 Welcome to the 10th meeting in 2015 of the Finance Committee of the Scottish Parliament. Can I please remind everyone present to turn off mobile phones, electronic devices, et cetera? We have received apologies from Mark McDonald, and therefore welcome once again his substitute Bob Doris to the meeting. Welcome, Bob. Our first item of business today is to decide whether items 4 and 5 are private. Are members agreed? Yes. Members have indicated their agreement. Our second item of business today is to take evidence as part of our post-legislative scrutiny of the local government finance, unoccupied properties, et cetera, Scotland Bill's financial memorandum. Therefore, I would like to welcome to the meeting, due to the aura of our Gail and Bute Council and Brian Murison of Highland Council. Members have copies of all written submissions received, along with the Scottish Parliament Information Centre briefing, so he will go straight to questions from the committee. The normal procedure in the committee is that I will start with some opening questions and then we will expand the session out to colleagues around the table. The first question is not on your own submissions, although I will go into your submissions and when I ask a question, either of you or both of you can feel free to ask, it is with regard to speculative activity and or regeneration. With the exception of Falkirk, all local authorities responded to the evidence said they saw no evidence of an impact on speculative or regeneration activity. I wonder if you want to comment on that. For our own council—that is our Gail and Bute Council—we have not found any evidence of that, but it has been difficult to track any of that directly. We have a TIF area in our open area that is just starting up and we are expecting to have regeneration activity grouped around that, but it is too early a stage to have anything that is noticeable to the effect of the empty rates changes. Is that something that you would agree with? Yes, we have areas that we are aware of regeneration, but there is no correlation between that and the empty properties. In terms of the Gail and Bute submission, you have said that collection rates have been adversely affected. You have said that collection accounts with double charge at the end of Jan and that only 79 per cent can be with overall collection rates at that time of 93.66 per cent. Can you tell us why you think that that might be the case? We certainly find a continuing issue with collection on the accounts that have the double council tax charge on them at the end of February. The collection rate on those particular accounts had not changed from that. It was still around the 80 per cent mark, whereas our overall collections were up at the 96.5 per cent by that stage. These are particular properties that have been empty for a long time. In many cases, owners or landlords are absent and are not living in the locality. We know from the addresses that they are in particular areas where it is difficult. There is a surplus of property there and the properties do not necessarily have a good resale value in the marketplace. They are not easy to sell. It is not really a surprise to us that the collection is down on those particular properties. It is affecting our overall collection rate by about 0.4 per cent. In terms of the cost of pursuing those individuals, what is the impact on the council of that? There is no direct impact on the council on the cost of pursuing them. That is because we have arrangements that are set up with sheriff officers that are commission-based. It means that unless we make a collection on those accounts, we are not paying out any money, so there is no direct impact on the council's financials, except for the loss of the council tax income. I assume that the figures for £13.14 are not complete. I wonder if you can clarify that, because you said that the collection rate in £12.13 in terms of empty properties in second homes, you are talking about 98.92 per cent, 12.13 to 52.71 per cent. That seems to be a dramatic difference. Yes. The end of February anticipated was 88.21 per cent. Okay. Did you expect it to be over close to the 90 per cent? We have only increased it by 10 per cent, so we are only seeing a 0.1 per cent reduction, so we would anticipate the figures to be on. We have nothing to suggest that it would be anything less than what it has been for previous years. One of the things that you said in your submission was that the emerging issue is a marginal increase in pop-up-type shops, which might be a tribute to the landlords seeking out short-term tenants, possibly rent-free to avoid 90 per cent EPR. Is this something that you expect to see increase? You said that it was marginal, but is it something that the council is concerned about? Yes, it is. It is marginal at the moment, as we are talking about maybe less than 10 properties, but they are clustered in obviously the high street, for example in Inverness particularly, where we saw over the Christmas period an influx of Christmas bizarre-type shops that have moved on to become independent mobile trading shops. They are there for about three months, then disappear. Without saying it, the same owners have just changed the type of shop or the same occupiers, and we are seeing a pattern emerging. Is the way in which you feel that that matter could be addressed? What we are doing is moving on to utilising the legislation. We have written to the landlords in particular that own the properties, and we are suggesting that we will charge them as the leases will be under the one year. Is that girl in but seeing anything of that nature? No, I think that our economy is not as buoyant as in Inverness. Unfortunately, we have not actually had pop-up shops, we just have had empty properties. I have noticed that the numbers of empty properties for non-diabetic rates have been reducing year on year. It is not a growing problem, it is a slightly lessening problem. Just one other point before I open up the session to colleagues. Long-term empty homes are being actively marketed for seller exempt from a council tax surcharge, but some local authorities have expressed concerns over how that has been monitored and the cost implications. Do you have any concerns on that particular issue? It is correct that, if an empty home has been actively marketed for seller or let, you only implement the double charge after 24 months, as opposed to after the 12 months. In terms of validating whether a property is being actively marketed for seller or let, we have taken a straightforward approach to that, making sure that we have copies of the home report and that it is being advertised on a website or through actual physical adverts and newspapers and so on. We have had one or two cases where people have set claim that they have been advertised, both on a notice in a village shop, and that has been the extent of it. We have not agreed that that was sufficient. We have literally had one case of that. We have not actually found it to be a difficult matter, and we have not gone to the extent of sending out empty homes officers, specifically to inspect the properties that are discussed with the tenants and owners. Although our empty homes officer is in regular contact with empty home owners who are experiencing