In this video, you'll learn about the three types of public services that keep our countries running and how you, as a service design professional, can design for them. Here's the guest for this episode. Let the show begin. Hi, I'm Sally. This is the Service Design Show, Episode 169. Hi, my name is Mark Fontijn and welcome back to the Service Design Show. On this show, we explore what's beneath the surface of service design. What are those hidden and invisible things that make a difference between success and failure all to help you design great services that have a positive impact on people, business and our planet? Our guest in this episode is Sally Halls. Sally is the head of the Policy Lab in the UK. Having years of experience working in the public sector, Sally is going to share a different side of service design with us today. Let me introduce this episode with a question. Think for a moment about all the public services you use in your country. What comes to mind? Getting your driving license, extending your travel documents, maybe voting registration or paying taxes? These are all public services provided by our governments. Now also think about the day-to-day services running in the background that keep our cities running smoothly. Like keeping our roads safe, providing education and doing garbage collection. All services that our governments are tasked to do. Now imagine not having the right policies in place to secure our economy, protect our country or even allow you to travel freely. Well, this brings us to the topic of this episode because you're going to learn about the three types of public services that need to be designed for and how the differences between these types of services impact you as a service design professional. So if you stick around until the end of this episode, you'll know how to design services that people haven't explicitly asked for, how service design professionals are bringing the voice of the public into rooms of policymaking and how you can find fulfillment in your work when working on multi-year projects of which the impact isn't immediately clear. Well, that about wraps it up for the introduction. Now it's time to sit back, relax and enjoy the conversation with Sally Halls. And welcome to the show, Sally. Hi, good to be here. Yeah, excited to have you on. Interesting topic. I don't think we've covered it that many times will explain what the topic is in a second. But Sally, the first thing I always start with in these conversations is a short introduction to give some context to who we are listening to. So could you share a shine a light on who you are and what you do these days? Yeah, sure. So I'm Sally Halls. I am a service designer. Currently, I'm in a role where I'm heading up the policy lab at a government department and that enables us to bring service design methods into the policymaking space. So we get a very different experience of service design and a very different experience of the kind of services that we work on. Yeah, quite a unique environment from what I already learned from you in our prior conversations to this conversation. So I'm looking forward to exploring that a bit more before we do that. We also have a lightning round. I have five questions for you to get to know you a bit better as a person next to the professional. Just the first thing that comes to your mind and we won't dive deeper into them. But let's see where this takes us. Are you ready? Yeah. All right, Sally, what's always in your fridge? Always in my fridge. Butter and oat milk, I think. All right. What's your favorite holiday destination? Oh, any kind of a warm beach with a sea that I can swim in. Yeah. Especially now that we're recording this in the middle of winter. If you could recommend one book, which book would you recommend? I am reading at the moment. I'm reading Hello World, How to be Human in the Age of the Machine. And that's by Hannah Frye. And it's really fascinating. It's all about data science and algorithms and actually how they're currently being used in our society and really helping me to think about how we can start to kind of bring some of those principles into our work. Link in the show notes, as always. Sally, what did you want to become when you were a kid? Oh, the first thing I remember wanting to be was a librarian, which is not very exciting, but I've always been a big reader. So I guess it opens your horizons, right? And last and final question, which is a tradition here on the show, is do you recall the first time you learned about service design? Yeah, I think it was when I was studying or when I was in my first job. So I actually studied industrial design and back then, service design wasn't really a thing. It was just starting to be a thing. And you kind of heard it, you know, heard it whispered about on the grapevine and I was very intrigued by it and and was very fortunate enough to actually be able to become a service designer over the years. And here we are. Everybody seems to have a story around their encounter with service design, which is which is quite interesting. Thank you for sharing the answers to the lightning round questions. Definitely give some context. But let's transition into the theme and topic of today. Like I said, it's something that surprisingly hasn't been covered a lot in the conversations on the show as far as I can remember. And that is we're going to explore different types of services. Somehow we don't get to discuss what services actually are on the show a lot. We do talk a lot about the craft and the tools, the methods, the conditions in which service design takes place or in which it can thrive. What we rarely actually talk about services. So this is going to be our opportunity to do so. And you framed it really nicely by giving I would say a framework of three different types of services. Maybe we can start with that. And what are the three services types of services that you distinguish? So I think that normal normal services are things that we kind of identify as services of what I would call transactional services. So there is a very clear ask from the user of I am trying to achieve something and I will, you know, perform some actions and may pay you some money in order to achieve that outcome. And I think that's probably the bread and butter of service design work, really. And I think services are quite difficult to talk about anyway, because they are so intangible, aren't they? And so it becomes quite difficult this conversation to have when you are trying to kind of pin down what a service is.  Which is, you know, what we are all used to and expect these days. But once you start to move away from the private sector and those kind of services and you start to think about public sector and what the government delivers, you start to encounter some slightly different services. So in the department I work in, we deliver what we call, what I call preventative services. So these are the services that help us to, you know, live our day-to-day lives and, you know, maintain a kind of normal state of society, as you would expect. So, for example, you know, I am able to walk the street safely. I am able to, you know, go out and feel confident that I can come home again, you know? And these are the kind of services that there is no explicit ask from the user. There is just the expectation of what the norm is. And actually it's when these services disappear, when you don't deliver these services that then you start to notice that these services were being delivered for you. And then the third kind of service that I wanted to talk about was around, from a service design perspective, they are an arms-length services. So there are services that you are commissioning. So actually, you know, government departments, they actually commission a lot of services. They don't deliver those services themselves. They ask, are there agencies, are there bodies, are there companies to deliver those services? But as a service designer, the tools that you suddenly have to design those services become very, very different. And so I thought it'd be interesting to talk a little bit around, you know, what do we do as a service designer? How do you ensure that your service is delivering a successful outcome when you're not able to do any of the service blueprinting, you're not able to talk to the users directly yourself? Yeah, because that's the case, for instance, where those services are at arms length and delivered and maybe where the journey is designed by a third party and you don't, like, you're commissioning them, like you said, right? Yeah, so I can imagine that that's a different dynamic. And the preventative services, I do see a lot of them in the public sector. The thing in my head was garbage collection, right? Yeah, that's one of those things that you sort of take for granted almost. Maybe that's a characteristic of these kind of services that you take them for granted.  And those are these preventative hidden services. And the common ones, like you mentioned, the transactional services are the ones that we are most exposed to as a service design community, right? Yeah, absolutely. And because there is a much clearer relationship with the end user, you have a clarity around this is the user, this is what they're asking for. And I will work through these steps in order to deliver this for you. And I think as soon as it becomes a preventative services or the arms length, that relationship breaks down and that. And so it becomes more difficult to talk about, I think. I have some questions around that. But first, I would love to explore that in our prior conversation and in your notes. I saw that you mentioned something about it. There is some confusion and maybe misconceptions around these preventative services. Yeah, so I think preventative services, they are often discussed in different ways. So within government, I would say they're not traditionally thought of as services and we often talk about them as capabilities. And so, for example, do we have the capability to detect explosives at the airports, for example? And the way in which you talk about things really dictates the way you think about them and then the way that you seek to kind of manage them and improve them. And obviously, we're all very familiar with airports and having to queue to go through airport security. And actually, when you talk about, do we have the capability to detect explosives? Yes, we do. We have all these machines and they're able to scan and what have you. But when you frame it differently, when you start to put humans into that equation, you start to think in terms of can we ensure that everyone can get on their plane and make it to their destination safely without encountering explosives? And can we do this in a quickly and efficient way? And you start to think about, well, what is the human experience of that? How can we better improve that? And you start to think of it much more as a service and through that you can then start to implement service metrics and start to look at customer experience, et cetera. Any idea or clue or hunch on why the language is more focused on capabilities and maybe having the right tools rather than providing a service? Like is there a historic context that explains this? It's a good question. I mean, often these are capabilities that are being delivered by operational teams.  