 What's going on, I'm in the morning. Good afternoon, everyone. I'm welcome to the 10th meeting of the Justice Sub-Cmitter and Policing of 2018. We have no apologies. The first agenda item is pre-budget scrutiny and this is an evidence-taking session that's part of this year's pre-budget scrutiny session. Our focus will be on the financial aspects int försöfaniaeth yn gwybod i'r Cymru, yn EICT, ac yn eich gyfweld i'w ofens o'i gwaith. Efallai, mae'n r spoilersaio ar y Péc보다 1, yn elfen neu', yn elfen, i'w copyright y Pécenda 2, ac yn eich cyflym y Cyfrym 들어가eth. A hynny i chi gael y gweithgrifennu James Gray, cynllun yn ymweld i'r cwrdd, ac i'n fynd i chi i'n meddwl i'r FICT, yn EICT, yn EICT, ac i'n cyfrymramaeth Cymru, ac i chi'n meddwl i'u cyflymannau Cymru i'r cyflymannau llunyddol. Felly, wrth gwylwg, mae wedi gweld ICCI yn y dywedig. Felly, ac rym niech beth o'rmarfa ar y tu'r rheol. Felly, rym niech beth o'r gallu chael ei ddefnyddio i gael gyfan hyfforddiant hwnnaeth o'r comedi yn wylio gyda'i gwirio'u ddim yn ei d résidliadau â gwaith. Rhywatchdelfonau'n safyn ni'n ddweud i gyfreithio'r Cymru yn y trafnod o'r ddweud i ddweud i'r cwestiynau mae'n gweithio'r ddweud, mae'n ddweud i'r cyfion wahanol pension and it is mentioned in the financial statements there. Since we are talking about ICD, can I just ask in general terms about the lessons learned from the I6 project and how they are put into place to shape what we will go on to discuss please if someone can maybe broadly outline that? Mr Hawk. The lessons learned from the I6 project was one of the questions that the SPA has just been asking of the proposals that have been brought forward by Police Scotland now to reform their digital data and ICT capacity. There were several lessons learned from the I6 programme. One of those was around the risks in taking a big bang approach to change in the ICT area and therefore in the proposals that we have now in front of us. I should say that the outline business case for the new programme around digital data and ICT was discussed and approved at the SPA board last week. Those proposals, instead of a big bang approach, took an incremental phased approach in order to deliver the benefits sequentially and not put all the eggs in the one basket. There are other differences between the I6 programme and where we are now. One of the issues that the SPA has taken interest in has been Police Scotland's own capability to deliver change. Over the last year and a half in particular, we are content that Police Scotland has significantly increased its change management capacity in order to deliver a variety of changes. The team that Martin Low leads as director for ICT in Police Scotland is used to running a baseline of ICT services for the organisation, but it has not been asked in the past to deliver anything of the scale and complexity as the new programme and therefore additional support has been brought in. That, again, is a difference from I6. The final point that I might highlight is that I6 was an ICT solution, trying to build on the best of the eight legacy forces and apply that across Scotland. The new proposals instead take a broader approach to develop an integrated digital and data and ICT programme together in order to really let policing perform well in the 21st century with 21st century technology. Everything from the way in which officers engage with communities, the way in which officers engage with each other, the way in which they are able to tackle cyber threats, for example, and all of those are different to what the I6 programme itself would have delivered. To follow-up on an aspect that you have not referred to, but it is in one of the submissions. That is about that this is not seeking to implement, I quote here, novel technical solutions each of the elements sought in the outline, but in this case it is already in place in one of the other UK forces. If that is the case, is there any danger that it affects the time that that equipment will have currency? I know that you have to go in it sometime and there will always be a new one, but the fact that it is existing use, is that a factor that was factored into your decision making? Perhaps I will make an initial comment on behalf of the SPA and then perhaps Martin Low could comment more from a Police Scotland perspective. The business case does not, again, unlike I6, seek to develop new and untested technology. Instead, though, it would represent a step change from where Scotland's capability currently is to where it needs to be in order to engage in a digital world. It is existing tested technology in place in other police forces elsewhere in the UK, but it is not old technology. What it currently has is 20th century technology, which dates back to the old legacy forces and suffers from a lack of investment, particularly in the run-up towards the creation of Police Scotland in 2013. Do you want a brief comment before I bring Mr Stevenson in, Mr Low? Yes, please, convener. Just in support of what Kenneth has said there, we have made that point that nothing that we are looking to implement is bleeding edge. Almost everything that we have included in the ICT strategy is already being used either within the wider public sector or somewhere within UK law enforcement. There is not a single force in the UK that has done everything that we are proposing to do, but everything that we are proposing to do has probably been done within one of the remaining 42 forces. Just in support of what Kenneth has said, that statement is in terms of general principles around technology sets. Of course, you are correct, convener. Technology will move on, so we are looking to implement mobility for police officers. Most other forces in the UK have already implemented that, but the technology is moving in terms of the types of devices and the approaches. It is more a general principle, but we believe that that gives an element of confidence and mitigates some of the risk around those types of programmes on the basis that the technology has been implemented. We are more than keen and willing to learn the lessons from others that have gone before us, so to speak. In your introductory remarks, Mr Hogg, you made clear that we have an ICT project. However, it is running in parallel with a project that changes the way in which Police Scotland works and the people who are employed there. In other words, it is about changing processes for human beings and so on and so forth. I am relatively clear who is in charge of the ICT project and who is in charge of the project of change that relates to it in so far as it affects people in Police Scotland and the structures that we are in. The short answer to that question is the chief constable, and beneath him is the deputy chief officer with support of his executive team colleagues. Perhaps I could just set the context for this. In 2017, a 10-year policing strategy was agreed for Police Scotland, called Serving and Changing Scotland. You are quite right to point out that part of the ICT improvements that are required are not only to upgrade outdated core ICT capability for officers and police staff, but to enable a far wider set of reforms and changes within policing. To act as that key enabler of change, we need ICT developments. That is being developed as a portfolio of change. It is managed within Police Scotland in the first instance, reporting to a change board that has been chaired until recently by Deputy Chief Officer David Page. It is now chaired by Deputy Chief Constable Fiona Taylor. Within Police Scotland, those are the organisational arrangements for leading that. Let me just say to be clear that the chief constable is responsible for everything, that is a given. You have referred to Fiona Taylor who has appeared in front of this committee, etc. Who gets fired if this part of what is done is not done? It is clearly not the chief constable, it probably is not Fiona Taylor who gets fired. In other words, at the end of the day, if it does not rest at a single desk, it will not get done, is my attitude. Who gets fired? If you are referring specifically to the digital data and ICT programme, no, I am not, because I think Mr Loh is the person who gets fired on that. Do forgive me, Mr Loh. I hope and believe that that is a distant prospect. Sorry, to be serious, and I am trying to pursue quite a serious point, that ICT projects can succeed as ICT projects, but the project