difficulty in selling the properties and she is working closely with them. We have only implemented the 100 per cent surcharge from 1 April this year, so we have identified 72 properties that have come into the category, and we have written to them to find out what their attentions are, but we will then continue to monitor the situation on an on-going basis. I will open out the session to ask questions that will be Gavin to be followed by John. When the legislation was proposed, there appeared to me to be two policy aims. One was to reduce the number of empty properties, and the second was to raise revenue. If we look at non-domestic rates only first, would it be fair to say that it has, from your council's point of view, raised revenue? It is correct that it has raised revenue, because we can measure specifically the increase that we have charged in addition to what we would otherwise have charged. That revenue does not come directly to the council. Of course, it goes into the national pool, but we have also seen a reduction in the number of empty properties over the period as well, so I think that it has been successful in both those fronts. Yes, I would just have to say it. Although it is not to a greater extent, but it certainly has that impact. It has raised revenue. Stricing with non-domestic rates, in terms of the number of empty properties, what sort of impact has it had? Is there a definite causal link between the legislation and the reduction in empty properties, as opposed to, say, the economy more widely in your council area? I can give you the numbers. In 2013-14, we had 157 empty properties. In 2014-15, up to just a couple of weeks ago, we had 119. That was quite a significant reduction. The amount of the additional charge has not changed that much. It went from 184,000 to 161,000. However, I cannot say that there is a definite causal link. The economy in our area has been improving over that period, and therefore it is difficult to be sure. Likewise, we have had a reduction of 35 properties overall, but, as I say, again, we agree that there is no apparent link. We know of areas in which there has been regeneration, and we also know of the issue that I have already mentioned with the high streets. One of the initiatives that were brought in at the same time was called fresh start. If you brought an empty property back into use, there would be a reduction in rates. What impact has fresh start had on your council area? It has been minimal in our council area. I am afraid that it has not brought the figures with me, but it has been just a handful of properties. You do not have the figures with you, but do you have them? Is it something that you could supply to the committee? Easily. That would be quite helpful. The convener asked you about speculative and regeneration activity. I think that both of you said that you did not notice anything, but I was interested in using it. It is quite difficult to track, which I suspect that it probably is. How has your council attempted to track it, or is your sort of conclusion that there has not been any difference based on gut feel or hunch, or is there something that you are specifically tracking? Our economic development unit tracks start-up businesses through business gateway, and that leads through to additional occupation of rateable properties, but we do not really track the reasons why people go into those properties in any systematic way. That is absolutely the same. We live with our business gateway people, but we do not monitor individual properties in detail. In relation to the cost of public sector bodies in terms of the changes, Argyll and Bute have said £80,000, but can I just be clear? Is that £80,000 over the two years, as opposed to £80,000 per annum? That is correct. That was over the two years. In 2013-14, it was just under £44,000, and in 2014-15, it was just under £37,000, so there was a reduction between the two years. In terms of percentage, it was 24 per cent in both years of the total extra cost through the change in the charging mechanism. Highland, you have said in your submission that it is £73,000, but is that over two years or is that per annum? No, that is over the two years, so it equates to 21 properties that we have. Just to be clear, in terms of working out the cost on public sector bodies, those, the £80,000 and the £73,000, that is purely for your council or associated bodies, as opposed to all public sector bodies located in your council area. For Argyll and Bute, that includes all the public sector bodies that we are able to identify. In fact, it was just three, it was Hans and Ion's Enterprise, the NHS and Argyll and Bute Council. For Argyll and Bute, it includes every public sector one that you can identify. Likewise, it includes police. If Highland and Ion's Enterprise, for example, had an empty property, that would be included in here. If we go on to council tax now, or domestic properties, as opposed to NDR, convener, has most of the questions that I wanted to ask. I just wanted to come back to the collection rate, just to make sure that I have got this right. I think that you both suggested that the collection rate had been adversely affected, at least marginally. In terms of the actual revenue brought in, the overall revenue has increased, but in pure percentage terms the actual rate has dropped by a few basis points. That is absolutely correct. In absolute terms, we have collected over £0.5 million extra income that we would not otherwise have done, because we have collected 80 per cent of the additional double charge. Obviously, we have only increased by 10 per cent, but we have still taken increased income in the region of £210,000. I should clarify that my figures refer only to the double charge, not to the reduction in discount. We reduced the discount back in 2005 at the earliest possible opportunity, and there was about £1.7 million per annum additional income through that each year. Our collection rate was not impacted through that activity at all, it was only when we introduced the double charge that we found an impact on the collections. The last question is quite technical, but I want to get to the bottom of the collection rate issue. Has the collection rate dropped marginally because a few more people are saying that the charge is outrageous and we are not paying it, or has the collection rate reduced because it is the same properties that they are not paying, but because they are due to pay more it appears that it has not been collected, even though it is exactly the same properties? Has there been an increase in the number of properties that people are refusing to pay? I am not certain on that, because we had not tracked those particular properties separately in previous years. I suspect that those properties were always bad payers, and of course the doubling of the charge doubles the problem. We know that at least 0.2 per cent has been added, but it may be as much as 0.4 per cent. Are you personally aware of any people saying that we are not paying now because it is double the charge? Are you aware of any? We have had a number of appeals against the imposition of the double charge on the grounds that people feel that it is unfair generally, rather than not against the legislation. Some of those have gone as far as the