Yn y gweithio. Fy fawr, wrth gael eich 25 yma ar y Ffynol 2014 o'r ddweud o'r Gwylchân Sgolwch. Mae'n rhoi i ffwn i'r ffudio am yw i'r grwyddoch chi i gyd. Mae'r dweud o'r gweithio i'r ddweud o'r ddweud o'r llwyth y cilydd Malkham. Yr unrhyw ni'n gweithio ymnoedd ymnoedd i'ch gweithio i'r ddweud ymnoedd 5 i'r rheinybwch ar amser. Mae'n gweithio i'r ddweud ymnoedd ymnoedd eich of business this morning. I want to take evidence from Professor David Bell and David Iser, both of the University of Stirling's Division of Economics on the recently published paper, Scotland's fiscal future in the UK. I would like to welcome both to the meeting. The paper was circulated to members in advance of today's meeting, so we will go straight to questions from the committee. As usual, I will obviously start the questioning process. However, before we start, I'd point out that we have a very full agenda today and I like to dyrwun, ond mae'n ddigonwg, mae'n dweud i bod i gwahodd gyda'r cymwylltauau, a'r ddaw'r ddaw'n gwahodd bobl i'r holl i'n ddechrau ddegonwg. Felly, mae'n rhesynoliaeth i ddim yn ei ddweud. Rwy'n dwi'n gawd a'n oes ddweud lawer o ddweud.  Mae'r gweithio o ddau'r 10-15 pence o'r ddau. It amounts to an extension basically of the kind of revenue share. It doesn't give control over progressivity and it doesn't really give you control over tax bans and then the question is what advantage might you seek to gain out of having control of tax bans and progressivity? and we do not know a huge amount on it! Just depends how getting the rest from the UK reacts but one of the things I think that we bring out is that there is a huge size difference between Scotland and the rest of the UK. The rest of the UK might not be too worried is Scotland uh say cut an income tax rate relative to relative to the rate that pertains in the rest of the UK. That might be true, it depends how mobile people are between Scotland and the rest of the UK, and whether people come in and out of the labor market because of changes in income tax rates. So, having the slab increases the revenue and it changes your incentives in the following way. It makes the kind of block grant adjustment will have to be larger. And so therefore there is more pressure on the Scottish Government to grow the economy as fast or faster than the rest of the UK in order to keep its total public spending in line with what it would have been had the Barnett formula continued. Once you start playing around with the bans and the rates, then you're going to induce things to happen in response to these changes. And they may be good, they may be bad, but you are constrained to some extent by what your larger neighbour is doing, because at some point people will react. I've got an evidence committee and its people suggested that a specific proposal could cost Scotland 2 per cent of its GDP and 75,000 jobs. Is that something you think is exaggerated, accurate? What do you feel having a different rate, a higher rate here, which can't be reduced relative to the rest of the UK? Having a higher rate here, there's certainly one issue with that, and that is because we have a highly unequal distribution of income in Scotland. A large proportion of our income tax is paid by a relatively few people, those on the higher and particularly the additional rate of income tax. So there is the potential to cause movement between Scotland and the rest of the UK if you go massively up compared with the rest of the UK in terms of, let's say, the additional rate. I would be surprised if you're talking about as much as 2 per cent of GDP. Obviously it depends on how much you change the rates, but there's obviously a penal rate at which point increases in taxes become self-defeating. Increasing the tax rate becomes self-defeating. Let's move on to something else. Sorry, I didn't realise David, you wanted to comment also. In some previous work that we did on this, we looked at the question of how much additional revenue would come to the Scottish Government if one P was placed on each rate of income tax. Now, assuming there's no behavioural response, the research suggested that there would be an extra £460 million coming to the Scottish Government. When you take into account these likely behavioural responses that David's been talking about, so the possibility that some people decide to relocate either as individuals or to relocate some of their income, then that additional revenue might be more like around £370 million. So a difference of around £100 million when you take into account these behavioural effects. So I'm not quite sure how that aligns with the previous figures that you quoted. The other point, just in terms of progressivity, I think the Labour proposals were that the income tax devolved to Scotland should be, the progressivity of that should be able to be increased but not necessarily decreased. I'm not sure quite why you would want to restrict yourself to that kind of being able to move the progressivity in one direction but not another. On the issue of VAT, Devo Moore recommends that half of the VAT revenues raised in Scotland should be assigned to the Scottish Parliament. In such a situation, would Scotland have any say in setting the rate? I think the evidence that we have at the moment is that EU law would preclude any differences in rates of VAT within parts of the same territory. So it doesn't seem likely that, under that basis, the rate of VAT would be something that would be able to be devolved to the Scottish Parliament to be different in Scotland relative to the rest of the UK. I'm aware of that. It's the issue. It's the issue that they're saying is that because of that, there's a possibility that maybe half of VAT could be assigned to Scotland. There wouldn't be a different rate from the UK, but would we have a role in helping to set that rate? I guess that is a question about inter-governmental relations and how those play out. What we're talking about here is a tax-sharing arrangement. Most of the proposals that are being put forward are not for tax-sharing, but tax-sharing is pretty common in countries like Germany. Effectively, that means somehow coming to an agreement about the tax rate and then divvying it up according to some formula. What that means is that Scotland wouldn't have a different risk from the rest of the UK. All of the VAT would be pulled together for the whole of the UK, and Scotland would get 9 per cent, whatever per cent of that. If the rest of the UK is booming and they're all buying high-value items, a lot of VAT revenue south of the border, Scotland would still get a share of that, even if its economy wasn't or people weren't spending so much in Scotland compared with the rest of the UK. So, sharing of taxes is not something that seems to be very much on the table here. It's quite common in other countries, and it can give a misleading impression of how much power the different sub-central governments, for example, the German case, the lender, have. You've got exactly the right point there, because they don't have a huge say in setting the conditions for the tax. On to co-operation tax. You've said that it's been proposed for devolution by Devo Plus on the basis that economic business development devolve policy areas, although most proposals recognise the risks inherent in devolving co-operation tax, namely the fact that the high mobility of the tax base may trigger tax competition. Surely there's already co-operation tax competition right across the world. It almost looks as if you're referring to this only within the British Isles, as if somehow the rest of the world is not significant to this whole discussion. That's what I read into that. There certainly is co-operation tax competition. I was looking at some OECD figures on co-operation tax rates, and it's absolutely clear that they're converging downwards. The stand-out exception is the United States, which still has a co-operation tax well above 30 per cent, and that's been the cause of some recent disputes that have been emerging, things like the Pfizer takeover related to specifically that issue. It does seem to me that co-operation tax rates are converging downwards, but I think that the rates are only a part of the story because the allowances and the whole nature of the way the tax is applied can vary even if you have the same headline co-operation tax rate. Those aspects, other than the rate, might be of interest to particular kinds of firms. You emphasise research and development by giving large R&D allowances, then you will attract companies that are biased towards R&D and so on. It's much more complex than just thinking about the rate, although the rate is quite important. How does the USA manage to cope with varying co-operation taxes across the USA? Is this the Rhode Island question? Obviously, it's the issue about whether you can have different co-operation tax rates in different states, and clearly you can. How do they work to ensure that you don't have the issues that were raised, for example, if you've touched on your paper about tax competition? There must obviously be an element of that, but how do they ensure that that works effectively? I don't know the details of the co-operation tax arrangements in the States, I'm afraid. You're absolutely right that the co-operation tax issue is an international issue, and ideally we would have a greater level of international agreement about how we set those co-operation tax rates clearly. Potentially it is more of an issue when you're looking at a within territory situation because for a company choosing between whether to locate in Scotland as opposed to the rest of the UK, Scotland and the rest of the UK are clearly fairly similar economies, so a different level of co-operation tax may play a relatively stronger role in influencing how that business decides to locate as opposed to if that business is choosing to locate between the UK and a completely separate country. I think it is true that within the States you've got, I think, is a Rhode Island that has this lowest rate by quite some distance and a huge number of companies name-plating in Rhode Island. I don't really know how that's handled, but the fact that not all of US industry has moved to Rhode Island suggests that there are other issues. For example, you think about California, which is quite high tax rates, but it also has other attractions, the higher education institutions, the ability to find capital in all kinds of different ways and, of course, a very pleasant environment, which may be the countervailing force to Rhode Island's low co-operation tax rate. Co-operation tax is an issue, but only when all else is equal, I suppose. Now I've already taken 13 minutes, so I need to move on to colleagues around the table. First, to ask questions will be Jamie to be followed by Gene. Thank you, convener. In your paper, you say that the Scottish rate of income tax will operate effectively as a flat tax because you can't vary the rates differently from one another, saying that this implicitly leaves income redistribution as a reserved issue for the UK Government, and that this may undermine the extent to which the Scotland Act proposals really meet the desire for greater fiscal policy autonomy. Can you say what you mean by that latter point in particular? Well, I think what the main incentive that the Scottish rate of income tax gives to the Scottish Government is to match the rate of growth of the tax base in the rest of the UK. Otherwise, the size of the block grant adjustment will start to exceed the amount of revenue that the Scottish Government is raising from this flat tax that you describe. You cannot use that flat tax to alter people's behaviour because you don't control the rates, you don't control the allowances, and you can't really use it to redistribute, again, because you don't control the rates, you don't control the allowances, but we have shown in another paper on inequality in Scotland that it is even moving tax rates around quite a lot income tax rates in Scotland. You don't have a huge effect on overall inequality, and the reason for that is that what we call the market or the pre-redistribution of income is very unequal.  You've touched on the issue of the problems that could be associated with asymmetric growth in the tax base, and that's something that I've discussed before, Professor Bell, and you described that as the Scottish Government bearing the full risks associated with that, but you do see the corollary of this as, of course, the Scottish Government is fully incentivised to grow the income tax base. How, just with control of the Scottish rate of income tax in itself, isn't really going to give the Scottish Government that much power to do that, is it? It still doesn't have control of our immigration and things like that? Well, that's a good point. It doesn't have control over immigration, so if there are blockages due to inability of Scotland to attract the kind of high productivity individuals, then that might have a negative effect. Although, you know, it's difficult to calibrate that at the minute, but, of course, Scotland does spend very considerably more than the rest of the UK does on economic development, so Scotland, I think, comes second to London in terms of its attractiveness for inward investment. So, there are levers, and Scotland's chosen to use the economic development lever, it seems, quite well, to enhance the growth of the Scottish economy, which should grow the tax base. It's not that tax alone will be responsible for growing the tax base. There are other supply-side instruments that are available to the Scottish Government, which could help in that regard. The Scottish rate of income tax means that the Scottish Government will capture some of the positive benefits of economic growth in terms of increased tax receipts, but it won't capture all of those benefits, for example, in terms of reduced welfare spending. So, it's giving some incentives, but not completely full incentives, and the other thing, as you've touched on, as David has talked about, is that it doesn't give the Scottish Government power to address income inequality and the distribution of income. The point that I've made in a previous paper is that if the growth in the income taxed revenues is concentrated on, let's say, bankers' bonuses and they are being taxed at £45 in the pound, Scotland is only getting 10 of that £45, whereas if it is more about lower income growth, where they are being taxed at £20 in the pound, Scotland is getting a half of that increased revenue. I want to turn to the issue of the reduction in welfare spending in your paper. You referred to the UK welfare state being seen as the key element of the risk-sharing resource pooling mechanism that is the defining or a-defining characteristic of the union. That's the labour proposal talk of rights enshrined at UK level that should be paid for from UK taxes. Liberal Democrats talk of maintaining the UK social welfare union. The Conservatives describe the social union as hugely important to what glues us at the UK together. In this context, it's unclear to what extent welfare devolution is compatible with these principles, so it seems pretty clear that it's unlikely that social security will be devolved, or that more than 100,000 children will be pushed into poverty. There are welfare changes in Scotland by 2020, but 100,000 disabled people in Scotland have been affected by these changes. 