as a whole can fail if the organisation does not respond to that changed ICT environment. The benefits are delivered in what people do not by the ICT system. I just want to be clear who we as a committee and everyone else should hold the countable as the single person whose job it is to drive through that change, because this is not easy and I want to know who it is, functionally, not the name of the individual. Accepting that the chief constable delegates within his structure, the individual who is leading that wider programme of change is assistant chief constable Angela McLaren, and she is supported by a business change manager in that. She is doing that in the role as chair of that board that you referred to. The chair of the change board is DCC Fiona Taylor, but she has specific responsibility for that broader programme of cultural change, which you are referring to, to support the ICT change. I do not want to spend more time in it, convener, but I think that that has been a good start. Thanks, and I am sure that there is collective responsibility for driving it forward, for the voids of doubt, we are wanting everyone to maintain their positions and work industriously in the public's behalf. Daniel, thank you. So Mr Hogg, you set out the identification of the fact that you are relatively happy that Police Scotland has taken on board new capacity and capability around the technology space, but obviously this is a very big programme. There is going to be need to be resource, which is needed for the programme, but then not needed thereafter. Therefore, there will be third parties contracted to deliver this programme. I was just wondering if you could, or whether it is yourself, Mr Law and Mr Gray, could outline how that is going to be approached. Is there going to be work packages put out for tender to your specific systems integration firms? Also, how do we ensure that there is not sort of mission creep? I know that Ernst and Young are already engaged. Is there a broad approach in terms of engaging third party to deliver this work and the commercial structures that will sit around them? I will answer that, convener, if that is okay. Thanks for the question. We have talked about the uplift in the existing Police Scotland change capacity and capability, but we already recognise that that will not be sufficient to deliver on, as you have already suggested, a programme of this scale. Therefore, there will be a need for some commercial engagement. We have done some pre-procurement market engagement. There are some options that we are currently working through in terms of how that looks. As you will probably gather, there are a number of different options that we could look to explore in terms of a single vendor that could partner with us to help deliver this programme. We could divide that up. You have already identified that systems integration partner will be key. We will definitely need that type of support. The options that are available to us in terms of how that looks and feels are currently being worked through. The fact that the overall OBC was approved last week by the SPA and is now being submitted for consideration at government level, we are not sitting on that and waiting for the answer. There is further work that we are doing on the support of the programme, and that includes the make-up and shape of the commercial engagement. It is very challenging for anyone listening in on the OBC. We can all do it, Mr Lo, if you could outline that term. The Outline Business Case? I was about to ask when you were about to issue our FPs, but I will not do that. I would be interested, given that the structure, how those work packages are put together and how they are also fit with one another, is obviously a critical point. You have your outbound business case. What is the timeline for putting work out to tender or identifying how many work packages that will be in the overall programme of just £300 million, as I understand it? Some of that convener will be subject to clearly the decisions that have yet to be made on funding, so there is an element of that that will be based on that. However, I would expect that we will be fairly well advanced in terms of our plans and model before we get to the tail end of the year. Obviously, there will be commercial sensitivities, but there is a deep interest that one of the UK's largest IT programmes will be rolled out effectively. What level of insight will you be able to provide us so that we have confidence that that is progressing as we would expect? If there is a wish on the part of the committee for us to come back and share some of that, I am perfectly happy to do that. Mr Hogg, what is scrutiny of third-party contracts while the SPA does, particularly with regard to below the threshold of 500,000, which we have talked about in recent times? The process from now on is that, before contracts are entered into, individual full business cases will be developed for each of the component parts of this going forward, in line with the available funding. Once the Scottish Government has considered that and once this Parliament approves a budget for next year, individual components will come forward separately for scrutiny and consideration by the SPA before the contracts are let. On your comment about the thresholds, the thresholds remain in place. However, the SPA has taken a range of action in order to assure itself about the robustness of that work. Some of that takes at its own hand through officers and members' engagement with Police Scotland. Some of it instead is about ensuring that Police Scotland's own systems of assurance are up to scraps and are working appropriately. Alternatively, it is about engaging third parties and getting third-party scrutiny around that. For example, as part of testing the quality of the outline business case, our internal auditors, Scott Moncriff, were asked to review whether or not the outline business case was fully compliant with the Treasury Green Book guidance, which is part of the Scottish Public Finance Manual. Our conclusion was that it did materially comply with that. In addition, we had a Scottish Government-led technical review conducted by the proposals, and they gave a red amber green rating to the programme. At this point in time, they rated it amber green, for example. Through a range of activities, we will be looking for detail and testing what comes forward, but it will be at an individual component level, in addition to the global outline business case. Just following up the point that you were making earlier on, Mr Hogg, about learning the lessons from I6 that move away from a big bang approach, but more of an integration with digital and strategy around data, it would suggest that there are more components to that. It would be interesting to understand whether the approach then to governance and to assurance has changed as a result and in what way has it changed, both within the SPA and what you are looking for in terms of the challenge function and the oversight within Police Scotland? Yes. That is a more complex and a more broad-ranging set of proposals than I6 was. It has a far wider scope in terms of aspirations and its impact on capability. For the SPA's part, that is very much something that we are considering at the moment, in particular for the reform programme, but actually more generally because we are at the moment seeing a ramping up of the policing reform activity in other areas as well in order to deliver the 10-year policing strategy. Another area, for example, would be the corporate services transformation, which is also coming down the tracks at around the same time. You may know that the SPA has commissioned or is undertaking a review of our own corporate governance structures in this area. We are looking at our committee structures and reviewing whether they are optimal for dealing with a change programme of this size and scale, and the digital data ICT programme is one very good example of where both at board level and committee level, but also in terms of the SPA's executive team's capability or whether we have in place the capability that we need to apply or to fill our statutory functions in the governance and scrutiny of those proposals. Is that in terms of capacity or understanding or a combination of both? In terms of the SPA's executive team, it is a combination of both. What that looks like in practice is recruiting additional