Welcome to the second meeting in 2016 of the Scottish Commission for Public Audit. We are very tight for time today. We need to be finished before 2 o'clock, so can I ask all members and witnesses at the outset to keep the questions and the answers concise and to the point, and as usual, if you could make sure that your mobile phones and other electronic devices are turned to silent. I'll move straight to agenda 1, which is Audit Scotland's spring budget revision. Agenda item 1 is evidence on Audit Scotland's spring budget revision for 2016-17. Members have a copy of the proposed revision in their meeting papers, and I'd welcome Ian Leitch, chair of the board of Audit Scotland, and Caroline Gardner, auditor general, Diane McGiffin, chief operating officer and Russell Prith assistant auditor general. I think that the auditor general might want to make a brief introductory statement. As in previous years, our spring budget revision request relates to pension adjustments. We've requested budget cover of 1,041 million to meet a non-cash pension charge that will arise as a result of accounting adjustments in 2016-17. The charge is driven by the continuing impact of low discount rates used to value pension liabilities. Those low rates increase the future pension liability forecasts and, in turn, the estimates for the in-year pension service costs that we're required to account for. It's worth emphasising that these movements are notional and don't lead to cash movements at all. As we've explained to the commission before, we're not able to plan for these changes in advance due to the timing of the information that we receive from our actuaries. We get the information once a year. We received this information in April 2016, so well after our last budget proposal was received by the commission. And as you can see from the information in our submission, the amounts involved are very variable and unpredictable. The Scottish Government have therefore asked us to deal with them through the spring budget Amy process, which is why it's here today. I'm sorry that this is a complicated adjustment, but Russell and I will do our best to answer any questions commission members may have. Well, the first and obvious question is, can you confirm that you've held preliminary discussions with the Scottish Government to confirm that the previously agreed arrangements with the CHM Treasury remain in place and have you advised them of the amount of audit Scotland's requirements? The answer is yes to both, convener. Thank you. Can I throw that open to any members if they have any question about this spring revision? Well, it's not specifically on the spring revision, but the Lothian pension fund in general, you'll be aware that pension divestment from fossil fuels and so on is occurring and that there are global efforts to decarbonise. And I believe there's about 5% of the Lothian pension fund invested in fossil fuels. Would you are audit Scotland open to reform to better inform pension members of where their pensions are being invested? More transparency around that I think would be helpful. In broad terms, I'm absolutely in favour of more transparency around public finances, including pension arrangements. I think there has been a gradual movement towards greater transparency about the investments of the local government schemes, which are the only ones that are funded and therefore invested. And I think we'd be happy to give you more information outside the meeting on the way that's developing if that would be useful. That'd be very helpful. Thank you. Thank you, convener. Any other members have a question at this point? Is there anything you would like to add to that audit general? I think that we're content if the commission members have got no further questions. Thank you, convener. Are the members content to agree by correspondence a letter to the finance committee, summing up our views on the spring budget revision? I think that members have obviously got a copy of the budget proposal and the fee strategy in their meeting papers. We have the same witnesses in this agenda as previously, so I'd like to invite firstly the chair of the body in Leech to make a short introductory statement, followed by the auditor general. Ian. Thank you, convener. Good morning, members. We are pleased to present to you this morning our planned budget for next year and our revised fee strategy. You'll be aware that we've been reviewing our funding for fee and fee arrangements in order to ensure that they are fit for purpose. This has been through a thorough process that I've described to this committee and previous members, consultation with all our bodies in which we audit. The fee strategy you have today is the outcome of all of that. We are implementing this strategy for the 16-17 audits. The timing is important because this fits with the new round of audit appointments. The procurement exercise for this was carried out earlier this year and will bring considerable savings. The review reaffirms and builds on the principles that we've previously guided our fee strategy, including the need to ensure fairness and transparency. The revised strategy aims not only to recover fees for our work across the piece but to better balance those fees within each sector and who are possible within individual bodies. One of the key changes that we are proposing relates to the funding of NHS performance audit work. In order to bring this into line with the other areas of the auditor general's remit, we propose that funding for this work should come from the Scottish Consolidated Fund. Details of other proposed adjustments are explained in the fee strategy paper before you. High-quality audit work remains a priority for Audit Scotland. Our budget proposal supports this goal by identifying resources to implement new quality arrangements. That will help us to enhance our assurance on the quality of audit work, promote continuous improvement in audit quality and support professional and technical leadership in public audit. At the same time, we are committed to quality, we strive for value for money. Our main expenditure is on our workforce, which we continue to actively manage. Staff numbers are smaller than in 2010. Despite that, we are confident that our on-going investment in staff development and training of professional trainees and the way we are changing how we work together will continue to deliver cost-effect of efficient world-class audit. I will hand over to Caroline Gardner to give you some introduction on the detail of the budget proposal. As you will know, the budget proposal has been prepared in the context of some uncertainty at the moment. In particular, the amount of work required as a result of the full implementation of the Scotland Act 2016 and, of course, any further devolution of powers as a result of the EU referendum. The proposal in front of you today is based on our known workload as it currently stands, and, as our audit responsibilities change in the light of those developments, we will obviously discuss the resource requirements with the commission further. In summary, the proposal that you have got will deliver an average real-terms reduction in audit fees of 8.6 per cent for the 2016-17 audit year, which has just started. A reduction in the revenue resource requirements sought from the Scottish Consolidated Fund of 2.6 per cent in real terms, simplified funding arrangements for the NHS performance audit, as Ian referred to, a reduction in our gross administrative costs of just over £1 million or 6 per cent of our expenditure budget for the year, and greater transparency in funding arrangements. Overall, I am confident that it strikes the right balance between value for money and ensuring the quality and support to Parliament that we provide, and we are happy to do our best to answer the commission's questions. In that case, perhaps I can start off. On page 4 of your budget proposal, you note that additional work will arise from the 30 integrated joint boards, and those will be audited by auditors appointed within the local authority. That is a considerable increase in work. Can you confirm the oversight arrangements for integrated joint boards and, in particular, what oversight role the public audit and post-legislative scrutiny committee will have in regard to those? Certainly, convener. The audit arrangements for the new integrated joint boards were included in the legislation that established them, so they were set up as local authority bodies, and the audit appointments are made under that regime. All the funds that the joint boards spend will come from either local authorities or from the NHS. At the moment, we think that that is about £8 billion a year, so very significant amounts of public money and providing services that are key to communities right across Scotland. It is one of those areas where the strengths of the public audit model are apparent, in that the accounts commission appoints the auditors to them and can report on problems that occur in the individual bodies. However, because of the significant amount of NHS funding that is coming through, I will also have oversight of that and can report back to the Public Audit and Post-legislative Scrutiny Committee. The committee in the last session of Parliament received the first of the reports that were producing on progress with setting up the bodies, which noted that some progress had been made but also that some risks remained around governance, budget setting and oversight. We are expecting to produce the second report in that series during 2017, and that will be reported to the Public Audit Committee in the normal way to give you that line of sight for the way the money is being spent and what is being achieved with it. Given the hybrid nature of the funding, will the Public Audit Committee have full oversight into the IJB through your reporting? Full oversight to the extent that the overall process is being developed and implemented as planned and for what is being achieved by it. There are accountability arrangements back from the joint board to both the local authority and the NHS, so that line of sight through the NHS gives you in the committee a scrutiny through the work that I do. I think that we will have to see how it develops in practice over the next few years as they take on the new responsibilities in full, but for now it certainly does give the Public Audit Committee the proper degree of oversight. My question relates to page 4 of your proposal in respect of the assumption that you make regarding the extent of timing of the work that is required as a result of the Scotland Act 2016. You also make reference for further allowance for planning for the implications of the EU referendum result, and you estimate that around £100,000 has been set aside for those purposes. I wonder if you could explain what those cash payments account for in terms of the additional resource that you think you will need to deal with those uncertainties. As commission members will know, the Scotland Act 2016 is being implemented over quite a long period of time. We already have Revenue Scotland set up, which will administer the new devolved taxes. We already carry out the order of Revenue Scotland, and there is no new additional work there. We have arrangements for collecting the Scottish rate of income tax in place now, and the second report that was published this week by the Comptroller in Auditor General for the UK spending HMSEs and my additional insurance. Those arrangements are already up and running. What we are still investing in is making sure that we understand the implications of the new full devolution of income tax on non-dividend, non-savings income, the assignment of VAT revenues to Scotland, and in particular the new social security powers, where we know that there will be a social security agency that is not yet up and running. There will need to be a good deal of interaction between that social security agency and the Department of Work and Pensions, and there will be about £2.7 billion of payments coming through those arrangements annually, so a very significant sum and a very high volume of transactions. We are investing in making sure that we understand the Government's plans for delivering that, but we understand the audit work that is needed and can come back to you with a clearer picture of what that audit work will require. The £100,000 that you referred to was paying for an assistant director who we have tasked with leading our thinking in