80,000 households have been hit by the bedroom tax, so the two of us talk about this being what glues us together. We're getting stuck in the glue if we don't get any further devolution. Do you really not see this as a serious prospect? You don't think that we'll see the devolution of social security to any extent? The point that we were making there was not that we don't think that welfare devolution is on the table or makes sense, but we were simply in that part of the paper making the point that the traditional argument for keeping most elements of welfare spending reserved, not just in the UK, but in many other countries as well, is that those welfare spending functions are appropriate to have at a federal, if you like, national level to ensure that citizens in all parts of the countries receive the same level of welfare services and that there's an element of risk-sharing over the economic cycle and so on. That doesn't necessarily mean that you have to agree with the welfare policy that is in place at the moment. That part of the paper was simply making the point that that's the traditional starting point of the fiscal federalism literature. I'm just writing something that's not published yet on devolving welfare. One way to think of it is that welfare is there to cover a number of risks. In the first instance, I guess, when way back when social insurance was introduced in the first instance, it was about ensuring against unemployment. Actually, unemployment-type benefit job seekers allowance now accounts for a smaller and smaller amount of the total welfare bill. David's just put the point. One argument for having unemployment insurance on a national UK-level basis is that if one part of the country suffers a big shock, say the oil industry in Aberdeen suddenly was not doing so well, then unemployment benefit is actually a subsidy not just to the individuals in Aberdeen, but to the Aberdeen economy and keeps it more buoyant than it would otherwise have been. So it's a form of insurance. Actually, if you look at most of the benefits that are now covered by welfare, they're not about insurance. They're about things like disability, or having a need to care or bereavement, these sorts of things. In those sorts of circumstances, it's not quite so obvious that you would be fulfilling this kind of cross-national subsidy to keep the economy going function. I guess that I argue that there's a possibility of deciding on, let's say, how much Scotland currently receives in relation to a particular benefit. Attendance allowance is one that the Labour Party have selected. And then somehow indexing that in the way that the block grant adjustment will be indexed and letting Scotland get on with that sum of money to distribute to the disabled. The good thing about that is we already have a policy of free personal care, and it doesn't look like these two policies sit all that well together. Attendance allowance on the one hand and the free personal care on the other, because they're essentially trying to do the same thing. The disadvantage is that while having a big sum of money, you have to pay the administrative costs of sharing out that money. Even if you do that through DWP, it will still be expensive because the welfare system, as you know, is extremely complex. Something not too dissimilar to that is done in US states, and I think it's worth thinking about in relation to some aspects of welfare spending. That isn't... I would just reiterate what David said. This is about the design of welfare. It's not about the current policies and the levels of support that are available. I'm not saying... Neither of us are saying anything about that. Thank you. First of all, reading the paper, it seems that you have dispensed with the idea of the vow made by other political parties that the Barnett formula would remain untouched. Is that correct? The Barnett formula is still implicitly there in that the block grant will be... Sorry, under the labour proposals, it's pretty clear because it's just an extension of the Scotland Act that the Barnett formula will be there. The block grant will be determined and then it will be adjusted. It will be reduced by an amount that the Scottish Government and the UK Treasury will agree on. Once you start to increase very substantially the amount of money that's been taken away from the Barnett allocation, then it becomes, I think, less easy to defend its continued existence. Indeed, it is not just about Scotland. I was present at the meeting on Monday where very strong arguments were being made by a representative from Wales about how the Welsh Government feels, perhaps with some justification, that Wales has done badly out of the Barnett formula for some time, so I would have thought that it might come under more pressure if there is a substantially greater take in terms of income tax in Scotland, and I suspect there will be pressure from outside Scotland because it's unpopular outside Scotland. You do, I think, suggest several different parts of the paper that we are generously dealt with, really more or less because of the oil.  The allocations to Scotland through the Barnett formula are clearly largely a result of the historic baseline allocation. The Barnett formula gets a lot of criticism, but actually it's the baseline allocation that means that Scotland is funded relatively generously. In theory, I very much doubt this will happen, but in theory I think the UK Government, if it wanted to, could think about retaining the Barnett formula but making a one-off adjustment to Scotland's block grant, so retaining the Barnett formula, but nonetheless reducing the block grant. Anyway, I think the point that you make is around oil revenues, and I think there's been a couple of pieces of work done that have looked since 1980 at the North Sea revenues that have come from Scotland and compared that to the level of funding that's come back to Scotland through the Barnett formula, and over time the two things pretty much cancel each other out, so Scotland in effect has received back the North Sea revenues through the Barnett allocation. Not explicitly, but that's the implication. Implication in this paper, but I mean I think it's been challenged and found wanting. That's really the point that I'm making. The relatively generous grant is you are linking that to oil, but there is another thought that says that there's about £150 billion that didn't come back. Anyway, we'll leave that. The other thing I wanted to ask was really reading the paper. It feels a bit like being hamstrung. I mean, would you agree that to devolve the income tax really doesn't leave Scotland in a particularly better place, and the word power might be a bit strong? I mean, I would suggest that real power would mean that we might have power of taxation. Do you think that that's something that should be argued for? Well, I think a number of the proposals argue for full devolution of income tax, including the ability to vary rates individually and the ability to vary bans. That would bring a very large revenue source fully into the control of the Scottish Parliament. It would give the Scottish Government ability to address issues around inequality and redistribution. Yes, it wouldn't be the full panoply of complete tax powers, but relative to other countries around the world, that would really be a very substantial level of tax devolution to a devolved Government. It is true.  You are always still constrained in your ability to set tax rates and to, well, basically, because ultimately markets will tend to, or you'll end up with factors of production, labour and capital moving in response to differential taxes. I mean, we see that happening all the time. So, in a sense, yes, you could leave the constraints of having all of these things set at Westminster, but you wouldn't be unconstrained. That would be not the correct way to think about it. Haven't you just made the case in the paper that there are constraints? There are constraints of increasing the tax. We're still tied to an economy that's set around the London area and the financial sector. I mean, what we've been looking at is the existing proposals, and certainly they do impose constraints. Well, any Government will look at its fiscal position and make decisions accordingly. Governments have greater or lesser policies towards different parts of the country, and arguably the UK has one that doesn't do that hugely, especially within England, but having the tax powers would give you some greater degree of autonomy clearly, but it wouldn't be unconstrained. If you were to write a paper perhaps from a different perspective that was showing the powers that Scotland needed in order to grow its economy to develop industries, would you say that it needed the power to create taxes and impose taxes on different aspects of industries in Scotland? I mean, again, there is the issue of probably most companies, if you want to grow them, would prefer much lower taxes than currently pertain in Scotland. That would be one way, certainly, of attracting more business to Scotland. But there are what we call the supply side of the economy, which is about skills, which is about enterprise, which is about infrastructure and so on, which have a considerable bearing on your ability to grow the economy. With devolved income tax, the area that we should develop would be the financial sector, and that's the one that's providing the highest income in terms of tax revenues. Is that right? In terms of income taxes, it's less true now, but it was true certainly towards the middle of the last decade that bankers' bonuses provided a very substantial share of total income tax revenues. Under the current proposals, and as I mentioned earlier, Scotland wouldn't get a huge share out of that, it would get 10 out of 45pence or it was 50pence for a while. So it wouldn't benefit to the same extent as the UK Government would from those kinds of that type of income. The paper refers to the UK as though it's a well-functioning monetary union, but somehow there's an advantage to being tied to it. Is that really what you think? In terms of a monetary union, the US is a very good example of a well-functioning monetary union. I think the UK is a well-functioning monetary union. The euro is not a well-functioning monetary union, partly because it lacks the ability to do the kind of cross, the fiscal transfers which support parts of the state when they get into trouble. So the example that Krugman made recently, although perhaps rather crudly, was that Florida and Greece were, in some ways, equivalent in the kind of shock that they experienced during the Great Recession, yet Florida has largely, through the kind of transfers I was talking about earlier, weathered the storm and not really suffered greatly, whereas Greece, which hasn't received significant fiscal transfers due to the policies being followed by the European Central Bank and the European Union, has still 60 per cent youth unemployment rates. Okay, thank you. Thank you. When the convener started his question, he mentioned the policies of the Labour Party in terms of increasing taxation, but not reducing it, the ability to do that, and Mr Reiser appeared to have a doubt in his mind as to the validity of that, which the convener agreed with, but they then discussed the issue of corporation tax and the pledge made by the Scottish Government to reduce it by a certain amount, regardless of the level set by the UK government, and the issue of tax competition, a race to the bottom, is essentially the issue in relation to both of those taxes, that a policy which allows you to raise income tax in order to increase the amount of money available for public spending, but a policy which prevents a reduction in income tax to avoid a race to the bottom, what are your concerns over a position like that, given that you had some concerns over allowing a race to the bottom in corporation tax? Yeah, I think that's a fair point to an extent that if you look at what's happened to income tax rates and corporation tax rates across countries over time, the pattern's very different, corporation tax rates have been going down in all countries. Income tax rates have stayed much more constant across countries. This idea that horizontal tax competition always results in lower tax rates isn't quite right. It depends very much on the type of tax and how mobile the tax base is that it's applied to. In terms of income tax, there's evidence that people think much more in terms of not in terms of tax competition, but more in terms of fiscal competition. So, if people can see that they are receiving the benefits of income tax through locally provided services, then they are generally more willing to accept those higher tax rates, and that visibility of income tax is a key part of the reason why income tax is often perceived as a good tax to devolve, whereas corporation tax isn't because that link between the tax and locally provided services isn't there. The tax base is very mobile, so you can get this race to the bottom. So, the issue of horizontal tax competition affects different taxes differently. I think the point that I made earlier about income taxes, really just why would you want to constrain a parliament forever more to only be able to operate a tax in one way rather than another, which is perhaps slightly different from a policy position of saying, we will cut the tax if we have it? I mean, this issue of mobility of the tax base is an important one, and capital I think is more mobile than labour, and that's why, as we've said, corporation tax rates around the world have been coming down because companies are able to move relatively easily nowadays, and indeed, overall, although it's not as extreme as corporation tax, it has become more difficult to raise huge sums through income tax. It's partly because we now have a lot of relatively poor people who don't pay a lot of income tax. We have a lot of relatively rich people who are probably quite good at finding ways of avoiding income tax, and the net result of that, which is bad for the poor, is that countries have increasingly focused not on direct taxes but on indirect taxes, so what happened at the start of this UK parliament was an increase in VAT rather than an increase in income tax, and the increase in VAT is partly explained by the fact that the tax authorities know they will get their money when they increase VAT by a couple of pence or whatever. It doesn't make a huge difference to people's behaviour patterns. Thanks very much for clarifying that, but the question that I wanted to ask at the outset this morning was in relation to VAT, the resignation of the tax generated in Scotland, because we know that you can't have different rates between Scotland and England under EU rules, so there's a good example there of how you can look to identify the amount of tax raised in a geographic area and assign that money via the block grant or whatever. Are there other areas where that could be done or are there other ways that it could be done with the block grant? That's a slightly different approach from the one that I described earlier. The one I described earlier was one where you take all the VAT revenues raised in the UK and you give Scotland its population share of it. What you're now interested in looking at is you try to figure out how much VAT is actually raised in Scotland and assign that to Scotland. You could do that with a number of things. For example, Scotland's per head, I've forgotten the exact figure, but it's something like 10 per cent. In terms of alcohol duties, the amount raised in Scotland is something like 10 per cent, so we would get more if we had our proper share of total alcohol duties. Trouble, that can be done. The difficulty with that is that the incentives you create are perhaps not the best. You have to be quite careful. It's not that unusual to do that sort of thing, and it might increase at a political level the feeling that we're spending the money that's raised in Scotland, but be careful about what incentives you end up with. That's helpful. James has pointed out in your paper that it's 16 per cent, not 10 per cent. What do we need to do in Scotland to build up our capacity at analysing