valuation appeals committee. In fact, we lost one because the committee felt that the policy was too harsh, even though it complied exactly with the legislation and the way that the council had chosen to implement it. Likewise, although we have not monitored individual properties, the feeling would be that it would be just an increase from the regular non-payers. We have only recently issued the letters to say that the 100 per cent surcharge would start from 1 April, which we got very little of no response. It was only when we issued the annual bills that we started to see an influx of appeals. I think that to date we have had 12, which we are dealing with, obviously. I am grateful for that. As I understand it, on council tax, your two councils have taken a slightly different approach in timing a Gaelan Bute. It says that it implements a policy to double the charge of council tax on unoccupied properties from 1 April 2014 and Hyland. It says that it will remove the 10 per cent discount and increase the charge to 200 per cent from 1 April 2015. Can you give us a little background as to the thinking behind that? I realise that all the other councils have all done slightly different things as well. For our Gaelan Bute, we were keen to implement the change as soon as was practically possible, because our councillors had been lobbying for the change to be made in the first place. However, we took a year from the change in the definition of the second home so that we could update our records to make sure that we had precise numbers that met the new classification of the second home and that we could give good advance warning to the people who were likely to be affected. Early in 2013-14, we took the decision that we were likely to implement it as soon as possible. We took the actual decision in August that year, and then we spent a lot of time reviewing the accuracy of the council tax records. First of all, as I said, we reviewed the second homes to make sure that they met the new classification, and then we reviewed other classifications of properties, particularly ones where the subject address and the contact address were different, but they hadn't declared that they were empty in any way to us. They hadn't had an under occupancy or a non-occupancy discount at all, but we suspected that there was nobody resident there, so we reviewed all those properties as well. By November of the year, we had a definitive list of the ones who were likely to be affected by bringing in the double council tax charge, so we were able to contact each of them individually to give them the advance warning and to make sure that they were able to tell us in good time whether they met the requirements of the actively marketing for sale or let before the double council tax charge came in on that following 1 April 2014. We took that whole year to do preparatory work and prepare people and to make sure that they were given the contact details of the council's empty homes officer so that they could work with them to remove their properties as many as possible from the catchment of the double charge. Over that time period, we saw quite a change in classifications of the numbers of the properties. The council also put a considerable amount of money aside to assist empty homeowners both through loans and grants. We put £3 million from the strategic housing fund into the pot to provide some sort of carrot to them to do something positive with their properties. That was a very important part because the policy implementation in our area was really about bringing homes back into use, not nearly so much about raising additional money. That is a welcome by-product, but it is a by-product. We have positioned the policy in terms of reducing the number of empty homes and making more affordable properties available to local residents and bringing them back into use. Do you think that Argyllyn but is unique in Scotland or at the high end of having that problem? We have a very large number of second and long-term empty homes together. Overall, it is over 10 per cent of our total properties. We are unique in having that level. Highland is probably next to us in percentage terms. That is huge and has a big impact on our communities. That is a big issue for us. The theme from what I get from you is that you wanted to do it as soon as possible, but you gave people sufficient time to work out the practicalities. Can you tell us about Highland? It was very impacted, probably exactly the same extent that we extended it over the two years. The idea was to introduce the policy from 13 to bring the discount down. The difficulty that both councils have is the rural, the extensive rural areas. It is identifying whether they are second homes, whether they are long-term empties and just making sure that the databases are correct and affording people the opportunity that we have worked over. Obviously, when we brought the policy back, it was then extended to 100 per cent from this year. Do you think that we are looking at this too soon? It seems to me that you are both in the process and other councils are also in the process of changing over a number of years. When will we get a better picture and things will settle down? It is very hard to look at one year on its own. Should we go back to it in maybe five years? I certainly think that it is too early for us to gauge, because we will obviously only see the impact of 100 per cent from this on-going year. The impact for us to date has been minimal, but I think that this change will allow us to reflect possibly a few more years before we can see the full extent. I think that the position for ourselves is now much more stable. I am expecting that year on year going forward to see a slight reduction in the numbers of long-term empty homes as more and more are brought back into use. I am probably anticipating about a 10 per cent reduction year on year, but that is still an educated guess based on the number of properties our empty homes officer typically brings back into use, which is around 60 each year. Some of the registered social landlords have been a bit unhappy about the changes. Can you tell us how unhappy? We have had a housing stock transfer, so the council does not own any council houses anymore. Our largest registered social landlord who received the bulk of those houses, the additional cost to them has been £20,000 for this first financial year. It probably will go up from that, because it has quite a large number of properties that are currently void, but they are finding particularly difficult to let in particular areas. I am interested in that. In my constituency, we have quite a lot of housing associations, and some are very good at relating and some are not, but I realise that it is not just down to the housing association, but also down to where the properties are and things. Are there particular problems in your area about some houses, more remote ones perhaps? Yes, and it is very much down to particular areas, whether there is an oversupply in the market and private sector landlords have been bringing down their rental prices. Normally, they are much higher than the social land rented sector, but we have noticed that they are particularly hard to let areas. Some of them have been bringing them down to nil rents just to get