There is absolutely a whole skill set that, you know, these teams need to have in order to deliver those kind of actions and tasks. But because it is being seen as an operation that a government is delivering, I think it then, you know, government services have been going through a bit of a, you know, a revolution over the past half of many years, particularly in the UK. And, you know, there's been a real transition between how we think about our interactions with the public. And so, you know, GDS government digital services, they were kind of, you know, the people that really initiated the change and helped government to think differently about the services that we're delivering for our users. You know, all of our policies actually, they end up being delivered as services and that's how government interacts with the public. And I think it's just a continuation of that. So we started with the most visible services and, you know, it's a slow, it's a slow change. You're trying to move a very big ship and turn the ship around and, and the operational, you know, operational staff and those kind of hidden services are at the back of the big boat, I would say. Yeah. And I've worked in the public sector in the Netherlands on some services and projects and one of the things you often hear is like, it's a monopoly on these services and you can't choose like paying taxes, right? There's just one entity you can go to and the same probably goes for your garbage collection, but you also mentioned that for these arms length services it's harder to talk to the user. I'm curious, what are some of the specific challenges that you see around these preventative and hidden services? Like what makes it more difficult or challenging for services are professional to work on these preventative services? Let's focus on those first. Sure. So I think with preventative services you are, I'm often, you know, designing for the whole public and there is no specific user and so there are no specific needs and so it becomes because you're designing for everybody you're almost designing for nobody, if that makes sense. And so it also then becomes challenging to have those conversations with the service providers with the people who's, you know, buying that you need and whose opinions you need to change to help them kind of understand, well, we're trying to help people, for example, I don't know, with the border force, you know, you're saying, well actually we're trying to prevent the dangerous materials from coming into the country so that the entire population can live in a kind of peaceful, secure, safe country, right? And so it's a very high level objective and that can make it quite hard to then tie the activities that staff are doing, the day-to-day activities with kind of tangible, measurable outcomes. And so, you know, that might be the vision, I guess, and then you need to start to break it down into much smaller kind of objectives and targets where you can then start to tie the activities to those outcomes, that makes sense. Yeah, it makes absolute sense. And like the feedback loop is less strict or less connected or I don't know what the right word is, but you sort of like being at the security and doing border control, like it's really hard to feel that you're contributing to a sense of safety inside the country. Like that's a pretty, yeah, pretty loose feedback loop, right? Yeah, absolutely. And you know, are they getting any feedback, right? Actually, is that feedback coming in? And there are so many other factors as well. It's such a kind of complex problem, right? And so how can you tie this action that you are performing over here to this kind of bigger initiative? What does this mean for you as a service design professional? How do you handle these situations? I mean, it's difficult, right? It's always, a lot of what we do as service designers is often kind of advocating for a different way of thinking, a kind of a mindset that kind of puts the customer first and helps realign the services and how they are being delivered around kind of delivering to those user needs. And it is the same as that. It's just an extension, right? So, you know, we are still trying to achieve an outcome for a user. It's just a little bit more removed, but you can still go through some of those same service design activities and you can really help to kind of, I don't know, even just bringing the conversation into the room sometimes just achieves a bit of a different mindset because until that point, you might find that a lot of the people in the room hadn't even thought about it in that way. You know, they've been looking at productivity outputs, right? Like, how many decisions are you making a week?  Or, you know, XYZ, right? And that's a very different metric to how safe do our citizens feel, right? And so, I think, just helping to bring in that bigger picture and helping to kind of elevate the kind of the horizon that people are looking at is probably a really useful role that we play as service designers. Related to this, I'm curious, like, let's say a new colleague starts in your team tomorrow and they are coming from an agency or consultancy side having primarily been exposed to these transactional services, the commercial sector. Like, what would be some of the things that you have them do first or maybe some lessons that you first would share with them in their onboarding process to, yeah, to get them up to speed? Yeah, I mean, it's a challenge that we are constantly and can't doing as we onboard more stuff. So, I mean, the first thing we ask them to do is to kind of go through some of the policy-making training to understand, actually, what do our policy colleagues experience, because that immediately gives you a different sense of what the job is, right? These are the people that we are working alongside and these are the things that they are being asked to deliver and our role is then to support them. We also, you know, we have to brief them in all the different kind of policy areas that we work in and each of those areas comes with a very different mindset, very different culture and that brings with it a different way of working, a different way of engaging with the stakeholders and then once they become familiar with the policy areas, then you can start to talk about, well, actually, one of the ways in which we are working, how are the ways in which we are able to make an impact and I mean, we don't have all the answers. We're still learning, you know, and every day we encounter new problems and new challenges that, you know, we have to feel our way into, but, you know, it's always interesting, that's for sure. Yeah, I can imagine. This, there was one question on my mind that also comes from my experience with working with the good public services is that have you found a way to sort of celebrate success? And what I mean with that is, again, like you said, you mostly notice these services when they start lacking or they start malfunctioning. So yeah, if you're redesigning the garbage collection service, I found that it can be really hard to sort of find pride and find joy and find a sense of fulfillment and that you're doing a good job because like you can almost only fail. What's your take on that? Yeah, it's a really good question. I mean, I think it's fair to say, you know, it's the work can be quite challenging and it can take a while for the impact of your work to kind of manifest. So, you know, some, you know, explorative work we can do, you know, it might take, for some policy colleagues, it might take a year, two years for that actually to kind of manifest in a policy outcome and then it takes, you know, a further amount of time for then that to kind of actually be experienced as services by members of the public. But you have to take success as, you know, changing an opinion as, you know, influencing a decision towards what will achieve a better outcome. And those are the things that kind of is the ripple effect, right? Actually, if you have someone at the top making the right decisions and the impact of that will then impact, you know, hundreds, thousands, millions of people, depending on, you know, what that service is. So... Yeah, so it's way harder for you to actually evaluate if services are improving because it just can take a very long time before they ripple out into, before the general public starts to see the effect and like who will say that the garbage collection has actually become better? Like that, that's, it's just one... But where your measure of success is, are we seeing decisions being made that are more in line with, I don't know, more in line with, how would you describe that? I would say are the decisions actually, do we think the decisions are actually going to have a better outcome for the service users, for the members of the public? And, you know, a lot of our work is about evidencing the decisions that need to be taking and helping senior people to understand this is what the public are experiencing at the moment. And actually, if we take these steps, that will improve it in this way. And often that can be counter to, you know, what is currently being considered. And so if we can change that opinion, then we have gathered the right evidence and we have created a compelling case to ensure that the right outcomes are going to be met. And when you mentioned evidencing, what can you, can you color that a bit? Like, how do you do that? What is that? Sure, I mean, a lot of it is around kind of understanding what users, members of the public are experiencing at the moment. So, you know, through deep dive interviews, we will often then, you know, kind of, we'll still do the journey mapping, kind of understanding the experience, the end-to-end experience of those people. And typically you'll find that, you know, the service that they're experiencing is being delivered by multiple, you know, agencies and teams and companies and what have you. And so often we are there to kind of help join all of those silos together and to kind of really help those teams to understand the problem in the whole and the different levers that are available. And, you know, policymakers will typically see opportunities in terms of policy opportunities, but they may not necessarily be so connected with how it's being operationalized or how, you know, the kind of digital and technology solutions. And actually, those are all levers that can help, kind of, build momentum and build, kind of, change towards the policy outcomes that they are looking to deliver. So, in my, in the way I would summarize this is, one, is you're bringing in the voice of the public inside the organization even more than it is maybe already there. And the other thing is you're looking at what