people with additional skills, and that is something that we are partway along the journey of. My assessment as interim chief officer has been that the SPA executive team has not been at the level of capacity capability that it needs in order to carry out our core statutory functions. That is what led to the improvement plan that we put in place at the start of this financial year and which we have been working towards delivering against since then, and against which I report to the SPA board monthly and in more detail quarterly. In terms of the Police Scotland governance arrangements and management of this process—presumably Mr Loh, you are taking the lead there—but there will be strands of this for which we project leads. How is the governance and the assurance secured over what will be such a broad-ranging set of proposals? The first point that I would like to make is one of the differences between this programme and I6. This transformation is being led by senior police officers and supported closely by senior police staff and professional advisers like myself. That is an important point. We have SROs, senior responsible officers convener, for all the individual constituent projects. We have our internal Police Scotland governance around the corporate finance and investment board, the change board, as you have heard. We are also establishing some additional elements of governance and assurance. There is work being done at the moment to stand up a design authority, which will be essential, given the component nature of elements of the programme. Sitting underneath the design authority is going to be a technical design authority that I will lead that will ensure that the questions around the individual technology components are being meshed together in a way that is sensible. There is a whole range of existing governance and new elements of governance that have been put together to support this programme. You probably touched on it earlier on, but that process of what this is going to look like has identified solutions that are already in place and operational in other parts of the UK. Therefore, there will not be a test in the market to see what they come back with and suggest that they can do within an assigned budget. That is going to be far more prescriptive and driven from within Police Scotland. Is that right? There will still be a test in the market, because there will be open procurement around those types of technologies. I am not sure whether that is the point that you are making, but there will still be that. Your expectation would be that this is the baseline. If anybody thinks that what they are able to do can go beyond that, it is up to them to make that case. We will be very clear within the individual projects what the business requirement and the technical requirement is. We are still going to engage with the market, even though we have good information, awareness and knowledge of existing solutions out there. I see that as a benefit. Governance and assurance processes internally within Police Scotland will be able to challenge anything that comes back in a robust fashion. Absolutely. There will still be full assessment of submissions from vendors in the normal manner from a procurement perspective. Thank you, convener. Can I ask you to perhaps outline your priorities for the SIT project, your sort of top line, and also how much of an input did trade unions and staff associations actually have in leading those priorities? I can take that. I think that I probably referred to this last time that I was here. In terms of the priorities, from a technology point of view, it is a bit more important from an operational policing perspective. We have talked about I6. I6 did not deliver the gap and the requirement for the type of capability that I6 would have delivered. It still exists. There is a project as part of the programme around co-operational policing systems. That would be, in my opinion, one of the key priorities. We have been fairly clear that provision of mobility and providing mobile access to officers remains a key priority. I mentioned last time data and tackling the challenges that we have organisationally around data. That is no small challenge. We need to rationalise and consolidate our data sets and data flows. There are three that I will immediately mention. There are some core infrastructure elements that are very much in my own domain that we need to develop. In other words, technologies that will underpin everything that we are looking to do. For example, refreshing the network and making sure that we have the right level of connectivity and bandwidth to all the locations that we have throughout the country is essential. That would be another priority that I would put in, almost describing that as a kind of foundation or a building block or pillar. Those are the priorities. On the unions and staff associations, from my own perspective, my reading of the situation is that the unions and staff associations are broadly supportive of what we are trying to do from the data, digital and ICT strategy. They understand and agree with the need to provide better technology solutions to both our officers and their staff. There has been consultation with the unions and staff associations, although I would say that we can always do more in that space. I have presented several times now to the Police Scotland bi-monthly engagement forum to which all the unions and staff associations are invited. We have had discussions with the Federation. The Federation was able to provide some of the storyboarding and some of the officer case examples for inclusion within the OBC. Clearly, like many of you, no doubt, I follow the social media contributions from certain members of the Federation. I think that recent tweets have indicated that they are broadly supportive of the direction of travel. I am sure that they are supportive, but have they actively been asked for input and been put forward suggestions to you? Yes, they have. Around two of the pieces of work that are highlighted as a priority—the co-operational systems and the mobility project—I am aware that the Federation is involved in the decision-making bodies of those projects so that they are there within boards or steering groups and actively contributing to and influencing the direction of travel. That is a good baseline or a benchmark for how we involve associations and unions in the projects that will be stood up as part of the programme. Is there any one aspect so far of the strategy that is proving to be problematic or the toughest challenge for you to face? Thank you for that. The biggest challenge will be securing the funding that we need to deliver the programme. I know that I am ordinarily directed to the source, but do you recognise the sentiment or do you understand what prompts a comment of that nature? In short, no. We have already discussed that the technology that we are looking to implement as part of the programme is pretty much tried and tested within most other public sector bodies or UK law enforcement agencies. I do not particularly recognise that. I know that there is some reference to drones, convener. I do not know if you want me to touch on that. That is not about technology that is not proven and space-age solutions. It is about fundamental basic technology for front-line operational policing. I will follow that up. Mr Loh, you have referred to part of what Unison was driving at, but to complete the quote, we need investment and a strategy for improvement, which does not prioritise drones or retinal ID tech at the expense of getting the basic ICT infrastructure. That is long overdue. I take it that you can offer some reassurance that that is what lies at the heart of the process. Absolutely. The vast majority of the constituent projects and the funding that we are seeking to get is about core technology aimed at core operational policing. To my knowledge, there has been some discussion around retinal systems, but there is not a project within Police Scotland from a technology point of view that I am aware of at the moment that has been stood up to look at that. The organisation is and has purchased UAVs, drones under another guise. They are not operational. They are currently being tested. Mr Hogg, I do not know whether there is anybody who fetishises IT in SPA, but perhaps you could reassure us of that. The related point that I wanted to touch on was this