and ultimately then dealing with the concept of behavioural response to taxes? That's really quite a difficult question. The UK experts on this, indeed possibly the world experts on this, are the Institute for Fiscal Studies in London. The economists do get quite nerdy about this, and it's trying to construct a situation which is, on the one hand, like real life, but on the other, where one group of people are confronted with a certain tax rate and another group of similar people are confronted with a different tax rate, and then you see how they respond to it. Now, there have been quite a lot of work done at UK level and in different countries. Then you've got a question. If you look at it, how useful do you think the comparison is between Scotland and these other countries? To make a general finding from the literature that we have now, first of all, the kind of people who react quite a lot to changes in the tax regime are people who are just about on the point of retiring, so they might make a decision whereas people mid-career are less responsive to difference in income tax rates. Sometimes married women are more responsive to income tax rates, but then things like how much child support there is matters. It's clear, although I don't think there's a huge amount of evidence yet, that things like tax credits affect people's willingness to supply labour, to work longer, because once you exhaust your tax credits, you can suddenly be facing not a tax rate of 40% or 40%, you can be facing a tax rate of 70%, and you think, well, what's the point of doing that extra hour of work? So there's a need for a body to bring this all together in Scotland. It does seem to me because clearly, as you get whatever powers Scotland will get at the end of this process, it's important not only to educate all of the people who are involved in policy making but the Scottish public more generally, that it isn't simply you raise the tax and you get X and assume that that's the end of the story. In terms of a body, who would you envisage doing that then? One of the risks with any devolution of taxes is that if we get our behavioural response element wrong, we could end up not getting £460 million. It could be something hugely lower or higher than that, depending on what happens. Obviously, through experience, we would get better at it and make fewer mistakes, but I suppose my slight concern is that we have to go through all the pain first before we actually get the hang of it. How could we set it up so that we make as few mistakes early as possible? Well, thinking about the structure in the UK, you've got the Office of Budget Responsibility. In fact, they don't do this stuff, to be honest. They look at taxes and I think they will largely be looking at Institute for Fiscal Studies research on this. There are different possible models that one could think of, but you have to have one that has a very good pipeline to the types of research, not just the Institute for Fiscal Studies. Some of the stuff that we've looked at has been in Denmark and other European countries has been work in the States, but you have to have that international linkage so that you're up to date with the latest thinking on these issues. It's called applied microeconommetrics, if you want to know that. We really need to have people who are very much up to speed with the latest thinking on that. Help, thank you. I wonder if I could turn to your paper, page 10 of your paper, figure 2 headed decentralisation ratios in OECD countries. I wonder if either of you are in a position to really just to talk through what is going on in that particular chart. Well, I'll try. This is looking at the share of expenditure and the share of revenue that sub-national governments have in different countries of the world. For example, if you take the point that's marked UK, Scotland, what that's saying is that of all public spending that takes place in Scotland, Scottish Government's responsible for around 50% of that on the x-axis, but on the y-axis at the moment of all taxes raised in Scotland, Scottish Government's responsible for less than 10% of those. The graph is then plotting all these other OECD countries in terms of the expenditure shares and revenue shares of sub-national governments in each of these countries. In some of these countries, the sub-national governments are local authorities. In some of the Nordic countries, for example, local authorities have the ability to vary tax rates and so on. In other countries, these are sort of clearly US states, canthons in Switzerland, regions in Spain and so on. What we've then done is we've tried to say, okay, well, if we implemented all the proposals of Scottish Labour or the Scottish Conservatives or diva moral diva plus, where would that put Scotland at that point on this graph? If we take, for example, the UK-Scotland point where it is at 50% and about 8%, the Scotland Act is really about raising taxes so you go straight up from where you are. The Labour proposals increase taxes but also increase spending a little bit because there's discussion of giving powers over attendance allowance and housing benefit. So the Scottish Labour is slightly to the northeast of the Scotland Act. The Conservatives no more spending powers but more tax-raising powers is vertically above, well, some spending powers, vertically above Scottish Labour and so on. So that's how it works out. Eventually you end up with a very, very large proportion of both spending and revenue raising and that case is the diva plus case. For the sake of completeness, if you were to plot the Scottish Lib Dem proposals in there, where would that be on the graph? I'm not sure why they aren't there but it would be somewhere around diva more diva plus area. Just for the sake of completeness, the figure on the title is 2010 which is probably the most recent figure you were able to get. Has anything major changed to any of these other countries in there that would make the graph look markedly different? No. I wonder if I can just ask the same initial question then. If you go over the page on to page 11, figure 3, tax power of sub-central governments in OECD countries, can you just again briefly just talk through what that chart is telling us? One of the things, if you go back to figure 2 and look at Germany, on that graph, the lender in Germany would appear to have a relatively high share of revenues raised in Germany about 30%. One of the issues is, and this is something we talked about earlier, a lot of the taxes that have devolved to German lender are devolved in the form of taxes being assigned so the lender don't actually have the ability to vary the tax rates or thresholds. What this graph is doing is it's looking at how the taxes on the y axis in figure 2 break down in terms of the level of power, if you like, that the sub-national governments have over each of those taxes. So it's not necessarily the case that because a sub-national government has a relatively high revenue share it doesn't necessarily always translate into it having full autonomy to vary that tax rate. The power can... It may appear that it has a lot of... Or it might be suggested that it has a lot of control over revenue but its power is actually more limited because it's sharing more than setting the rates and base. German one in particular might seem a little artificial because a huge proportion of that is tax-sharing only. So you've got all the OECD countries on the left-hand side of your chart or a number of them, right-hand side of your chart or is the UK and I guess various proposals for Scotland. Again, for the sake of completeness, if you had the Scottish Conservative and indeed the Scottish Lib Dem ones in there, where would they feature? Because they're both absent on that chart. I think, well, if you look at the... Starting with the Scotland Act proposals, we've interpreted the Scottish rate of income tax here as being a tax that's almost more like a shared tax than a full control tax clearly given the discussions we've had. So that's reflected in the Scotland Act and the Scottish Labour proposals. Sorry, the Scotland Act and the Scottish Labour, the Scotland Act proposals are where the Scottish Government varies the rate only but not the base. The divo more proposals give full control over income tax so the Scottish Government would have control over the rate and the base for income tax but divo more also bring in the idea of tax-sharing of VAT and the divo plus proposals are all of the taxes that are proposed for devolution. The Scottish Government would have control to vary the rate and the base. Again, I can't, off the top of my head, remember exactly where the Conservatives and Liberal Democrat proposals would be but I think they're somewhere below divo plus but around divo more. Yeah, I think they'd be in between the Labour and the divo more but we could, for completeness, if you like, come back to you with the graph that has those in because clearly the share of the central Government-determined rate and base would actually be higher for both Scottish Conservatives and Scottish Liberals but I couldn't tell you the height of each bar. I'm asking you to describe what a chart would look like in variable terms. Is that easy enough to do? It would certainly be useful personally. Off the top of my head, one of the issues might be that for some of the taxes it wasn't entirely clear to what extent the proposal gave power over a base as opposed to a rate and that might be why we haven't included it here but we can certainly go and have a look at that. Last issue for me then, just you talked a little bit about the devolution of wealth for at least some aspects of it. If you were to devolve the whole of wealth it is and obviously some of heaven will argue for what does that do to what you describe as the vertical fiscal imbalance? The difference between the spending that the Scottish Government has control over and the taxes that the Scottish Government has responsibility for. At the moment, the Scottish Government already, as you know, has a particularly high vertical fiscal imbalance. It has responsibility for a lot of spending but not much tax revenue. Most of the proposals or a lot of the proposals key concern is to address that vertical fiscal imbalance by devolving tax powers to the Scottish Government. There are some good reasons as well why you might want to devolve some aspects of welfare spending but if you do that you increase this vertical fiscal imbalance even more so the implication is if you want to narrow that vertical fiscal imbalance then you would have to match welfare spending devolution with even more tax devolution. You are talking about £15 billion. It is of that order so it is income tax plus half of VAT, something like that. Okay, I'll add one last very quick one, convener. Thank you. The devolution of capital gains tax, pros and cons. I suppose cons are potentially a fairly mobile tax base would be the big risk there. I would have thought if there were already ways around avoidance of capital gains then they probably would magnify these possibilities if you devolve it. Beautiful. Thanks, convener. It's like Gavin Browner quite like tables and figures and things and I started at table one and a page seven. The ones that jumped out at me were the ones where Scotland was quite different and I suppose that was my starting point is if Scotland is in a different position are they not the obvious ones to give us a lettuce of control over so the first one is not C revenue. It would be an easy one. Give us 50%, give us 75% or something like that. I'm assuming it is volatility the main argument against that? Not really, I don't think so. It is quite common in other states e.g. Canada for example that a share of resource revenues are allocated locally. The UK side tended to argue that oil revenues aren't going to be very good in the future and our side tended to argue that they were. It would be a chance to test that if they let us have them see what we could do with them. That's true. The question I guess is that if you're going to do this block grant adjustment thing maybe I would come into a conclusion too quickly certainly there would be a volatility issue about your adjustment to the block grant because it's even less predictable than income tax is. Given that there are borrowing powers associated with forecast errors for the income tax revenues as it currently stands if you were to go down that route you would have to have increased borrowing powers to cover the uncertainty associated with devolving Norse oil revenues to Scotland. By giving borrowing powers or a build in so that the first few years the assumption would be you would save and build up a fund which would then cover you in the future? Yeah but would that not require I mean there would have to be a quid pro quo in relation to the block grant because the UK would be losing that source of revenue for its own a revenue account so whether you can put it into a savings account it might be debatable. The risks around volatility are the big ones but the other thing about the Norse taxes of course is that it doesn't give particularly any incentive to the Scottish Government to grow the economy it doesn't give any powers over income distribution or anything like that so it is really just a source of revenue albeit a very volatile one. A vertical thing? It would help solve the vertical thing but it would solve the vertical thing quite differently from one year to the next so how you dealt with that would be quite a challenge. Now the other three, next three down that were quite different for Scotland when I think one's already been mentioned was that alcohol will also have tobacco at 41% compared to what the UK per head have and betting and gaming at 17% and these are all issues where health policy comes into them and I think gambling is one of them I spoke to a group yesterday and they said that the number one thing they'd like to see Scotland control would be gambling and are these then issues that both we could tie in the revenue side and our other policies? I mean it's possible but again this issue of response comes up just as in relation to corporation tax and to income tax I suspect part of the reason that tobacco duties are much higher in Scotland is not just I'm not convinced that rates of smoking in Scotland are that much higher but partly because there may be less smuggling in relation to cigarettes in Scotland because of less easy access to... That would still mean that Scots are paying a lot more tax because a lot of English people are buying illegal tobacco That might be true The question then is how far can you press that to get the health benefits that you might want to do? It's not a question I know the answer to The argument for devolving alcohol and tobacco duties is a strong one as you've mentioned given the links to devolved spending policy there are a couple of practical difficulties in devolving these taxes the primary one at the moment is that these are taxes at the moment that are levied on production and importation to the UK not on consumption Is that difficult to change? I don't know how difficult that would be to change but it would represent a major change in how the taxes collected certainly I think you'd have to charge the outlets I suspect that might be quite expensive but it's not impossible The other thing, this is something we don't quite know the answer to is that, related to the issue of different rates of VAT and the EU laws that preclude that I'm not sure to what extent it's really been tested so far around the extent to which you could have different rates of some of these excise duties in different parts of the country I don't know the answer to that at the moment Clearly the Scottish Government is exploring the issue of having a minimum price and we'll see how