somebody in them to pay the council tax. That has been the exception, but it has been heavily reported in our local press. However, we have two areas, such as the parts of Campbelltown and the parts of Rossie, which are particularly problematic. Would that be true in Highland as well, or are you short of housing everywhere? Well, there are certain areas. The correlations are exactly the same. So you would have some areas where the landlord is having problems letting? Yes. I think that just the final thing that I wanted to ask about was if you have got any evidence of avoidance and people doing artificial things, you hinted at that when it is nil rent just to get the council tax paid. The suggestion was certainly in some business areas that a small business was being given much more property than they actually wanted, just so that the landlord could say that it was not empty or vacant. Is that an unusual situation, or do you think that there are signs of that happening? We have not seen much evidence in the non-domestic area, but in the domestic area I am concerned that there is quite a lot of potential to say that a property is a second home and for it not to be long-term empty. Because of the rural nature, we have not employed a large number of officers to go out and do inspections of those. We have taken what people have told us as valid, but certainly anecdotally, I know of some instances where properties are boarded up and yet we have been told that they are second homes, and it just cannot be the case. That is an area for going forward, where we are going to put some more resource into. Initially, we wanted to take a fairly soft approach on that, but we know that there is avoidance. As I said, we have not moved to the 100 per cent surcharge yet, so we have not seen any particular problem with the council tax. The difficulty, as we reported, was in the NDR. We are starting to see the pattern whereby shops are occupied for three or four months, then move out and a new shop will kick in. There are suggestions that they are doing it rent-free, and it really is just to avoid the 90 per cent charge. The patterns are forming where it is the same properties. Is it difficult for you to pin down who is liable or who is the owner? The nature of non-domestic rates charging is that by the time we get it into a recovery situation, the owner that the occupier has moved on, and it is really tracing them then. That is great. Thank you very much. Richard Lylew was going to ask a question on that specific issue, but he is not going to ask it, because he has just answered it in effect. I appear to have no other questions from colleagues around the table. Is there any other point that she would like to make to the committee? For myself, thank you. No, okay. I would like to thank you very much for the evidence that you have given to the committee this morning. Thank you. I suspend for five minutes to get the new, the next little witnesses in. I shall reconvene this session. Our next item of business today is the evidence from Scottish Government officials on the human trafficking and exploitation of Scotland Bill's financial memorandum. I therefore like to welcome to the meeting Neil Renwick, Ann Oxley and Cat Duggan. Good morning to you this morning. Members have copies of the financial memorandum, as well as all written evidence received. We will go straight to questions and, of course, you will know that I will ask some opening questions in a look at the session to colleagues around the table. First thing that I would ask about is a consultation. I understand that Aberdeenshire Council has suggested that the consultation window is relatively short. Was there a specific reason for that? There wasn't formal consultation on the bill. The position that we took as set it in the policy memorandum is that there had been extensive dialogue and a number of reports undertaken looking at the issue of human trafficking, both for adults and victims, and that we drew heavily on that work, both by the Equality and Human Rights Commission, the Commission for Children and Young People and by the committee of this Parliament as well. We took account of that in reflecting on the detail of the bill. I think that one of the things that everyone seems to agree, it's a fair point, but at the same time it must be frustrating from your perspective as with regard to the comment and overall accuracy of the projected costs, because it is obviously a criminal activity, it's covert. If it's successful, costs could go up, if it's not successful, it might not go up because you don't arrest people, people aren't tried, et cetera, et cetera. That all being said, there's quite a wide margin in terms of the projected costs. Is that because you've tried to take the absolute minimum that you think this bill costs and the absolute maximum, or do you think that the costs could go beyond the parameters that have been suggested in the financial memorandum? We acknowledge and we acknowledge in the financial memorandum and acknowledge today that this is a hugely difficult thing to make estimates about. It's a hidden crime by its very nature. We know that there are people who are currently identified and are referred through the national referral mechanism and are confirmed as trafficking victims. We know from agencies that there are people that they are in contact with who, as adults, don't wish to engage with that process, but there's a strong belief that they are trafficking victims and we can be reasonably confident that there are far larger numbers of people who we don't identify and don't come into contact with who may well be trafficking victims but may be receiving support in other ways in due course. Just with the hidden nature of the crime, there is no way of confirming an absolute figure for that. We've looked at the national crime agency, which does a strategic assessment of the levels of trafficking across the UK or an estimate drawing on not just the number of referrals but intelligence information and advice from agencies. Their estimate across the UK is that the true number of victims is something like two to three times the numbers that are referred through the national referral mechanism and we've used that as our best estimate of what the numbers would be in Scotland. The significant grant support for the victims of trafficking, and I think that that's acknowledged, but a number of local authorities in North Ayrshire Council, my own area, South Lanarkshire Council also have talked about subsequent additional pressures going on to social work, for example. North Ayrshire Council said that additional pressures may occur within social work assessments associated with investigations or prosecutions. South Lanarkshire Council have also talked about the impact, for example, on social work, education and housing. I'm just wondering if you feel that the financial memorandum is really taking enough of a long-term view on the potential impact of local authorities that the bill may have. We recognise that the way in which the current arrangements already work for people is that where someone is identified as a potential victim of human trafficking, they have a right to a period of support to allow them to adjust from their experience of trafficking and take decisions about what