point about priorities and why we are doing this in the first place. From the SPA's perspective, one of our absolute priorities is that whatever is done in this space delivers the actual benefits for front-line officers and staff. In plain English, what that has to mean is that officers are not still using pens and paper in taking notes and then going back to an office and typing something up and typing it up several times on several different systems and therefore not being able to spend more time in communities. That would be one of the benefits that we are really keen to see delivered by this. I think that that sits beneath the jargon of mobility or mobile working. There are some really basic things, which both staff associations and trade unions are very clear and need to be fixed just to get to a basic level of functionality. Long before we ever get to some of the higher end cyber crime capability stuff, which is also part of this mix, it is that focus and benefits that is one of the tests that the SPA has been and will be applying to this as it progresses. Are we convinced that this is going to deliver the very real world changes that are necessary and that are currently frustrating officers and staff in Police Scotland from doing their jobs properly? I wonder if unison were on something quite important, fetishisation, et cetera. Is the software that we are looking at software that we expect to migrate over time over a range of hardware platforms? It is the bigger investment because it relates to how people do the job and changing people is more difficult than changing hardware. I ask this because I have just discovered in the last two months that software that I wrote in 1974 is still running. A Parliament wrote the first algorithm for printing in Braille, and it is still in use, and he wrote it in 1969. Unison is raising a very important point there. Is the software going to have a longer life than the hardware may? Is that part of the plan? I think that, as Mr Hogg has already suggested, the software will be modern, it will be of its time and current, but as a guest you already know, Mr Stevenson, software and hardware platforms need to be refreshed, patched and upgraded over time. That just goes with the territory, I guess. I am not sure whether that answers your question, but both the hardware platforms, the hosting platforms and the software will be current. We will be coming with some specific financial questions, Mr Gray. I am conscious that you are sitting there patiently, thank you. Following on from Rona Mackay's question, the roll-out of the technology will it be Scotland-wide altogether, or will it be division by division? Or at least an attempt to answer it. The deployment model, the implementation model, will, I guess, be determined by the nature and the specifics of the project. In some cases, the answer is both. In some cases, there may well be a deployment and a project where that does happen on a divisional level and some of it may well occur at a national level, just depends on the nature of the project. If I give you some examples, the mobile working project that we are looking to stand up, that will be trialled initially in one division. We will seek to get the learning from that and the lessons from that, the officer feedback from the deployment, the training, the implementation, the early look and feel of that solution. We will use that information to shape the rest of the project, which will likely to be on a divisional level. You actually answered my supplementary question about how you could learn if it wasn't on a national roll-out. Can you just comment briefly on the nature of the information that will be placed in the public domain in terms of updates during further planning and implementation? As you would expect, as we do at the moment, we will be publishing regular updates on our progress. We will be reporting those to various levels of existing SPA governance. By definition, those reports tend to be placed within the public domain. You will find already that a high degree of transparency around the core documentation on the programme so far, the strategic outline business case, the strategy, some of the supporting documents, the covering papers have all been placed within the SPA public domain and are therefore available on their website. Those updates are likely to include expenditure updates, results of testing and risk plans. I see Mr Hogg looking to come in, but absolutely, in my opinion, yes. It was just to confirm that the SPA's intention would very much to be do what it did last week, which was to consider the whole outline business case in public and to publish the papers associated with that. There was one exception to that. The only item that the SPA took as a private item of business was an annex to that outline business case, which dealt with counter-terrorism and serious organised crime matters, which were classified confidential. Everything else was discussed in public and, going forward, would and should be. Good afternoon, gentlemen. I wonder if you could provide an explanation of what has caused the increase in costs from the previously reported figure of 200 million to now 298 million. In the strategic outline business case that was produced a number of months ago, that looked at a cost profile over a five-year period. Since then, when we have worked the numbers through on the outline business case that was approved at the SPA board last week, that has now been stretched out to be done over a 10-year period. The numbers from a capital requirement perspective have not changed significantly over that first five-year period, but what we have built in on years 6 to 10 is the replacement costs that would be required. That is the reason for the increase. Would there be more specific replacement costs for the ICT in particular? Sorry, yes, for ICT hardware. It is something that we have done within Police Scotland every year as ICT hardware reaches its end-of-life. It gets replaced, so it is building in a replacement programme for ICT hardware. So, it is a 98 million. All of that? Does that count for the total increase of the 98 million? In the outline business case, the capital requirement over 10 years is £244 million. The difference in capital in the previous strategic outline business case, which is £206 million and the outline business case that was produced for this month of £244 million. The difference between that is the replacement costs in years 6 to 10 for hardware. Is there any revenue costs? There are revenue costs, and that is the figure that you were quoting of around £300 million. That is taking the capital costs of £244 million and the revenue expenditure associated with the outline business case, which is largely linked to the corporate services transformation part of the digital data and ICT business case. As a result of that being a cloud-based solution, which is a revenue-based model, whereas most of the others are capital. That is the revenue element. The investment part of the revenue element is £53.8 million over the 10-year period. Are there any costs associated with the use of consultants? There are, and they are both included in the revenue costs related to having a professional service support for the corporate services transformation but also built into the capital costs for the rest of the digital data and ICT outline business case. Those numbers are not in the 200-page document, which I think you have been sent, but I can give you, if you would find that helpful, a breakdown of how much we are estimating the professional services component would be for each of the different packages of work that make up the overall programme. We would most certainly want to see that, and especially in light of the submission that we have had from the Scottish Institute of Placing Research, where it says, it is important to learn lessons from the failure of I6. As plans are made and budgets are allocated, it is essential that the value of academic researchers, rather than just private consultants, are harnessed. In unison, there is obviously discontent when they say some of the costs that we have seen in the budget has been spent on external consultants and contractors, so I think that the whole committee would like to see much more detail on how much has been spent. Can you say why you have not looked at the Institute of Placing Research and that academic expertise that is there? With