you're delivering from a more holistic cross department, silo, breaking perspective. That's at least the two things that I'm getting from your story. Yeah, I think that's probably right. Yeah, and then. Thank you for everything. You can use this recording to share through the organization. But yeah, that makes a lot of sense and doing sense making. And then maybe being less involved in actually designing the actual services but providing your colleagues with the right tools, with the right insights to make the right or slash better decisions. Yeah, that sounds like a great summary. Thank you. I'll use that. We've talked now about these preventative services, but you also mentioned services that are at an arms length. I would love to dive into that also a bit. And I think you gave an example at the start, but maybe you can help me to better, even better understand like, what are these services that are on arms length? Good question. So, I mean, typically, as I said, a government department will commission a number of different services. It's not possible for us to deliver all of those services and they can be varying scales. So, the police forces, very large service, right? And at a smaller end, you've got various support services that might be being delivered for much smaller populations. And actually, it's quite a challenge and it's quite a different way of thinking when you start to think about, well, we are commissioning this service and how do we ensure that they are achieving success? So, let's take an example, right? If I was to ask you to, let's say, we've had some news in that, children aren't working to school anymore and we're kind of seeing all sorts of kind of obesity problems with them. And actually, how can we encourage children to start working to school? So, we think, okay, well, we need to, how can we help them? We'll commission some kind of, help walk your children to school service, right? And so, how do I, if I look to commission that service, how do I know what success looks like? Am I just saying, well, I just need you to get the children to school safely? And then you start to dig it down a level and you say, well, actually, I need you to get the children to school safely and they need to be there on time. They need to be escorted by people with the suitable kind of background checks and qualifications and actually, well, how many children can you take? And actually, what are all the kind of frameworks that I need to put in place in order to ensure that you can do your job correctly and safely? And what am I asking you to do? What am I contracting you to do? That makes sense. And what are the outcomes that I'm measuring, right? And actually, the way in which it's, you're still talking about kind of services and principles, you're still looking to kind of quantify the outcomes and measure what is this kind of satisfaction and what have you, but you have to do it at a stage removed. So I need to put things like that in the contract. I need to think about actually how am I governing your service, right? What are the meetings that we have? When do I touch base with you? How are you reporting back to me and how well the service is going? And how can I be sure that what you say is actually true, right? And so you start to think about all of these other tools, I guess, that you have that you need to think about to ensure that this service over here is operating correctly and that we can achieve the outcomes. And there is an extra level of responsibility, I guess, because it's a government department and you need to ensure everyone's safety and well-being. Yes, I think so. Well, my brain always goes into examples that I've seen and you mentioned the walking your kids to school example. Recently, I was in a local hardware store and they provide a service of putting solar panels on your roof. But that is, it's not a service from the hardware store itself. It's done by third party supplier like under the label of the hardware store. And I'm thinking like this might be something similar where you sort of purchase the service through the hardware store, but it's actually delivered by third party. And when we look at that example, what is there to design? You mentioned the contracts, like the conditions, but let me just rephrase the question again. Is there something to design and is that do you feel the work of a service designer still? Yes, because the way you design the contract, the way you word the contract very much impacts how the service will be delivered. So if you can input into that process, you can help to ensure that the service is being set up in the right way. It's being managed in the right way, and the funding agreements and how you look to fund the service can also impact, you know how well that service can operate, et cetera. We often talk about this, but in this case it's even more your designing for the conditions in which the service can be, where you're increasing the chance of success for the service. Yes, exactly. You're kind of trying to create an environment to enable the service to flourish, and you're trying to create an environment that will nurture that service, right? How do you kind of set the right guidelines for that service to kind of travel down, which will ensure that it won't diverge and kind of go off on some kind of random track and actually not achieve the outcomes that you're looking for. It's interesting because we do hear this a lot, and it's not even with arms-length services, but it's also like designing the internal organization in order to deliver a specific service. Like, it seems that as service design professionals, we are doing a lot around designing the environment that enables a certain type of service experience to emerge. And in this case, the service might not be provided by people who are under the same roof as you, but have a different logo and sticker and name on their organization. But in essence, yeah, you're still creating or designing the environment. Yeah, I think that's a really good way of thinking about it. And once you've created that environment, then I think the organization design is becoming a big thing. I think we're seeing increasing amounts of projects where we are being required to think about how the organization is being set up, how it's being resourced, what is the role and remit, and actually what are the responsibilities of the people here than that. And all of that, they're all just new or different levers to ensure that you reach the outcome of what your service is trying to achieve. What would you say is the most difficult part of designing services that you describe as being at arms-length? I mean, you can feel quite twitchy about wanting to get stuck into the actual service, you know? Like it's, you do have to kind of, it's not your role to get involved in the detail of that service. Your role is actually around understanding the parameters to enable that service to succeed and to ensure that those are being designed and then created correctly. And often that means working with staff who are very colleagues who are very far removed from your typical design colleagues. They don't talk in design terminology. They don't necessarily understand your design vocabulary. And so there's a lot of relationship building, kind of communication, trying to understand, when I say this word and you say this word, do we mean the same thing? Are we aligned or are we using the same word? Totally, you know, cross-purposes. And I mean, it's amazing. We are constantly aware of the need to do this and yet we are constantly finding that it's a challenge, isn't it? You know, we are always talking at slightly cross-purposes when we are really trying to achieve the same. Yeah, I don't know if that's a specific challenge to the service design field, but it is definitely a common theme in our practice. What would you say are the common mistakes that you see people making when you, what I found interesting, let me go back for a second, what I found interesting is that you said it's itching to get into the actual weeds of the actual service and that's not your role. So the way I described it in my head is like you have a different design material. You're not designing the service anymore, but you are designing the organization or your design contracts, governance, calendars, meetings, stuff like that. And working with that other design material that has to have a certain interest and you have to also get pleasure out of that. Yeah. What are some of the common mistakes or pitfalls that you see maybe people getting into this kind of work, making when they are not being able to design the actual service, but rather have to work with the other design material, the organization? I mean, I think a lot of it is often counter-intuitive to be working at that level, I would say, you know, as a service and then you do expect to be kind of working in the nuts and bolts of how that service operates. So it feels a bit counter-intuitive in it, therefore feels a bit uncomfortable. And actually that can cause us to kind of perhaps lean back a bit to kind of be a bit like, oh, I need to do this thing, but I'm not, I don't feel comfortable, I don't feel confident. And, you know, as with all of these things, as with all the challenges that causes more issues, you've got to embrace these things, you've got to lean in and get involved and really start to kind of understand these new tools that we have. And, you know, Key to that is always asking questions and I feel like there is a lot of, you know, we can be, especially if we don't feel confident, we can be very cautious about asking questions and not appearing to look stupid and everything else.  