I welcome everyone to the 16th meeting of the Education and Skills Committee. Can I please remind everyone present to turn on mobile phones and other devices on to silent for the duration of the meeting? The first item of business is the decision on whether to take a number of items of business in private. Firstly, as everyone contends that item 6 of this meeting is in private. Thank you. The number of items in the first week back that I am proposing we are also taking private and they are listed on the agenda. They are consideration of two draft reports and an item on the committee's work programme. Is everyone happy that these three items are in private at the next meeting? Thank you very much. The second item of business is a session on the Scottish Government's draft budget 2017-18. This session will cover the draft budget and also the committee's pre-budget scrutiny of SDS, SFC, Education Scotland and SQA. I welcome to the meeting John Swinney, the Cabinet Secretary for Education and Skills, Olivia McLeod, director for children and finance, the families and Aileen McEchnie, director of advanced learning and science for Scottish Government. Good morning. I understand the cabinet secretary wishes to make a short opening statement. Thank you, convener. I welcome the opportunity to give an opening statement in relation to the 2017-18 draft budget. Education is this Government's defining mission and our priorities are to ensure that our children and young people get the best possible start in life to raise standards in schools and to close the educational attainment gap. The budget focuses on those areas and reflects the strength of our overall commitment. The UK Government's approach to public spending has provided a challenging context for our spending plans. Despite that background, our overall national investment in education and skills will increase by £170 million this coming year. On childcare, we will continue to invest in early learning and childcare as we work towards delivering the increased entitlement of 1,140 hours a year by the end of this Parliament. The budget delivers an initial £60 million to support the first phase of workforce and infrastructure development needed to support that ambition. On schools, we are closing the attainment gap through increased targeted investment in schools. The budget delivers £120 million in 2017-18 for schools to invest in ways that evidence tells them will close the attainment gap. That is £20 million more than previously announced and is funded from Scottish Government resources. The £120 million pupil equity funding will provide schools across the country with an allocation of around £1,200 for each pupil in P1 to S3, known to meet the national criteria for eligibility for free school meals. That is on top of the existing £50 million per annum, which is already provided to deliver targeted support to those authorities in schools in areas with the greatest of need. On higher education for the sixth year in succession, we are investing more than £1 billion in higher education in 2017-18. The budget allocation will protect the core teaching and research grants, and we will ensure that we continue to make good progress on our ambitions to widen access to university for young people from the most deprived communities. We announced the new fair access commissioner on 16 December, and that was renowned educationalist Professor Peter Scott. We will continue to protect free university tuition for all eligible undergraduates. Capital investment will increase by 77 per cent to support research and infrastructure investment and ensure continued investment in excellent learning environments for our students. That investment will support our universities to remain internationally competitive, to continue to be around for their research excellence and ensure that access to higher education remains based on the ability to learn, not the ability to pay. We have invested over £6 billion on further education resource and capital in colleges since 2007. We have maintained college funding in 2016-17 and have increased it in real terms by 5.9 per cent in the 2017-18 budget. The increase in our investment to Scotland's colleges will help them to generate opportunities for young people to improve their life chances, to generate the skilled workforce that is needed to secure economic growth. We will continue to maintain at least 116,000 full-time equivalent college places, equipping students with the skills to take them on to positive destinations in education and employment. We have also increased college capital funding in this budget by £20.4 million. This increase in investment will, among other things, allow work to begin on a new campus at Falkirk for the Forth Valley College. We are investing in modern apprenticeships by increasing the number of MA's starts this year as a step towards £30,000 by 2020. We will establish a new flexible workforce development fund for training needed to support inclusive economic growth. The budget also delivers £221 million to interventions that support skills, training and employment in Scotland, matching the funding transfered as a result of the UK Government apprenticeship levy. That includes an additional £8 million for modern apprenticeships. I look forward to addressing comments on the committee. Before I move on to questions, I remind everybody that we have a full agenda today. We have a lot of questions that we want to get through, so if we can make questions as short as we can and the answers as short as they are required. I'll start the questions. We're starting with a focus on school education today. One of the things the finance committee has asked us to look at was how public bodies work accords with the Christie principles. The committee has done good work in the performance of the SQA in Education Scotland, and there's a strong theme of collaboration across the sector. However, the committee has not always found it easy to identify clear lines of accountability for fairly significant decisions, for example, around the structure of the senior phase. Is there a tension between Christie principles of openness and accountability and collaborative working? I don't think that there is, convener. I would readily concede that the world of education is complicated. I've certainly become very much aware of that in the past seven months. There are lots of stakeholders and perspectives that we need to take account of in taking decisions particularly around the content, the design and the delivery of the curriculum. That's an endeavour that involves the Government, our agencies, Education