their long-term needs and life choices will be and where the Scottish Government currently provides funding for that period of immediate support. At the moment that was set at a minimum of 45 days, that was increased from the earlier level, and we fund that for adults through direct grant funding from the Scottish Government. Clearly once people move beyond that period, part of the function of that is to allow them to take decisions about their long-term future and ensure that they can access into mainstream services just as anyone else can access into mainstream services. It's important to note that a significant majority of the people who are identified as victims of trafficking come from out with the European community and are therefore subject to asylum and immigration arrangements and therefore would be subject to support arrangements organised by the UK Government, including support arrangements that are funded to local authorities. The vast majority of people who are currently identified as trafficking victims will get support in that route. There are separate arrangements in terms of children, which Cat can describe. The situation in relation to children is somewhat different because local authorities are already under a duty to provide services to children of this nature under the Children's Scotland Act 1995. We do not expect that there will be more trafficked children in Scotland because of this act. We do think that there are a lot of children who are accessing services currently who may not have been identified as being trafficked, but they will still be receiving and unreceipt of services for a different form of abuse. We do believe that the awareness and training that will come as a result of this act means that front-line services will be better able to identify those children as being trafficked and give them perhaps a different form of advice and counselling. North East recounts have talked about the fact that they are already doing training to recognise victims of trafficking and exploitation. They do not believe that that will have a financial burden on them. In relation to the Scottish Court service, they have concerns about the one-off cost of £12,000 to amend the criminal case management system to allow it to record statutory aggravators for offences connected with human trafficking. However, they also curiously—I find it curious that they said that—and I quote, if responsibility was to lie with the SES for feeded aircraft and ships, then we would require to procure a service that would provide for the transport storage and disposal of these items. Is it likely that there will be any four-feeted vessels and aircraft and ships and all that? Is that something that you do not think is likely to happen? Or, if it was, how would that matter be addressed? The bill allows for additional powers. It is important to separate out the two elements to this. There is one around the immediate seizure of vehicles, ships and small aircraft. The bill will allow the police to undertake so that they can immediately stop the risk of further trafficking happening. There are separate provisions under existing proceeds of crime legislation that allow for the seizure of vehicles and aircraft and so on, but that is under existing legislation that happens already. We are not expecting huge numbers of additional seizures in that way, but there are existing arrangements to cover that. I am going to let colleagues in a minute or two. I have just one further point. Between 2012 and 2013, the number of potential identified victims across the UK identified with the ANC strategic assessment and NRM increased by 22 per cent and 41 per cent respectively, but the bill is looking at about 10 per cent of an increased year-on-year. Is there any reason why that 10 per cent figure has been chosen, given that the numbers seem to be increasing? We have been looking at both the NCA figures and the national referral mechanism figures for Scotland. The NCA figures are only the most recent figures that provide separate information for Scotland, whereas the national referral mechanisms have a run-up respect to 2012. The numbers that we see for the national referral mechanism have gone up from 96 in 2012 to 99 in 2013 to 111 in 2014. That is with the input of Police Scotland putting a lot of effort into this area, undertaking more training of officers and also the NHS and others training being provided there into local government. We are seeing an increase in the numbers of people being referred, but it is not a huge step increase. It is a steady increase for the NCA. The figures for Scotland were slightly unusual. For the rest of the UK, we saw higher estimates compared to the NRM, once intelligence and other factors were drawn. For Scotland, it came back lower once we took out people who were not confirmed as victims and duplicate cases. We are trying to understand why that was the case. However, on the basis of the NRM figures, we are confident that the numbers will continue to go up over the next few years. We think that 10 per cent is a reasonable estimate based on the input that we will put in. We are not expecting that to have an immediate result in increased identification. You do not think that there will be a deterrent effect of the legislation if there is going to be an increase a year on year? The hope is, in the long run, that we will have a deterrent effect. If I was being honest, I suspect that there is still quite a significant pull of people who are not identifying that we still need to identify before we can be confident that we are seeing a genuine turn-down in the numbers of people being trafficked. You are absolutely right that that would certainly be the aim is to deter people who are trafficking. A number of the measures in the bill trying to achieve that, such as the risk orders and control orders that are in there. Thank you. I am very much fat. Sorry, I cannot be the only one who is going to add something. It is just that Neil looked at you as if you were. Okay, I am going to open the session now to colleagues. The first person to ask a question will be John to be followed by Gavin. Thanks, convener. Just to press you a little further on what local authorities might face, I am thinking that, A, if the legislation is going to be tighter, perhaps we are going to find more victims, young victims, who the council would presumably then have to take into care. That comes at quite a cost. Presumably, if we are imprisoning more adults, they have their own children who would then perhaps have to be taken into care. I am just wondering if there is not a possibility that we have a considerable number of younger people who need to be taken into care. I will answer the question on the prisons and the numbers of people who cannot answer them. In reality, what actually happens is that there are 22 children and young people who were referred for the national referral mechanism in 2013. The numbers for 2014 are 25 children, even including the national crime agency, who has said that it is two to three times more than that. Children who anecdotally have come back, who have done quite a lot of work with local authorities on this and health boards as well. They have said that a lot of children have come forward who they present as being victims of one