And, you know, if you feel nervous about asking that question, think about how you can reframe it, right? Ask the question, but ask it in a way that, you know, that kind of draws out the information, but doesn't, you know, doesn't make you feel exposed and, you know, helps to kind of shed light on the situation where you can really feel able to practice and to add value and to, you know, really bring those skill sets that you have to a kind of very different problem area. Now, if you're open to sharing, I'm curious, what was the last moment that you felt uncomfortable? Yeah, that's a very good question. I mean, we are currently scoping out a new project and it's a new policy area and every time we work in a new policy area, you know, you're working with colleagues who are so knowledgeable about this area and your job is to get up to speed and to read all the reports in the past 10 years and understand all the different, you know, initiatives that are happening and all of these conversations, you're always trying to understand the scoping and the background and the context and it's always a little bit uncomfortable, if I'm honest. It's always, you know, you're always operating in the unknown and that's what we do as designers, you know, we are there to kind of operate in these kind of tricky, unknown kind of problem spaces, but I think I've learned to lean into the discomfort. I think that was my newest resolution with this year was to actually kind of lean into all those moments that I find uncomfortable and to really embrace that discomfort and, you know, and that actually part of that helps us to work better, to perform better, you know, that's like adrenaline does help us to get going. Yeah, that is the fun and exciting part of our work, like being in the unknown, in the unknown, exploring the unknown and being comfortable with the unknown, but it's definitely easier said than done, especially when it comes to yourself. Like, it's easy to tell this to somebody else, to your client that they need to have patience and trust the process and that everything will be all right. But yeah, when you have to share this message with yourself, then it's often a different story. And yeah, yeah, imposter syndrome is very, very near, as always. What? Yeah, if we would have had this conversation five years ago, no, let me rephrase this again. Like, if you were listening to the service design show five years ago and somebody was on the show having a conversation with me about these types of services, what do you wish you would have heard in that conversation? Like, what do you wish you would have known, I don't know, five years ago that you know now from experience? I always found, you know, I always had heard about Policy Labs and I was so excited about the idea of bringing kind of our design methods and ways of working into that kind of, what felt like a very more serious kind of problem space as it were. And actually, I think I was quite intimidated by it. I think it took me a while to kind of reach a point where I felt experienced enough and confident enough to even apply it, right? And actually, you know, the only way to gain the experience is to apply and to get involved and to start working in that area and, you know, if you're even vaguely interested, then, you know, absolutely get in touch with your local, you know, Policy Lab or initiative that you can find and reach out and just show that you're interested and, you know, it's an incredibly exciting area to be working and it is always, you know, every day is really interesting. There is never a dull moment, so. Yeah, yeah, so don't wait till you have the experience to start and gain the experience while you do the work. Are there any useful resources, links that you can recommend for people who want to dive deeper into this topic? Yeah, absolutely. So there is, in the UK, we have a policy design community where, you know, people working in this area come together and there's, so there's a kind of very active blog so I can share the links for that. We also have things like the kind of open policymaking kit, which is also a website which kind of helps policymakers to work in a much more open and kind of explorative way, which is quite useful for designers as well, to understand, well, here are the ways in which we're trying to educate our policymakers, so it kind of gives you the kind of a different way in. And then in terms of kind of government services for those who aren't aware, there's Lou Down's book on good services, it's just a general kind of go-to bible and often kind of gives very good examples of kind of government services. So maybe that's a kind of entry level into kind of public sector work. We've discussed a lot. If you could take an attempt to sort of summarize our conversation up to this point, like what would your summary be? I mean, I think the summary would be that there are many types of services out there which require us to kind of have different relationships with the users and engage with different tools perhaps, but actually the kind of the intention behind how a service designer works is always the same, right? And it's just we need to be flexible and adaptive to kind of work in these new areas and really help others to kind of embrace the service design ethos and mindsets. Yeah, and thank you for sort of highlighting and double clicking on the word service because I think we need to do that more often and even develop a better understanding of the different flavors of services and the different characteristics of the different services. And there's so much more to learn and explore and there's already a lot of knowledge around that. So I hope this got a few people interested to dive deeper into these topics and learn more about preventative services, arms length services and maybe come up with their own definitions and ideas on what kind of services are there out there and what does that mean for us as a service design community? So yeah, thank you Sally for coming on and shining a light on that. I found it really eye-opening to learn about these three types of services and how they impact our work as service design professionals. Hopefully this got you thinking as well. If you enjoyed this episode, consider subscribing to the channel so that you'll be notified when new episodes come out. My name is Mark Fontaine and I wanna thank you for tuning in to The Service Design Show and I look forward to see you in the next video.


The first item of business this afternoon is portfolio questions, and as ever, short succinct questions and answers would be appreciated. Question number one, Jamie McGregor. To ask the Scottish Government how it supports the teaching of foreign languages in schools. Minister Alistair Allen. Presiding Officer, we want all young people in Scotland to have excellent language learning opportunities from a young age as a normal and expected part of a broad, relevant school education, and that's why our one plus two languages policy is supporting local authorities in schools with significant extra funding, £9 million over two years, and it's why we're working closely with Education Scotland, Scotland's national centre for languages and others to create the conditions where early and continued language learning becomes the norm. Jamie McGregor. Yes, I thank the minister for that answer. Does he agree with me, and the findings of the foreign language learning inquiry conducted by the Parliament's European Committee last year, that foreign language assistance can play a very important and cost effective role in helping our school pupils learn a modern foreign language? Does he therefore share my concern that the number of foreign language assistance in Scotland schools in 2013 to 2014 was done by almost three quarters compared to 2005 stroke 2006? What action will the Scottish Government take to reverse the situation and ensure that as many pupils as possible can benefit from working with a foreign language assistant? I shared the member's enthusiasm about the importance of native speakers in the class. As he knows, I met the cross-party group on German about this and other issues only last week. It is important to mention that, in the last year or so, the numbers overall among language assistance has actually gone up. I appreciate that there is much to be done, but it is also worth saying, because I know his particular interest in German, 30 German trainees who have been brought into the system as well. The Scottish Government works with the British Council and others to make sure that we continue to improve the availability of modern language assistance throughout the school system. Does the minister agree that the One Plus Two policy is the most ambitious language learning programme in the UK and that the economic and cultural opportunities that can be gained from learning a second or third language in addition to mother tongue are extensive? Yes, it is true that the benefits are very extensive indeed. Across the chamber, we can probably agree on that, cognitively and culturally and economically, it is in Scotland's interests that we develop a culture of language learning much earlier than has been the case in the past. I appreciate that that will require a lot of work for all of us together in the education system, but I believe that the end is very much worth doing that. To ask the Scottish Government what measures it is taking to combat bullying in schools. Our national approach to anti-bullying, developed in partnership with stakeholders, sets out the common vision and aims to make sure that work across all agencies and communities is jointly focused on tackling all types of bullying. To support the implementation of the national approach, we have established and wholly fund respect me, a national anti-bullying service, to build confidence and capacity to tackle all types of bullying effectively. We are committed to refreshing the national approach to ensure that it remains current and reflects policy developments and a working group will be set up early in 2015. The minister will be aware of Enable Scotland's new campaign, Be The Change, which is aimed at tackling abuse of an offence of language about people who have learning disabilities. Enable Scotland, working in collaboration with a number of partners, has developed a school resource for teachers of S1 and S2 pupils, which will raise awareness of learning disability and take an early intervention approach to promote positive attitudes to learning disability. Does the minister therefore support Enable Scotland's campaign and what action will he take to encourage local authorities to implement the four-week lesson plan in secondary schools that will focus on educating children about learning disability from the 2015-16 academic year? The member is right to point to the particular importance of ensuring that young people grow up with a respect for and an understanding of the issues faced by people with learning disabilities. One of the things that the Scottish Government and the education system more generally now focuses on is promoting positive behaviour. That is central to what we do and it is central to our understanding of the kind of dignity that everyone has to expect and should respect as they are right within our schools. To ask the Scottish Government what action it is taking to address teachers' workload issues. The Scottish Government is working with teachers representatives, local authorities and other partners to address teachers' workload issues. That includes an unprecedented package of support and resources to implement curriculum for excellence. Our curriculum for excellence working group on tackling bureaucracy is taking forward a strong set of actions to support schools in reducing unnecessary bureaucracy. I thank the minister for that answer, but does he share the concerns of the EIS who say that there is a workload crisis in our schools, Scottish schools, or with the NASWUT who said that the Scottish Government is facing a ticking time bomb? The cabinet secretary's predecessor said that he wanted to maintain or increase teacher numbers every year since 2007 that there has been a decrease. In fact, there are 4,000 fewer than when the SNP took office. On top of that, there are cuts in classroom assistance and support to our staff. Are teachers' unions right to voice their concerns? Will the cabinet secretary inform Parliament whether he intends to