Scotland and the SQA, local authorities, professional associations. It involves a range of other professional stakeholders, including the Association of Directors of Education in Scotland. There are a whole range of different players. The challenge is to ensure that all of that dialogue and discussion is focused in a way that enables us to have a clear sense of direction. That is what I'm focused on, ensuring is the case. In relation to the points that you related, that question to in connection with the Christie principles, I think that the importance of being open and transparent about the decisions that we take is vital. We also need to focus—this is probably the key issue that comes out for me—the key point of principle from the Christie commission work, which is relevant in the work that I'm doing, is that we must focus on the needs of the whole child. The child must be central to the design of the education system and the decisions that we take must have the interests, the wellbeing and the progression of the child and their development at the heart of our decision making. Is there anything that you're working on or anything that you think could be done to improve that clear line of accountability for something that isn't working? We know where it started to go wrong. I think that I'm going to look at the arrangements around all the different bodies that we have that look at some of those questions. We have a curriculum for excellence management board. We have a subgroup of that, the assessment and qualifications working group. I chair one of those. I don't chair the curriculum for excellence management group. Those are arrangements that I've inherited. I'm going to have a look at that in a timely fashion to make sure that that operates in an effective way, a clear way and a transparent way so that accountability is clear. I think that we have to accept, and nothing I do about education will detract from this point, that there are multi-layered levels of accountability within education. The Government has some responsibility, agencies have responsibility, local authorities have responsibility, schools and teachers have responsibility and there are various other points of accountability into the bargain. We will never remove that multi-layered accountability requirement because we need different layers within the education system to be accountable and to take ownership of the responsibility of ensuring that we deliver quality education in Scotland. Cabinet Secretary, within our spice briefing for the committee today, it states that the budget for curriculum for excellence has been reduced across SQA education Scotland and central government budgets. This comes at a time when the SQA has told the committee that they are going through an intense period of assessment redesign, which is on top of business for usual, on top of their transformation programme with a very tight timeline to meet. They were very clear in relation to my own question that this requires additional resource. It's also a time when education Scotland has been charged with burning a barrage of bureaucracy and we've received some pretty poor PISA results. The response from the Scottish Government is to cut cash from the general curriculum by £4 million. Money for qualifications assessment has been reduced by 50 per cent. Non-staffing budgets vegetation Scotland by 16 per cent. Does the cabinet secretary agree with Professor Lindsay Patterson that this approach is a big risk and is unwise? No, I don't. I think that we have developed the curriculum to a very advanced stage. The qualifications framework is developed equally to a very advanced stage. Yes, there are changes to the content of the qualifications approach that has been made, which are about rebalancing between the final assessment and the course assessment that is undertaken during the course year. As a consequence of that, that is a more minor change to the process than the design of qualifications, which is the work that has been very much at the centre of the activity of the SQA for some time. On Education Scotland, I hear loud and clear the necessity for Education Scotland to be more focused to reduce the volume of guidance that it generates, and that's exactly what I'm doing. We don't need more money to reduce the amount of guidance that we produce. We need to make sure that that is sharper and clearer and has more impact within the system. I think that the decisions that we've taken have been robust and clear decisions. If I will continue to monitor all those decisions as we go through the financial year, but I'm confident that we've taken a set of decisions that are appropriate for the stage of development of Scottish education. Thank you very much, cabinet secretary. Following on from that and the point about the assessment redesign and being undertaken by SQA, on 2 November, the committee stated that it is intolerable if there are errors in exam papers. Now, when challenged by the committee on 23 November, Dr Brown said that these mistakes were happening because, and I quote, people are working extremely hard and that there is a need for the SQA to ensure that they have appropriate engagements and institutions to ensure quality assurance, as she highlighted issues with resources. In terms of the mistakes that they made in ensuring that with this very tight timeline that we've got that we don't repeat them, how much of this is related to SQA resources or how much do you think is a failure of leadership in SQA? I think that the issue that Mr Thomson raises is described essentially in the letter that Dr Brown has sent to the committee dated 16 December, which goes through the various elements of the process of quality assurance within the SQA. When you look at the six steps that Dr Brown marshals in her response to the committee, the committee will be able to see the processes and interventions that are put in place to make sure that quality is assured as part of this process. Now, I visited the SQA just last week and I think that it is important to remember the scale of and the number of transactions that the SQA is involved in on a routine habitual basis. It is a colossal number of transactions that all have to be accurate and I spent some time with the team who are responsible for the presentation of examination papers and the amount of care, attention and focus on detail that goes into every single paper that the SQA puts forward is obviously a huge challenge. There are teams who are doing that and Dr Brown has set out very clearly in her letter to the committee the various steps that are taken to make sure