly strong emphasis on the mental health dimension and the welfare dimension of the impact of Covid-19 on young learners. Carers have obviously been quite badly impacted during the pandemic, so that is a particular group where their caring responsibilities have often become more significant because of the challenges that local authorities have had to provide caring support during the times of lockdown. We are seeing, at the moment, as local authorities turn their minds to longer-term recovery planning, how they are trying to draw those connections together. There is real scope for place-based planning and community engagement to play an important part in helping to address those inequalities that are moving forward. For those responses, I will bring Elin O Wittam in for a supplementary question and then an additional question. I would like to ask the commission if there is any evidence that you have seen of councils using their equality impact assessments to use a gendered lens to look at the decisions that they are making that affect women. We know that women are by and large in precarious employment, as Elin O Wittam outlined there, that are most affected sometimes by such decisions. So, just to look back over the past little while, are we seeing evidence that councils are taking that proactive approach? If one of my colleagues wants to come in, you can let me know and I will bring you in. However, we have not at this stage, as far as I am aware, looked at equality impact assessments in explicitly that light. However, we are very focused on our role in terms of inequalities and how we can report more substantially on that. We are also mindful of the forthcoming human rights legislation that the Parliament will bring forward in due course. I am saying to you that I would expect to see more of that in future work. Certainly, in terms of how we are taking forward our audit work, we are planning to do a lot more in inequalities. I have just seen my colleague Carol Calder might be able to say a few more words about that. Anthony Watt wants to come in first. I was just going to make the point that we have been thinking very hard about how we embed equalities across our audit work. We are very conscious that the changing legislation means that we probably need to adopt a human rights-based approach to our work. We have done quite a lot of thinking about that. It is obviously not straightforward or not easy things to do. We do not want to do it in a mechanical way, but we will anticipate looking more closely at things such as equality and that to say. Most of the process is through which local authorities are handed over to Carol Calder because she wants to say more on this. Thank you, Anthony. I was just going to add that our next local government overview report for 2022, as Alma mentioned, we produce two each year. The focus on that will be very much on the recovery plans that councils have in place and the progress that is being made. Not only will inequalities be one of the big themes for that, but we will be looking at how councils have progressed through the lens of women or other disadvantaged groups. We will also be looking at how all that links to economic redevelopment and climate change. We will be trying to pull in all those links to see how that is affecting and improving the circumstances for people in local areas. The one thing that we will be specifically looking for is that the response has been targeted and that councils have good independent evidence to know what the issues are in which communities are in their area and they have taken a targeted approach to that. I think that you will see in our next report more focus on that. I will move on to my other question. I would like to know the commission's view generally on mainstreaming of participatory budgeting and community impairment. What are the risks of transparency, accountability and resourcing of these really important workstreams and policy areas? Oh, thank you, Mr Tim. That is a big question. We have seen that councils are taking steps towards participatory budgeting. More than steps, some have actually advanced it quite a bit. It is something that they do now, as a matter of course, so they have built that into the way in which they work with communities. Our best-valued reports, which we produce for each council on a five-year basis, look at this in quite a bit of detail as well. We have quite a bit of evidence now about how councils are doing that. They do not do it all the same way, and that is okay because every local authority area is different and they work with their communities in slightly different ways, but they are all advancing this. Can they do more? Absolutely. What we have seen through the pandemic has been more empowerment of communities and more support for communities as councils have removed some of the bureaucracy that had been in place before in terms of letting communities step forward and do some work themselves. We do think that there is scope for that to grow and for that to be more widespread across Scotland, so that is something that we will be continuing to look at in our future audit work as well. In terms of transparency and governance, that has not been an issue that we have identified as a problem in the approach that councils have taken forward so far. I do not know if that is because councils are just really getting into it and they are being quite careful about their approach, so it might be an issue for us to consider as it becomes more commonplace and widespread, so that we can make sure that it is being taken forward in a clear and transparent way, but that is a good addition to that question. I do not know whether Antony wants to add