this area. It is the full cost of that post plus development for him and the team that is working with him to really make sure that we are thinking through the audit implications, managing them well, building up our expertise and coming forward to you with a credible plan for the resources that we need for the longer term, as that thinking is developed. Since June, we have also asked him to take on responsibility for the implications of the EU referendum. Obviously, again, we do not know what that will mean for Scottish public finances in terms of what funding is devolved to Scotland and what audit arrangements are needed, but we will do that in a joined up way, and that is what the £100,000 that you referred to is funding. I appreciate that. Just so that I am clear, the £100,000 is the cost of the salary of this new appointment, but you made reference to investing in further research or investigations. Do you anticipate an additional cost beyond the £100,000 to invest in this additional research and understanding of what that is actually going to mean? We think at this point that the £100,000 covers our costs of doing the developing and planning for it. It is the full cost of an assisted director post, plus the associated costs in terms of training and development and travel that is associated with that. We know that there will be an additional cost of audit once it is clearer how the new social security powers will be used and, for example, some smaller things like the Crown Estate, but we want to come to you with a credible, properly worked up plan rather than guesstimates about what it might involve, and that is why we are investing for now. So that will come later? Absolutely, in future budgets. In future budgets, right? Yes, indeed. If I may jump back to a supplementary to your question 1, if that is okay, Auditor General, you state in your paper, page 4, about the IJBs. They will be audited by the auditors of the relevant councils. I am assuming that they will be auditors of local authorities who are used to auditing councils. What experience will they have of auditing NHS? From where I sit, the budgeting arrangements and then expenditure are quite complex for the IJB and a number of councils are still trying to get, and health boards are still trying to get to grips with that. So in terms of audit, it is going to be really important. Are there people who have joint experience or how can Audit Scotland and how can we be confident of their skills to do this properly? You are right, they are complex new bodies and they have got very significant responsibilities. The legislation that established the integration authorities also set them up as local authorities and therefore within the local authority audit regime. The auditors who the Accounts Commission appoint to carry out local authority audits, most of them also do NHS work and Russell can keep me straight on the number of those. But in any case, one of the central costs of Audit Scotland is in providing guidance and support to all of our audit teams to make sure they have got access to the expertise they need, to the information they need and providing opportunities for them to share their experience and insights and really make sure we get that consistency of audit work carried out across the sector. It is something we are monitoring closely and you will see elsewhere in the submission a reference to our investment in the quality of audit. But the starting point is that they should all be capable of doing this and Audit Scotland provides extra support where that is needed. Russell, do you want to add to that? Just to say that of the five firms that we use in local authority work on top of our own staff, three of those are also auditing the NHS in the new round of appointments and of the other two one firm was and as it happens the staff from the other one also have previous NHS audit experience. And the other point I would make is that in wherever possible we have appointed the auditor of the main council in an area and the health board to the same auditor. That is not possible across Scotland but, for example, to take Dumfries and Galloway as the example, the auditor of Dumfries and Galloway council is also the auditor of Dumfries and Galloway health board and is therefore doing the IJB as well. So the external auditor has complete oversight across the IJB arrangements. Okay. I just think that this is going to be fundamental to Parliament's ability to scrutinise effectiveness of the IJBs so watch that with interest. Can I continue to my next question chair? Page 5. You note that other administrative costs has decreased from 9,558,000 in the current year to 8376 in 1718 and throughout the document it is confirmed that the bulk of these estimated savings will arise from savings in fees paid to appointed auditors, which are private sector firms that Russell referred to, following our recent procurement project. Now, while the commission welcomes such significant savings, is it possible that audit firms will perform audits with less qualified staff in time to accommodate these reductions in their fee income and could this lead to an increased risk of poor audit quality for the bodies audited by the firms? I note that you have set side 100,000 to support and enhance quality regime, but with the adjustment to fees can you explore that a little? The board probed this question because it is a matter of concern and we are satisfied and Russell will give you the detail that by enhancing our quality input and additional resources we can check to make sure that the competitive fees that we got in the procurement round are not going to result in a poorer audit service. That is why we are both doing that so that we can do more checks on this. The firms were made quite clear to them what our quality expectations are before the tender round and, as Ian said, we are investing in enhanced audit quality arrangements to ensure that we are able to continue to give assurance to the Auditor General, the Accounts Commission and indeed yourselves about maintaining the quality and indeed improving the quality of audit. Absolutely right, we see the discounts that were offered this time as potentially posing a risk toward equality, so we are aware of that and we are planning to make sure that that does not happen. It does also strike me that Audit Scotland has to set side 100,000 pounds to check on quality regimes in which firms such as KPMG, Ernest Young, are taking handsome fees for the audit of our public sector. Should it not be incumbent on them to internally ensure that quality and because they are earning that fee and that not come at the expense of the public purse? You are absolutely right to ask the question. I think that the starting point is that all of the auditors we appoint, whether from the firms or from our in-house teams, are required to meet the international standards on auditing, the ethical standards which apply and the code of audit practice, which is the commission and I agree for the widest scope of the audit work we do here. We are always seeking to get the balance right between the quality that we cannot compromise but also getting best value for the public purse out of this. At the moment we do have robust arrangements for quality in place, but they provide us with different information about the in-house teams and the firms. For the in-house teams, we commission ICAS, the Institute of Chartered Accountants in Scotland, to carry out an independent review every two years of a sample of audit work and we get that information back directly. For the firms, either ICAS or the Financial Reporting Council on a UK base is to carry out a review of their work but not the work that is done specifically for us. We have less information about the firms, although we have the assurance that they are meeting the professional standards that are required. My view and that of the commission after discussion with the board is that because we are seeing continuing reductions in the tenders that are made by the firms in the competitive market and we welcome the cost savings that come from that, we should be recycling some of those savings into making sure we have truly comparable information across all of the people carrying out audit work for us so that we have the assurance that we are fulfilling our responsibilities and the commission does. It is a fine balance and I think it is worth noting that the £100,000 that we have put into the submission this year to ask for your support is about reviewing the arrangements. We do not expect that to be the cost going forward necessarily, but it is the cost of a project to review that and make sure we have consistent information across the piece and are getting that balance between cost and quality right. You would hope that £100,000 might reduce in time? I do not want to prejudge the results of the review, but it certainly is the one-off cost of reviewing how we do that and putting in place arrangements for the future. You are saying that the £100,000 is recycled money from cost savings on the firms that have been commissioned? As Ian said in his opening statement, we went through a very significant tend around that we do once every five years at the beginning of 2016. The results of that were competitive and gave us a reduction in the costs that we will be paying to firms overall over the next five years. We think that it is appropriate to look at recycling some of that into the arrangements that we have for assuring quality and driving up quality over the piece during the five-year period. Is the quality regime going to extend to in-house teams as well? That is one of the things that I am keen that we do. At the moment, we have different information about the in-house teams and the firms. I think that it should be a level playing field. We are also looking at the way in which we assure the quality of the performance audit work, which is what the Public Audit and Post Legislative Scrutiny Committee sees most directly every time. All of that will be on a common basis. Just coming in the back of Jenny Marra's comments, there must be a concern with fees and everything going down that the quality of service is maintained. Just sharing my experience in public audit, there was certainly a perception that in the case of Coatbridge College, probably again in Edinburgh College, and certainly it would appear last week in the case of NHS Tayside, that internal and external auditors were not exactly on the ball in some respects. That is a worry. It would be a significant worry to me as well, convener, obviously. We do, as I say, have quality arrangements in place at the moment. I am satisfied that the auditors that we appoint are all meeting the requirements that we place on them. That clearly is not quite the same thing as the impression that the committee is able to take from them as they are here before you as witnesses. I think that there may be more we can do to support them to perform as well as they can do in that setting. There is also something, as you will be aware from your formal life, about the gap between expectations of what auditors might be doing and what they are actually appointed to do. I think that we need to do what we can both to close that gap, but also to explain it that auditors are not there to seek out fraud or poor behaviour that they are there to provide assurance on the way public money is being spent, and I think that we need to keep an eye on that. All of that range of issues is behind the investment that we want to make in quality assurance. John, I am conscious that you have to go. Do you have any question that you would like to throw in? I am fine. Page 8 notes a new approach to best value across all 32 local councils in Scotland. I would be grateful if you could explain the new approach to assessing best value in our local authorities and what has changed from the previous approach. I need to start with the caveat that best value in local authorities is the responsibility of the Accounts Commission, not as me, as the Auditor General. Although, obviously, as an accountable officer for Audit Scotland, I have got a responsibility. Diane, do you want to talk about that from your perspective as a steering group? The new approach looks at the best value auditing of local authorities and maps that out over a five-year period, the lifetime of the audit appointments. The previous approach and the one that the Accounts Commission wished to move away from meant that, on a risk-assessed basis, local