Hansard

I welcome the opportunity to debate the Public Audit Committee’s first report of 2011, on the third parliamentary session. I have listened carefully to Hugh Henry’s comments in setting out the contents of the report and will address those in my speech.

The committee’s report has assessed a number of the ways in which the Government can improve how it operates. Those observations are especially relevant as we enter a period of significant financial constraint in the years ahead. Mr Henry highlighted a frustration about the scrutiny of local authority finances. Although I understand the committee’s frustration, many of the issues that Mr Henry highlighted—which are serious and significant—can be pursued by the Accounts Commission in its own investigations and scrutiny. That has been done on several occasions when local authorities have performed poorly. Nevertheless, I understand the point about completeness of perspective that Mr Henry makes on behalf of the committee.

The committee’s report identifies three themes: transparency, governance, and data collection and the measuring of quality. The permanent secretary of the Scottish Government, as the principal accountable officer, has provided the committee with a full and detailed response that addresses each of those themes. In that response, the permanent secretary emphasises that the Scottish Government is fully committed to ensuring that its use of public funds is as transparent and accountable as possible. The response also sets out examples of the many improvements that the Scottish Government has made to its processes. Many of those improvements were made in response to previous recommendations that have been made by the committee.

On the issue of transparency, the committee reports that its ability to hold the Scottish Government and public bodies to account has been compromised by difficulties in obtaining financial and decision-making information. Examples are cited that relate to the disclosure of senior salaries, the payment of compromise payments and the need for improved guidance on the use of public funds.

Ministers recognise the importance of transparency and scrutiny in relation to public money and have a range of robust arrangements in place for the disclosure of financial information. Indeed, some changes have been made recently to increase transparency, which is an acknowledgement of the focus of the committee.

Members will be well aware of the provisions of the Public Services Reform (Scotland) Act 2010, which imposes wide-ranging duties on the Scottish Government and public bodies to publish a range of financial and other information. That regular reporting will add significantly to the culture of transparency because it will require the public disclosure of information that was not previously disclosed.

Other initiatives are under way. For example, as Mr Henry said, last June the names and job titles of senior civil servants earning over £150,000 were published by the United Kingdom Cabinet Office. In addition, last October we published information on senior civil servants earning more than £58,000. The senior civil service is a reserved matter and we await guidance from the Cabinet Office on further disclosure.

In terms of payments arising from any compromise agreement, Audit Scotland has full access to the details of any such agreement and will disclose the position if the “Scottish Public Finance Manual” rules are breached in any way. I can confirm that no compromise agreement has been entered into with a civil servant in the Scottish Government since 2008. In the interests of further transparency and in line with guidance that was issued by HM Treasury last August, we will disclose details of exit packages in a note to the Scottish Government accounts.

The committee also raised the issue of governance, particularly the need for policies and projects to have good financial and outcome measures at inception and for robust governance arrangements to be in place to manage the project or policy. Significant improvements are being made in that area.

We have made progress on implementing recommendations in all four of the committee’s work streams with regard to major capital projects. The roll-out of the infrastructure projects database and the establishment of a new infrastructure investment board stand out as two recent significant developments. Our on-going work programme of developments and reforms has delivered improvements in the way in which we manage our capital projects. That work will play a vital role over the period of the next spending review, helping to deliver value for money and maximise the economic impact of capital investment.

On good governance more generally, we are focused on providing and promoting clear leadership and strategic direction across the public sector. We are also ensuring that regular dialogue takes place at a senior level between the Scottish Government and chief executives and chairs of public bodies, and that day-to-day working-level engagement also takes place.

Public bodies already have access to guidance such as the “Scottish Public Finance Manual”, which deals with risk management, among other things. Public bodies must also have an agreed management statement that sets out respective roles and responsibilities. We are preparing revised guidance and will take account of the committee’s report and recommendations in doing so.

As a specific example, constructive engagement and close alignment between the Scottish Government and public bodies is essential. We are revising and updating guidance on relationships between the Scottish Government and public bodies, and the “On Board” guidance for members of the boards of public bodies.

I want to highlight the points about governance that Audit Scotland made in its recent report on capital projects. It said that, in recent years, the Scottish Government has strengthened leadership and oversight of the capital investment programme and that

“The accuracy of cost estimating has improved in recent years.”

It also said:

“The Scottish Government is improving its project monitoring and management of the capital programme through developments such as the new Infrastructure Investment Board”

and the establishment of the Scottish Futures Trust. In all those areas, I acknowledge the absolute importance of projects being well founded, well designed, well programmed and well costed. The measures that are now in place have significantly strengthened our ability to monitor performance and ensure that wise decisions are taken.

The third theme of the committee’s report is data collection and measuring quality. That is an important issue, and I suspect that, in some areas, it is the most difficult one to address. One of the big policy shifts that the Government has undertaken has been to radically improve the pace of focusing on outcomes in policy making, but Mr Henry makes a fair point. To complete that process, one would need to be able to see how funding directly relates to outcomes. I am not going to stand in front of members and say that such a system is about to be enacted and it is all sorted out, because the process of moving from what is essentially a portfolio-based and programme-based budgeting structure in the Scottish Government to what I acknowledge would be a desirable focus on the outcomes that we intend to achieve and how resources can be channelled to meet those outcomes is immensely complicated.

In many areas, the data that are published are required to conform to the UK Statistics Authority’s code of practice for Government officials. That code of practice requires official statistics to be produced to a quality level, and we have assembled many of the statistics that are publicly available in the format on the Scotland performs website, which Mr Henry welcomed. That essentially gives a day-to-day and regularly updated assessment of the performance not only of the Government but of Scotland as a whole in achieving particular objectives. Some of that work is clearly founded on the work that is undertaken in the Scottish household survey, the health survey and the crime survey as major evidence-gathering sources for the achievement of outcomes. The quality of the information is strong and is based on the Government’s requirement to ensure that statistics—which are produced independently, I might add—conform to the requirements of the UK Statistics Authority’s code of practice.

The committee has produced thoughtful and powerful reflections on the way in which public funds are used. The questions involved are important, and they preoccupy me in undertaking my responsibilities and the civil servants who are responsible to me for the policy area. I assure members that the Government is taking seriously the thinking and contents of the Public Audit Committee’s report and that, where we can change practice to improve performance, we will undoubtedly take the opportunity to do so.

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