form of abuse or as being vulnerable and in need of care anyway, and they would have been taken into care and perhaps been seen as a looked after child, and it is only later through the process that they become known as victims of trafficking. I think that that will be exactly the same situation that we see here, so there won't be a massive upturn. There won't be lots of children and young people who are coming in from nowhere that are presenting as victims of trafficking just to better understand that the children who are in the system may have been trafficked before. That is the point that I was really wondering about. We are saying that we think that we are in touch with all the kids and, as you say, some of them we find out more about them as we go through the system. I was imagining, but I have not been involved in the bill itself really, but there are kids out there that we are not aware of that are in houses or whatever and that by tightening up the legislation these kids might become apparent, but that is not really the expectation. There may be some, but I think that it would be a small number that we would be talking about in that. I think that we go back to the first point at which everybody has made that it is a very complex issue and a lot of it is hidden, so we do not really know, but all the evidence that we are getting an anecdotal life from local authorities and services that work directly with children and young people on those specific issues are that it would be a very small number who would be those children that would be not known to services at all. In terms of the criminal justice system and the numbers of people going through the courts, we know and advise from the Lord Advocate that there are very small numbers of people who have been successfully prosecuted under the existing specific human trafficking offences that exist for as a maximum in any year in 2013, but what the Lord Advocate has advised is that there are other people who believe that the offences were committed in a trafficking background, they are not able to prove the trafficking element of it, but they are able to prove other offences such as immigration offences or money laundering or brothel keeping offences and they will prosecute them through those offences, so those people will already be going through the court system and already be going to prison, but just not with the label of human trafficking. Part of the aim of the bill is both to strengthen and clarify the trafficking offence but also to introduce trafficking aggravators, which will mean that where someone is prosecuted for one of those other offences and there is reasonable evidence that there is a trafficking background that that aggravator can be applied so that we can see that those are cases with a trafficking background as well. Equally, of course, there may well be people who we are not currently identifying and we would hope that we can identify those and have them being prosecuted. Another point, just from a different angle, when we put somebody in prison, I see the figures £42,500, which presumably includes the cost of building the thing and paying the interest and the governor and all those kinds of things. If you put one more person in prison, it does not actually cost £42,500, does it? We use that as the unit cost basis in which to make that, but you are absolutely right when you start having to look in the round in terms of what the overall impact on the prison population is and when you start passing the thresholds of needing new accommodations so that the numbers involved in human trafficking are very small and would be in the normal margins of the change around in terms of the prison population on a day-to-day basis. I am not saying that we should do this, but if you look at the marginal cost of what is the extra cost of one extra prisoner in a prison, presumably it is very, very little. Yes, the cost of your first prisoner in your prison is extremely expensive and then it goes down as you add more people in. It is a very difficult thing to try and it is something that we do in a lot of the criminal justice legislation is to try and reflect that, but we try not to underestimate it equally or overestimate it, but we recognise that it is not an exact sign. Thank you, Gavin. Not much else left to ask from my side, but just a couple of questions. If we go to the financial memorandum, the back page of that memorandum, you have paragraph 60 and just underneath that you have table 7, which is a collection of most of the costs. Bottom right-hand corner total cost in year 4 between £775,000 and £1.928 million. Somewhere right in thinking then, you are based on what the work you have done. The likely maximum cost as a consequence of this bill by year 4 would be just over £1.9 million. Yes, that is right. As Mr Mason has pointed out, that would include the full costs of the largest part of those costs relating to the prison service until it is at the extent of the court, so we do not think that in reality the full costs would be at that level. It could well be lower than that. Certainly, we would expect it to be at the lower end rather than the upper end, but we have included the range to try and reflect on that. Okay, that is helpful. The convener asked about a deterrent effect. Presumably, the policy objective and your hope over time is that this does have a deterrent effect, but I guess that the unknown is at what point and to what degree is it a deterrent effect. In your figures, have you assumed a deterrent effect of nil? If there is a deterrent effect, then it is a financial bonus as such, as well as a good full stop. Your working assumption is that there is no deterrent effect. In broad terms, that is right. We have not assumed that we will see a turnaround in the timescales that we are talking about in the financial memorandum of a small number of years. Suspicion from the basis of the various reports that have been done is that there may well be a number of victims who are not identifying, so that we still need to take account of that. The one area where we have looked at was in terms of the introduction of specialist risk orders for people who have already been prosecuted or identified as potential traffickers, where we are introducing new risk orders to control their actions. Part of that is to detail them undertaking further human trafficking activity. Certainly, down south, the assumption was that when they were introducing similar provisions that that would offer a significant financial benefit in terms of not having to proceed either with criminal cases or with the other action around that, we have not assumed any savings in that way, but we have just assumed that it would be cost-neutral. However, it is perfectly possible by the time that you get to year 5 or year 6, and so on, that actually the 1.9 drops to 1.7. It is perfectly possible that, in terms of the trajectory, instead of a guaranteed upwards trajectory, over time it becomes a falling trajectory. That is certainly our hope, yes. Okay. Just that last issue again, it has been touched on, but I just want to clarify. It starts at paragraph 39 of the financial memorandum, part 3, confiscation of property. I just want to check the Government approach to this, because the Government approach seems to be