that progresses I suppose then taking my thinking a step further instead of starting where we are and adding on some more powers the other way would be to say we'll start at the far end of having all the powers and then start taking things off and the obvious ones because this term home rule has been mentioned which I think is a slightly old fashioned term I guess I think I know what it means whereas I don't know what devil max means So, I mean if we were to be in a position to say like Jersey where you don't do foreign affairs you don't do defence but at the end of the year we would just write a cheque to Westminster here's your cheque for foreign affairs and defence and we'd do everything else I mean is that, from a financial point of view is that feasible, is that possible? It's effectively what the Basque country does but you have to be in a strong physical position to be able to do that Now the UK is not in a strong physical position and Scotland wouldn't be you know, even if it raised all the revenues in Scotland then it would be making payments for things like debt interest defence, foreign affairs these sorts of things of course it's making payments and might want to have some kind of a say around how those monies might be used but the Basque country is certainly more affluent than Spain is so it can go down that line at the moment at least there would be difficulties because of Scotland's physical position This is the practical point I didn't quite understand it on page 3 it talks about the Scottish Government this is after the Scotland Act will be responsible for taxes equivalent to around 27% of its spending and on page 9 at the bottom it says the Scotland Act proposals result in the Scottish Government's revenue share increasing to 17% I think that might be council tax not being part of the Scottish Government effectively so the 27% I think is council tax business rates the landfill tax the stamp duty land tax and the income tax but they can't quite all be described as Scottish Government taxes right okay so the 17% we'd at least exclude the council tax and maybe some of the rest do I have it am I is page 3 and page 9 page 9 is right at the bottom two lines I think we're talking about two slightly different things here one is the percentage of all Government spending in Scotland and one is the proportion of existing Scottish Government spending I think but I would have to read it in a bit more detail because I was just a bit confused as to whether I was comparing like with like and I think my final question then would be I mean you use the word federal in your paper it appears in page 9 paragraph 4 and it gets used quite widely I mean am I right in thinking that federal doesn't really define how much power is down at the individual states level it's just more about how the structure works and so the example of Germany is that actually there's not very much power but it is a federal system so federal doesn't really tell us how much devolution there is it just tells us there is a setup this area of this is kind of a well known area of economics and the OECD has a website associated with it and we call it fiscal federalism so often we use that term and it covers a multitude of different arrangements across different countries probably fall into a bit of a trap that economists use the word federal in a slightly different way than political scientists sometimes do to an economist fiscal federalism is just the study of which taxation and spending leavers to allocate to which level of government it doesn't necessarily say anything more than that and we've sometimes perhaps mixed the economic and the political notions of the word Thank you, that's a concluded question for the committee, I've just got a couple of further questions to ask on page 19 you say that if tax devolutions accompanied by reform of the mechanism for determining Scotland's block grant either as part of a quid pro for more powers in order to operationalise tax devolution Wales the Scottish Government's budget may face a decline in its spending power relative to the UK now one of the concerns we have on this side is basically as the term powers may be devolved but not necessarily budgets for example when the council tax benefit was devolved a few years ago only 90% of the budget was devolved with it so ended up with a £40 million shortfall that the Scottish Government and local authorities had to make up is that an issue of concern to you I mean I think you have to separate powers that are being devolved from the overall the macroeconomic fiscal stance so the question really is if you are still part of a union then one of the defining characteristics of a union is that the union determines the macroeconomic fiscal stance so powers can be devolved but if the fiscal stance is one which is saying that there has to be cutbacks on the on the overall deficit then you can get this situation where you have both a sudden you're suddenly getting new powers but also a reduced budget to deal with that issue but they are in a sense separate issues the question is who controls what and I guess the argument would be that mostly the central state gets to determine the overall macroeconomic stance whether in other countries other other governmental organisations get to debate that issue then is a fair question to raise but the UK is traditionally this has been the it's been the treasury which has determined this issue that's policy control but not fiscal control I couldn't possibly comment there's something I would like to comment on it's in page 18 and you say that there is perhaps a danger that Unionist parties are raising expectations beyond what is feasible for political reasons what are the proposals that are not feasible that are being made my worry about this to some extent is that the powers over taxation aren't the be all as far as economic growth is concerned and I've kind of gone into that issue recently that they will increase the accountability of the Scottish Government and Scottish Parliament and they will create certain incentives for the Scottish Government to ensure that the Scottish economy grows as much as possible but this is not these tax powers and of themselves are not necessarily the key to seeing the Scottish economy grow substantially faster than the rest of the UK another point on the comment that you quoted wasn't necessarily just related to tax powers as well we haven't talked quite so much today about the various proposals for welfare devolution and some of those relate to or propose devolving bits of tax credits or bit of an employment programme and there are potentially a lot of practical political difficulties around that as well which I think that comment was alluding to just to seek clarification on the point on co-operation tax and income tax is it not the case that the devolution of co-operation tax would allow co-operation tax to be raised if a Government so wished as opposed to be lowered where as Labour's proposals are simply to be able to raise income tax to a level but not have the power to reduce it could raise it you could potentially redesign it it is true as we both said the tendency has been over the last 20 or 30 years to see co-operation tax rates internationally tend towards the Irish rate which is the minimum rate of 12.5% most countries have some way to go to get there but it's absolutely clear that co-operation tax rates have been coming down and any further points that you wish to make before we conclude ok, well thank you very much for responding to all our questions I'm going to call a 5 minute recess to in order a change of witnesses join us very shortly on the next site of our business today is the evidence in a round table format from representatives of three community planning partnerships from Glasgow, Murray and North Ayrshire and I therefore like to welcome to the meeting Chief Executive and Executive Director of Finance and Jim Grayhead of Democratic Services at Glasgow City Council so welcome Laura Freel, Executive Director of Finance and Corporate Support North Ayrshire Council and Iona Colvin, Director of Health and Social Care Partnership also at North Ayrshire Council at NHS Ayrshire and Arn welcome to you Roddie Burns, Chief Executive, Murray Council and Pamela Gowens, Chief Officer of Health and Social Care Integration at NHS Grampian the way this round table format works it's something we're very familiar with on this committee is that I shall be asking one of our witnesses to kick off and that'll be Lynn who has been forewarned albeit with only three or four minutes notice but nonetheless what'll happen then is that after Lynn responds to my initial question anyone who therefore their after wishes to contribute just kind of put your hand up or nod or whatever just to get my attention and we'll take people in sequence you can come in as often as you can we may have cross discussions in which you can ask questions of other witnesses et cetera et cetera if things start to slow down and we start to get bogged down a little bit I may stimulate proceedings by picking one of you at random and quoting from your submissions so be on your toes okay so Lynn I'm going to start this round table session by asking you to provide an update on the following evidence which was given to Finance Committee in 2010 as a part of the preventive spending inquiry and I quote we're at the early stages of implementation of Glasgow's early intervention programme and we need the results and early indications of how well we are doing before we can determine what to do in shifting resources the intergenerational issue is that we are constantly responding to different pressures of deprivation in a city such as Glasgow and to be very honest about it I'm not sure that we will ever tackle it absolutely now four years have since elapsed so I'm just wondering what progress has been made in over those four years okay thank you chair there's been a significant amount of progress in Glasgow in those four years and that was reflected in the audit of community planning by Audit Scotland who said we had made progress and a fact since that report has been published we've made more progress around joint resourcing which I can speak about the key to us was in 2012 and part of it was we completely overhauled our structures so first of all a board was put in place that's chaired by Bailey Eileen Culleran who's made significant progress and on that board we have got the statutory organisations that should be involved plus a few others we've got the weekly group who look after social housing in a large proportion of Glasgow and we have got some other people as well with the voluntary sector underpinning that maybe she just said about the board the board at that level has got board chairs from these organisations so it's very much at the highest level underpinning that is an executive group that is chaired by the chief executive and on that it has chief executives from those organisations plus a few others we've also got the DWP on that we overhauled our actual more local structures and we have now got 21 area partnerships and they report into three sectors two in the north north east north west and the south of the city and they report right through the community planning so it's been a real hard look at our structures and our views that you have to the structures right and the right people there at the right level to make progress and that was reflected in the report one of the things that has come through the audit Scotland report and I know is a frustration for the Scottish Government as well is the lack of progress around joint resourcing and budgeting and again there's been with the national community planning chaired by Pat Waters we've made progress on that we took the view in our community planning to focus on be a bit more targeted we've also got the national priorities but we've been targeted on areas that we think as a community planning partnership we can actually make progress in and there are three main areas for us there's a use employment there is alcohol and there's a vulnerability that covers two areas the first one is homelessness which we're looking at first of all and the second one is to do with our in-work poverty and we are looking at joint resourcing there and I was tasked before Christmas to set up a group that looks at that and we've got all the director of finance on that group looking at our budgets and we've made progress already on youth employment and we've got processes in place for the other two so that's a real high level in terms of how we've been tackling it since 2010 and our view is that we have made progress but there is significant more work to be done and said that CPP has made an important shift towards a more long-term, preventive approach to public services that aims to break the cycle of poverty and poor health and within the three priorities accounts commission found that the CPP needs to address how it identifies allocates and redirects resources to fulfil those and it did say that only a small proportion of the total level of spending available is currently allocated to those three priorities the first thing is we're trying to establish exactly what those amounts are so for youth employment we have worked out across the city it's about 148 million of spending youth employment across a whole range of agencies in Glasgow including the voluntary sector and that took a bit of work to get that in place that is for that's our 1314 budgets we also agreed and we put in all our budget papers for all partners in the community planning partnership that we are committed to showing resources and looking at it but we are looking at areas that we feel we can make most progress in the next stage is the alcohol that's been led by really leading on the youth employment the council is alcohol has been led by health and we've just started the work on that and the figures are quite minimal they're about 40-odd million or so but again we'll progress on that to be made and homelessness is the next one and at this point we cannot say across the city how much is getting spent as we could say for the council for example but not across the city in terms of budgets and the scale the council commission in their report I think they have a figure of about 4 billion for the spending in Glasgow and they break it up and there's about 1.3 for the city itself a lot of that spend is to do with DWP spend is to do with loan charges is to do with employee costs so we've decided to take a more target approach in these hard to reach areas and hard to deal with areas first of all John Thanks convener just for a bit of clarification as to what's actually happening as compared to structures and planning and things for example in 3.3 it talks about joint resourcing to gain a holistic understanding analyse and assess consider quantify and consider which all suggests to me we're still at the preparatory stage whereas my impression was and we'll hear from the other CPPs later that actually some things were beginning to happen on the ground in other areas or am I misreading that? No there's maybe the distinction is between calculating the might that's spent and actual developments on the ground so there's a lot happening on youth employment in terms across the city and different agencies that are involved we're trying to get a sort of understanding of the resources that go into that and we're also getting an understanding of where maybe there's duplication or where we can be more focused the youth employment as the first priority they started about a year ago and they had a sort of a summit I think is the word where all the agencies in the city came together to talk about what they do and to talk about what they want to achieve and we're building on that so also in I should say also as part of the community planning