authorities would receive a best value audit once every three years, once every five years. Some authorities had not had a full best value audit for quite some time. What the Accounts Commission is seeking is a regime that helps to provide an ongoing assurance about the achievement and delivery of best value from authorities through the audit process on an annual basis. In some years, during the five-year appointment, there will be an added element to the best value reporting. We have remodelled a whole range of the work that we do in local government auditing. The Accounts Commission recently ran three roadshow events with local authorities to set out the new approach to chief executives and council leaders, and we will be rolling out the first year of that starting now. The first reporting from the first authorities, who are having the deeper best value audit in year 1, will be later in 2017. Over the course of the five-year appointment, the coverage of best value issues through local authority audits will be clearer and more comprehensive. There is an ongoing dialogue between the Accounts Commission and the Scottish Government over the framework for best value principles and the guidance that the Scottish Government issue, against which we audit. Our audit teams and the firms who are appointed to deliver best value audits have been working together to roll the new programme out. We could certainly provide you with further supplementary information, if you wish, and we could share with you the presentations that were given to council leaders and chief executives just recently. If you could do that. It seems like a more efficient process that will give greater clarity. That is what we are hoping for. I would like to focus on your business restructuring proposals that you outlined on page 8, where you say that the plan is to reduce the headcount of administrative support staff and realign skills and resources, and you are looking for a budget of £100,000 to fund the transition. Can you explain to me how £100,000 will be paid, given that it is an additional resource and it has not been met from existing resources? The background to this is the move that we made in 2015 from two officers in Edinburgh to a single office. We previously had two officers each on five floors with lots of different rooms within them to one office, all on a single footprint and with much more efficient ways of working better use of technology because we were able to do that. That, together with the ways that we are changing our staffing and the ways that people work more widely in Audit Scotland, means that the sorts of admin support we needed quite different from what we needed previously. Against the backdrop of a no-compulsory redundancies policy, what we have done is to design the structure that we think we need to support our business going forward, to go through a process of supporting our existing staff to apply for the roles in that new structure. Then we are looking for the provision that you mentioned in the 2017-18 budget to enable us to redeploy the staff who were not matched into the jobs in the new structure. We expect that redeployment to take place over a period as other staff move on as vacancies arise and so on, but it is really to capture that bridging point between where we are now and where we hope to end up. Diane, do you want to add anything to that as the person who has led the work? No, I think that that is pretty comprehensive. We are pretty far down the road. So, we are just going to ask, can you give me an idea of timescale for these changes? So, we have completed the transferring and matching and interviewing of colleagues and people now have their new roles and there is a supplementary team of four people who are in the team that we are looking to redeploy. Thank you. Can you just confirm or reassure us that the work previously undertaken by staff at these certain levels will not now be done by more senior staff, which would create an inefficiency for the jobs that they are supposed to be doing? Absolutely. One of the biggest drivers here, as the auditor general mentioned, has been the relocation on to a single floor and a single site of teams that were previously dispersed and that generates lots of efficiencies itself. In addition to that, the use of technology in the business, both by audit teams and support services, has made many tasks that were previously delivered by business support services redundant and so on. So, we are continually looking to maximise efficiencies. It would not be efficient for us to be displacing work to our audit teams, and our audit teams would be the first people to tell us that. In fact, what we are seeking is the opportunity to look for projects and support that add greater value to audit teams in the delivery of work, but what that looks like has changed significantly since the teams were first established and it is time for us to resolve that. Just another point. You are not making compulsory redundancies. Does that mean that you have offered a voluntary redundancy? We have offered voluntary redundancy through this process, and we will also be offering a voluntary early release scheme later on, but we expect that to be pretty modest. Do you have figures that you can give us guidelines for that? We will be launching the voluntary early release scheme in the new year, and we can certainly report back to you on that. The restructuring process is very recent, so we are still in dialogue with colleagues, but when we get to the conclusion of that, we can certainly share that with you. Just a reminder to keep questions and answers fairly tight. Jenny? Before he comes to me. Yes, page 13, Auditor General, you talk about the 196,000 of efficiency savings, so you are going to put more work in house teams rather than appointed auditors. Why is that decision arisen? Does it suggest that in-house teams are less expensive than the firms, or does Audit Scotland feel that you are not getting as much value from money from the firms as you used to? Neither of those in relation to that figure. We described earlier that we have been through the large procurement exercise to make audit appointments for the next five years, and as part of that we sought tenders from the firms in each of the sectors that we audit. That process starts off with an indication of the audits that will go to firms in each of the sectors, but once we know which firms have been successful, which have bid the right balance of price and quality to come into it, we invariably find that there are some conflicts of interest. So, for example, a firm might be the internal auditor for a council and can't also be the external auditor for a council. At that stage, Russell and his team enter into a tortuous process of discussion to make sure that we know about all the conflicts of interest and that we are avoiding them. We are making audit appointments that don't generate those conflicts. At the end of that process this time, an additional £196,000 worth of work that we had expected to go to the firms was actually appointed to the in-house teams without any increase in the in-house team's resources to take it on. We are confident that they can cover it by smarter working, the use of technology that we have been talking about, the investments that we are making in one organisation working, but we are generating an extra £196,000 worth of efficiencies as a result of the fine-tuning of the audit appointments at the end of the process compared to what we expected at the start of it. Are conflicts that you mentioned that you can't have the same internal and external auditor? Are conflicts like that more common now than they used to be? Russell, have you got a view? Yes, I think they are slightly more common as in particular in relation to internal audit there are probably more public bodies now that have firms as their internal auditors than was the case maybe a decade ago. They were doing it in house a decade ago. More were doing it in house I think. Does it also suggest that perhaps to follow on from Rona Mackay's question that the kind of staff count or audit Scotland actually you found yourself with surplus capacity and that's why you're pooling some work in back in house for auditors? No, I'd say not. Again Russell might want to comment. You asked as part of your lead into the question whether our in-house teams were cheaper than the firms. In practice actually they're not, they're slightly more expensive and that's something the commission has explored in the past partly because we know that we ask more often that they are more closely involved for example in providing support to Parliament, they provide intelligence to us about what's happening across public services and what we try to do over the life of the audit appointment is to make sure that the in-house teams can demonstrate either that their costs are coming down to the average of the firms or that we can quantify the added value that we're getting from having an in-house team. So it's about that balance of gradually increasing the efficiency and quality of the in-house team against the benchmark we have for the firms. Thank you. On page 17, Appendix 1, the budget for audit support external fees is forecast to fall by 27% from £586,000 in 2016-17 to £425,000 the following year. The actual expenditure in this area was 273,000 in 2015-16 and 311 in 2014-15 so given the historical levels of expenditure in this area are you content that the budget proposed in this area is actually realistic? Yes and I'll ask Russell to talk you through why that's the case, that'd be helpful. One of the biggest significant component in the variation of these figures across the piece is the cost of the national fraud initiative. That's an exercise that costs us approximately £200,000 and takes place every second year so the reason for the £586,000 for the current year is because that's a year in which we will make that payment and it then drops back again for the next year and we'll come back up in 2019. On page 17, Appendix 1, the budget for IT is forecast to increase by 18%. In fact, the entire capital budget £200,000 is in relation to IT. Maybe you can give us a little bit more information about that. I seem to remember about three years ago or so, we also had a fairly stiff charge for IT. Resilience and reliability of our IT is absolutely critical to the business and the more that our colleagues out-auditing in public bodies are travelling around and working across Scotland, the resilience that we need in the IT service is critical to keep them being able to work and access secure networks and so on. A lot of the additional costs that you see here is about the ongoing improvements to the resilience and security that we have. This year we invested a lot in achieving our ISO accreditation and we're very pleased to get that to ensure that the way that we hold data is very secure and we are continuing to invest in equipment that enables our teams to be able to work really from anywhere and at any time and the investment is the ongoing investment in IT resilience and security. Do members have any other questions that they would like to ask on the budget? On page 5, can you remind me what the corporation tax is for? Yes, we receive a small amount of interest income on money that's in a commercial bank account and that is taxable. On the same page and over, the proposed change to the funding of the NHS performance audit, clearly that's quite a significant change. On the face of it, if it brings it into line with what's happening elsewhere, it seems reasonable. However, I just ask you, does this constitute a technical increase in the NHS budget? I don't think so and in any case it's a very small amount, £475,000 a year. As you say, convener, the background is that for historical reasons performance audit in the NHS is the only part of our performance audit work where the audited body makes a contribution, currently the boards are paying 40% and the Scottish Consolidated Fund is paying the other 60%. As part of the review of the transparency and consistency with which we do this, we identified it as an area where we have the chance to improve both and to simplify the process for you, but it's clearly right at the margins and it's cost-neutral for us. It's cost-neutral for audit Scotland. My only concern is that if we're moving a cost away from the NHS and it's going to be met now by the Consolidated Fund, does that constitute technically an increase in budget in the NHS? I