anything to that. The only thing that I would add, if you do not mind, is to say that for us the issue is to do with transparency. It is more to do with visibility and impact, because Alma says that this is an agenda that local authorities have been taking forward for some time now. I think that Covid-19 has shown that there is scope to increase the pace and increase the scale of this type of activity. Therefore, if that does happen, we might expect to see greater impact and visibility in that work. It is sometimes felt that it is happening alongside rather than planning and delivery of services. I think that we would like to see this being a bit more from mainstream activity moving forward. Perhaps I have better evidence of what difference it is really making on the ground. I am sure that it is making a difference on the ground. The communities that are involved are probably saying that they are getting a lot out of this. It is probably improving the life chances and outcomes for individuals that are involved, but there is something about making that more visible and sharing the good practice that it feels like there is more to do. I hope that, in our role as committee, we can help to make this participatory budgeting benefits more visible, too. I would like to move on to Paul McClellan. Thank you, convener, and welcome chair and members of the committee today. This is roundabout as we recover economically from Covid councils' abilities to support recovery or key services such as economic development, planning and environmental health are fundamental in that objective. Can you comment on spend levels on needs across Scotland? Is there divergencies? What impact is that having on economic recovery? Thank you, Mr McClellan, for that question. It is fair to say that there will be differences across Scotland. Local councils will take different approaches to all of this work, depending on the needs, the range of businesses and the type of support that is required across their local area. The resources that they have to put into that will be quite different from one part of Scotland to another. In our local government overview report published last year—we published it at the end of June because we delayed it a wee bit with the onset of the pandemic—we did a service case study specifically on planning services, and we commented at that stage. The audit work for that is now nearly two years old, but we commented at that stage on the fact that planning had new responsibilities, but budgets had been reducing. There were important roles in terms of leadership and partnership working for planning officers and planning councils. There was a range of issues around workforce planning and encouraging new officers to come into planning and the importance of planning in terms of regeneration and the concepts around making good places for people to live in the country. If you want to know more about that, I would probably need to defer to my colleague Carol Calder, but that is an overview. In terms of economic development, we have seen some really interesting developments. The cabinet secretary referred to some of them earlier on today around community wealth building. I am quite familiar with some of that from the time that I spent previously in North Ayrshire Council, and I have kept an eye on how that is developing. That is definitely of interest to the commission, and one of the areas that the commission is interested in is a more inclusive approach to economic recovery and economic development, and one that has a local focus, but which also starts to look at some of the issues surrounding inequalities, because none of those things are unrelated. I hope that that gives you a flavour overall of where the commission is coming from, Mr McLean, but I will pass it to Anthony, and I do not know whether we might want to let Carol see a few words about planning as well. I think that it is fair to say that services such as planning and economic development and other services such as that have been cut under greater pressure over recent years because of the emphasis and the focus on protecting services such as education and health and social care. I think that we have doctors' pressure and budget reductions, so that is just to state me to fact from the analysis that we have done here the two. I think that we are very keen to focus on the role that planning and economic development can play in terms of Covid recovery and renewal when the commission is committed to featuring that in its future work programme. We have previously reported on things such as city deals that have been a very important bit of supporting economic growth. We have reported in the past on the role of local economic development departments and local authorities as well, but now feels like a good time for us to step back and think in this new context. Particularly if we think about the new national planning framework and the new challenges that Covid-19 is presenting, what roles does local authorities play so that we can expect that to feature in the accounts commission's work programme moving forward? I will hand over to Carol now, if that is okay. Thank you, Antony. We did some work on planning in 2019 and reported it in 2020, so it is a wee bit out of date and it is obviously pre-Covid. However, we had a discussion group with stakeholders across the sector about what the issues were in planning departments across Scotland. One of the fundamental things that came out were the reduction in budgets over the last few years. The focus on planning has moved to regulatory function, as opposed to the wider delivering outcomes of sustainable environments and sustainable economic growth. What I would say