reverse the cuts, maintain the current level or to continue to cut teacher numbers even further? The numbers have stabilized since 2011. The member is aware of course of who the employers are. The employers are local authorities. The Government does work with local authorities to ensure that, as I am sure, local authorities also want to see that numbers are maintained in line with the existing teacher pupil ratio. In the broader issue of workload that he raises in his question, I have never been someone who tries to shy away from the fact that the introduction of a completely new set of qualifications has involved work for teachers. However, I think that the work that has been done since the successful implementation of those qualifications to involve the teachers and the teacher unions and planning a way ahead is entirely positive. Does the minister agree with the comments by Terry Lanigan, the Executive Director of Education in West Dunbartonshire at the Education and Culture Committee, 30 September, when he stated that, having worked in education for 37 years, there has been no initiative in Scottish education during that time about which there has been more communication or more support? I certainly welcome the spirit and content of those comments. Of course, they tie in with other comments from elsewhere in the sector. For instance, Ken Cunningham, the general secretary of schools leader Scotland, mentioned that the preparation and consultation in that area has been more than I can ever remember, and the amount of effort that has gone into this knocks the others into the corner. Again, I do not take away from the work that has been involved, but in all parts of the education sector, the work that has gone in has been significant, and we have all benefited from that. To ask the Scottish Government what discussions it has had with Falkirk Council regarding its obligation to provide a flexible approach to parental choice for early learning and childcare. The Government meets regularly with local authorities and discusses a range of issues that include childcare. It is for each local authority to implement the provisions in the Children and Young People's Scotland Act relating to early learning and childcare, taking into account local needs and priorities. That includes a new duty on local authorities to increase flexibility year on year, based on consultation with representative local populations of parents and to publish plans showing how they are doing so. I thank the minister for her reply. She may be aware of a privately funded nursery that serves my area, the Little Stars nursery, which has been trying for seven years to gain partnership status with Falkirk Council, but it has been refused despite rating standards of four and five. Parents claim that this is discrimination as it has denied their children access to local education services. There is no doubt that Falkirk Council has fallen short of the Scottish Government's objective in that regard. What can the Scottish Government do to ensure that Falkirk Council enables proper parental choice through a flexible approach? I thank the member for raising the issue. We expect local authorities to meet their statutory responsibilities and it is for each of them to decide how best to do that to meet local needs. That includes using a mix of providers such as family centres, childminders and private providers, such as the member who mentions that he knows well locally. Local authorities are now required to consult with groups of parents at least once every two years on patterns of childcare provision that would best meet their needs. That should introduce greater levels of flexibility and choice in the system as we work with local government to further develop and expand the provision that is so important to so many families across the country. However, I would be happy to meet the member to discuss the issue further if he thinks that that would be helpful. To ask the Scottish Government whether it plans to introduce software engineering as part of the school curriculum. Curriculum for excellence enables young people in schools to develop their skills and focus on the learning that is needed for our modern dynamic economy, consistent with the developing Scotland's young workforce agenda. Within the curriculum framework and through the suite of computing science national qualifications, learners have many opportunities to develop the understanding and skills that will enable them to take up careers in software engineering and programming. He will be aware that, despite the considerable efforts over recent years, we are still well short of producing the numbers of software engineers in Scotland that we require. Estonia seems to have made great strides in establishing a world-class reputation for producing software excellence in software engineers. What more does the minister think that we might be able to do to raise the profile, particularly in schools of careers in software design, so that youngsters can see the fantastic career opportunities that lie ahead? I am always happy to learn from the experience of other countries. Certainly it is worth saying that, in Scotland, £250,000 has been provided recently to BCS to provide learning opportunities for teachers, as part of our plan C project, about making sure that the skills and the confidence are there among teachers to keep up with this fast-changing subject. In terms of teacher numbers, the Government recognises that this is a subject that deserves some priority, given the demand that exists for it. It is also true to say that understanding the career opportunities that are there is an important message to put out in the curriculum that has been reflected in national career events. Could I ask the Scottish Government whether it has given any thought to the call from the Royal Society of Chemistry to broaden the science curriculum to include subjects like engineering and to start with having dedicated science teachers in primary schools? The Royal Society for Chemistry and others have made very important contributions to the debate about science, particularly as the member mentioned in primary. I think that there is now a much wider acceptance of, but more importantly, understanding of the need for science in primary. A great deal of work goes into creating the skills and the confidence to use those skills amongst primary classroom teachers to ensure that science is firmly grounded in the primary curriculum. To ask the Scottish Government how the raising attainment for all programme is raising the standards of education in schools. Raising attainment and reducing educational inequality is a top priority for the Scottish Government, Education Scotland and all our partners. The raising attainment for all programme was launched in June this year. It involves more than 150 schools from 12 local authorities. The programme brings a structured approach to improvement into Scottish schools. The raising attainment for all programme will complement the other work that is announced in the programme for government, including the Read, Write, Count campaign and the creation of attainment advisers for every local authority through Education Scotland. May I very much welcome the minister's answer and its ambition, but can she further explain how the programme is going to make a real difference to break the connection that currently exists between social deprivation and educational achievement for too many pupils? Poverty does not stop at the school gates. We know that poverty very much can undermine our efforts to make progress. Of course, Westminster policies are undeniably making the situation more challenging. However, education brings choices and opportunities, it brings routes out of poverty for children and young people, and it can and should be the key in breaking the cycle of generational poverty, which can be all too real in modern day Scotland. The raising attainment for all programme and the other interventions that I have mentioned will indeed help schools to relentlessly focus on doing everything that they can to erode that connection between deprivation and poor educational achievement. I congratulate the cabinet secretary on her appointment and wish her well in her new role. Last week, the First Minister said that, against every main measure education was improving. We would of course expect that after being in government for seven and a half years, but it is not true, because in areas such as numeracy, the Scottish Government's own figures show that standards are actually falling. Therefore, I ask the education secretary whether she counts numeracy as a main measure of educational achievement, and what action is the cabinet secretary going to take to address numeracy standards? Absolutely. Numeracy is an important priority. It has to be viewed with the same parity of esteem with the importance that we place on literacy. Numeracy is indeed at the heart of curriculum for excellence, and we have committed £1.2 million over the next three years to accelerate the development of local authority numeracy hubs, and there are currently six numeracy hubs led by various areas up and down the country. However, it is true to say that our attainment record in Scotland is good and improving when you look at PISA results, when you look at the attainment gap and where it has closed in terms of maths, reading and science, whether you look at school leaver destinations or, indeed, the record number of passes that are higher and advanced higher, but, nonetheless, the inquiry of attainment for all and closing the equity gap is my top priority, and we must pick up the pace. In terms of attainment, 35 per cent of S2 pupils in 2013 were not working at the expected level of numeracy compared with 2 per cent of P7. Why is there such a deterioration in only two years, cabinet secretary? Mrs Garland makes an important point that when you compare the progress of the similar surveys for literacy, progress and attainment remains at a good level of attainment remains at 80 per cent plus. There is, indeed, something that happens perhaps between that transfer between primary school and the first few years in secondary school, but, as I have already indicated in my answer to Mr Bibby, numeracy is, indeed, a priority for this Government, for the actions that I have outlined. Numeracy, along with literacy, is absolutely at the core for ensuring that all our children attain more and are prepared for the world of work. To ask the Scottish Government how it assists general teaching staff in helping them to ensure that pupils with autistic spectrum disorders receive full support. To help teachers and educational support staff meet the needs of pupils with autism, the Scottish Government funded Scottish Autism to produce the autism toolbox website. This online national tool will encourage best practice for all education staff in schools to support pupils with autism. The toolbox website will also provide a forum for continually updating and disseminating good practice. Scottish Autism has