think it would actually mark a very small and a miniscule in the scale of things saving to NHS budgets. I don't imagine that the Scottish Government would want to reallocate the funding away from the NHS, but it's one of the things that contributes to the reduction in the audit fees, which you will see in the audit proposal for that sector. I suppose that the concern from the point of view of the commission is if it does constitute an increase in the budget to the NHS, however technical, possibly we can recommend it if it's appropriate, but we were in a position that maybe we'd have to get more advice on that and maybe ask the clerks to clarify that and come back to members of the commission so that we're clear in making our decisions as to where the powers in that lie. I think that that would be useful, but just for clarity it would be a reduction to the budget for the NHS and absolutely other margins. Would reduce their audit fees by more than would otherwise be the case? I'm just checking to see if there's anything that actually hasn't come out already. The current VAT arrangements, are they secure with HMRC? I remember two or three years ago there was a bit of correspondence and now she had some difficulties over VAT. Sorry, I'm on page 10. Is that now absolutely 100 per cent? The agreement that we reached with HMRC two or three years ago remains in place and we have no reason to think that it won't remain in place. How does it affect IGBs given the hybrid funding? They're local government bodies and therefore they fall within the local government regime. Even if funding comes from NHS the VAT is still secure. Because they're local government bodies, yes. The bodies themselves are local government bodies. They're not under control of the Scottish Parliament. Okay, unless the members have any other questions, I'm going to propose that we move on. Are members content to agree by correspondence a letter to the Finance Committee reporting our views on this budget proposal? Subject, of course, to the clerks coming back on that technical question on the NHS. Next thing is the fee strategy. Maybe I can start off with the key messages on page 4. The fee strategy proposes a fundamental change in how performance audits are funded and the NHS is funded. Can you explain in terms of the funding for NHS performance unit audits, how did the 6040 split originally get arrived at and how the funding was worked out to reflect the work and the requirements of the stakeholders? In other words, why was it put that way in the first place? I think that it goes back to the establishment of Audit Scotland in 1999-2000 when Audit Scotland was bringing together the work that had previously been done for the national audit office in Scotland and the work that had previously been done for the accounts commission in Scotland, at which point the accounts commission covered both local government and the NHS. At that point, all of the performance audit for local government and the NHS had been funded through audit fees within the accounts commission's regime. When Audit Scotland was formed, it became clear that the local government regime continued, if you like, at arm's length, but that the performance audit in the NHS would have a benefit to the Parliament as well as to NHS boards themselves. Therefore, the decision was taken at that point that it made sense to share the cost between them. I think that the 6040 was an estimate of where the benefits might lie. As always with these things, there's nothing terribly scientific behind it. Our experience of carrying out the fee review over the last year also has been that it is now an outlier. It's the only area where the costs are split between the Scottish consolidated funding funds and audit fees and that it's an inconsistency with the way all of the other performance audit work that's carried out for the Parliament is done. It's difficult to explain to people. It means that the fees in different sectors move at different rates for reasons that have very little to do with the work that's done for individual bodies. It just seems to us that if the commission is happy to support it, it's quite a straightforward way of simplifying the funding and fees arrangements, making them more transparent and making it clear that performance audit is one of the key parts of the support that we provide to the Parliament in overseeing the use of public money. However, it's a long way back in the midst of time, I think, as a short answer to that. On page 7 of the fee strategy, we're told that revised and enhanced auditing standards have increased the minimum amount of work required to conduct a fully standard compliant audit. Further notes go on to say that developments in technology in both accounting and auditing have streamlined audits of the largest bodies. On the face of it, those statements may appear contradictory and I would be grateful if you could explain how that increased amount of work is matching up with streamlined audits. How are you doing it? I'll ask Russell to talk you through that. First of all, the international standards on auditing a few years ago were completely revised and in doing so, the international audit insurance standards board increased the number of mandatory steps that were required to complete any audit. That has tended to push up the costs of smaller audits, but equally some of those changes to the standards meant that slightly less work was being done on some of the larger audits, whereas previously the amount of work was more proportional to the size of the body that that balance has changed. Bringing in technology has enabled us to carry out audits both more consistently and more efficiently. For example, having the electronic working papers files means that managers can access files from anywhere so they can review at any time. They do not have to go out on site and review paper files in one location. The files are accessible to the entire team. Those are some of the ways in which we are able to do audits more efficiently while still having to meet the highest standards. On page 7, you note that there are increased expectations in auditing or reviewing governance statements, remuneration reports and strategic reports and management commentaries. Can you explain those expectations and how and why they have increased? In the private sector, partly in response to the financial crisis a few years ago and some of the earlier corporate failures, the Venrontite failures, the standards of corporate reporting, corporate governance increased particularly for listed companies. Now successive governments have taken the view that they want to apply the higher standards in the corporate sector into bring those across into the public sector. Over recent years that's meant that, for example, governance statements have come in for all public sector bodies. Separate remuneration reports have been created, they didn't used to exist at all and they are subject to audit. There have been significant developments in management commentaries, strategic reports and the front end of the annual report in other words. Those are now subject to more audit review than they were previously. It all stems from trying to enhance standards in originally the private sector which successive governments have then adopted and brought through into the public sector. On page 8 of the fee strategy, Audit Scotland notes that audit fees should be set within the objective of recovering the full cost of audit in each sector. However, Audit Scotland states that some costs will be pooled within each sector. During the previous SSEPA's December 2015 meeting, Audit Scotland was asked if there will be a move towards fees being set for individual audited bodies within and across sectors. At that meeting, Auditor General advised the commission that this issue was still being considered by the board. Again, on page 8 Audit Scotland notes that it's reviewed and revised the cost of individual audits using information on the actual cost of delivering the audits in recent years. We acknowledge the improvements that arise from a closer balance between fees and related expenditure within each sector, but are there plans to ensure that individual bodies are only billed for the actual audit service that they receive? The statutory requirement that we work under is a requirement to recover our costs each year across all of our work. We have always complied with that. Within the fee review, the board has agreed—we have discussed with the commission here previously—the view that we can increase transparency and accountability by narrowing that to make sure that each sector recovers the costs of audit. The new arrangements will do that year on year. We have looked closely at the question of individual bodies. It is not quite as straightforward as the question suggested. We have rebased the audit fees to make sure that they more closely reflect the cost of doing the audit in each body, depending on their size and complexity and so on. We have reviewed the arrangements by which we apportion the costs that do not apply just to the cost of an individual body—the costs of audit strategy, the sorts of support to auditors that we were talking about earlier, our property costs and our IT costs. We have reviewed how they are apportioned to sectors and to individual audits. We will see some rebasing of audit fees for the audit appointments that have just started. Where we think the cost would outweigh the benefit would be to go through a process at the end of each year to review how much we had spent on each audit and go through a process of refunding and invoicing the amount that is spent for individual bodies. Instead, the audit fee will be kept under review during the life of the appointment. If there are improvements in the audited body or reductions in what they are asked to do that mean that their fee should come down the scope for that to happen, equally the scope for an increase where we feel that is required. However, we are not looking to recover the costs at the level of the individual body each year in that way. We have placed our focus on doing that at sector level, matched with much greater transparency for individual audited bodies about what they are paying for. You can see that breakdown in the fee strategy, where they will now have four lines showing the direct cost of audit, the pulled costs, and the other categories of performance audit and the overhead costs for which they are making a contribution. They get much more transparency, the sector will balance overall, and their fee will move across the life of the audit appointment, depending on our experience of doing their audit. Can I just ask one other question? On page 4, the key messages, we have had very substantial fee reductions over the past four or five years. This year, we are reducing fees again by 6.7 per cent, and you state that you are expecting further real-term reductions in fee levels in 2017-18 and in 2018-19. Isn't this a huge challenge given the expansion of the work that is coming down the line? Are there not lots of dangers in this? Again, I need to be really clear that the proposal relates to the work that is already known to us. As we have clear information about the new responsibilities that we have, we expect there will be new resource requirements, and we will come back with a clear proposal for that to the commission. At the same time, we take seriously our responsibility to make sure that we are providing the best value for money that we can to the public sector in Scotland and to the Scottish Consolidated Fund. We know that we have been able to make savings through the procurement round, through things like the property moves that we have made, and through our continuing efforts to make sure that our workforce is the right shape and size for the work that we do, and we will carry on doing that and passing on the benefits. I need to make clear that that is entirely separate from the resources that we will need to take on new responsibility. I think that it is most appropriate for us to treat those separately rather than to blur them into one for the accountability that we owe to the Parliament. Do members have any other questions that they would like to ask? Order, General. Do you have anything that you would like to add? Thank you, convener. I think that if there are no more questions, we are content to leave it there. In that case, I close this meeting of the Scottish Commission of Republic Audit. Thank you for your attendance.