is that there is enormous appetite amongst those planners to be involved in that, so that the act itself and the new powers and the new refocusing of what planning is about is very much welcomed. However, there has been significant issues around resourcing and recruitment. There are only 100 planners per year, approximately, to graduate in many of those going to the private sector, and 35 per cent of the current workforce in local authorities are over the age of 50. There is a difficulty to get planners in, but there is a tremendous appetite to move from that focus on regulatory function of planning to that wider outcomes-based, community-empowered approach. It is good to hear that we are all encouraged by the idea that we move to the wider outcomes, community empowerment approach. I would like to move to Miles Briggs for the next question. Thank you, convener, and good morning to the whole panel from the Accounts Commission. Ms Calder touched on the question that I wanted to ask. It was specifically with regard to any analysis that you have conducted around local government workforce issues, and you have already outlined the challenge that planning departments across the country are seeing. I suppose that my key question that I wanted to ask was what assessment have you made pre-pandemic and post-pandemic about the workforce challenges facing local government? Thank you for that, Mr Briggs. Every best value report that we undertake, and as I said, we do one of those for a council on a five-year basis. We look at the workforce challenges and comment on the extent to which they have workforce plans in place. Our view is that, based on that research so far, more workforce planning needs to be undertaken. That was our view before we went into Covid-19. It is still the same that there is more work to be done. There are different challenges in different parts of the country, so you will go to some parts of the country and they will have workforce planning challenges around teachers, for example, and getting teaching resources, and you will go to another part of the country, and that will not be a specific concern in that part of the country. You will go to some places and you will find it very difficult to get environmental health officers or planning officers in the other parts of the country. That might be a little easier. It is quite different from one part of the country to another. What we do ask for is that councils look at what the needs are and start to plan out from that over a sort of medium-term basis. I am going to pause there. I do not know whether one of my colleagues feels that they would like to come in. I do not know whether that is something that one of the other can't name. I was just going to make the point that we have not done national analysis of workforce pressures across local government per se, but, as I almost said, it is something that we look at consistently as an individual. Social care is obviously an area that we know that there are potential pressures. We have also reported in the past about the difficulties at local authority experience because there is a competitive market around digital as well. It is one of the areas that we want to look at more carefully as we think about planning for recovery. When we have written reports before on workforce planning at Scottish Government level, I think that that has proved to be a useful exercise to identify opportunities and challenges, so it is something that we want to think about as we plan our work on planning for recovery and renewal. That is one for us to think about, I think. Thank you for that. Is it fair to say that there is a disconnect between the workforce that we need in local government and what our university and college sector are then producing? I was struck by the comments that Ms Calder made with regard to 100 planners, obviously qualifying for both public and private sector in Scotland and the workforce, 35 per cent of the workforce being over 50. Is that something that you have looked at in terms of what we actually need in the future? It seems to be that we, in the NHS as well, have not caught that national workforce planning right, even though we know that people are heading towards retirement. I think that those are helpful observations, Mr Briggs, about some of the issues that local government is facing, and the health service as well. One of the other things that occurred to me while Antony was updating you was that we also saw during the pandemic that council workforces were impacted specifically by the pandemic, either through large numbers of their staff having to shield so that they could not then work or indeed being impacted by the virus itself and becoming ill. Whatever is happening in a local authority area to their overall population is quite likely to be happening for that council in terms of its workforce planning as well and its current workforce, because councils recruit to a large extent from their local area. If you go to the island communities, for example, it will be pretty much 100 per cent from their local area, but even across parts of Scotland it is quite strongly that local authority area as well. We have not done that detailed work, as my colleague Antony said. We are planning to do more work. One of my colleagues, Blythe, has just reminded me to say that we do have it in scope for our local government overview, which will be produced next year in 2022, so it is something that is coming forward. However, we encourage councils always to look at medium-term workforce planning as a minimum. Thank you for that. I would like to go to Willie Coffey. Thank you, convener, and good morning, Elma. I wanted to ask you your thoughts on the