regard to the professional services spend, we will absolutely share with you what we have at the moment, but bearing in mind, this is still an outline business case and it is our best estimate. As the accountable officer said earlier on, it will happen as there will be a number of full business cases that come through for each of the different components that will have the actual costs in them. We can share it, but just to say at this moment that it is based on estimates. The reason for having the professional services cost built in the outline business cases is linked to the point raised earlier around bringing in surge capacity. They are not people that we need to have employed permanently because this is coming in and doing a piece of work and then those people moving out, so that is why it has been done in that way to enhance, as we said earlier on. We have strengthened the internal capability to deliver with Impley Scotland, but it is not enough and that is why there are professional services in there. Can you tell us even a ballpark figure of what has been spent on external consultants to date? To date, I can say what the figure has been in the first five years of Police Scotland, so from 2013-14 through to the end of 2017-18, it is £11.3 million. The proposed expenditure in the current financial year is £7.7 million, so there has been a fairly significant uplift this year and that would continue in the next number of years if we were to progress with digital data and ICT because just the scale of the programme means that there isn't sufficient capacity within the organisation to do it and the expertise is required. We wouldn't want to employ people full-time and make it a commitment to a full-time employee where it is a time-limited piece of work and that is why there are professional services costs within the business case. The SQI-6 costs were reimbursed. Were the costs reimbursed for the consultancies? To the best of my knowledge, yes, but I will confirm that to you. And the point from Dr Megan O'Neill, associate director of SIPA, the Institute of Policing Research? Yes, I can respond to that. The SIPA does have good links with SIPR and indeed I met the director recently, as indeed separately, the chair of the SIPA. SIPR is a network of 14 academic institutions and they carry out extremely valuable research on all matters relating to policing. It is different, though, from the sort of technical support that is being brought in to Police Scotland to deliver the digital data ICT programme. In that case, the support being brought in is people who have worked with other police forces in the past to build similar digital data ICT systems within police forces. It is more at that applied end. It could also just clarify that the figures that James Gray quoted apply to professional services for all purposes, not just digital data ICT over the last five years. The actual sum spent on the ICT component will be very much smaller than that. That was a broader range. You mentioned that further financial teams and back-up additional support had been brought in. Quite a lot of additional support, I presume, is to deliver the ICT as well as general things. Can you tell us the cost of that and outline just how much support that is? The new chief finance officer—I take it that yourself, Mr Gray—a team of seven strategic leads and management. That is quite some investment. Can you quantify just exactly how much has been spent on that in addition to the consultants? Specifically in relation to the finance service or do you mean more? The new team has been brought in to deliver and take the lead in finance. That would include delivering ICT overall. The seven new leads brought in to strengthen the finance service was part of a restructuring of the senior team within the finance in Police Scotland. It will help to support the digital data on ICT, but it was more broad than that. It was to support the whole financial management and financial planning. The seven posts to the best of my knowledge—I can check—is an investment of approximately £400,000 per year. What I would say is that there has been a restructure, so whilst those seven posts have that value, there have been people who have left the organisation, so there has been a saving there. As you will be aware, previously, we had brought in quite a bit of additional support from professional services to bolster the finance function. That is now tailing off and has been replaced with a new senior team. As part of corporate services transformation, which is included in digital data on ICT, there will be a restructure of the entire finance service. We have made progress in that we have a new senior team in place. We have been working through a payroll project. My objective is that the overall cost of the finance service of Police Scotland will be less than it was two years ago, but will be of sufficient quality and to address the issues that have been raised previously by Audit Scotland and internal auditors. For example, the payroll project will deliver recurring or on-going annual savings equivalent to nearly £1 million, which more than pays for the additional senior people that I have brought into the team. The reason I did that was for an organisation with a budget of £1.1 billion. I had two direct reports to manage that entire budget, and it was just completely unmanagable, so that is why it has been strengthened out to have the seven. I think that we have far more control around the finances now. There is still a lot of work to be done, but I would hope that, as future audit reports come out, there will be value demonstrated in that investment. You understand that we are doing our pre-budget scrutiny just now. We are looking at things like staff costs. I would have thought that, as the new chief finance officer, you would understand the value of the committee having those figures before us today, both the consultants and the cost of the new structure. I am a bit concerned that the offer from the Institute of Police Research, because lessons are learned and we have already said from other public sector projects that it seems to me being dismissed. It is going to come, if there is value, a fraction of the cost of some of those other services. I merely leave that thought with you and look forward to the additional information that you have undertaken to provide. I just wanted to briefly explore, in the ICT project, where costs go revenue versus capital. In particular, in relation to the software, we have heard that a lot of the software is coming from other police forces in these islands. Who owns the intellectual property associated with the software that will be brought? Therefore, based on that, how are you allocating that to revenue or capital? I just want to clarify that the software that we are looking to use will not be coming from other police forces. It is being used in other police forces, but those will be commercially available software products from commercial vendors and suppliers. So you will have no ownership, and you will merely be licensed to use it? There will be a range of licensing options. Again, you will be aware of perpetual licensing or whatever the models are. There are a number of models for software licensing that vendors offer. How are you going to treat that allocation to revenue or capital? There is always a debate when it is a perpetual licence as to which side of the line you put that, for example. I will ask James to explain that in a second. Within those profiles around capital and reform, there is provision within the capital for software that would be being purchased in that perpetual way. There is a smaller set of provision within the revenue for licensing that would be renewable, depending on the model. I will deal with Mr Loh for a minute. If most of the software is therefore going to be licensed, are you making arrangements to escrow all the materials that would be necessary for someone else to take over the maintenance of that software in the event of default of the supplier? Thanks. Escro provision would be a standard provision within our tender documents and the contract documentation. That is fine. I think that Mr Gregg wanted to supplement it. It was just to give you a bit more background to how we have developed the financial model in the outline business case and how we have got the split between capital reform and indeed revenue costs. We are saying