Thank you very much for that, Lornaan. You've just tightened the whole project by seven years, you've just talked seven years off about. Come to that. It's not like you at all. So we're going to move from an individual academic position an individual academic situation and how they've used Open, how they've created content how they've shared it, and how they've been to my mind anyway, Emma's not in the room, been very authentic about it and yn mynd i gyd. I gynonwch am ymddangos yw'r ffordd mewn cyfathol, mae'r hynny'n gobeithio yw'r rhan o'r bwysig, ein rhan o'r pwysig, a'r rhan o'r pwysig o'r bwysig o'r rhan o'r bwysig o'r bwysig o'r eich gweithio a'r bwysig o'r pwysig o'r Llegos Dda. Felly, mae'n cyd-gaith yng Nghar涵 Llywog yn y 21 yma oherwydd oherwydd mae'n cyfathol o'r bwysig o'r bwysig o'r bwysig o'r llwyngol mae'r Llywodraeth yn ymchwil gwahol i ni, a gydwch mwy o'ch cael eu bod yn gweld, ond mae'n ddych chi'n hyn yn fwy o mydd eich pan oed dymes yn all felly o'ch ei'ch bod ychydig i'w ddych chi'n ei wneud, mae'na dwy'r Llywodraeth yn y Llywodraeth wedi'i gweld eich wnaeth ar y cwmhiliad, sy'n fwyaf am ymweliad ar y cyflog tiwn i'r hyn yn gweithio'r newydd, a'r newid i'r ffordd o'r lluniau a'r cynnig i'r ffordd o'r newid yng Nghymru. Mae nrhyw 3 yn gweithio eich ffres. Mae'r rhai bydd y ffordd o'r ddechrau cymdeithasol, mae'r nrhyw'n gwneud ei wneud eich ffordd o'r newid yng Nghymru, a'r newid o'r newid i'r wneud eich ffordd o'r newid. cyflym o'n ddweud dymr nobl syddadoeth oedd y cysylltu i'r ffordd. Rwy'n ffynol, yn gyflawn i wneud i'r heatedrio'r ddweud a dim myfafaf, mae'n myfyrfa i'r hunain, mae'n gyfreidio i'r meddwl, ac mae yna'n meddwl i'n meddwl. Rydyn ni'n gobeithio i'r ddweud y cwnglwg yn siarferio'r ddodol i ffawr yw'r cyfrifau. Felly, rydyn ni'n gobeithio ar y bwysig, rydyn ni'n gobeithio i'r ddechrau ffwrdd ar y Ffwrdd y Llyfriddol Newydd. Rydyn ni'n gweithio i ddath Vader a David Hulm. Rydyn ni'n gobeithio ar y bwysig. Y mhwyl drwyddoedd y ddechrau'r hyn yn ei ddweud, yng Nghymru, yng nghymru. Ond yw'r Llyfr Gweithgaredd, y 1752-1757. Yn y Llyfr Gweithgaredd yn Llyfr Gweithgaredd, yn y prydysgr i'r Llyfr Gweithgaredd, Fe oedd ein statiwn, yn dda o'r stiwn i'r Llyfr Gweithgaredd yn y dda o'r hyn yn ddod i'r llwyffydd, ac mae'n dweud o'r past, ac y byd am y% Lywodraeth Llywodraeth neu yw'r ffwrdd cerddwyd yn cynnig pwyllgor yma'r hanes. Mae'r bys i ddodi'r fanolaeth ar gyfer yn yr Ymgeis eich Ddiwrnig, mae'r ddaf yn ymdrwy, ond mae'r ddiwrnig yma'r ddiwrnig cerddwyd yn yr Ddiwrnig ym Mhwy pleased wir Gydfodd Ilywodraeth. Mae'r ddiwrnig yn ddiwrnig yn y ffr� a nhw'n credu'r hyn o'r hyn ymu'r ffr�, a mae hyn erioed y ddiwrnig yma. that we all thought was the best one. Cluttered history. A couple of points on that, and Katherine Croane spoke about this at the first keynote. I wouldn't even attempt to try to bring that level of sophistication to the things that she said in such a clear and compelling way. What I will say is that that upper case, and lower case, and you're open in terms of that definition about technical and removing barriers and all the rest of it, fod amdano lle i fyfyddan ni, mae gondolol i hoffadd rhywb이�n adon nhw, aيفred i nôr yn ei ôl. Mae nhw'n bryda i fynd i chi i ddangos y cas wy sighvt o'r ydych chi'n gwheithio hyn nhis yn yr hyn這種 geistcoed. Roedd chi'nhen ni'n gor simplyf eraillineaeth yn yr Institute of Education? A beth ein gwn이고 mae hynny Passh�� сказ iddu qua gylleng Merthyr ac mae edrych dinosaursau o leisi. Affi chw frontol specification hon gallwn David a dyna o'n mynd i'w ni'n dwy'r wneud, dyna i'w wneud o'r ffnwyshwyl yn fwy o'r fwy o'r ddeunydd, dyna i'w wneud o'r fwy o'r fwy o'r fwy o'r fwy o'r ddeunydd. Ond ydi'r storio cyllid yma, yna yw cyllid o Unigbryd George Force yn Scotland, i Edinburgh, a yn ysgolwch hwnnw i'n gweithio'r Llywodraeth Cymru yn y Cwm Nesaf. A'r gwneud ar hyn yn y Llywodraeth Cymru yn y Llywodraeth Cymru. Mae'r byw'r byw'r byw yn ymwybodol, mae'n cwrdd ar gyfer ddwy'r byw, ac mae'n ddefnyddio fyddiadol yn gwneud, a mae'n gweithio'r 10 pwyllwy ymgwrs yn y stach neu'r ddangos, mae'n gweithio'r 11 pwyllwy. Mae'n gweithio'r Gwnegei Llyfrgell, ac mae'n gweithio'r bwysig. Mae'n gweithio'r bwysig o'r rhaid, mae'n gweithio'r bwysig o'r coffaeth neu'r jacrowd yn cael eu bwysig o'r firstbwysig ar Harry Potter, y Harry Potter seriw. ychydig yw 14 yw'r gwir. So, mae hi'n gwybod y Hocam, yng Nghymru, yn ychydig yn George IV yma, ond mae'n gwybod, mae'n gwybod, mae'n gwybod yn gwybod. A'r Llywodraeth Nesaf, mae'n gwybod yn ei wneud, yn yr ymgyrch yn ymgyrch, yn y Llywodraeth, mae hi'n gwybod, yn ymgyrch, yn ymgyrch yn ymgyrch, yn ymgyrch yn ychydig, yn ymgyrch yn ymgyrch, mae'n gwybod yw'n gwybod, Maes i'n meddwl i'r Exibisi Cymru, yn fwy i'r sefydliadau a heddiw, ond y ffordd i'r sefydliadau, y byddai'n meddygol. Mae'r Ffyrth Folio 1 yn ymddangos i ddaeth i'r Lai Lai Lai Pwg 11 i Lai Pwg 2, felly mae'n meddwl i'r Ffyrth Folio 1 i'n meddwl i'r Oxford Cymru, fel y gallwch chi ddim yn ddifelod ar y twyd yn y gwneud. Mae hi'n meddwl i'r Lai Lai Lai Pwg 12 o'n meddwl i'r Lai Pwg 13, iawn yn ystod yn hynod yn ychydig yn gweithio'r cymdeithasol. Yn y cwlwedd cyd-gwlwyddon, y cyfnodd cyllid cyllid cyllid, Edinburgh mae'r cyfnodd cyllid cyllid. Mae'r cyfnodd cyllid yn cyllid yn cyllid. Mae'r cyfnodd cyllid ar y cilydd. Mae'r cyfnodd cyllid ym Ysgolodd yma. Mae'r oedd yma. Mae'r oedd yma. Mae'r oedd Robin Lewis, Stephenson. Mae'n ddiweddio'r Llyfrgell Llyfrgell am hyfforddiad mewn bydd y cyfnodd cyllid gyda middlwyd ar y wahanol. Mae'r cyntaf yn y gelbeithio, effeithaf mae'n gwybod i'r gweithio'r sylltion. Ond mae'n amlwg yn nodi'n gwybod i gilyddiaeth iawn. Ond tro wedi'i'n gweithio'n gwybod i gyd yr oeddwn, rydyn ni'n mynd i'n mynd i'r Wlad, a rydym ni'n beg ohol i gyd, sydd wedi'u yng Nghymru a nhw'n sefydlu o'u cyfrifwyr yn i oed i'r rôl i'r Gwlad. Rwy'n meddwl i fy modd, boi'r cyfrifol o'r modd y tuchael a'u cyfrifol yn y pethau yma, a'u cyfrifol yn y Llaidwyr Fylltadol. Yn ni'n gwneud am y Llyfrgell Llyfrgell i'r gynhyrchol mae'r heblidwyr iawn o'r Llyfrgell Llyfrgell, ond mae'n gwneud o'r lliflwyr o'r lliflwyr, ond mae'n gwneud o'r lliflwyr o'r lliflwyr o'r lliflwyr o'r lliflwyr o'r lliflwyr o'r lliflwyr. Ond o'r ddegosiaeth o'r ddigon y dyfodol y gweithio'r Gweithio Gweithioedd yng Nghymru yw'r llawr o'r gweithio'r Llyfrgelliaeth, o'r ddigon o'r ddegosiaeth o'r blaen o'r ddull i'r ddull yn ymwneud yng ngheil, o'r ddweudio'r Scolon. Rydw i'r Llyfrgell Llyfrgell yng Nghymru yn ystafell i'r Llyfrgell Llyfrgell, a'r ddweud o'r ddweud i'r ddweud i'r ddweud i'r ddweud. dyna rhoi, mae nhw'n mas gwybod am hyn yn rhoi cyffredinolau. Mae'r cyffredinol ar gyfer cyffredinol yr cheredinol, mae'n gynnwys cyflwynau oes y bwysig ar y Newisio Llywodraeth. A'r ddechrau ar adnod y wallach yn inni. Mae'n cyffredinol is iechyd, dyna mae'n gilydd i wedi gweld cyffredinolUNT, rwy'n gweld, os ysgolwch sy'n gymryd, mae'n cael ei fodio of Scotland at the moment, a feature of how we actually look at and view ourselves, and we curated a massive collection of material relating to the Scottish referendum, not just the UK web archive where we collected a lot of material, a lot of limitations on that material, and maybe I'll talk about that a bit more later on, but also all sorts of ephemera and various badges and everything, all sorts of things were collected and curated, and that's part of our role as a memory institution, as a memory institution for Scotland, and that's a key word that resonates through our new strategy. Let's just think quickly about a global definition as well, I won't go into any detail about that, but this idea of custodianship of the nation's intellectual heritage, all very, very good strong words, in every national library, this is the IFLA declaration, every national library aspires to be like that for their country, but lots of national libraries are trying to find their identity in this very busy, busy and sometimes cluttered information space that we're in. I'm going to mention collections quite a lot, but I'll try and do it quite briefly and skim over, that's just really a nice picture of a number of things, Robert Lewis Stevens and I squeezed in there, I was introduced because I did a book on that a long time ago, but that book, and I just mentioned that book, it was produced in 1911, I believe it was never taken off the shelf, it was never taken off the shelf in a national library, I would recommend it as a legal deposit book, until I took it off the shelf in 1993 and just thought that's a fantastic picture, I'm going to put that in that book, and I challenge many of you to go into a bookshop and you see it in the cover of a treasure island, because it can be freely used around the rest of it, it can go on travel and everything else, but no one else has got a copy of that because it came into the, and it had to wait its moment, it had to wait from the first decade of the 20th century, many, many decades later until it was picked up and used and what a shame it would have been if that was lost, so lots of content you have, birkin hair there, you'll see right in the middle, the first serial killers in the whole of Europe, that's the first for Edinburgh as well, and they didn't, they didn't dig anyone up, they weren't grave robbers, they developed their own fabulous way of doing it, and I'm quite happy to speak to anyone at dinner tonight and tell them how they did it, but you may not want to drink anything after that, you may just be on your last glass of wine after you hear how they did it, most seriously this idea of the dual role of the National Library is a very, very important and vital one, now one enders preservation at the other enders access, this conference here is interested in access, the National Library, most national institutions have to play that tension game between preservation and access, our publishers who we have the right to claim a copy of every publication made in Scotland are quite rightly insistent that we look towards our preservation responsibilities, the future guarantor, the preservation copy, the last copy, the security, the restricted, the future use, possibly not so much current use, so again there's a set of ideas and a set of markers for an institution telling you that this is the way we view you as a national library, on the other end there's an expectation of excellent buildings and seamless illegible services, ease of use, ease of use plays well into open as well, this idea of remote access as well, there's a terrible, terrible dilemma for national institutions that have really electronic legal deposit to square the answer of it, I don't know if that's the wrong way of saying it, how do you say to someone in 20 years or 10 years that you have to come to the national library, a physical institution to view an electronic resource, I'd love to hear your phrases that I can use when that happens because I can't really come up with anything yet. And funding is an important thing, it's one of those things that we sometimes forget, 90% of the money the national library gets, its revenue and capital comes from the Scottish Government, comes with great responsibilities as well, and that little number there, it's a big number, it gouges me many times, 27% reduction since 2008, so over a quarter shrinkage in terms of that revenue that enables things to happen that allows us to feed innovation, allows us possibly to be more open and we'll come back to that. Our operating context, I won't go into a lot of detail with this, but there really is something there about governance and funding, there's a bit of strategy, a new strategy that will come to you in a few seconds, we made this tough, it was our own tough demands, no one asked us to do it, well I cannot ask everyone to do it, but apart from that there was major sign up to it, I can assure you, and also this idea of that wide user base, we're very very committed to that idea of democratising our resources, of making them available right across the information space in Scotland, and also this case for open, chose my words carefully, they are an emerging external factor, because I'm not in a higher education institution, well that seems