work that you planned to do in following the pandemic pound and just what the scope of that work may be. In particular, will you look at the systems and processes that we used to distribute support to businesses, communities and individuals and so on? I am sure that other members around the table during the pandemic heard stories about how difficult it was for a number of organisations and businesses to access support. Will you look at that? Was it flexible enough to get it right? Did everyone who needed help get help? I would be interested in what your thoughts are about that work that you planned to take forward. Thank you very much for that question, Mr Coffey. We are still doing some work on or determining exactly what all that work will look like, but one of the key areas that we will be looking at will be the way in which funding was distributed. We have already had a number of discussions as a commission about the distribution of grants to businesses and local groups and how that works in practice. We will be having a look at how that has developed, but we will also be looking at how councils receive their money. I do not know whether my colleague Brian Howard wants to say a few words about that. Yes, thank you very much. As well as coming to this committee with this report, I am also an auditor to five councils and five IGBs across Scotland. Part of our local audit work this year has been responding to the differences that happened this year during Covid. As part of that normal annual audit work, we have been looking at the controls, for example, that were in place, put in place, existed over the additional funds that were administered by councils, a lot of the business grants money that went out of councils to individual businesses. We have been looking at controls over the disbursement of funds. We also have, we participate in the national fraud initiative, and the additional fund flows under the grants that have been made for Covid are part of that. We are also aware of the elements within that grants, which might present additional fraud risk and are looking at the detail of some of that. Antony, you have got a few words that you can add as well, a few thoughts that you can add to this as well. Thank you for the question, Mr Coffey. It is a very important question. There has also been significant amounts of funding allocated to support Covid-19 response and recovery work, not just in local government but in health and enterprise agencies as well. Our strategy in this area is not too faceted. We are gathering information to understand the flows of funding that came from the UK Government to the Scottish Government. We are then analysing how those funding flows went from the Scottish Government to the various agencies and to local authorities as well. That is one specific piece of work that we will be doing and preparing that report next spring. In advance of that, we have been doing periodic updates of how the money has developed over time. The next Covid-19 tracker will be published later in September, and that will update the Scottish Parliament on the way in which the funding has shifted in year. Obviously, the Scottish Government has had to make quite important decisions at different points of the year, outside the normal budget cycle. That will be an important piece of work for us to do. Brian mentioned that this will be covered in next year's local government overview. We will also be covering that in NHS overview reporting as well as another specific piece of work, which I think is probably of interest to your question, which is looking at the way in which the Scottish Government supported the economic response to the Covid-19 pandemic, which will include coverage of how the business support grants were allocated and spent. That will probably involve doing some analysis of variability of the use of those business support grants in different local authority areas. At the heart of that, we want to learn lessons. This was an exceptional set of circumstances, but if there are things that we can learn about, how we might do this better or differently in future times, we will be trying to do that as part of the audit work. I hope that that is helpful, in addition to what my colleagues have said. Of course, thank you, L3, for that response. Finally, from me back to Elma. Elma, you said in your own comments that we do not want to return to the way things were. Everybody says that we are hearing that right across the board. How realistic is that hope? Do you think that local government and other agencies do not return to the way things were and that we embrace some of the new opportunities that came our way, particularly with the digital technology, to really change the way we do things in Scotland in the future? Thank you, Mr Coffey. I am quite optimistic that that will happen. I am optimistic because I see that, from our discussions and our work with local government, we can see the benefits and the outcomes that local people have achieved as a result of a different way of working. We can also see that, in terms of councils' recovery plans and renewal plans, they are looking at how they transform building on the work that they have already done. The recovery plans are now part and parcel of their transformation plans, so they are trying to build on what they have done better as a result of the pandemic. It sounds awful to talk about anything being better for something as horrendous as the pandemic, but there are some things that people have done that are improved and they want to build on that. There is a real issue of leadership, both political leadership and officer leadership, both in councils and at the Parliament, and for that