offered all education authorities awareness sessions on the autism toolbox. I thank the minister for that and reassure him that some of the teachers and parents that I have spoken to welcome the toolbox website. However, it is the case for many children in the autistic spectrum that homework is a very stressful time, which often strays into some of the challenges that young people with autism spectrum disorders have out of school. It is welcome that the minister is saying about the toolbox. Can the minister join me in asking what work can be done to help support children better with autism spectrum disorders in dealing with work that they have to undertake away from the structure of the classroom? The member rightly points to the fact that homework can provide a particular source of stress for children and young people with autistic spectrum disorders. For that reason, the Government and the education system are keen to provide support. One of the most important forms of support is continuing professional development of teachers. Through the autism strategy that was launched in 2011, there are a number of one-stop shops aimed at providing many forms of support, not least one that exists within Lanarkshire. I am dealing with a constituency case involving a teenage autistic boy who considers that his teachers do not understand his literal interpretation of remarks nor his lack of tact. That has led to him becoming disengaged educationally. Can the minister advise what support is in place to enable existing teaching staff to gain greater understanding through CPD and for new teaching staff through teacher training to be given a greater understanding so that, when they start in post, they have a much firmer understanding of autism and autistic spectrum disorder? As the member rightly says, one of the biggest tasks is to make sure that teachers understand what autism is and what it can mean for a child or a young person. One of the central tenets of the standard for full registration is that new teachers identify barriers to learning that may exist and respond to those appropriately. The autism toolbox, I believe among many other functions, does perform an important role in ensuring that teachers understand what autism is. To ask the Scottish Government whether it will provide an update on the progress of the accompanying guidance for the Children and Young People Scotland Act 2014. Statutory guidance on part 6, the early learning and childcare of the Children and Young People Scotland Act 2014, was published in August 2014 to coincide with part 6 coming into force. The remaining statutory guidance to accompany the act will be formally consulted on prior to publication with the appropriate timescales ahead of commencement of the relevant parts of the act. The minister will know from her recent meeting with the Scottish Kinship Care Alliance how strongly kinship carers feel about some of the proposed changes to the support that they receive. The girthlike provisions within the Children and Young People Scotland Act are vital for many kinship carers. Could the minister give more detail on the guidance being developed around the child's plan and any other aspects of the guidance that could determine what support will be available to kinship care families? I thank the member for her replies, and I might be able to follow some of the more detailed issues around the implementation and consultation on guidance in writing to her. However, certainly the statutory guidance on parts 4, 5 and 18 of the act, which includes child's plan and wellbeing, will be, we intend to consult on from February to April next year, which I think should give some clarity for the kinship carers as well. Not least as well, we will be bringing forward consultation on the guidance that is to accompany the kinship care order as well for the act. However, I am happy to continue to engage with the member on the different timescales for the different parts of the act, which all have their own different times of commencement. I will keep in touch with the member on those points. Many thanks. Question 9 has been withdrawn for understandable reasons. I turn to question 10. James Dornan To ask the Scottish Government for an update on its getting-at-right-for-every-child strategy. Aileen Campbell The key driver of our getting-at-right-for-every-child approach is the Children and Young People Act, which received royal assent in March this year. The GIRFFEC duties in the act are to be implemented in August 2016. James Dornan I thank the minister for that answer. Does she agree with me that a large share of the credit for the success of GIRFFEC to date is the role that voluntary bodies such as Homestart, which does invaluable work in my constituency, play in the strategy? Will the minister agree to visit Homestart to see for herself the good work that it does? Will she update the chamber on what the Scottish Government is doing to continue to ensure that this aspect of GIRFFEC continues to thrive? I thank the member for raising the good work that Homestart has done in his constituency, and I am also aware of the good work that happens in other parts of this country, as well, not least in the Highlands, to support families with young children, helping to ensure that parents have the skills and the confidence necessary to build better lives for their children. The work that Homestart and other non-statutory bodies do is a crucial component of getting-at-right-for-every-child and young person in Scotland, and that is why we have a number of key relationships with a number of groups and organisations that are taking forward the good work that James Dornan outlines as being carried forward by the Homestart. I am happy to take forward a visit. I am not sure if it will be me, or it could be my maternity replacement if I am a cloud, but nonetheless, regardless of who it is, we would both be very pleased to come and see the work that James Dornan has raised to stay in the chamber. To ask the Scottish Government what action it has taken to encourage people to attend for their education courses. Our reforms mean that courses are increasingly tailored to student and employer needs, making them more attractive to people who want to progress to good jobs or further study. The developing the young workforce programme will build on that, providing more and better pathways for people to benefit from a first-class vocational education, closely linked to labour market need. Neil Findlay. Often it is short, non-certificated courses that is enough to begin a person's journey back into education. The minister will know that her Government's 140,000 cut in college places is having a serious impact on adult education. What is the Government doing to support adults into the FE sector and support courses that were crudly and outrageously described by some of her colleagues as hobby courses? The Scottish Funding Council has undoubtedly moved away from very short courses. Nonetheless, very short courses remain where they have a huge benefit in terms of access, or indeed have an economic benefit. It is not true to say that we have moved entirely away from very short courses. They do still exist. Of course, we have worked hard to get the right balance of provision. I make no apologies for prioritising young people, because it is indeed young people at the end of the day who are always hit the hardest in times of recession. We should be proud of our record in terms of young people and further education, more young people studying full-time courses that lead to recognised qualifications, that boost their prospects of getting good work and sustainable employment at that. To ask the Scottish Government what the budget priorities are for the education and lifelong learning portfolio in 2015-16. The First Minister made clear last week in publishing the programme for government that attainment is our top priority. The full budget priorities are set out in the budget document published on 9 October 2014. What happens in real terms to the higher education resource budget in 2015-16? The Scottish Government is very proud to continue to invest £1 million in higher education. That is £1,041 million. Within that, we have asked the Scottish Funding Council to keep back not to allocate £22 million. That represents 2 per cent of the budget. We want to ensure that we have the flexibility as we move forward with our ambitions for post-16 education and training. There is a commitment to maintain the unit resource for teaching. Question 13, Mike McKenzie. I ask the Scottish Government how much will be invested in the programme Scotland's Schools for the Future. £1.8 billion will be invested in the Scottish Government's Schools for the Future programme in partnership with local authorities and will see the construction of 91 new schools. Further projects to benefit from a fourth phase of the programme will be announced in December, taking that figure well in excess of 100 schools built for over 60,000 pupils by March 2020. I wonder if we could outline how many schools in the Highlands and Islands region will benefit from that funding. The Scottish Government has committed to providing Highland Council with funding of almost £26 million for two secondary schools, that is WIC and Inverness Royal Academy. Moreover, through phase 4 of the programme, Highland Council will receive a further £10 million for a new 3 to 18 campus, which will encompass schools at Tain Royal Academy, Craighill primary, Notbreak primary and St Dothus. To ask the Scottish Government what consideration it has given to making school inspections without giving prior notice. Education Scotland's inspectors carry out unannounced inspections when they are aware of serious concerns about the care and welfare of pupils at the school. Inspectors have carried out five unannounced school inspections in 2014. Education Scotland is currently discussing with its stakeholders how to develop school inspections for the future. Does the minister agree that ordinary school inspections do not give an accurate picture of a school, given that the weeks of notice given creates a flurry of activity to enable a school to look at its best and the work more ordered than might normally be the case, and that unannounced visits, as is the case in the care sector, would better reflect a school for better or for worse? I should say that I have confidence in the inspection regime. I understand the points that the member raises and they have been discussed in the past in Education Scotland and with stakeholders. There are pros and cons arguments that have been put around the proposal that the member makes. The pro being producing stress and creating an accurate impression, but the con being the argument against perhaps what the member is advocating being that we have to be careful about ensuring our relationship between inspectors and the schools and making sure that inspectors are inspecting with rather than merely inspecting schools. There are, however, as I say, five schools that have had a no warning inspection, although