to be much more embedded when I was at Edinburgh, much more embedded the case coming through for open access, you've heard about open educational resources and all the rest of it, less of a driver, but nevertheless an important driver now, back to the clutter, these are some of the issues, some of the challenges, the institutional culture, some of the things that we have to deal with, creating all of this content, many many parts of it come with all sorts of different complications as we make that big big jump to share as much of it as possible through that digital initiative, but we've not been sitting idle waiting on something happening, we've done quite a lot already, we've been digitising material, we've been sharing it, we've been using creative commons to make sure it's as available as we can bear it to be, or as it is allowed to be, and it's grown organically, we've grown this whole thing organically, and I'll come to some of the initiatives that we've done over the last few years towards the end of this talk, but critically we've also opened the buildings, we've opened the buildings, to my mind open is also about that physical space which is the library, and there's this image of the massive massive library with tiny little door, and it looks so small, it's a bit like something like an Alice in Wonderland, you know the space is shrinking change, and if you look at some of the libraries in Oxford actually you'll see this, a tiny little door to get into the historic library, and then it opens up inside, so that vision is something that we're working about, how do we open the space up, how do we make the actual physical space more open, but also how do we drive openness and an open and innovative culture inside the space, we've done that through social media, we've got lots and lots of people tweeting at the library now, you didn't say use your camera phone, show people what you're doing, just be open and authentic about what you're doing, you'll see our twitter feeds have gone up quite a lot, so part of just using that in that sense is maybe inappropriate for the conference, a bit seeking forgiveness rather than asking permission to do things, just go for it, try it out, see if it worked, and if you're going to fail, fail fast, so the openness journey has been messy, it's been cluttered, confused rights, although we've cleared a lot of that up I think, lacking in coordination or some sense of that as well, it's time consuming, there was a lack of institutional buy-in, and I think that that might be previously, my institution is buying into this, but that open road and I'll come to that in the conclusion, I see that as stately progress along that open road, not getting a fast-pale mail pace, we need to take the whole institution, we need to take all of the collections or as many of them as we can as we do, as we go along, and we need to upscale, as we upscale we need to declutter, it's very very administrative heavy, lots of transactions around rights and processes and reuse less so, and we need to be careful about how we map it, we have a board, we have a board that have different views about these things, we have to manage their expectations as well, and we have to beg and borrow the best, Shakespeare did it, why can't we do it? We do envy and admiration very well at the National Library of Scotland as well, and these are some of the institutions that we think are doing fab stuff, fantastic stuff, New York Public Library, really really interesting things they're doing with some of their content, also the Bibliotech National, the Welcome Library, I've got a separate comment to make on the Welcome Library so I'll leave it there, but the National Library, the British Library, look at what they've done with the mechanical curator, terrific stuff that was a result of the project with Microsoft, which lasted for a short period of time, but what they've done with those images and pushing them out and allowing them to be used, very very interesting, but really the Welcome Library and what they've been doing over the last few years in terms of upscaling their activity and pushing content out, working with the internet archive is really something that we're keeping them watch, fly on, as we consider how we get down that route in terms of upscaling digitisation, and in Scotland you see lots of really quite wild things happening as well in the commercial space, and this is one of my favourites over the last couple of weeks with BrewDog, just basically putting their whole recipe list for every beer they've made, now BrewDog if you don't like beer around that's fine, but this is important because they are ProRata, the fastest growing company in the whole of the UK at the moment, and what they've done is they've just basically pushed out their, basically their intellectual property and said you can use it, do you like, and if you look at that it tells you exactly how to do the whole thing, now what are they saying by doing that, that's a huge huge risk for them, so there's lots of examples out there that are affecting even institutions in the national library, and what effect that will have, first dichotomy, this was mentioned in the first keynote I think, about there's no open and closed, it's that messy space in between, and that's the same as an institution as well, how we deal with all of that, we don't see that as closed and open, I mentioned a few things, some of the closed things, there's not a lot we can do about it in the short term, but in the long term that commitment to further and more an innovative openness is a given in our new strategy, quickly on the strategy itself, we felt that there might not be any interest from the press, and then we came up with a few messages about what we planned to do, and we did very well actually, we got a lot of media impact for the strategy we were launching last September, but things got slightly muddled in that media space as they often do, and the one that made me laugh and then cry was that the national library would digitise 24 million items, and even with the great ambitions that we've brought to the institution in the last year or so in thinking about how we could actually transform ourselves, we won't be able to do that, and so that was a slight exaggeration probably the first time the press or the evening news have ever done that, and so the actual figure is a third of the whole of the corpus of the national library, and I'll come to that in a few seconds, that's the strategy, you'll be absolutely delighted to hear that I'm not going to enumerate this and go through it and read out every part of it, all I'm going to do is just touch quickly on the things that I think are important in relation to what I'm going to talk about about these scary numbers as I come to that, a lot of it's about improving access, and what we didn't want to do was put something in that just became this lovely warm words about improving access and doing this and reaching out, and what we wanted to put was a scary number, something that would terrify us over the next few years and actually commit us to it, something that would energise the organisation, and what we came up with was this idea of complete a full list of the library's holdings, hidden collections, every library's got one, few librarians talk about them, we're going to make all of it available and well we're going to catalogue all of it, use metadata and all the rest of it, to make it available so there's full disclosure of that content, and also the total corpus, a third of it will be in a digital format, and again you'll see my scary numbers, you'll see how much effort that is going to take to do that, and underneath there's some other things. The bottom one 2.2 will be welcome back to haunt me over the years about making that material globally available, that is a big big ask for some of the limitations that I've already spoken about. Promoting research is dead centre now to the National Library, it was airbrushed out of the conversation for a few years, absolutely central to what we do and also supporting learning, and reaching out, I just mentioned, I just this reaching out now, I brought it back in again, a key thing that we want to do as well is we've got all of these buildings that we look after and we've got a website and we've got web services, we want to bring parity of esteem for both of those, so the attention of the institution needs to be on both of those, and we want to in some senses recalibrate the resource that we put into it to make sure that as we develop these services and we bring this content through it's actually quite clear how you can access it, not just in our web space but in other places as well, and I've got a very sophisticated design for the website towards the closing of this presentation that I'd like to share with you. Unfortunately my numbers have gone slightly odd because this is coming out on work but I think you can still see it, is that the cocaine up there, no excuse, it's gone a bit funny, so really these numbers very quickly, the next three slides are just about scale, the first one is physically we've got 26 million items at the moment and it grows by about 800 daily, that's the figure, the rest of it you don't actually need to know, below that born digital is this illegal deposit I was talking about, at the moment that's one and a half million it's growing I feel exponentially, it's going up by 800,000 a year at the moment and we do that in partnership with the other legal deposit libraries, so those are the two figures that I'd like you to hold in your head at the moment, this is other content that we have, that one at the top is a big, big thing for us in terms of inter-perpetuity content that we've purchased over time, we need to think more seriously about that and how that plays into into your space and then under that the UK Web Archive, if you're interested in that the UK Web Archive is part of the illegal deposit and it's very locked down, millions upon millions of URLs but very very locked down, you have to consult it in a legal deposit library and if you look at the British Library's open UK Web Archive it's about 15,000 websites and they've gone through the exercise of getting it as free and open as possible and it's millions upon millions of hits every year, I don't know of a starker contrast in terms of closed and open as regards the resource, the scary number is four million and four million is what we need to produce or we need to digitise or get into digital format, probably from our analogue collections over the next 10 years and it is 10 years, spite what Lorna said earlier, I can't accept that challenge of doing it in three years, it'll take every effort we've got to do it in that longer period of time and that's the kind of content we're talking about, the one at the bottom about born digital, illegal, we have to have attention between that, we can't do that exercise without thinking about this electronic content that we bring in that we curate the government pay for so we've brought attention to those two but the scary number at the moment is four million that might go up it might go down and we've forecasted what the born digital illegal deposit will look like over that 10 year period that is still a massive ask for us you really are talking about us going up at 10 times 15 times what we do at the moment over that 10 year period what it will do is transform the organisation and it will transform what we do because it will take us from probably the bottom scale of the bottom of the scale of national institutions across Europe that are moving analogue to digital through digitisation and sharing and doing OCR and all sorts of other things probably closer to the top how are we doing it we're working on it we're working on it at the moment the numbers are there and we're really at the point of designing quite an interesting library-wide digital production programme and it will be inevitably because that's what it is at the moment as we up scale it commercial in-house bespoke there'll be manuscripts and archives at this end there'll be there'll be really mass industrial digitisation at that end that's the network we've got at the