Chamber and committees

Good morning, and welcome to the 27th meeting in 2022 of the Finance and Public Administration Committee. The first item on our agenda is an evidence session on the financial memorandum to the National Care Service (Scotland) Bill.

I welcome to the meeting Mark Taylor, audit director at Audit Scotland; Emma Congreve, knowledge exchange fellow at the Fraser of Allander Institute; Hannah Tweed, senior policy officer at the Health and Social Care Alliance Scotland, which will be referred to throughout this morning’s session as the alliance; and Ralph Roberts, chief executive of NHS Borders, NHS Scotland. I thank all the witnesses for joining us and for their written submissions, which we obviously have questions about.

We will move straight to questions. I will kick off with a question for Mark Taylor. I would like an explanation of what you mean by the word “significant”. In your submission, you say:

“there is likely to be a significant degree of variation in the treatment of central support service costs and other ‘overheads’.”

You talk about “significant” this and “significant” that. I would like to better gauge what you are talking about. For example, you refer to

“the significant amount of uncertainty set out in the financial memorandum”.

Can you give a bit more information about what you mean by that?

My only concern is about the range of numbers. Obviously, “significant” means different things to different people, so I just wanted to see whether I could pin you down a bit more on that.

Hannah Tweed, in your submission, you suggest that

“the financial memorandum does not provide sufficient detail on funding plans to assure the sector of sufficient investment to see the proposals implemented—particularly given the significant impact of the cost of living crisis on the third and independent sectors, as evidenced by recent work by SCVO.”

Obviously, you, too, have significant concerns. If there is a shortfall in relation to what the financial memorandum hopes to deliver, do you have any idea of what that shortfall might be?

I have been very neglectful this morning. I have not given the apologies from my colleagues John Mason and Ross Greer. They are coming to the meeting, but they have, unfortunately, been held up by train difficulties on their way through from Glasgow. I apologise for not saying that earlier on.

Emma Congreve mentioned a gap. NHS Scotland said in its submission:

“There is no detail about which community and mental health services were included within the financial memorandum.”

Therefore, that is a gap that concerns it.

Your response to question 7 talks about the volatility of inflation and about costs that have not yet been assessed. You also say that the

“variability of cost of staff harmonisation/rationalisation highlighted in paragraph 54 is not reflected in the range quoted.”

You use the word “significant” in saying:

“In our view there is likely to be significant uncertainty about the cost of harmonisation that goes beyond the extent of services and staff groups involved.”

What range would be more realistic than the range that has been quoted?

Hannah Tweed was nodding while Mark Taylor spoke. Your submission quotes paragraph 56 of the financial memorandum, which says:

“It is not anticipated that the establishment of the NCS and care boards, and the transfer of functions to those bodies, will have any financial implications for any other public bodies, businesses or third sector organisations, or for individuals.”

You disagree with that.

We are not looking for specific pounds, shillings and pence costs at this stage, but we are looking to see whether the parameters are correct and whether the best estimates have been delivered in the financial memorandum.

Cost underpinnings are important, because we are looking at structural changes and there seem to be colossal sums involved. We are not talking about building new headquarters for each of the boards or anything like that, but we are talking about hundreds of millions of pounds, and it is important to know how the figures have been arrived at, how accurate they are and so on. Do we have the best estimates?

Thank you very much.

I will now open up the session to members. The deputy convener, Daniel Johnson, will be first.

You were asked:

“If applicable, do you believe your comments on the financial assumptions have been accurately reflected in the financial memorandum”?

I found it interesting that you basically said that you did not believe that they had been. However, the Fraser of Allander Institute took the view that the

“analysis provided by the Scottish Government is reasoned and logical.”

Will Emma Congreve explain the institute’s thinking on that?

Thank you for that. You say in your submission:

“what could be the most significant”—

that great word again—

“public sector organisational change in recent memory must not be underestimated in both time, unnecessary distractions and increased costs.”

What do you mean by “unnecessary distractions”?

Thank you.

Emma, I found the Fraser of Allander Institute’s analysis quite interesting with regard to table 3 in its submission. You say:

“Decisions relating to the number of Care Boards have not yet been made, and the figures in Table 3 assume 32 are created, one for each local authority area.”

Does it seem efficient to you to go from 32 local authorities to 32 care boards? What impact would that have on delivering what the bill is ultimately setting out to do, which is to ensure high and consistent quality of care across Scotland?