encouraging environment to be developed. One of the things that I have seen through my career—there will be a bit of reflection here from me, as well as from what I have seen since I have been working with the Accounts Commission on Audit Scotland—is that it is sometimes hard for councils to do new things, because the risk, if they get it wrong, can be quite substantial. Sometimes we are not very kind to councils when they do not quite get things right. There is something around that leadership and holding true to doing things in a different way. We are learning from mistakes and recovering quickly on the back of that. Certainly, in the Accounts Commission on Audit Scotland, we are also very, very keen that we want to see councils trying to do the right things. We are open to the potential for making mistakes, learning and moving on. If we can see that that is happening, that is something that we would be very encouraging of. I would like to pick up on the issues that are being faced by integration joint boards, and in particular the financial pressures. I believe that the majority of IJB boards are struggling to achieve breakeven, and they are also facing issues in relation to instability of leadership. Is there more information on the commission's assessment of the funding, financial planning and performance of integration joint boards? Thank you very much, Ms Gallagher. That is another great question. We have reported in successive years on the financial difficulties that are being faced by IJBs and the leadership challenges. We have not seen a change in that over the pandemic, but they continue to have financial challenges. When I say leadership challenges, that is not to say that they are not trying to show leadership. It is really about the very specific issues around getting chief officers in place and actually for them to stay with that IJB over a period of time to allow them to get a bit of traction and direction for the IJBs. What I was going to bring up is that the commission is about to start a significant piece of work, which will commence next autumn with when we go into a new five-year audit period. Our current audit period has been six years because we have extended it by a year because of the pandemic, but we will start a new five-year audit period next year. As part of that, we intend to start to do best value audit reports on IJBs, and we have already started to pilot some of that work with IJBs. Again, that is about trying to be supportive in terms of improvement, but also highlighting the key issues that need to be addressed. I would hope that those would be matters that we could bring to some of the other committees within the Parliament, but we can bring some of those issues to your committee as well, because they cannot really be separated from local government and housing matters in terms of what IJBs are doing. We will start that work next year formally. We have also undertaken quite a bit of work in working with Health Improvement Scotland to have a role in that as well, and we are trying to take a very joined-up approach to our auditing of IJBs so that it is a very much holistic picture that is going to come forward. I think that that summarises the position from my perspective. Anthony, you have been leading a lot of this work along with this. I do not know if you want to add anything to what I have said. I think that the context for this is quite important. If we think about the recent freely report and the thinking that is going on around how we might need to transform adult social care and other aspects of social. For me, it is unknown demographic pressures that IJBs have faced sometimes. We have reported about the challenges that IJBs face financially, but there is also something for me that reaches about the challenges that they face in terms of managing change with NHS territorial boards and local authorities. That is a difficult job. You are trying to manage change across a number of organisations. The levers that IJBs have available to themselves are, to an extent, constrained by the legislation. I think that there are some quite important questions as we look to the future about how we find a way of working that allows the outcomes to be improved in the way that the freely report highlighted, but also addresses the long-term financial pressures that those bodies face. As Elma said, when we talk about leadership challenges, I do not think that we are criticising the leadership of individual IJBs. It is just that we have seen quite a lot of churn and turnover at IJB chief officer level. It is a difficult job. This is very much on our radar, as Elma said, and we will look forward to reporting that to the committee and others on the outcomes of our work. I have a question. Many councils have declared climate emergencies and have climate officers or teams in place. I wondered whether the commission intends to assess the extent to which councils are contributing to Scotland's net zero ambitions. That is the work that we intend to be taking forward. It is something that we have been very interested in. We have highlighted it as part of our best value audit report whenever we do one of those on a council. The most recent one from Aberdeen highlighted some of the work that we have been doing there and Aberdeenshire last year, some of the innovative work that we have been doing there. We do that to try and let other councils see what else is going on. We are planning to do some climate change work certainly before we get to November, so we would hope to have a short publication that we can bring out just a wee bit later this year. I do not know whether any one of the team wants to say anything. Thank you very much. That