that that is accurate. That is essentially a very basic requirement of what the SQA needs to deliver on behalf of the examination system and to make sure that that is accessible and dependable for young people who are involved in the examinations. At the same meeting of the committee, colleague Tavish Scott challenged Dr Brown on the submissions from teachers, which were quite clear that they were being swamped in guidance and documentation. One submission from a teacher raised concerns about 81 pages of guidance across five different documents, across three different websites and members of this committee did express concern that there was a danger of sinking in a sea of jargon. Part of the response to that was that there would be a transformation programme resulting in changes to the IT system, which I know again worried some of the members in the committee. Can you confirm that the £1 million that is allocated for a new IT system in the budget from previous experience, given other IT systems and their parts of government, is this a realistic budget and when do you believe the new system will be in place and available for teachers? Those are internal systems within the SQA that are being developed. SQA is hugely technology dependent and that again is very obvious when you visit the SQA's operations and you can see how technologically dependent the SQA is to process and handle the range of transactions that are under way. We have responded to the requirement for additional capital resources to support the IT developments within the SQA. IT developments are a routine part of developing the work of the SQA and ensuring its capacity can deliver for the examination system. The work that is under way is programme work to be undertaken within 2017-18, so those resources will be available to undertake the IT improvements within that timeframe. There are clearly lessons that the SQA is learning and Dr Brown has made that point clear to the committee as well about the communication process that the SQA is involved in and to make sure that that is as robust and effective and as useful as it can be for teachers and for students. Daniel Johnson My line of question is something that follows on. I think that it is fair to say that this committee was quite overwhelmed by the survey results that we got. There is a sort of a very clear majority of teachers who are less than satisfied with the level of support and lack confidence that the SQA and Education Scotland are really supporting their objectives. I think that a lot of the negative views are associated with the way in which the qualifications have been designed and implemented and the way in which they have worked. What we have done and continue to do is try to understand why they have not worked in the way that we have anticipated that they would work. That was not one of our submissions. That was from Janet Brown. Does that quote, and indeed our survey results, not indicate that the issues that are faced by the SQA are not rather more serious and urgent than maybe your initial comments have made out this morning? Daniel Johnson I think that it is very important to listen to feedback and to engage in that feedback and to listen to survey evidence. However, I just want to make a point about some of the survey evidence that the committee took. On Education Scotland, the committee took a piece of survey evidence that it published based on the feedback of 211 teachers in Scotland out of 50,211 with comments about Education Scotland. That was a voluntary survey. It was not weighted. It was not properly constructed as a sample. It was just 211 teachers. I do not say that to belittle it. I just say it to put it into context, and we have to be careful about what conclusions we deduce from that type of dialogue. Michael Matheson I accept that we are saying about the education survey, but in the SQA there was from all the various sources we got exactly the same message. Michael Matheson I am just putting this into context, convener, about the survey around Education Scotland and what it says about it. In relation to the work of the SQA, what is the SQA's purpose? The SQA's purpose is to deliver a credible assessment framework and certification framework within Scotland to ensure that young people who are able to undertake their courses are able to obtain reliable and credible certification at the end of that process. In my experience, that is generally viewed to be the case within Scottish education. The SQA certification is viewed to be reliable and dependable. Now, if the process, the issues that are raised about dialogue, engagement, communication, guidance—these are all legitimate issues where I am certain that there is room for improvement in the performance of the SQA, and the SQA has to make sure that it focuses on that task and how it takes forward that challenge. With respect, when you have the head of the SQA who are responsible for the examination, saying in essence that the problems that they face are to do with the way that the examinations have been designed, implemented and the way they work, which is what this book says, do you not think that that should be ringing some very serious alarm bells? Well, I suppose it has, because we have removed unit assessments from national 5 and from highers, so we are undertaking a programme of reform. The design of the qualifications has relied to an extent on unit assessments, and unit assessments have been judged to be by the profession cumbersome and duplicative in the assessment that is undertaken of young people. So, I have taken action to address that point, and we are going to remove unit assessments, starting in the 2017-18 diet, to make sure that the assessment burden is not as cumbersome as it has been. Again, with respect, that point was not in response to a question about unit assessments, it was in response to the examination system as a whole and the way that the SQA interfaces with the teacher. I have to say that I do not think that pointing to unit assessments is sufficient. With the greatest respect, I do, because let us look at the relationship between the curriculum and the examinations. The curriculum for excellence is designed in a fashion that the performance of young people should not be solely and exclusively assessed by a final examination, that there is course assessment that contributes towards the overall performance of a young person. That is a requirement of the curriculum. The final examination is there to assess and to test particular elements of the knowledge and the learning that has been undertaken by young people. Unit assessments