I concede that they have been for unusual reasons. Has the minister given any further consideration to whether the state of building should be included in a school inspection? The responsibility for assessing the state of buildings lies with local authorities, but it is worth saying that the work and the money that has gone in has significantly reduced the number of schools that are in either C or D condition and the number of pupils that are currently in a condition C building is now 104,000, condition D 6,000, which are very significant reductions on previous years. Thank you, Presiding Officer. To ask the Scottish Government what agreements are in place with COSLA regarding the funding of education services. The majority of funding for education services is provided to local authorities as part of the annual local government finance settlement. However, there are some specific agreements with COSLA with regard to some elements of education funding. The Scottish Government has agreed to fully fund the expansion of early learning and child care introduced through the Children and Young People Act. That amounts to £329 million over financial years 2014-15 and 2015-16. We have provided £41 million in this financial year to maintain teacher numbers in line with pupil numbers and £37.6 million to secure places for all probationers who need one. We have agreed to provide £24.8 million in capital funding this year and a £70.5 million revenue funding over this year and next to cover the delivery of free school meals to pupils in primary 1, 2, 3, starting next January. Thank you, cabinet secretary, for your answer. With particular regard to Stirling Council, and given that the Tory Labour parties on the council voted through a council tax reduction for the financial year 2012-13, would the cabinet secretary agree with me that they should have no reason to reduce education services in Stirling or complain about grant funding levels from Government? As the Scottish Government has fully funded the council tax freeze, that should have no impact on the level of education services as Stirling council was able to reduce its council tax in 2012-13. That would suggest that the money provided by the Scottish Government was more than sufficient for the council to maintain the level of all its services. Question 16 has been withdrawn and a satisfactory explanation has been provided. Question 17, Kezia Dugdale. To ask the Scottish Government how many applications to the Access to Education Fund it has received, how many were successful and how much has been awarded in grants. There were 609 eligible applications to the Access to Education Fund of which 247 were successful. A total of £1,500,000 to £23 has been awarded to the successful applicants, which will directly benefit 303 schools in every local authority area across Scotland. The Cabinet Secretary for Education and Life Law and Learning visited 4th U Primary School in Edinburgh this morning to hear from parents, children and staff how that funding will make a difference to them and their successful application to the fund will enable them to develop a library to focus on literacy skills and focus on a culture of reading across the school and the wider school community. Their strong focus on parental engagement and working with others and the clear commitment to access to education for all makes us a great example of how that funding is helping to break down barriers to learning across communities. I thank the minister for that answer. The Access to Education Fund is obviously for new projects. It is not supposed to supplement core funding. Given the cabinet secretary's answer to Bruce Crawford, can the minister tell me why some schools are asking parents to pay for paper and books and art resources if the council tax is fully funded? Does he accept that that is happening and does he accept that some parents cannot make up the difference? Obviously, the purpose of the funding question is to make sure that nobody faces barriers to education. For that reason, many of the applications that have been put forward successfully have ensured, for instance, that children who face disadvantages are not disadvantaged by some barrier in the form of IT, to ensure that they are not kept from enjoying school trips and to make sure that everyone is fully included in the life of the school. Applications can be up to 5,000 per school, and I believe that they have been successful in ensuring that we have an education system that benefits all. To ask the Scottish Government what its position is on whether modern studies should be made available in all secondary schools of 16 and 17-year-olds have the right to vote in elections. We are delighted but not surprised at how the referendum did engage 16 and 17-year-olds and the thoughtful and impassioned engagement in the debate created an overwhelming case for giving 16 and 17-year-olds the vote in future elections. We are pleased that the Smith commission report calls on the UK Parliament to devolve the relevant power and time to allow the Scottish Parliament to extend the franchise to 16 and 17-year-olds for the 2016 Scottish parliamentary elections. All young people learn about democracy and political systems as part of their broad general education. The problem in Scotland is that modern studies is fairly unevenly spread. How many secondary schools are there in Scotland and how many of those provide modern studies courses? The most recent information is that 80 per cent of schools teach modern studies as a specific subject. There are around 70 schools in Scotland that do not. Many of them are smaller schools, and I suspect that that might be what the member is referring to. Although it should be said that democracy and political literacy feature within the requirements of the broad general education up until the end of S3, the Scottish Government takes very seriously the arguments that were successfully put forward that we deserve a generation of young people who are engaged in the political debate. To ask the Scottish Government how it will tackle the link between child poverty and educational attainment. The Scottish Government and all its partners have a strong shared commitment to raising attainment and achievement for all and closing the equity gap between children and young people who are most and least advantaged. We are supporting a range of activities, including raising attainment for all, which is working, as I said earlier, with over 150 schools across Scotland to drive forward sustainable and consistent improvement. The school improvement partnership programme, our access to education fund and, as announced in a programme for government, attainment advisers to be based in every local authority across Scotland, as well as a very clear focus on improving literacy and numeracy in P1 to P3 pupils through our Read, Write and Count programme. Recent reports indicate that students from more affluent backgrounds are 50 times more likely than students from more deprived areas to obtain five higher grades A. Other statistics show huge gulfs between academic achievement from affluent areas to deprived areas. Will the cabinet secretary give us a clear indication today what practical measures are being taken to reduce those gulfs because we cannot allow our education system to maintain such differentials between students with strong academic potential, not achieving their aims and ambitions because of the geographical area in which they happen to grow up? I think that Mr McMahon and I are in agreement that inequity anywhere in our education system is not acceptable. The Government will do everything within our existing powers to tackle poverty and inequality. I have already said to members previously today that my top priority is the Cabinet Secretary for Education and Lifelong Learning, which is attainment for all to raise that and to do everything that we can to close the equity and attainment gap. I regret that we do not have more welfare powers to tackle poverty. Nonetheless, we will, with the powers that we have, focus on pragmatic measures on the front line within schools that will make a practical difference to the lives of our children on a day-to-day basis and ensuring that more of our children reach their full potential. To ask the Scottish Government how the expansion of funded early learning and childcare will benefit the most disadvantaged. Through the Children, Young People Act, we are investing £329 million in this financial year and next to expand annual funded early learning and childcare for three and four year olds to 600 hours. That represents an increase that will save families up to £707 per year per child. We have extended that entitlement to our most disadvantaged two-year-olds with around 15 per cent becoming eligible in the current school year, rising to 27 per cent next year. That is more than any of our predecessors have done and more hours of childcare than any other part of the UK. I thank the minister for that answer. Could the minister outline what the Scottish Government is doing to raise awareness of funded childcare to parents and carers? Launched the second phase of our marketing campaign to raise awareness amongst parents and carers of the expanded childcare entitlement follows an initial phase of public information that happened in the summer. The new launch of the campaign coincided with the cabinet secretary's visit to Melville Street Nursery in Edinburgh, which I hope will address some of the concerns that the member raises. Many thanks. That concludes questions. I will now move to the next item of business. I will ask members to change places as quickly as possible.