we've also got we're looking at reducing re-offending, we're looking at our early years and also the thriving places agenda as well so there's another of aspects as well of the priorities national priorities but in terms of putting a process in place and a methodology that would work for looking at joint resources and we're starting with those three priorities and all the partners are on board to support that. I want to know my rush to ask things so I shall continue Jim Gray in terms of capital planning Glasgow says a further emerging element of the work of the joint resource working group was around capital planning just wondering if you can talk us through that a wee bit. This is very much an outgrowth of the discussions around joint working and resourcing again picking up on the point that Mr Mason made that it's not that nothing's been happening before it's trying to look at it in a more systematic way and make it the norm rather than the if you like opportunistic or by chance. In other words trying to work towards a position whereby the partners share with each other at an early stage the capital project ideas the opportunities that they have look at where more can be done by coming together rather than looking at a project simply in isolation so far we've been in discussion with colleagues in health around the refresh programme of health centres some of that's already in progress in Glasgow for example in the Gorbils we're now looking at some other areas of the city in discussions with colleagues in health where we can also take the opportunity to make clear linkages between the integration of health and social care programmes to look at where we can at an early enough stage plan joint capital expenditure because I think a large part of the problem has been in community planning over the last 10 years we don't have time at the moment or it's too late so we're trying to forward plan and to build that much more into the heart of the budget setting process at an early stage John You're also another example given 313 is housing development between Glasgow City Council and the Wheatley group I was wondering if you could expand on that because in a sense all housing development in Glasgow is linked to Glasgow City Council is it not? Absolutely I think what we're looking at there is looking again for added value opportunities again it's not that we haven't been doing it it's looking at what can we learn there's some very good examples from Wheatley group or GHA for example we have a very successful programme it's colloquially known for environmental janitors it's a job skills training programme we're looking at opportunities in terms of investment, housing investment as it happens where are the potential for social economy developments et cetera in local areas so it's really trying to integrate the housing investment work into the broader agenda of economic development and social inclusion Okay Gavin I mean it's not commenting on anything so far should I just throw something out and something that I think as a committee would be useful to hear from any of our witnesses today we've obviously looked at preventative spending as a committee over the last three years now I think in terms of this budget two things that personally I would find really useful from anyone to comment on first one is in terms of preventative spend it takes a long time in order to get results and I think we have to be patient but from what your organisation has done in the last say three to four years are there any initial results that you have seen that you can point to in a tangible way that you can hold up as areas where you think you've been successful and there may not be a huge amount of that so far but if there are any it would be very interesting to see but secondly given that budgets are tight what are the things that you have done less of because in order to put additional resources into preventative spending the money would have to come from somewhere so what are you doing less of and what are the results from that so far as well just again it would be useful to get any tangible examples of that Well Iona I notice in the North Ailsworth report you say that the family nurse partnership was already demonstrating positive benefits and that's an initiative that this committee actually championed I wonder if you can talk about that in indeed other areas Family nurse partnership certainly beginning to show evidence of improvement in fact in the latest heat targets for Ayrshire and Arran for the first time we're beginning to see lowering in terms of teenage pregnancy and improvement in breastfeeding so that's very welcome we're not absolutely sure one links to the other given that the family nurse partnership deals with a relatively small number of families but I was lucky enough to go along to their open day a couple of weeks ago really and meet the families and it really is quite inspiring in terms of looking at the numbers of babies there and the numbers of dads there actually contributing to parenting as well so it's quite remarkable in terms of some of just that whole involvement of parents with their children and that improvement so we'd certainly encourage people to do that and forget the opportunity to do that I think so we're beginning to see some outcomes there and we will obviously evaluate but we know it's a very tried and tested programme and we know that it has a good evidence base there's a couple of other things we're doing they're relatively small things I suppose the most obvious one is our multiagency domestic abuse response team which is a joint initiative based in Kilmarnock police station and that's with SCRA as well and that has had an immediate reduction on the numbers of young people being referred to the panel particularly younger children actually and in terms of the time reduction mainly women not only women but women have to wait for response so it's having major impact and for the first time this year we've actually seen a decrease in domestic violence now neither we nor the police would claim one is absolutely linked to the other but we are obviously tracking them so that's been something that's been very encouraging and we've put additional resource into the multiagency domestic abuse team and we're at the moment discussing with the police how, as you'll know, the police have moved to these concern hubs how do we jointly resource the concern hubs and actually join up some of that adult child and public protection a bit better and they obviously want to do that on a paniersher basis so I suppose one of the things through health and social care integration has been an improvement in terms of those relationships across Ayrshire because we work across three councils with the health board and we have progressed significantly with the partnership and so we have had a shadow arrangement for our health and social care partnerships since the first of April and I'm the chief officer for that which means that I manage all the health and social care resources within that partnership and in Ayrshire and Arran we have agreed to put in all of health services apart from the two big district general services into the partnership and all of in North Ayrshire council all of the health and all of the social work service so that's for children and for criminal justice so that's progressing we have a management team appointed and we have a shadow board and we are about to develop a strategic plan which will set out the priorities for service development and redesign and in that we will also talk about what we're going to do less of because we have to do less you're absolutely right do less of something in order to do more the council has invested in children services particularly around prevention and early intervention and made money available I think about two and a half million Laura something like that which doesn't sound a lot but North Ayrshire terms is a significant amount of money and with that money we've really looked at early years work and combined and integrated teams going into the early years services so there's a number of initiatives going on that are beginning to show results but we know it's about moving the mainstream and really I think the next iteration that when we produce the strategic plan for the integration partnership that will begin to move the mainstream really very much I'm just going to let you in a wee minute Laura I mean I notice that North Ayrshire council actually has been commended for its multi agency approached by the Scottish Government there's a national best practice and I believe that the multi agency team has also received a number of accolades and as indeed is a known knife better lives campaign I was going to ask you though about the initiatives to make young people war work ready if you can talk to us about that but first of all Laura if you want to come in with the point you were going to make To build on what Iona had said about moving resources into early intervention and prevention it was part of the council's budget strategy to disinvest in some areas to create the opportunity to invest in early intervention and prevention Iona's given a couple of examples but we've also diverted money into economic development to invest in youth employment business work that we want to do with with the business sector because we recognise the importance of that as part of the overall journey for the council so it is part of the council's budget strategy one of the things that we have started to do and we've got no historic trend information on it but we're starting certainly as a council to look at how much of our spend is reactive and how much of it is early intervention and prevention so that we can track if we are doing what we say we intend to do in terms of making that shift in expenditure so there's no trend information just now but as part of our approach to budgeting we are tracking early intervention and prevention spend Can I just ask you that how easy is it to split the expenditure into bits because some expenditure that you might say is reactive but it's also preventative for something else are you able to do that? I think you're absolutely right it's not black and white what's early intervention and what's reactive spend but what we have done is we each director looked at their spend and tried to make that split between reactive and early intervention prevention and we then went through a peer review kind of process to kind of test that to be sure where we're classifying the expenditure correctly so that we had a strong baseline that as we move forward we can see if we're actually making progress in that shift in expenditure early intervention A couple of years ago myself and Michael and indeed Jim held a North Ayrshire employability workshop on our draw and we took evidence from a number of organisations there looking at employability and there were a number of concerns that were actually raised by sectors such as business sector, third sector in particular which is in North Ayrshire there's myriad policies and schemes in place to deal with employability layers of government, obviously Scottish local government all with interests and targets often competing lack of a common set of objectives, funding in which partner gets credit for various outcomes I mean one employer for example said that public sector agencies including the council were persistent but not joined up and there was a feeling that there was actually in 2012 less joining up in partnership working of agencies in 2012 than there actually had been a couple of years before so I'm just wondering what progress is made to try and reverse that and have a much more seamless delivery and realise there's been significant progress since then in terms of reducing levels of youth unemployment etc in North Ayrshire but what progress has been made in terms of this across agency working in North Ayrshire Thanks chair, I can probably speak at a very high level about some of the things that are happening in North Ayrshire to make that a much better relationship across the sector Team North Ayrshire I don't know if maybe some people have heard of team North Ayrshire but team North Ayrshire that brand of that approach has been established to deal with the very issues that you've raised about knowing who to speak to which agencies get responsibility for which aspects of the relationships across the sector the brand was launched about a year ago and there's further work on it just now or further progress being showcased if you like just now and that's very much about the relationship between the council Scottish Enterprise Irvine Bay which is our local regeneration company but also the work with Job Centre Plus Skills Development Scotland and Ayrshire College and the approach is about being clear about what the business opportunities are for growth within our top 150 businesses so that it's not a trying to work your way or figure out who it is you need to speak to to move things along so that's something that's very much I was going to say work in progress but I think the feedback that we're getting from the businesses of the difference that that is making for them is very very positive and tying back to the issue of employment and in particular youth employment it's about understanding what these businesses need and ensuring that we are getting people in a place with the right skills so that they can fill the employment opportunities as the businesses develop. Thank you Michael to follow by Roddy. It was in relation to that issue that you raised. The thing that struck me and I took away from that visit to Erdrossan was the frustration of a lot of the agencies that were involved in delivering what were essentially Scottish Government policies that they could tell you how much money they were putting in. They could count the number of people who were going through the system but there was a real sense that the outcome wasn't all that it could have been so what you could measure they were ticking all the boxes with good numbers through they were getting the right money to the right places but there was a real frustration amongst a lot of the agencies that were involved in that partnership that had they not been constrained by some of the tick box aspects of the process that they could have had better outcomes for a lot more people. For example people who were placed with firms on training courses where they were restricted to 13 weeks where 16 weeks might have got that person into a position where they could have sustained themselves going forward but at the end of 13 weeks the course ended and that was it they had to move on and someone else came in so you count that next person as another person who's gone through the system but the actual outcome was less than it could have been and is that a frustration that goes beyond our dressing basically To give some some perception of how we are tackling similar issues in Murray and how we've tackled them is through we obviously have the community planning board which is underpinned by five partnerships and one of those is the economic partnership and that's the partnership that's driven the response to a similar issue around the mismatch between skills and jobs because that is what the issue is in Murray it's not just about jobs, it's about the skills for those jobs so what it's resulted in in terms of outcomes is close working with in our cases Highlands and Islands Enterprise with Skills Development Scotland and probably more importantly the private sector in the shape of the Chamber of Commerce and individual businesses who have in some cases funded quite substantial programmes such as Career Scotland to give young people an understanding of the world of work and also an understanding of how to prepare for work in all its shapes and forms so that's certainly been a way