that, by the time, if all of this programme is fully delivered, there will be revenue costs, recurring revenue costs, of about £28 million per annum. Obviously, significantly more benefits, nearly £53 million. What we have done is looked at. It is an area of judgment in your right that can be quite tricky around what could be treated as capital as an intangible asset. Wherever we could do that, that is what we have tried to do on the basis that we know that we have some significant revenue challenges in the years ahead. Certainly, what we have done is applied accounting standards about what is capital and what is revenue and built the business case on that basis. That is why we have got an element of investment that is capital, an element that is revenue and then obviously the on-going revenue costs that are associated with licences and maintenance. What different depreciation figures are you using for software that you are capitalising on hardware? We typically use five years. That is a piece of work where we would need to do some more detailed work on that because the way we have captured the investment requirement is to say that the capital requirement is £244 million. That is the cost. Obviously, there is the non-cash depreciation element that feeds through the budget. A working assumption is five years, but we need to get into more detail behind that because, obviously, different types of hardware may be able to have different lives, but that is our standard accounting policy. I just want to ask a brief supplementary and marketing question and briefly something on Fultons. First of all, just in terms of the outline business case, that is obviously an estimate as you have stated. An estimate at this stage must involve quite large estimating factors and margins for error. Is the number that we have got in front of us, is that your expected cost, or is it your maximum cost and what degree of contingency factor has been applied to the outline business case? That is a good question and we have considered that. For each of the different modules within the outline business case, optimism bias has been considered for all of it. Optimism bias ranges from 0 per cent, where we have certainty over cost. For example, mobile working is a component of the digital data and ICT outline business case, but it is in itself being a full business case that is moving ahead and we have a contract, so we know what the actual value is. Ranging through to some of the modules where you are right, there is a lot more clarity required to get certainty over the cost, so we have applied up to 50 per cent optimism bias on the cost there. The average across the outline business case is 20 per cent, which for outline business cases is fairly common, but that is the average across the piece. Our expectation is that the costs overall will not exceed what is in the outline business case. I was just wondering if there was any more detail that you might be able to share with that following this meeting. I have got the second question raised for Martin Low around the milestones and level of information that you might be able to find. Last time around, when we were discussing this, I had some concern that the information that we had was very technical and technology-driven. In my view, any programme like this needs strong functional design and strong outline application architecture. Is that maybe some information that you will be able to publish or share with the committee once those become available? In fact, some of that was already available, so there is a project roadmap that is available as part of the products that I mentioned earlier. There is also a reference architecture, so the technical reference architecture. The highest level is a relatively straightforward model with an awful lot of detail sitting underneath it. That material is already available also in the public domain, but I am happy to provide that information to committee if it is necessary. I am hoping that our last hour or so has not been academic. What discussions have there been with the Scottish Government ministers or officials regarding the funding of this? I can respond to that. The SPA for its part has certainly discussed the on-going development of the work towards the outline business case with Scottish Government officials. I have also been present at a briefing meeting with the Cabinet Secretary for Justice to brief him on the expected outline business case costs. That was in advance of the SPA board meeting last week, where it approved the outline business case. If I may, I could make one other related point, which I think just very briefly. Cabinet Secretary said no problem £300 million. Certainly not. The cabinet secretary thanked us for the briefing and said that he would need to consider that as part of the Government's on-going spending review. That relates to the next point that I wanted to make. One of the questions that I have asked as a officer is, what is the cost of doing nothing then? If we do not do this, what would the cost be? That working was built in the outline business case. The answer that the outline business case produced was that over the same nine-year period, nine-ten-year period, as the £244 million capital cost is cited for the preferred option, the cost of simply maintaining the existing systems and not adding any additional functionality or any modernisation is over £95 million. That is important context. It is a point that I have also made to the Scottish Government. We do not have any of us an option to do nothing about this. The level of functionality is not acceptable in policing. The key question is what should be done. That needs to be a conversation with Government. In the event that the full capital or, indeed, revenue funding is not available from Government to fund us, the intention would be to phase this. It would be to progress towards the same goals set by the outline business case, the same option that performed best in terms of values for money, but simply to take longer to get there and to cut our cloth accordingly in line with the available funding. It was to follow up on Daniel Johnson's point about contingency funding. We have a submission from Police Scotland and I see in their figures on that table from 2018-19 onwards exactly the same figures are in three columns. How does that tally with the 20 per cent optimist bias contingency be exactly the same figures from 2018-19 to 20 per cent? Can I ask which page of the submission? It is page 3, table 2, 1, 2. Okay, so this table is actually unrelated to digital data and ICT. This was to demonstrate that in the financial memorandum that was associated with the bill for Police Scotland coming into being, it had an assumption that £1.1 billion worth of cumulative savings would be achieved up to 2025-26. What this table sought to demonstrate was that, based on the actual cost savings that have been made in the first five years of Police Scotland, excluding the reform funding that has been provided—if you net that off the reform funding that has been provided, the cumulative savings will be in the region of £1.8 billion to £1.9 billion. It was just to provide about a context around—my understanding was that this session was as well as digital data when ICT was looking at the wider financial aspects. It was just to highlight that, since Police Scotland has come into being, it has delivered savings that, on an annualised basis, now are almost £200 million a year. Cumulatively, up to 2025-26, that will be £1.9 billion against a target of £1.1 billion. It was just to demonstrate that there has been significant savings achieved and that the organisation is on course to exceed the original savings target in the business case. We are still considerably in deficit. Could you tell us where the savings have come from the £200 million of costs from the annual cost space? There has been significant savings in Police staff headcount. In total, and I can get those figures verified, between packages that have been paid to people like voluntary redundancy, voluntary early retirement and deletion of posts, it is getting on close to 2,000 posts. In addition to that, when you look at the non-pay budgets, there has been a significant reduction in the number of buildings that Police Scotland has, and there has been significant estate savings coming out of that, as well as general efficiencies when you look at, whilst the number of