moment but what we're doing for the first time is coordinating all that bringing it all together and seamlessly running it right right through the organisation and also costing it up how much does it cost us to do it because we need to do 10 times this in this parallel work on actually revealing those collections and part of the reason we want to do it over 10 years is because we need to give ourselves some time to do it but also the national library will be 100 years old as as a founded national library 1925 by 2025 and I don't think we can celebrate that without having a dramatic shift in the nature of the content that we offer the citizens we cannot do that and say we're going to refurbish a building and we're going to put a plaque up we need to do something that is really quite dramatic what we're also doing is resetting the library and the funding I'm thinking seriously about that restructuring at the moment we're in the process of doing that funding we're working on an escalator about how much needs to be done we think we need at least a million in the next couple of years every year for absolutely baseline big bet on this and probably need more than that looking at the welcome and looking at some of the other institutions that have done this we actually need to put more into that we're also working out and this is a big big thing for us how do we shift our donors and supporters from continuing to support heritage acquisitions if you google the national library of Scotland or put us into a search engine you'll hear that we bought a bravery recently the sweetheart bravery beautiful beautiful book we're just in the 13th century gorgeous book and we do okay in raising the huge sums of money to get that we brought the John Murray archive to Edinburgh cost 30 millions we do okay that was a painful exercise and it's they're a fabulous bunch of people that we work with there but how do you open the minds of donors and say digital is the thing this is what we need to do next and that's a really really difficult thing for an organisation to do which is steeped in heritage which is the first books printed in Scotland the Shakespeare first folio we've got all of that content that just opens people's eyes so how do we make that shift so we're thinking on various things in terms of fundraising campaign but we've had discussions with our foundation our charitable foundation and they've nodded and said okay we get it we see it's in your strategy we should see that's what you're what you're going to do and the language is beginning to shift and move as well so decluttering the library won't take time and these are some of the things that we've done we've done over the last few years work working with the internet archive we've got 5 000 items on the internet archive this is the usage very very good usage excellent and it's it's broken new ground in terms of how the library thinks about its content also worked with wikimedia we had the first wikimedia in residence in scotland in the national library of scotland that wasn't mentioned earlier i noticed and lots of images have been put up there as well and they're heavily used too so there's we're breaking ground in terms of the sort of cultural imperative in the organisation for thinking about being more open but really that's just that was just a short exercises to remove to this really upscaling initiative that i've spoken to you about as i draw to your clothes i'd like to spotlight our map library and just to me it gives a it gives a kind of exemplar or a nice little case study of an institution like the national library over the last few years they've digitised 140 000 maps they've done it in a very innovative way they've they've got themselves involved in commercial partnerships bernas told me to stop i didn't realise i had gone over i was looking backwards okay i'm going to stop quite soon i won't go into any detail but terrific work being done there google analytics off the scale in terms of what they're doing they actually drive more traffic than our main website some fantastic pictures that lawerna won't let me show you but i'll canter through them really quickly gordon's map of edinburgh 1647 gordon's map magnified by the good people of the map library some of the fantastic stuff that they've done there john slazer's map 1690 edinburgh castle zoomed right in you can do that on the website using triple i f fantastic stuff that they're doing so there are good stories to be told in the national library i was going to go into great detail about this complicated website that we're thinking of designing but i'll just briefly mention what i think it might look like over the next few years services stuff in data foundry the data foundries where a lot of the open content will go not only open content i've spoken about how do we run our buildings how do we manage down the environment how do we green all those buildings we've done a lot of good things with that we're putting the data in there so you can look at it and reuse it and all the rest of it the data foundry part the stuff is obviously what i've been mentioning but the data foundry is a fferocious animal it needs to be fed and so that's the that's the kind of view you have to have of it and if you design your space like that it needs to be fed stuff from the stuff part and from the services part and overall it will change the organization so that's the the current view of what the the website might look like the road to open it's zigzaggy for us there's pock holes there's all sorts of things and there's lots and lots of people down that road cheering us on and some of us some some of them booing us saying you're not going fast enough you should be going that way but what we've done with our new strategy and with some of these numbers that we've crunched we've given ourselves a real purpose over the next five to ten years that i think using open and using all sorts of different methods i think it'll give us a new national library of Scotland for the 21st century thank you very much yes sure do you mean the metadata well we our metadata is is open it can be searched it can be reused our database will be developed we haven't quite worked out a delivery mechanism for the actual digital content we've just joined the triple i f consortium we're actually going to be redesigning while we're going out to procurement for a new library management platform which will be end to end and it will manage all of that data and information what we will do is follow the the sort of international standards for all of this as well and that's about as much as i can answer in relation to that question over here yeah that's a really good question and it's something that keeps me awake at night but i'm really glad and happy that i've got a lot of technical friends and we've we work with the british library we work with the legal deposit libraries and we're actually we're actually involved in a in a project with edw that in in europe and we're putting i think about half of our content in the moment into that and triplicate or testing it we're again working with international standards doing testing and research i can't guarantee that all of this content especially analog to digital content will be available in 10 years 20 years 30 years but what is important is that certainly the analog to digital as we do to the best standards we can we use the metadata properly and well and we develop it we put it in the right spaces but also that we work on digital preservation and how we can recover that material which might mean that we strip back some of it but can i say also that i said it keeps me awake at night it doesn't really because i'm a historian as well when you look back the way lots of things get lost lots of things the the broad the broadleads called i've already mentioned this again i'll use another example things that get lost things technologies become obsolete and the this methodology for digitisation the drive for us is to open up the organisation is to open that content up and to in parallel to work as closely as we can with ensuring that content will be available will be migratable and it can be stripped down and recreated when we have to do it and that's a bit as much as i can do i'm not a i'm not a i'm not a i'm not an enthusiastic proponent of it will all be here in 50 years time but what we will have is a number of institutions that are massively committed to making sure that it is including the national language. John for such a really inspiring to you that i'm actually a strong type of institution that's going through my phone right now man however thank you for coming today it was really time to your talk i think when higher education sector could learn a lot from listening to the kind of questions that my views are asking so we can just good job traditional by trying to pause


Hi, I'm Zor. Welcome to Unisor Education. Today we will talk about amplitudes of electric and magnetic components of electromagnetic field. Now, this lecture follows the one where we were talking about speed of light, and we have come up with a formula which I will put on the board. So, it's basically a continuation of that lecture, and I will use basically all the results which have been derived in that lecture. So, I do suggest you to refresh it if you don't remember what's in there. It's a previous item on the menu just prior to this one. It's called speed of light. So, you go to coursephysics14 on Unisor.com and choose the waves part, and in that wave, waves part, you will have this particular lecture on electromagnetic field amplitude. And prior to this is speed of light. Now, the website unisor.com contains not only this particular course, but also the prerequisite which is mass for teens. Also, right now I'm working on another part which is called relativity for all, which is basically a little bit higher, more advanced level after the physics for teens. The site is totally free. There are no advertisements. Sign-in is optional only if you would like to use some functionality related to educational philosophy. If you wish, if you have a teacher and he would like to supervise you, so you need sign-in on both sides to basically establish the relationship. Otherwise, if you just do it by yourself, you don't need any sign-in. What else? Every lecture including this one obviously contains on the website right next to it the very detailed explanation of the same material in a textual format. It's actually a textbook format. So, I mean, if you will combine all the different notes for all the different lectures in proper order, that would be a textbook. So, I basically kind of divided it into lecture and notes, lecture and notes, et cetera. And it's all related through the menu. You have the top-level menu and then sub-menus, et cetera, which will give you a proper sequence and logical dependency between the lectures. Okay, so now back to business. We are talking right now about the simplest kind of electromagnetic field, so-called monochromatic flat waves or plane waves, if you wish. Now, what is this? Imagine system of coordinates. Let's say this is x, this is y, and this is z. The magnetic field has electric and magnetic component. These are intensities of the field, the forces basically. This is the force per unit of charge and this is also per unit of something. So, magnetic and, now, they are perpendicular to each other. And let's say this is direction where vector of electric component is directed and this is directed along the y-axis. Now, so the electric component goes along the x-axis. The magnetic component goes along the y-axis around zero. And obviously the direction, this is the speed of light, this is the propagation of the waves. So this is a monochromatic plane waves. And obviously I assume that, and again that was in the previous lecture, the result of Maxwell equation in this plane simplest, I would say, case can be expressed basically analytically. Something like vector E has, in theory, it has three components. E x, E y, and E z. But these two are equal to zero. This one not equal to zero. Same thing with vector B. It has three components. B x, B y, and B z. And B x and B y and B z are equal to