of taking some of the frustrations out and also some quite challenging discussions because when we spoke to employers what they were looking for was skills in English and maths, system subjects when we look closely at our attainment levels we struggle in English and maths so there's an issue there in terms of how we deliver the curriculum so that's brought about some really interesting discussions about how we deploy resources and schools and what we need to do in the future so I think if nothing else what community planning is added is that kind of discussion and I think that the whole prevention plan is the next logical step from where we are in community planning certainly from a Murray context I mean, one of the things in your submission which differs from our submissions is the question that was asked about sharing your best practice, there's myriad different sharing of best practice in your submission relative to the others I'm just wondering if you can talk us through some of those how you're working with other CPPs and other organisations out with CPPs to share best practice I think it's brought about a reflection of two things I think first of all rather like Glasgow we had to do quite a bit of refresh around the board, the board structure and indeed the whole community plan so the natural thing to do is go away and look where best practice is in the country and indeed elsewhere so that's partly an explanation for that, I think the second explanation is that because of the size and scale of Murray we do have to share and some of that is just about the way the services because we look west in terms of enterprise and the college network and the challenge we look east in terms of the health network in terms of NHS Grampain so it's a natural thing to do and I think I'm not saying that we're doing anything better than anyone else but I think it's a natural tendency we have to look out with our boundaries and out with our own skills and resources quite often to get what we need to address the particular issues and the challenges that we have in Murray Pamela, in terms of disinvestment what decisions have been taken disinvestment in Grampain in order to reallocate resources where they would have a greater more positive impact? I don't think at this point I can give you a definitive answer on that because it's a bit like as being described by others giving statement that this is a bit of a challenging process to work through I think the opportunities as we go forward do sit around the relationships between the community planet partnership and the five partnerships one of which is the health and social care partnership which I'm chief officer for how we do our budget setting how we agree in terms of our line of sight of where we're trying to go to what we think is possible we are very similar to Iona although we are looking at adult and older people's services within the partnership in the first instance looking at what budgets are going to be devolved first of all out of NHS Grampain into Murray and then within Murray we will need to look at the distinction between where we put our focus and our target and I do believe that the strategic plan the relationship with the community planning partnership is going to be key to getting that right and driving our disinvestment and investment in the right direction so I think we are in that kind of transition period where I think it's very hard to say that we've truly disinvested in current activity you know you have a nice list of all the activity that we have there and one of the observations from the commission and I think one of the observations from our report would be that some of that would have happened as a result of investment through preventative spend perhaps not a disinvestment and transfer of money so that's the kind of risk I think in hand as we develop and mature in the coming months Okay, I mean it's just that we've been talking about this for a long time and I'm disappointed and surprised that there hasn't been anything more concrete I don't know if the other, if Glasgow's got anything that they want to mention on this because Glasgow in the past we're particularly concerned about how they would disinvest them I'm keen to see what has been done In terms of how we disinvestment, we looked at our budget strategy and we decided that we were spending money on things we didn't need to spend it on and it was totally around property and we had 19 city centre properties and we reduced it to six and that gives us a revenue saving of about 6 million a year so over 10 years we've got 60 million and that was the financial strategy so you could put resources or you could focus on social and education so it may not necessarily be within the budget itself within those departments that you disinvest or whatever you can do at a strategic level and we've been doing that we've also set up we've now got customer business service of which two and a half thousand staff are in it including all the revs and BEM staff all the staff that work in the schools in terms of clerical so to be able to deal with peaks and troughs of work etc what I'd like to maybe add something slightly different is what we've found is that one of the ways where you can have preventative spend and quite often the gain from preventative spend isn't in the council it's in other agencies so it will be in DWP it will be in the police and one of the way you can do it is when you just work better with partners and we have got a couple of examples I'd like to maybe share with you chair and the first one was to do with Glasgow's health and heroes Mr Mason may be familiar with this it's sort of based in Duke Street and what we found out a few years ago was that we had about 200 homeless veterans in the city and it was a real issue and we have now got a holistic approach is actually run by SAFA which is the Armed Forces family and they employ the staff and we've got the combat stress in there we've got Poppy Scotland a whole range of agencies and the main key agency getting in there was the weekly group and the GHF for housing and we've now got a Glasgow veterans programme and the actual amount of money being put into that by the council is probably not even six figures and we have now got no homeless veterans in Glasgow only one has not sustained their tenancy we've got 300 or another veterans in jobs so a way of working can be a preventative spend and that's how we see we're preventing real issues in terms of health, in terms of housing and the other one is I think all the long term conditions and that's with health and with a McMillan and that is again dealing with social worker there housing there, other agencies and this is people who got cancer and the main thing apart from their health was that they were in danger of losing their homes they gained a real financial difficulties and since we set that project up in 2010 I think we've got about 40 million in benefits to these people and McMillan cancer support has said that Glasgow is the only city in the UK where you aren't at risk of losing your home if you get cancer so it's not just a case of major shifts in spend it's working differently, working with other agencies who can be more trusted the veterans organisations are more trusted than social worker or the council by the people they're dealing with so we've done a bit of a mix strategically shifting resources, not spending money where we have spent it before and more organic in terms of these organisations and I just maybe add in as well in terms of our youth employment we took a view around apprentices linked to the Commonwealth Games and we've put 5,000 young people through apprentices and most of that is with the business community so there's different levels I would say that you can do preventative spend and different ways of tackling it and really letting different organisations played with strengths and some of those organisations are more trusted than others when they're dealing with this clients. Thank you very much for that, it's very interesting if you're reducing the number of facilities from 19 down to 6 you're going to look for a capital receipt for that? Yes a capital receipt, we had to do two things we agreed that I think we got about 40 million capital receipts but we had to invest about 27 million in the new facilities because it's all open plan and to have that you've got to have the technology so we agreed that that would be the case but there is a revenue saving every year over and above that. Just three very quick points we used to echo what Lennon said in terms of budget strategy and everything that's been done clearly on a different scale in Murray is being done very much similarly to what's happening in Glasgow so for example we've taken 12 offices out of the main town in Murray 20 population 25,000 and we're down to one with quarter of a million pound saving and revenue and clearly potential capital receipts also that bit about there's more ground to be covered in terms of prevention I think we can all do a bit more and I think all the partners recognise that but thirdly and probably more importantly some of the barriers are often quite indirectly proportionate and quite indirect in all senses to the resolution so for example the labour market can often be a determining factor in something as simple as a number of carers you might wish to recruit if for example some of the retailers are on a pre Christmas drive Murray has got a low wage economy and that can be determining factor for many individuals is whether they want to sustain a job as a carer or whether they want to take something more attractive for the season and that's just the reality and that's a driver that's clearly out with our control in many senses but it's just sometimes important to recognise that there are underlying issues that are quite profound in terms of actually delivering a service and particularly one a preventative one Can I just acknowledge to the good record that Murray has in partnership working with noted and I quote that much of this has been achieved without the leadership of the CPP and as a result of reacting to national policy or specific local initiatives I think that's fair comment I think that what I would be comforted in is the fact that the findings of the commission do recognise that there now is leadership there and there is that good partnership working so the comfort from my perspective and I hope for the assurance that you have convener in terms of scrutiny is that with that leadership and with that partnership working then the plan that's now in place and as I mentioned earlier the prevention plan is the next logical step from that and that was also acknowledged by the controller of audit in his submission to the Accounts Commission earlier this year I think that Murray is well placed to take it forward and again as someone said this does take time but as I said I think we are moving in the right direction and I think that you know the partnership with that leadership will produce the required outcomes Okay thank you for that Laura in its report on North Ayrshire CPP the Accounts Commission commented on the linkages between outcomes and spending by CPP partners noting that and I quote together the main local partners in North Ayrshire spent over £500 million a year but the CPP cannot yet demonstrate significant examples of sharing resources to achieve better outcomes or of directing resources towards agreed priorities and the report recognised that there is no place to manage specific government funding initiatives between partners and its joint commissioning strategies between partner specific client groups but that it does not apply this approach systematically for other CPP activities and initiatives Yeah I can maybe say a wee bit about the work that we've been doing to resource map so we've completed the first phase of that and what we've done we've sat down with our core partners we've looked at our spend and it ties in with the neighbourhood planning approach and Iona can maybe say a wee bit more about that but what we've done we've looked at our spend we've looked at our spend across the neighbourhoods and where we've got to in that piece of work is we are looking to see the spend across the neighbourhoods does that align with the need across the neighbourhoods and what we've got just now as I say we've done the first kind of look at that we've got a high level spend across each of our neighbourhoods but we've recognised that that information is too high level and we need to drill down a bit further so for example across the neighbourhoods how much per head of older people population do we spend across the neighbourhoods and how does that then fit with what we should be spending across the neighbourhoods in terms of need and again that links in with the significant work that's been done to and I think it's in the evidence of the areas of family resilience where we've looked to each of the neighbourhoods characterised the neighbourhoods and identified the needs across those neighbourhoods so the next stage of the work that we need to do is to look at that spend, look at it relative to need and take a view about where perhaps resources need to shift so that it better aligns spend to need Iona, do you want to add further in your own submission of course you've talked about the additional information supporting the further development of resource mapping OK, in terms of the neighbourhood approach has been really helpful to us in terms of looking at the resource mapping we know what that will show that in some rural areas particularly areas like Arran and disproportionate amounts of money in relation to the population in North Ayrshers like many other parts of Scotland we have a huge variation in need between Largs in the North Coast and Arran where we have large elderly populations, people who live into their 80s or 90s basically who need health and social care services in their later years combined with Irvine in the Three Towns where you see people dying 20 years earlier than the people in Largs in the North Coast and Largs has got exactly the same challenges in a far more compact geographical term but who becomes sick in their early 40s and 50s and that's the challenge that we're facing at the moment and I think that's reflected then in the work that Laura's talking about in terms of looking at needs so our strategic plan for health and social care has a needs strategy underneath it which has been developed by Irshire and Arran for us which looks at some of the issues that we have around emergency admissions and outcomes for vulnerable children because we've agreed those are kind of the priorities areas that we need to look at and we'll begin to look at how we address some of that neighbourhood issue in terms of what the strategic plan which will be available for the first draft within the next month really and that will set out how we're going to spend the £200 million that the council and the health board have delegated into the partnership as well as how we'll spend the £2.9 million of integration fund that the government have made available so we'll set that out and we're not going to be able to answer all the questions in year one we're going to probably have more questions than answers but we will define which areas we'll prioritise in terms of mental health in terms of older people in terms of learning disability in terms of children's services and indeed criminal justice services projects will be and how we will integrate the health and social care responses around those areas and so we will make better use of the resources we've got but I would like to mention the health and in the room in that demand for social care and for health services is increasing and I think one of the things about prevention and early intervention is particularly for social