police officers has been retained, there have been reviews into the rank ratio, the promoted structures, and there has been a rationalisation of senior posts. An example being that, instead of eight chief constables, there is one, but that is filtered down through all ranks. That is how the savings have been achieved. Going on to make these cumulative efficiency savings, would that be the same area? The way in which the £1.1 billion of savings had to be achieved was cumulative, in the sense that, because there is £200 million of cost being taken out this year, you count it every year through until you get to the end. That £1.852 billion of cumulative savings is something that is just rolling forward the level of savings that have been achieved to date. That is the basis of the calculation. Can I put to what the SPA have said in its submission? It is proving increasingly challenging to support the on-going requirements of a national service that must maintain a physical estate, fleet vehicles, ICT and other national operational equipment at this level of expenditure. That is protected to go on to make the one-bill savings. Where are the additional savings going to come from? Because it sounds as though it is totally unsustainable that we close more police stations, while the physical estate is still needed to be upgraded when vehicles are needed to be replaced? The table that we were previously speaking to is in regard to savings coming out of the revenue budget. Your point is right that I have put in the Police Scotland submission on page 4 that we are operating at a revenue deficit at the moment. We have budgeted to have an operating deficit of £35.6 million this year, which is down from an underlying revenue deficit of £63 million in 2016-17. We are on track to get that to zero by 2020-21. However, what we require in order to achieve that is the investment in reform that we set out in our three-year financial plan. You make a really good point in relation to that table on page 10, if that is the one that I am picking up correctly. That is in relation to our capital investment. We currently have a capital grant this year of £23 million. That is supplemented by receipts from the disposal of buildings. The single largest one this year is Pitch Street in Glasgow. As you can imagine, in the early years of Police Scotland, we have had significant disposals of property and we have been able to use the sales receipts to supplement our capital plan. However, we have now got to a point where there are very few future large sales coming through, so we will not be able to supplement our capital plan with a significant level of receipts. For example, our capital plan this year has £14 million worth of asset disposals to support the spend. We will be talking in future years of £2 million to £3 million. If we were to retain a capital grant at the level of £23 million that we have had in the past, that will not be sufficient in order to maintain. I am not talking about enhancement, but I am talking about maintaining the existing asset base that we have. We know that we have backlog maintenance issues, but then everybody does in their estate, but also the age profile of the fleet. There will be a significant reduction in the quality of the asset base if £23 million was to be what continues into the future. That is before you talk about the investment here of digital data and ICT, which is a significant uplift on that. The figures that we are talking about here are just to maintain what we have, and £23 million is very small. The reason behind it, to be honest, is that Police Scotland in the early years was not particularly good at developing business cases to make a compelling case for capital investment. This is an example where you have seen digital data and ICT, where we have come forward. This is how we have fixed that part of the organisation, and that is the bill. We have not done it for other areas yet. Can I just interrupt you there that capital, physically state, comes into that replacement of vehicles capital? They both have revenue costs as well. One way or another, whether we are looking at the capital budget or the revenue budget, if that is the area where we are targeting, there will be significant expenditure needed in the next few years. I do not see that recognised in the projections. Our three-year financial plan recognises the revenue costs associated with our asset base, and one of the points that we have made is that if there is not sufficient funding in the estate or in the fleet, we get cost pressures coming through on our revenue budgets. For example, the fleet tells us to stand still on the existing three and a half, roughly three and a half thousand vehicles. They need £11.5 million a year. We spend £5.5 million this year. That causes a revenue pressure because the age profile increases, so the maintenance costs of the fleet on average go up. You are quite correct that with an absence of investment in the capital estate, it puts a cost pressure into our revenue. In recent discussion, I was having some local federation reps that raised the very point about vehicle maintenance budgets. They were suggesting that local divisions were having to use their budgets to prop up the maintenance of the vehicles just in order to maintain a sufficient number of vehicles for them to do their local policing duties. Is that a picture that you recognise? Is that a sort of flexing manipulation of local division budgets to supplement the £5.5 million compared with the £11 million that ought to be going into maintenance? Is that a picture that you recognise? It is not a picture that I would recognise that a local division would be able to use some of its budget to buy a vehicle because capital purchases are all controlled centrally by the fleet department. Local divisions have an element of flexibility in their revenue budgets that, if they had sufficient budget, they may be able to do something with vehicles, but I do not know the detail of that. I would have to look into this specific. Suggestion that was made to me was not that they were buying new vehicles, rather that they were maintaining older vehicles beyond their expected service life, because essentially what was coming from the central pot was in terms of the number of vehicles that were not there. Frankly, they were just having to patch up and make to amend using their local budgets to do that. They also said to me, and I quote, that if you went into any police yard you would find vehicles that were not able to move because of a lack of money being spent on them. Is that something that you would recognise? No, it is not something that I would recognise at a local division level. I do recognise that, nationally, when you look at the maintenance costs of fleet, we are seeing cost pressures coming through because of an ageing fleet. How many vehicles or what proportion of vehicles are, at any given time, unable to be used because of lack of maintenance? I do not have that information, but I could get that provided. Will you be able to provide that? Just quoting your own submission, given the sizing of Police Scotland and our asset base, this level of funding results in underinvestment that is not sustainable. Even if my characterisation there is not one that you immediately recognise, it seems to suggest that there is a current immediate impact just because of the state of your physical estate, vehicles and other physical assets. What is the current cost or hindrance that the current capital levels are imposing on the police force today? Again, the detailed work around that has been done. I do not have it to my hand, but I could provide that. However, the point that I was making in there, for example, and it does go back to Police Scotland has not made a particularly strong case in the past for why we need a new estate that is more cost efficient than all the rest of it. There is an estate strategy on its way, so we are conscious of the fact that we need to start developing this and coming forward with robust business cases to seek the funding. Without us coming forward with business cases, we will not receive it. However, just to give you a better context of where we are now, our current capital grant is £23 million this year for the national police service. That run rate will continue over the next five years, and our capital programme would be smaller than that of the Shetland Islands Council, based