that there will be no additional costs and it does not really talk about any additional benefits either. Presumably, in practice, there are going to be some additional costs, especially if, while the convener suggested that it was unlikely, if there was, for example, a boat involved in the order, there would be a cost attach to that. However, if, ultimately, that property is confiscated and can be sold off under proceeds of crime, then there is an income as well. I guess that you have taken the approach that there will be neither a cost nor an income. Is that a policy decision or are there other ways of looking at it? This particular element is focused on a fairly narrow timeframe. It is in that immediate period when someone is first arrested and before they have been formally prosecuted, to allow the police to take immediate action if someone is using a vehicle for the purposes of trafficking to deter that trafficking by seizing control of that vehicle. As I mentioned earlier, there are separate arrangements that apply. Once someone has been through the court process and has been subject to conviction, then there are existing arrangements that deal when there is a formal forfeiture of the vehicle or boat. Maybe that is an impossible question to answer, but in broad terms, let's say that there is a boat just for the sake of argument. In terms of the costs of seizing it and holding it and storing it versus the costs of then being able to sell it, do those things tend to work out broadly, ffiscally, neutral or overall? Does the Government generally end up slightly better financially or slightly worse? I know that it is a very general question, but is there a general rule of thumb? We do not tend to separate out the individual elements of proceeds of crime income. We get a total figure for that. Overall, we gain a benefit from under proceeds of crime, and that money is used by the Government to invest back into communities through various schemes. Yes, there is an overall benefit relative to the costs. Okay, that is all. Thank you very much. I cannot general question. Earlier on, in the evidence that you were giving, you were talking about people, and we all assume human trafficking out with the EU, because people are free to come here. However, I think that there is some knowledge at least of bogus agencies who set themselves up as employment agencies in some Eastern European countries and, in fact, treat people almost in the equivalent way that is described here in terms of modern slavery or human trafficking. I think that it is similar to the bogus colleges that were set up to bring foreign students in. I think that there was an investigation into that. Is that something that is taken into the financial implications of how we investigate employment agencies that are, to say the least, dubious in their ambitions for finding work for people from Poland and Slovakia and so on? Anna, you will correct me if I am wrong, but the bill includes provisions and the existing legislation also includes provisions that allow for extraterritorial application of the law, so if there are people who are committing crimes abroad but are living here in Scotland or are here in Scotland, there is a scope for prosecution of those. Anna, is there anything else on that? No, but what you said is correct. The strongest evidence, I thought, is the biggest range of concerns that came from COSLA, although they were reflecting some of the individual local authority submissions as well. There are various sections that they deal with, but starting with protection of victims, I suppose that you have answered already in relation to child victims of trafficking, although COSLA suggests that a key point of the bill is to increase awareness and identification of victims. I suppose that there might be some skepticism about the idea that there would not be any increased numbers at all, but they also make points about internal trafficking and the possibility of appointing guardians. Is that against policy to appoint guardians? It depends on what definition of guardian is used. From the evidence that I have read that has come before, it can vary quite a lot. We have the Scottish Guardianship Service, which the Scottish Government funds. It looks at unaccompanied asylum-seeking children, which do not necessarily have to be trafficked children, although some of them have indicators of being trafficked as well. That is an organisation that we are reviewing at the moment in terms of funding. They do an excellent job of providing advice to children who come in outwith the UK, particularly outwith the EU, in relation to understanding their immigration rights and putting them at the centre of the process that is supposed to put in the immigration process at the centre and them having to fit around it. Our position in relation to guardians is that, with unaccompanied asylum-seekers, we will look at our work with the Scottish Guardianship Service and are going forward to when we are reviewing them later this year as well. In terms of adults there, in the kind of way that they are saying, those services are provided through dedicated providers such as Tara and Migrant Help, but they then go on to talk about a significant number of potential victims who do not engage with the national referral mechanism. Therefore, I am keen to confirm that the potential victim of human trafficking does not consent to a referral to the NRM. The processes are in place for Tara and Migrant Help to provide emergency funding to cover accommodation and so on. I do not really know in detail how that works, but is that a funding for you or is that UK Government funding? In terms of adults, for adults who are referred through the national referral mechanism, the purpose of the national referral mechanism is a routine to services and to Government-funded services. Any adults who are referred through that process and are then confirmed as trafficking victims have automatic rights to support that is funded by—for people in Scotland—the Scottish Government. That is the current arrangement and that will continue under the new legislation that we will continue to pay for them. Where people do not wish to take part in the NRM or are not identified as trafficking victims, clearly they are not part of that same arrangement and they will be subject to other arrangements if they are non-EA nationals, if they will be subject to the asylum immigration system that is funded centrally by the UK Government. If they are other than that, they will just be like anyone else that they can access into mainstream services. So could you reassure Cuslaw on that point about the funding of Tara and Migrant Help? Yes, we will continue funding. We currently do it through Tara and Migrant Help and we will continue funding services. Our assumption is that, within the financial memorandum, more of those people who we think are genuine trafficking victims will be identified, so we have assumed an increase in our funding for that. They also raise funding for awareness, raising and training. Would you accept their point on that? Yes, we do both as a Government and local authorities. I think that the convener mentioned earlier on that local authorities already fund training on recognising the signs of human trafficking. We worked with Police