work is that we need the universal services prevention and early intervention initiatives and that's what we've been working on in North Ayrshire what is it that health and education can do that begins to prevent some of the traffic towards social work because we've got more children in care than we've ever had before we've got more children on the child protection register than we've ever had before we've got more elderly people in nursing homes than we've ever had before and I'm now in charge of mental health services for the whole of Ayrshire and Arran and we have seen a huge increase in the numbers of people who are acutely ill coming into hospital services who require one or two or three or four members of staff to deal with them so there are a real strain in terms of the issues that we've got in provision of service and obviously in Ayrshire and Arran we're also amongst the highest in terms of emergency admissions to hospital so that's why we've prioritised emergency admissions to hospital a lot of the money is tied up there but it's not going to be easy to get it out and to move it into community but obviously that's something that we need to attempt to do but also to look at the outcomes for vulnerable children and so we're looking to see what we should do that we're using the resource we've got in the best possible way that we're integrating it across partnerships so that we are delivering with education and the police and the health and we I mean health and social work around children and we're delivering with health and education and social work and the voluntary sector particularly around older people and adults in the community so I think we can do a lot to look at how we can use the resource we've got better but in the end of the day the demand is still increasing and we see everyday the impact of the recession and obviously which is why for North Ayrshire employment is the most important thing because we know that having a job will have the biggest impact on somebody's health and for us that's really important but we see everyday the impact of the recession the fact that we've lost more jobs than many other local authorities in North Ayrshire and the impact of welfare reform particularly of people being put off their benefits and the impact that that has in very vulnerable populations so we have to cope with all of that as well as move the money and I think that we are trying to move the money that we can move but there's a bit for us, it's a real challenge because we still have to admit people to hospital, we still have to take children into care, we still have to provide nursing care placements, we still have to provide care at home and we still have to look after people who have mental health so that's the balancing game that we are playing at home OK, Jean Thank you, I can be that I was just going to ask given that the CPPs are relatively new and that there was not everybody was wildly enthusiastic about them in the early days if people feel and I think it was Eulyn who used the word trust that it seems that that's really important and if in the process of given that it's slow and that it's difficult to achieve this do you feel that it's worthwhile and just I think listening to a fairly positive case in spite of the huge difficulties that are I mean when these discussions take place are you talking about a different way and citing maybe Michael's point that there's a frustration with some kind of tick-block tick-block systems or generally people trust each other to get over that or around that but do you bend the system to make it fit what you really want to do that's not too complicated I think community planning is very important and I think with us in Glasgow they sort of overhaul of the structure has really helped and having a real political support behind it and board-level support at these other organisations is not just about the council it's board-level support at health board-level support police FAR etc and I think that's there and I think it's there part of the issues the reduction in resources across the public sector which is a result of the economic downturn means we just have to work together and I also think there's very much more of an appreciation it's about the citizens of the city and that's just becoming more important because things are moving to outcomes outputs away from inputs that can change the mindset so we are firm believers it is being slow I also think we have taken the approach that to look at these priorities we think that's manageable to look at our whole budget of four billion and break it down we felt in Glasgow was difficult to do to what success and if we can show success quickly and there is that we think we can do that's also gives you confidence to go forward because you know you've achieved something you're not just going around in circles really so that's how we say it we say it it's really important and going forward organisations private public sector have to work together to achieve what they want to do echo what's already being said I think the value of it is it has created that trust and I think the value of the outcome approach was everyone recognised when they saw the scale in nature that it was only by working collectively collaboratively that there would be some way of trying to resolve some of those issues because even in Murray's you know for all of its relative affluence and what have you there are still some profound issues in terms of the way people's lives are blighted by I'll call to take an example so I think community planning has that value it has created that trust I can give you one simple example to illustrate it what we've been doing in terms of our objectives is proofing them giving them a confidence rating and all the partners have to give a confidence rating for each of the objectives and one of the low scoring objectives was having confident young people and that was all about attainment and the reason why it was low is because as is reported in the Scotsman this morning we have real difficulty in recruiting and retaining teachers so there's an issue there that however well we might aspire to that target and that objective we're not going to do it if we can recruit and retain teachers but what that did that then sparked off a very constructive discussion between Skills Development Scotland and High and others around finding a solution to that that type of discussion wouldn't have taken place before it's a very simple example and it's highly anecdotal but I think it illustrates the point for me in terms of the value of having the right people around the right table discussing the right issues Jim The Christie commission found considerable evidence of serious shortcomings in the capacity of public services presently organised to deliver better outcomes now some years have obviously elapsed since the Christie commission reported in this committed to a lot of evidence on that I'm just wondering what particular bottlenecks remain in terms of delivering better outcomes at this time I think it's probably an emerging consensus that some of the barriers that we face in terms of joint working between public bodies in Scotland are around issues such as data sharing for example this is an area we've wrestled within the youth employment mapping exercise we've been doing and we've had some progress in terms of finding ways of working around this one of the perfectly legitimate issues I have to say in terms of data protection etc and confidentiality but I think we have to find more ways of getting more something resembling real time to share that information if I could give the example which is in the paper we submitted around re-offending for example we found that by working bringing a team together who can access the respective databases of their respective agencies we can work around some of the data sharing issues but longer term and particularly around youth employment we've been having discussions with the DWP about how they can better share the very crucial information they hold about claimants and former claimants some of that we think we can progress some of it may require primary legislation so that's one of the biggest barriers another one which comes up a lot is about on the one hand we are trying to work together more collectively in an integrated way where we've agreed a joint priority but we are still as partners individually required to report on to Scottish Government different departments of Scottish Government and we've been having dialogue with colleagues in Scottish Government about that about looking at how can we try and simplify some of the reporting arrangements in terms of if we've agreed to work on a preventive proposed alcohol together is there some way of ensuring that colleagues in health don't have to report separately and colleagues in the council don't have to report separately and colleagues in the police again on exactly the same issue flexibility in terms of obviously ring fencing general removal ring fencing has been extremely helpful but I think the degree of flexibility particularly around employment issues will greatly assist and for example the progress we've made on the city deal we would be interested in looking at equivalence in other areas of work where we could as Lyn said earlier and this is not a problem unique to Scotland it's obviously a problem in other jurisdictions England specifically where it may well be that a partner A has to spend more in the short run to help make savings for partners B and C can that be levelled out so that partner A isn't taking the financial hit because otherwise there is a perverse disincentive to resist change colleagues will have other ones but these are the barriers that I've certainly been discussing in Glasgow and that I've picked up in discussions with colleagues throughout Scotland If any other witnesses around the table will get issues with regard to all the next barriers Very much similar to as you've described in terms of the data sharing and that can be even simply within the health and social care arena and the time stealer that that actually is a time when we're talking about capacity challenges and trying to make that shift that a lot of energy and time can be stolen from the lack of a proper infrastructure to really allow that to happen easily and systems to happen easily I think linked to the reporting point we're probably talking more from a health perspective is the competing demands and it's a bit as it is when I was at Islay and I but when you get into planned care issues and waiting times and the initiatives and targets around that the resources can find themselves very concentrated and targeted away from the prevention and indeed the community end of business to the acute hospital and I think that's a real challenge because you may want to make that shift but it can be almost dwarfed by the need and the pressure to make that particular target I think if I can just add to the previous point in terms of the value of community planning I think it's critical and critical for the reasons of capacity that we certainly see a proportion of the population who'd be far better served elsewhere than entering health and social care services with the right resilience within a community and the right options available through the support of the community there are probably better responses issues than entering a GP surgery for instance I mean it's critical but in the report improving community planning in Scotland the review concluded and I quote that CPPs have not met the ambitious goals set for them and as seen as council driven exercises and are unable to show that they they're not able to show that they've had a significant impact on delivering improved outcomes across Scotland and that community planning had a little influence over the use of public money and I can understand why that statement to date has been made and that observation has been made however I think there's something about the maturity and the journey that this particular mechanism is on and I think when people talk about progress and certainly I'm fairly new to Murray but looking at how Murray's functioned and I've experienced a couple of the boards under pin-in structures it's certainly not there yet but the trust and the cohesion is starting to be demonstrated I think the almost self-assessment and confidence ratings that are being discussed across the partnership are creating a better arena for perhaps more recognition of what's possible together and I suppose we use alcohol which is one of our big issues that that really is a cross agency and a public problem which can often be deferred to health so I think it's about the maturity and the journey that the partnerships are on and perhaps the expectation Laura to be followed by John I just wanted to emphasise the importance of information and information sharing because I think we've heard today about reducing resources and increasing demands and I think if there is a real and there is a real need to shift resources then having the information helps provide the evidence so that you can substantiate any shifting resources I think that's really important and also I think it's really important that the information is available from all agencies Jim made reference to DWP expenditure and there have been particular challenges in terms of getting local information around that it is important in terms of seeing the whole picture locally The way Ms Gowns was talking was getting me thinking a bit using words like maturity and we've used trust already and things now these are quite hard things to measure I suppose as an accountant originally and maybe or at Scotland are the same we'd like to see a certain amount of money going into this box and going down that route which is nice and easy to measure but I do accept that if the health board and the council and other partners are actually working together even if you're still looking after your own pot of money but because you're working together it's being more effective that's a good thing but it's less hard to measure so it's harder to measure I mean is that where we're going or is it a mixture of the two I would hope it's a mixture of the two to be honest I think there will always be a tension and a point where it's hard to be so definitive because you could say that every opportunity as a practitioner in health or in social care where you interact with somebody that you would expect some sort of prevention activity to be to be evident it would be very difficult to extrapolate that from that intervention however we do know that we spend a lot of time with people where as I said before a more proactive approach maybe in the community could have an influence I mean examples of that in employability schemes and mental health in particular that we perhaps can prevent that use of medical and nursing models if you like which can medicalise things that don't need to be medicalised if we can understand the work clothes and understand the spend around that I would like the challenge to still try and see if we can disinvest to invest in more community activity and you know that we've had experience of this with other structures like the alcohol and drug partnerships that previously dates where I suppose the commitment of the partners and the willingness to the accountability not completely there in an authoritative way but the need if you really wanted to get a good outcome to work together was evident so there's an element of maturity there's an element of commitment I think in Murray partly because of the size we're very fortunate that gives its own dilemmas but one of the fortunate things is that there's a fairly small pool of people that have got to work together if you really want to make an impact and we're kind of fortunate in that that the layers are maybe less