on its published capital plan for the next five years. Just to add to that point, I am conscious that the context for this discussion is pre-budget scrutiny. As a kind of officer coming into this organisation, I have reviewed the overall financial structure of policing in Scotland. I just wanted to endorse the point that the chief financial officer made about the size of the capital budget for an organisation spending £1.1 billion and for an organisation of the character of policing, which uses equipment and cars. I think that there is a particular issue about the size of the capital budget and the balance between the revenue and the capital budget. £23 million is a disproportionately small capital budget for a public service of this type and of this size, and almost irrespective of what we do with digital data ICT, I would be very grateful if the subcommittee would consider that point in making representations about the policing budget, because it has far more systemic consequences, which members have picked up about impact on revenue, for example. I assure you that that will be reflected in our representations. Liam, you are washing in, and I am conscious of time. Thank you for the avoidance of doubt. Let's make clear that the Shetland Islands Council does not have an excessive or exorbitant capital budget. I was just wondering whether I feel on our bound to say that on behalf of my Shetland colleague. In terms of the representations that you have made, Mr Hogg, to the Government, you set out the do-nothing cost in relation to ICT or data digital and ICT. Have you mapped out the cost of continuing along the line, as Mr Gray said, of a capital budget in the region of £23 million and the implications of what that will be for the fabric of that estate, but also the revenue cost pressures that Mr Gray said are as a result of not having adequate maintenance in a number of areas? Are you able to quantify what that looks like? Only to an extent. Earlier this year, the Scottish Police Authority approved a three-year financial plan for the first time for Police Scotland, which underpinned the three-year implementation plan, along with a 10-year financial strategy for Police Scotland. Those documents did profile capital expenditure going forward, so I have a reasonable degree of confidence and certainty about the next three-year period, including the current year as year one. For example, we are on track halfway through the three-year period to eliminate our deficit on schedule by 2021. To go back to an earlier comment about the investment in the finance team, I think that the proof of the pudding is in the eating and the fact that we have now got a grip of the finances and we are on track to return to financial balance on track is a positive thing. However, what I have not done is undertaken a specific capital forward look along the lines that I think you are suggesting, which should project out what would the practical consequences be beyond that three-year period, for example years 4 to 10, of a capital budget of this size over time? Has any assessment been done about the risk of a pension shortfall? I might make a brief comment and then invite James to comment. Although the pension costs appear in the annual accounts for the Scottish Police Authority, the financial risk for police pensions is borne by the Scottish Government. That is why, although there is an overall pensions deficit mentioned in the accounts, it is nevertheless accepted to be a going concern because it is underrishent by the Scottish Government, but I do not know whether you have more detail on that. That is the position. I think that the point that we may be raising in the submission was just that what we are finding is that there is a significant pressure on the justice budget, as you will be aware, of police pensions that has been growing. That has indirect consequences, I suppose, for the public bodies within the portfolio, in that if more money goes into pensions and there is less available to be distributed to the public bodies, that is the only point that I was making on that. I suppose that you would want us to be asking the cabinet secretary about that when he came in. It is about a recurring issue that we have come over. The tension, if you like, between the additional 1,000 officers this figure 17234, the implications that that had for the loss of valued police staff who were laid off, the issue around backfilling, and then something that is more recent in that comes from the draft three-year financial plan from 2 May, which talks about capacity creation, which we are told would result in a reduction of 300 officers. So we understandably have unison concerned about the first one of those and the continuing implications of it and the Scottish Police Federation understandably concerned about the latter. What discussions or how will the budget reflect those competing demands? Perhaps I could start off with that question. First of all, in terms of police staff, it is undoubtedly the case that in terms of which staff group bore the brunt of the cost savings in the early years of Police Scotland's life, it was police staff and not police officers. As James Gray mentioned earlier, up to 2,000 fewer roles in police staff now than there were at the time of Police Scotland's creation. Partly that has been driven through efficiency and that is a good thing, but nevertheless it is the case that there are particular concerns there. Linked to that, and it is a point that I know that unison has made in their submission to the sub-committee, there has been an on-going inequity about some of the legacy terms and conditions of service of those police staff, depending on which legacy force they served in. They are now paid differential rates for doing the same job. Therefore, one of the priorities has been to harmonise those terms and conditions of service. There has been a programme of work going on now for some years, which is culminating this month, hopefully with positive progress being made towards a final proposition being made to all members of staff, which would see a harmonisation of those terms and conditions of service. The costs of that have also been built into our budget planning going forward. On your question about police officers, the three-year plan year 2, which is next financial year, includes an assumption of a reduction of 300 officers in the total complement in order to deliver the financial savings outlined. That was part of the three-year plan. Police Scotland is currently taking action towards that. Those assumptions can be revisited and can be changed, but if that were the case, other offsetting savings would have to be found in order to maintain the positive progress towards balancing the books by 2021. I suspect that that is just how I heard that, but there is no suggestion of revisiting the very good news that terms and conditions of police staff are being harmonised. That is not what you are talking about revisiting. You are talking about revisiting the officer numbers. There is absolutely no intention to revisit the harmonisation of terms and conditions for police staff. All I am pointing out is that, in the three-year plan for police officers, there is an assumption that, in 2019-20, there will be a reduction in total of 300 officers. We had a session about firearms licensing, which was very helpful. There were a lot of concerns about that particular issue, in which police officers had been replacing police support staff previously. At the conclusion of that, we got a very reassuring breakdown of figures. Will it be possible to get, and accepting that there will be areas of confidentiality around some of the departments, a layout of establishments, both police and support staff, and a comparator of how that would have started at the beginning of Police Scotland Police? I think that that would be helpful. Certainly. There have been no further questions. Thank you very much indeed for your contributions today. That has been extremely helpful for not just the Justice Committee, which is scrutinising the legislation and will be meeting with the Cabinet Secretary in the coming weeks. We are not closing the meeting. The next item on the agenda is to agree to take future consideration of the draft report and pre-budget scrutiny and consideration of the work programme in private. Are we agreed to that? Thank you very much indeed. I now can close the meeting.