is a very timely question. I think that we probably have to acknowledge that we have come a little bit late to the climate change—I was going to say party. Party is not the right term, but the climate change emergency and the policy area. It is not an area that has featured heavily in our audit work in the past, apart from what we have done best value what it is and individual local authorities. We are very clear that this is one of the biggest issues facing the world at the moment and it has to be given significant prominence and coverage in our audit work. As I almost said, we had a round table recently where we have brought together a range of stakeholders from community groups, academics, the climate change committee from the UK to talk about what the nature of the climate change challenges are facing Scotland and also to ask them how it can help. We think that there is a really important role for public audit to highlight the performance of individual public bodies in terms of discharging their climate change duties, promoting transparent recording around climate change spending and CO2 emissions within public bodies. We also think that there is probably scope for us to do a bit of work with other parties to highlight what good practice we are seeing emerging. You can expect this to feature quite heavily in our work programme in the coming months and years. The document that Elma mentioned a few moments ago will be at a first, if you like, a step for us to say that those are the likely themes of our work. We want to spend a bit more time putting a bit more flesh on the bones of where we think we can really add most value. The formal audit work probably won't start until early in 2022, but it's very much a part of our thinking at the moment. If I might just say a little bit more, we think that there's probably scope to do this and at the national level as well, because I think that we audit all the public bodies in Scotland. For us, there's something about using that audit work at local and at national level to maximise the value of the audit work that we do in this area, but it is going to be increasingly embedded in all the work that we do. Thank you for that response. It's good to hear that you are planning to take on the work. I'm certainly talking to various climate officers in councils across the country. I think that they feel like they need some feedback on what they're doing and the impact that they're having, so I think that it would be a very important piece to do and also hard to hear the idea of a national scope as well. We've got time for one more question, and I'm going to give that to Miles Briggs. Thank you, convener. I wanted to ask what the commission's understanding is with regards to the local governance review and how that's progressing and what views you had with regard to the fiscal framework that would be developed between the Scottish Government and local governments and how that would actually work? Thank you very much, Mr Briggs. I think that the local governance review in terms of how it works with local government as a matter for local government, I think that our view would be that if it's encouraging better outcomes for communities, for individuals and communities, that would be the ideal position. That would always be where we would want to see the results coming, if you like. I would like to say a couple of words about the fiscal framework, because the Accounts Commission, before I was even involved in working with the Accounts Commission under Scotland, has been saying consistently that the funding and the financial position for local government has not been great. They have had a significant period of time where they had reductions in funding, and it's only in the past year to two years where they have increases. Last year, most of those increases were one-offs. The large proportion were one-offs to deal with the pandemic. I'm not here to argue a case for COSLA, absolutely not, but COSLA has put some proposals into the Government in terms of what a fiscal framework might look like. I think that there needs to be more serious discussion about trying to improve the fiscal position, because councils' budgeting from year to year, bidding for funds, etc, just detracts from the day job of getting on with delivering better outcomes for communities and tackling some of the very significant inequalities that we have already discussed in this session today with the committee. They have raised issues around council tax and having more local flexibility around council tax and having more discretionary taxation powers. They also have a degree of certainty around their funding settlement. I thought that the cabinet secretary's comments on that were quite interesting earlier on about the settlement position. My view and the view of the commission is that, because of what happens between Scottish Government and UK Government, it happens in a certain way. That doesn't mean that that needs to be translated down to the relationship between local government and Scottish Government as well. Certainly with my history and local government, we have had a long, long time talking about a different kind of financial model or fiscal settlement for local government, and we need to collectively do better to reach some agreement. Thank you very much for all your answers to the questions. It has been very helpful in this evidence session this morning to hear your views. We look forward to working with you over the course of the session. The committee has agreed to consider agenda items 4 and 5 in private, and as such the committee will now move into private for the remainder of the meeting, and I close this public part of the meeting.