Scotland a year before last to publish an information leaflet to try and raise awareness. We have included within the financial memorandum an assumption that we would carry on funding additional training and awareness-raising activities as part of the human trafficking and exploitation strategy that we will prepare. Sorry, we are just going to say that, in relation to children as well, the Scottish Government published a toolkit last year, which is for front-line practitioners, and it is about who engage with children and young people, and it is about identifying potential victims of trafficking as well. We have also included it as part of our national guidance, which we refreshed in 2014. Following the committee meeting today, I am going to meet with the child protection committee chairs and a meeting that has been set up for quite a while, and that is also having a trafficking element in it, looking at how they are all responding to things locally and what we can do at a national level with it. They also say that clarification is required with regard to the costs and arrangements for managing and overseeing any trafficking and exploitation orders within a local authority. I suppose that that is the cost that we would be concerned about. Yes, the main part of the cost of that would fall on Police Scotland in terms of monitoring those, but obviously that has to be offset against the cost of not having to investigate and prosecute trafficking offences because we will be controlling and stopping the preventing those people from undertaking those offences. Finally, we are right at the beginning under the Offences section. They are talking about additional pressures on existing local government services such as local work assessments, and local authorities could incur costs in supporting any individuals that have a specific physical or mental health condition. Do you accept any other points on that and have they been taken on board? We will certainly keep a watch on what happens with both the new offence and the aggravators to see what the scale of increase is. The numbers, as I said earlier, are extremely small in terms of the numbers of people who are currently prosecuted. However, our advice from the Lord Advocate is that they are prosecuting people for other offences. We think that a reasonable proportion of the people who might be additional human trafficking offences will actually be people who are already being prosecuted under other offences. That will be one of our key aims, to keep a monitoring of that. If there are extra costs in local authorities, we will obviously discuss that with COSLA. Very briefly, Malcolm Chisholm covered some of the points that I was hoping to raise, and it is in relation to part 4 of the bill, as Mr Chisholm mentioned, about trafficking exploitation, profession and risk orders. I am looking at the bill, which is two new civil and associate interim orders to assist preventing trafficking exploitation, prevention and exploitation orders, TEPOs, trafficking and exploitation risk orders, and TEROs. That is the terminology, and I have read through the financial memorandum on that in a bit of costs and savings. However, when a TEPO or a TERO is granted, the monitoring process falls to Police Scotland. I heard what you said to Mr Chisholm about the benefits of not having to investigate in certain cases as well. Is there an anticipation of how many TEPOs and TEROs are likely to be issued in the first five years? We think that the numbers will be very small, based on the number of prosecutions at the moment, even if we were assuming that we managed to double the maximum number of prosecutions in any one year. We would still only be talking about eight, roughly eight people, so the numbers will be very small compared to the activity that Police Scotland undertakes. Had there been discussions with Police Scotland over what the level of monitoring would be? Eight people does not sound a lot given the significant resources that Police Scotland has, but it all depends on the level of monitoring that you put in place. That is correct, and it also depends on whether those are people that for other offences they are already engaged with in monitoring for other reasons. For example, they are obviously organised crime or issues associated with prostitution and brothel keeping. That was part of the dialogue that we had with Police Scotland, which is giving them the powers in terms of people that they are already aware of and in contact with. Just in terms, I do not want to get too hung up on the numbers, but it is a financial memorandum that we should get a little bit hung up on the numbers. Eight per year, maybe, I get that these have to be guessed by the very nature of the legislation and the criminality that is trying to be exposed here. Are we thinking that half of those people will already be under the monitoring of Police Scotland via investigations or all of them? What do you think? I worry that the finance committee is encouraging me to make estimates on all of this. In the dialogue with Police Scotland, they were comfortable that those were powers that would be helpful to them. The numbers would be relatively small and that they would probably already be in contact with. As I said earlier, the thing that we have not done is to make an assumption that there will be a significant saving from not prosecuting people, but that is clearly the intention of Tipos and Terros, which is that you are not having to pay the costs of investigating trafficking crimes and prosecuting people through the court. It is really a balancing off that you would rather put the work up front to save you having to do the investigation and court activity further down the line. I know that Police Scotland is content with that. I do not want to drift on to policy matters, but it is the financial memorandum. For example, in relation to monitoring of sex offenders within the community, there is a debate about how extensive that monitoring should be, should it be a multi-agency approach? Is it just Police Scotland that we are talking about in relation to monitoring those individuals who might be involved in a variety of other crimes, but we are not talking about a new specialist unit, we are talking about teams within Police Scotland that are already active on a day-in, day-out basis involved in those matters? That is correct, and that is something that I would give significant credit to Police Scotland that, very quickly after they were established, they put in place a national team and specialist local officers in dealing with human trafficking to make sure that, as a country, we were dealing more effectively with that crime. Those resources are already in place in monitoring those activities. That is helpful if Police Scotland is content, I suppose that the level of monitoring comes down to a policy rather than a financial memorandum position. That appears to have exhausted all the questions from the committee. Are there any further points that the bill team would like to make to the committee this morning? That being the end of our public session today, and having agreed to take the next item in private, I would like to close the public part of the meeting for a couple of minutes to allow official report, witnesses and the public to leave.