challenging although albeit when you look at the commission's report that there are things there that we absolutely need to improve on it's not just about inputs as we discussed last week well absolutely outcomes we get from those inputs there's no one with any outstanding comments that they wish to make so I'm going to wind up this session as we still have a lot of work to do on the committee this morning but what I'd like to do is I'd like to ask each of our guests to give them an opportunity to make any final comments before we wind up and because Lynn Stathard would like to give you the final word so you won't have to speak so I'll let the other speak first and you can come in at the end if you so wish so who would like to go first? you don't have to but if anyone's got any comments I want to make before we wind up Iona? I think in relation to the discussion around maturity I think it's a real issue I've been in North Ayrshire for four and a half years and the difference in the partnership is tangible and I think that is beginning to come through in terms of the outcomes both in terms of safe and of working and in terms of healthy and you can see things like numbers of young people in police custody numbers of young people in secure accommodation all of that numbers of young people in employment for example all of that reducing and part of that is through partnership working we're on the precipice now of the next step and I think that partnership and the way that we've worked allowed the council to feel confident about moving forward with its model for the integration of health and social care and the council took that decision 18 months ago to basically put all of its social work resources into that partnership and the relationship with the health board at that point was so positive that they could do that it wasn't like that four and a half years ago so I think there's been a huge move forward and it is about feeling confident and trusting each other but obviously it's helped by legislation in this case so I think that that will be a major step forward and I think that what Pamela Seen is right in terms of we will be able to do some of the intervention we'll be able to do much more earlier intervention than perhaps some of the preventative work but remembering that the partnership works across the whole of primary care as well as acute services so that the opportunities there are there are a lot of opportunities there to do things differently than we currently do them and to use the resources better and I think to think about the longer term care for Scotland's citizens so I'm thinking particularly maybe around elderly care where a lot of the money two thirds of the money is spent on emergency care and one of the challenges for us, for me and Pamela is to help make some sense of that to have a systematic look at that in terms of what that means across communities as well as within hospital services which is where we tend to look at it and to see how can we begin to reduce some of that and how could we transfer resources to make it better for our communities and I think that's about how do we across health, social work and the private and voluntary sector begin to look at what kind of care it is we want to provide in the future and I don't think we've been in that position before, we've had lots of initiatives basically looking at joint futures and there's some team of them basically but I don't think we've been at this position where we're seriously saying right here's all the money on the table, let's look at what it is that we think that the citizens of North Ayrshire in our case are going to need it in the future and that's where I think we are just now. For the comments from our witnesses I have something to say sorry Roddy I think it was always going to be difficult in a world of statutory bodies to work voluntarily and I'm slightly paraphrasing the controller of audit so I wouldn't necessarily disagree with that comment, I think that's a fair reflection and hopefully the new community engagement act will address some of those issues in the fullness of time but I think the keys are from this, the maturity it's been referred to points yet again to the next logical step is prevention, planning and all the benefits which I think we all hope for that have been so well articulated by North Ayrshire No one else wants to speak? Lynn, to finish us off I think that community planning and I think the health and social care that's just been referred to will take it another step I think it will actually take a huge leap forward because it's such an important part but all the other agencies are involved as well and there's a real prize for us in it making it work isn't that it's shown that public services are worthwhile they're of value and that we can do things and we can do things right and I think that's a prize for us and all of us okay, thank you very much for that thank you very much to everyone round the table for your contributions I'm now going to call a five minute recess to enable a change of our witnesses and to give members a natural break okay folks we're all here so I'm going to reconvene this session a fourth item of business today is to take evidence from the Scottish Government Bill team on the Community Empowerment Scotland Bill's financial memorandum and therefore I'd like to welcome to the meeting Doctor Amanda Fox Heather Holmes and Ian Turner so members have copies of the financial memorandum along with written evidence received and response to a call for evidence so we will move straight to questions and as always I'll start off with the questioning yes sorry, do you want to say a few words? sorry I just want to apologise for the sunglasses I'm recovering from a migraine and my eyes are still exceptionally sensitive to light that's okay, I assume you need some kind of photophobia so I didn't actually comment on that I didn't think you'd just flown in from a beach somewhere or anything if only running late and had to leave halfway through your sunbed treatment or whatever thank you for the explanation in any case okay right where are we now, Convention of Scottish Local Authorities you'll probably know has raised a number of concerns with the committee and they sent a letter to all members on the 6th of October and what it mentioned was the number of new burdens on local government and they said, well individually these are not overly onerous, they have the potential to combine to create a significant increase in work for councils and I want to say that the main concern from COSLA sent us around the difficulty of anticipating the demand for this legislation and in turn quantifying the cost that will be incurred by local authorities so I'm just wondering what work team went to in order to try and anticipate the demand for the legislation and ensure that there's a kind of realistic budget to go towards local authorities in order that they can deliver this bill effectively there was a lot of work which was done during the consultation period leading up to the bill there was an exploratory consultation and then there was a consultation on a draft bill and at those times we were asking questions about how might the provisions be used and what the cost might be behind them now at that time very little financial information was actually provided or what cost information from others were actually provided and we found difficulty in actually trying to amass what we had in terms of actually how you might use it and so in actually looking at the demand was difficult from that perspective because we agree with COSLA that it's not going to be overly onerous and we also agree that the demand element is the element which could change the cost profile however it's going to be very because of the nature of the bill because it's about community empowerment in particular in terms of participation requests community right to buy and asset transfer requests it's going to be up to the communities themselves to decide what they want to do it's not going to be for authorities to decide what they want to do so the different aspects which they might do within that it's going to be very hard to predict because communities are in different places and it's going to be based on those local priorities so trying to actually amalgamate that into a kind of demand profile it's actually very difficult and in fact it's actually hard to to do as we found out and no one else has been able to do it in that respect either to part 7 of the bill that relates to allotments as well as the wider consultation exercises we also wrote out to the 32 local authorities in December 2013 specifically asking if they could provide us with their views in relation to what the additional costs might be as a result of the new duties that are being brought forward specifically on allotments because as Ian rightly points out the cost will very much be dependent specifically in relation to allotments in relation to what provision is already there and what demand there is so we specifically wrote to ask them about what the costs might be and the figures that I've provided in the financial memorandum are based on the information that we received back from 15 of the 32 local authorities who responded to that request You understand the kind of points you're making and indeed the Minister, Derek Mackay actually wrote to us just before COSLA did see an ongoing discussion of stakeholders have not been able to provide monetary estimates making it difficult to provide accurate ranges I mean, this all makes it quite difficult for the Finance Committee to try and scrutinise this bill I'm just wondering what safeguards are going to be in place should for example the financial burdens on local authorities be significantly higher than is being anticipated I mean, some of the things I've talked about is for example the bill is reliant on council support, provision of community capacity building assistance which can be resource intensive continues for undefined period of time there's no reference in the financial memorandum and impact of reductions to local authorities asset base and this could affect the ability of local authorities to take out loans and then it talks about in terms of common good property there'll be some additional costs for local authorities I anticipated but these are not quantified and of course you've already touched on allotments which caused all so many restrictions and there'll be for local authorities if demand greatly exceeds the resources set aside for this The point of view in particular are participation requests which are new and in terms of asset transfer requests as well it's often the demand will be limited and I use that word in a kind of broad sense by the provisions of the bill itself because it's not like cos costler tried to use the analogy of freedom of information act and it's not like that cos freedom of information acts are individuals who can make requests for information and that's what they do The bill will be about community control bodies as defined by the bill so they must meet certain criteria being an arresting constitution and then must bring forward a participation request or an asset transfer request which must then meet this criteria within the bill as well and then it goes into a cost benefit procedure where the authorities will look at the benefits of doing the process and then align that against cos might be as well and that as it goes through will limit to a certain degree what the demand might be and you're absolutely right about the capacity of communities because communities aren't necessarily starting on the same level playing field but that isn't in itself we believe a matter for the bill to do, the bill provides the legal framework to allow organised community bodies to do these things capacity comes from other funds and other places for example we've got the Strengthening Communities Fund which is £3 million announced in April which is to help community organisations in disadvantaged areas to increase their capacity but it doesn't necessarily say that you then must do an asset transfer or you then must do a participation it's for them to decide what they want to do on their terms My concern is that expectations are raised and even allowing for that £3 million resource is not available to meet those expectations I mean the bill will not be able to deliver as promised and that's why I was asking what kind of cushion would it be available would the Scottish Government be willing to come back a subsequent time to look perhaps providing additional funding for local authorities for example in order to ensure that the bills are delivered smoothly I think as we've moved new duties which go with legislation the Government has a general convention that will provide extra funding the difficulty with this is we can't quantify that funding at the moment so I think as it works in practice we would need it to be demonstrated and quantified what that additional funding might be from the bill and then that would go through the normal processes and be provided in that way Okay, just a couple more questions and I'll open things out to myriad members of committee who are queuing up to ask questions The first one is with regard to community right to buy and the Scottish property federation stated that the only concern was I quote that the enhanced scope of CRTB and by extension asset transfer may inhibit larger scale uncomplicated investment in development land and a manner that is not hitherto been an issue under current rights Do you see that as being an issue in fact? Don't Issues like that were brought up around about the time that the Land Reform Scotland Act was passing through the Parliament and since that application of the community right to buy for the last 10 years we haven't seen that and we haven't seen community applications coming in that are trying to blight these big developments If we did get applications coming in that were blighty, if we want to use that word the chances are they wouldn't meet the public interest test so we also have check on our side we also have checks and balances that way to be a big issue especially on the urban land that will be coming within the scope of the community right to buy Okay and just to have one final point before we move on is I'll just give you three brief quotes one is from SEPA there are false expectations that SEPA will fully engage with all CPPs in Scotland given that this would be highly resource intensive and not cost neutral Highlands and Islands Enterprise have said with regard to participation requests expected to be able to absorb them to a large extent within the cost of staff time currently devoted to on-going business improvement activities and NHS Lothian have said without appropriate support and investment in community empowerment the key components of the bill will not be fairly accessible to communities I mean given these concerns do you not feel that there has perhaps been too much you know that the Scottish Government have been perhaps a bit too cautious in terms of the amount of resource they feel that will be required under this bill I mean it seems to be from the evidence we are receiving that that will be the case I think in terms of SEPA and they're particularly talking about community planning because they'll be one of the partners in the 32 CPPs across Scotland the bill doesn't say what their level of engagement in each of those CPPs should be the fact they should be involved actually goes alongside what their own outcomes are intending to seek how they engage will be flexible it will be decided with them in collaboration with the other CPP partners so we don't see necessarily the same resource issues I think that SEPA do themselves okay but what about HIE and NHS Lothian on HIE I mean we do a bit of work with HIE in relation