Hi everyone, it's MJ the fellow actuary and in this video. I want to talk about the Merton model So let's maybe start off with the history. It was created by Robert Cox Merton And he is famous for actually being part of the black skulls model Of which he won the Nobel Prize and he was part of the long-term capital management fund that Used the black skulls model was very very effective for a couple of years getting plus 40% returns before getting absolutely Destroyed when Russia defaulted and the Thai currency fell apart Ending to lots and lots of money getting lost But because the model was you know, it's often referred to just as the black skulls, but its full name is the black skulls Merton model Very interestingly is he has a student called Robert Jarrow Who we will be talking about a little bit late in another video who came up with the Yarrow Turnbull model which uses mock of jump processes to determine The probability of default anyway coming back to the Merton model We will see that's three people with the acronym of KMV They would take this model and they would extend it and Moody which is a credit rating agency would then buy out that KMV model and use it in their proprietary models known as lost Colk and Risk Colk so this model that we're using is very much a foundation to something that is used today And it's built very much on this idea that a company is financed by both equity and Debt and the Merton model It's a structured model in the sense that it's going to be trying to use the share price or the equity of a firm in order to Calculate the probability of default And essentially less this maybe explore this idea a little bit more so a company is financed by equity and debt Now we know that equity this is when you buy a share You get a form of ownership which allows you to vote on the strategy of that firm And it also gives you unlimited potential return You can think if you buy a stock today at ten dollars The price in the future could go up indefinitely and therefore there's this unlimited potential return Whereas if we look at debt debt in a way gets a fixed return So normally you say I'm gonna lend you money at a rate of 10% and then that return is essentially what you get and In in in the fact that you're getting less potential return comes with the idea that you're getting more Security so what we see with debt and equity is that if a company has to fall apart debt gets repaid first and this is because they have this higher Security or lower risk. They are gonna get lower return Whereas equity that doesn't have as much security gets paid out lost because they're taking higher risk They're gonna get higher return. Now part of this whole idea With the merchant model is we are going to be assuming that our equity isn't paying any dividends And we're also going to assume that debt is simply a zero coupon bond Which means all interest repayments are combined in the final redemption date So those are just two assumptions to to keep in the back of your mind Now let's look at the formula So essentially what we have is we're saying the Value of the company at time zero or if you want to think of it as the assets of the company at time zero But we're gonna go with value so the value at the company at time zero is Equal to the equity at time zero plus the debt at time zero and this is not time zero of the company This is just we'd say time zero for the present value right now, and then we have the future Date which is given by You know the letter t and we can see that in the future So debt t the future value of the debt It's either going to be equal to the smaller of of two values either It's going to be equal to The debt the original debt times the interest rate remember because this is a zero coupon bond Or it's going to be equal to the value of the company at that future time It's going to be equal to the smaller of those two values Whereas equity is going to be equal to the maximum of either the future value minus the future debt or zero So the whole idea with equity is remember to remember its limited liability if a company fails The shareholders don't have to put in more money. So this actually maybe just explain this a little bit more with an example So we're gonna look at two situations when the company does well and when the company does badly so when the company does well it's still in Business and what this means is that equity is therefore going to be equal to the value of the company less the debt and The debt is going to be repaid and it's going to be equal to the original amount Times the interest that was that was paid and this is kind of what we're seeing here This is that debt zero times the interest rate or here value Of the future minus debt of the future. So that's what happens if the company does well Now, let's look at what happens when the company does badly. So the idea here is that the company gets Liquidated it's it's basically it's game over So in the situation the debt was not able to be paid or the debt is more than the value So what happens is equity then receives zero now? If the future value is going to be less than the debt times the interest rate Then that is what the debtors are going to get they do get that lost from a remaining amount over there So when the company does well, these are the payoffs when the company does badly These are the payoffs over here Now if we had to draw the diagrams of these payoffs, we will see that equity is Basically acting like a long call on the company. You can think of this as the value of the company You can see as soon as it's above debt the equity Holders are going to be as we say in the money. Although when they're below You know when the value of the company is below the debt and the company is being liquidated We can see that the equity holders are going to get nothing and they're gonna lose that original investment that they put in so you Can think of that original investment as the premium for a long call and if we had to look at say The debt payoff remember the debt payoff we spoke about over here It's the minimum of the debts at the current date times the interest Or it is the future value of the company. It's gonna be the minimum of the two We're gonna see that this is the payoff diagram And we're gonna see that debt is behaving very much like a short put on a company So this was the big idea of the Merton's model was that okay? Hold on hold on what we're essentially dealing with is we can use the black skulls model that is used to value Options specifically call and put options and the premiums that one must pay in order to to get the right That these these contracts grant we see that we can use that when it comes to Equity and debt because here we can see that okay equity Like I say is is like the the premium for the long call and we're gonna see that the interest Repayment so the interest times the debt is effectively going to be the premium for the put option That the debt the person who's lending the money is going to be receiving so What we can do is if we had it like I say look at that black skulls model We can equate a whole bunch of these formulas or these these values that relate to call options We can relate it equal to our company So for instance equity a time zero is going to be the premium of a call option The debt at times t is the same as the strike price the interest times the debt at time Zero is equal to the premium for the put option the value of the company is going to be like the share price Of a company at a future time t and the value of the company time zero is going to be equal to the current share price of the company So like I said The big thing to to realize with the Merchant model And sometimes people do get a little bit tricked up with this is when we're referring to value It's the company's assets and this is not necessarily the share price What we're just seeing is that in the Merchant model assets take the place of share price in the black skulls model So also be aware that it is difficult in reality to know what this asset value is at all times Plus we're also assuming like what we'll see a little bit later the black skulls is that there's this volatility You know figuring out volatility of a share price is quite difficult You know, you've got to use the gawk model or a whole bunch of other other techniques It's it's also a little bit of the Achilles heel for the Merchant model Is that not only assuming that we know what the asset value is at all times? That's an observable security, but we're also assuming that we know the volatility of this asset value at all times And and like I said that is probably something that trips up this model quite a bit but bearing that in mind We can come back to our black skulls model Using these different values for it We can see that we can get the following formulas and how I'm getting these two formulas So I'm essentially taking the black skulls model and changing each of these values for what the Merchant model suggested And I've done that by linking up the payoff diagrams with those of an option diagram And this is where the fun begins because we know with the black skulls model if you're familiar with that We know that the probability that the future share price is less than the strike price is equal to the normal cumulative value of negative d2 Which the d2 is given by that equation over there this is basically the probability that the put will be in the money and What that means is we can use this with the Merchant model to say well Okay, if that is the probability that the puts gonna be in the money that is the same as saying the probability of Default at times t is going to be equal to or essentially this normal cumulative of negative d2. So This is where it gets powerful It's because if we know when the probability that the put will be in the money And we know the put will be in the money when it comes down here This means that the long person in the put isn't is enjoying the benefit But the person who's on the short side of it is going to experience a downfall We can use that logic to link it up and say, okay So the probability that the put will be in the money is the same as the probability of default of this company So this is one of the powerful things is that we can figure out this formula here Plug it in and it is going to tell us the probability of default, but that's not all Also, we're knowing from our formula that the interest times the the original debt is going to be equal to The debt at a future time Discounted by the risk-free rate Subtracted by the current debt and it's going to give us this current formula over here Which means we can do a little bit of mathematics and what we find is we can put the two together Because what we also know is that current debt is going to be equal to the future debt Discounted at the actual interest rate that is being applied to that debt instrument, which we can denote as B So deep sorry B is the implied interest rate or is the risk-free rate We can subtract the two together and we can find out what is the implied credit spread of this bond So we can know okay and remember we do expect corporate bonds to pay out an interest rate higher than the risk-free rate That should get on a government bond because of this higher likelihood of default and the Merton model is going to help us Calculate what that credit spread is so I can say this is the powerful thing of The Merton model is it tells us the probability of default Okay, it can also be used to calculate the company's debt at various times and We can use it to calculate the credit spread now look This was very much a high Overview of the Merton model it is something that is tricky to get your head over and like I said the big thing that I would Recommend is that you go back and you look at your the whole material around calls and option prices so for instance Go and watch videos on call and put options go and study the payoff diagrams of those instruments And then even go tackle the black skulls model and once you've done that come and rewatch this video again And that should give you just a clearer indication of what's happening with this Merton model But very very powerful We can use the share price of a company to determine probability of default on its corporate loans What the company's debt is and the credit spread so very very powerful? Things that we can bring from the black skulls. Sorry from the Merton model Anyway, thank you so much for for watching