zero. And only B y not equal to zero. And the analytical expression for correspondingly E x and B y is E x. It depends on time and location along the z-axis. So it basically goes this way and propagates that way. So it depends on the time and position of the z. So it's equal to some kind of amplitude. And then I believe I'm using sine. Yes, I'm using sine. It doesn't really matter sine or cosine because it's all dependent on the phase. So it's omega c minus z divided by c. Now, in text book you might actually see slightly different expression. You might see expression like omega t minus or plus kz, where k is equal to omega divided by c. Now, this expression is exactly the same as this one. However, I personally prefer this one because it has physical meaning. And here is the physical meaning. If regular oscillations are usually expressed as this one, for example, means t equals to zero, we are in a neutral position on the zero, right? And then we're oscillating with frequency omega, angular frequency omega. If you are further from the source, now this is basically dependency on the source only. So at source, these are oscillations. At zero, it goes this way all the time, okay? Back and forth. Now, if I would like to find out what it is on certain distance, well, there is a time delay. So the same kind of oscillations will be here as well. But with certain time delay, what is the time delay? Well, time delay is z divided by speed of light, right? So you divide distance by speed and you have the time delay. And that's why I prefer to have this time delay here. So in my personal opinion, it looks better than kz where k doesn't really, you know... I mean, they put some kind of name to this constant, but I think I prefer this one. So I will use this one. It doesn't really matter, quite frankly. So the b, according to... Okay, now this formula was actually derived in that previous lecture as a solution to Maxwell equation in this simplest case. Now, the Maxwell equations in vacuum looks very much similar to each other, and the solution would be exactly the same. So dy of t and z. So this is the magnetic component. It would look exactly the same way. And what's important actually is the same omega and the same shift in phase. Because electric and magnetic components, we did discuss this, they are always in phase with each other. When magnetic component is increasing, the electric component is increasing as well. When electric component is decreasing and magnetic component is decreasing as well. So they are always like in sync with each other. And that's basically how they are going all the time. And then it's propagating with the same speed of light further along the z-axis. Okay, so this is something which was partially discussed, derived actually in the previous lecture. And I just added the magnetic component which is exactly the same thing. Now, my purpose in this particular lecture, I would like to know the relationship between E0 and B0, between amplitudes, how big they are, relative to each other, of course. Okay, so that's the main purpose of this lecture. Now, how can we do it? Okay, now there is a so-called third Maxwell equation, which is Faraday's law, which looks like this nabla. Vector product with E equals minus dB by dt, where nabla is a pseudo-vector. I mean, I can put this as well. It's a pseudo-vector which is actually differentiation by covenants. Now, these are all topics which were covered in previous lecture. I was talking in details about this pseudo-vector. I mean, it's not a vector. It's just kind of a syntactical vector, if you wish, in previous lectures. So it's all explained over there. So right now we're discussing only this one. However, let's just consider that we have only a very, very simple case. This is the general form of third Maxwell's equation, the Faraday's law. In our case, things are much, much simpler. So if you will actually open up this vector product by covenants, you will have only one thing, you will have only this one. It's actually dEx of tz by dz times j. j is the unit vector along the y-axis. And minus db by dt, again, considering only dy component is equal, that's actually minus ddy of tz by dt and also the same unit vector. This is a vector, so that's why I have to put vectors. Now, both of them are along the y-axis. So if they are equal to each other, my equation would be very simple in this way. I can drop the vector part because it's unit vector along the same direction. And now allow me just to drop this index x and y because it's the only one. So it's easier to put it this way. dE by dz of tz equals to minus db tz by dt. So that's my equation. This is the simplest form of third Maxwell's equation in vacuum for monochromatic plane waves described by this. Okay, fine. So I have this equation. Now let's use it since I have explicit expression for my e and v. So I just decided to drop index just for brevity. So what is it? Well, let's just have this derivative taken and we'll see what happens. So derivative by z. Okay, so dE of tz by dz is equal to, okay, e0 is a constant. Derivative of sine is a cosine of this function times derivative of inner function. What's inner function under sine of z? We're talking about derivative by z. So it's just a constant minus omega nc. So I have to multiply by minus omega times c. Okay, great. So derivative by time of the magnetic component db of tz by dt by time is equal to, similarly, b0 is a constant. Derivative of sine is equal to sine of the same thing times derivative of inner function. Now we have a derivative by t, so the only coefficient is omega. Let's compare it. This, which is this, is equal to minus this. Okay, so this is equal to minus this. This is the same, minus here, and we are talking about minus here, right? So minus would be minus here. Omega is the same. So what remains? The only thing remains is e0 divided by c is equal to b0. Now this is basically the result which I wanted to get today. So as you see, the amplitude of electric component is by c, which is a very, very big number, speed of light, greater than component than the magnetic component. That's basically my result for this particular lecture. We might use it in some particular cases, but right now let's just stop here. And, well, basically that's it for today. That's the only thing which I wanted to derive today. I do suggest you to read the notebook notes for this lecture because there are maybe a little bit more details. I skipped, for example, from NABLA, I skipped a simple expression. In the notes it's a little bit more detailed, but in any case it's always useful to read the same material if you understand everything here. And don't forget that this lecture is not by itself. It depends on the previous lecture, the previous lecture depends on even more early one, etc. So you always have to consider the whole thing as a course. And that's what I recommend you to take the whole course because it's all logically related things, not just individual facts. It's the whole picture which actually makes you comfortable in your knowledge. Just if you just consider separate facts that might not actually be very useful, you will forget them anyway. All right, that's it for today. Thank you very much and good luck.


But how how do you say cheers salute salute? Welcome to Spain. Thank you first time. It's my it's my first time to build by all. How is it feels? Is that is I say Bilbao Bilbao Bilbao Bilbao Bilbao Bilbao Yeah, almost so obviously you're from Spain. Yes It's Bilbao the same Spanish as you here. They speak a different language They speak Spanish and also Basque I'm trying to work out whether that'd be the same as England being people speaking Welsh Is that the same I'm not being done there or? No, you could basically when you're in England you can drive to another place called wows, okay? And they just some reason it's not science like changing. It's a different language. I don't really get it But anyway in in Spain you have you have siestas and siestas means you have a break We have to do it after after lunch Yeah, but it's one of the reasons that we have now the longest living in the world This one I'm saying maybe I should try and bring the law in to England to do siestas. Is it a law? That's the best thing I've ever wrote in my life. It's not a law, but it's like a Social agreement a tradition.  Is this your first be EMA? It's my first EMA that I've been to yeah tending watching it on TV. You know I've watched it on TV Okay, it's great. And what do you think this year's edition in Bilbao? Yeah, I mean I go Spain all the time. I love Spain. He's got my pay off and obviously it's nice to Just to come build to come to Bilbao. Why are you looking forward to see probably Nicki Minaj? Thank you.  She's got something about her. Okay, because she's cool I like her man. Who would you freak out if you see someone to break up it? I think I have to confess Jason the rule. Yeah, he's amazing man. Do you know what girls are coming? Yeah, Dua Lipa is coming. Camila Cabello is coming. Avinna unanana. You dance salsa? Never dance salsa? Oh, man. I could do the Hoki Poki though. Hoki Poki? Do the Hoki Poki and you turn around. You show me that when I show you salsa. All right, we do it later. More wine. Cheers. So tell me Joey, you know where is the Guggenheim? Guggenheim? yeah what's where's that it's a museum it's really famous here oh i did see it it looks all crazy that one mad with the dog with a big dog yes in the outside so why do you think if you do some art here i mean i've got a c in art so okay let's do it it's about this is pain reveal reveal yeah it's reveal i don't know who it is it was just trying to draw you but it didn't it didn't really work out it's all like Picasso sort of stuff isn't it because it's not it's never Picasso is not perfect it's a bit edgy it's like cubism i think in english it's cubism yeah it's like abstract i think i went for the more more classic maybe or more retro yeah what would you give me out of ten nine of ten a nine out of ten yeah i'm gonna cheers you to that in a minute what about mine probably guessing you didn't take art as a gcse exactly i'm gonna give you a nine point three let's cheers to it though i'll tell you that for sure it was a pleasure it was a pleasure painting with you in bilbao to the mtv ema awards salut salut hi guys it's caroline and i'm here in bilbao for the mtv emas i just arrived and apparently my luggage just got lost so now i have to find a red carpet look really quick joey carol is that you oh my god how are you i'm great but my luggage got lost so now no red carpet look well maybe we should go shopping let's go shopping 100% let's go i need a dress accessories shoes bag everything basically everything okay so i think this can you hold the valentino yes i think that's my yeah casper casper a friendly ghost like that what about this do you know what that looks like that looks like it will fit you as well that could you mm tasty so we have the clothes and wait they're so sexy don't let me get that one the other one and let's go let's go let's go let's go this is the one you wanted to try nice not you i mean this is like boyfriend style nice it's too baggy you got a good figure babe you know i mean what about all white you could find better i have the red no oh peng delicious peng yeah you want it more sparkly oh yeah fresh fresh one word wallet three words tasty sexy dream no see i try something else last one what do you think about this yes yeah that's the one sexy confident dream peng that is the red carpet ema outfit wallop hi mtv it's caroline and i'm rosa bursham and we're here in bilbao for the mtv ema's and now we're looking for the best instagramable spots in bilbao and what do we need we need a camera a map and a car hola let's go let's go look at this next stop is larry barrah market and let's go have a look let's go it's called carolina should we try it i tried so we're at the next spot this is the zubi zuri bread and it looks cool no yeah i love it we have the sun facing us perfect for taking pictures maybe let's go over there and check it out yeah let's go looking at the round we had so much fun exploring bilbao check us out on instagram