were also added into that to provide some further rigor in that process. The judgment that was arrived at by the assessment and qualifications group and by the curriculum for excellence management board was that that was duplicative, and I have addressed that and removed that. Nobody in my opinion is saying that we do not need the course work assessment as part of the overall examination structure, because that is inherently part of the curriculum for excellence. Nobody is saying that we do not need a final examination, because I imagine that there would be various people who might be howling at me if final examinations were removed from courses, but what I have addressed is the fact that there is a duplicative nature around unit assessments. I am doing that to try to address Mr Johnson's point that when people are raising issues about the examination system, they are not questioning the course work and the final examination, nor would I think that it would be credible to do so because the curriculum for excellence requires that course work assessment to be undertaken, and we need to have a final examination to assist in the certification process, but where there is a duplication in the system, we should be prepared to address that, and that is what we are doing. Good morning, Cabinet Secretary. As you said in your opening remarks, education is a defining mission of the Government over the next four and a half, five years. I certainly do not envy your task in how complex the subject is, as the committee has been finding out over the last few months. In terms of the budget scrutiny, I wondered if you could comment on the whole issue around attainment, because there is clearly a huge emphasis on closing what has been termed the attainment gap. I know that this is a responsibility, not just of the education, Cabinet Secretary, because we do not want to fall into the trap of thinking that attainment can be solved just in the classroom. This is an issue of wider social and economic factors as well, and I know that the Forestry Commission funds development officers in Education Scotland, I know that justice ministers fund initiatives that are used in many schools in Fife and elsewhere, so across Governments, other cabinet secretaries and ministers have roles to play. I wonder how that has all been co-ordinated, or if that is something that you intend to look at, so that in four and a half years we are where we want to be? The policy foundation is what the Government is trying to do on education. It is linked together by three major policy planks—getting it right for every child, curriculum for excellence, and developing Scotland's young workforce. Those three policy foundations essentially draw together the thinking and the analysis that is required within Government to properly address the needs of every young person, so that if we genuinely are focused on getting it right for every child, then we have to accept that there will be educational contributions required, there will be health contributions, there may at times be justice contributions that are required, and we have to ensure that they are aligned as effectively as possible. One of the principal ways in which that is joint work that is undertaken within Government through our public service reform work, so that we are all aligned to these priorities and the joint working that goes on between different portfolios. Sharing that with a wider world, because if it is complicated enough within Government, it is even more complicated out with Government. We have drawn together the work of the early years collaborative and the raising attainment for all collaborative into one venture called the children and young people's collaborative, and that is about bringing together health professionals, educationalists, people from the criminal justice system, people from the third sector, a whole variety of different individuals right across the country in all the community planning partnership areas around the country to make sure that we are part of a joint learning process and that that gives cohesion to the way in which this agenda is taken forward, not just at local level but at national level. So the fundamental premise of Mr Lochhead's question is one that the Government accepts, that there is a necessity for that work to be reflected across all the areas of Government, and indeed the Children and Young People's Act of 2014 placed a requirement to develop a child's plan in different parts of the country to make sure that we are properly drawn together that work that brings together the activities of a range of stakeholders. Okay, thank you. In terms of achieving attainment gap in rural areas, I just want to raise an issue with you in terms of how we ensure the needs of rural areas are taken into account in terms of budget allocation. I know that this is clearly also a role for local authorities, but for instance, I was at Space High School this week and it came up in conversation that in terms of closing attainment gap after school clubs play a really important role, but in a rural community, and Space High covers the whole of Space High, they were spending £10,000 a year on buses, because clearly we're staying behind, you can't get the usual school bus, so extra transport has to be put on, and there's no public transport links really. They can't now spend that money because the money's not available, so the after school club's not available to as many children as what it was before. That's just an example of the additional challenges facing rural schools in closing the attainment gap, clearly on urban communities, economies of scale, local transport links are better. How can we ensure that the budgets are taken into account rural needs for closing the attainment gap, given the extra challenges facing rural communities? Some of the issues that are involved in that question are reflected in the role of adjustments such as rurality and sparsity of population that will go into the local government settlement and the distribution of resources that are essentially designed to reflect some of those points. In relation to the attainment challenge, obviously we're moving to a situation where in 1718 we will be channeling resources directly to schools driven by the eligibility for free school meals within those areas. The existence of deprivation and the need to make sure that resources reach all of the instances of deprivation around the country will be much more prominent in the distribution of the resources, the £120 million that I've talked about earlier. Up until now, we've not been following such an approach, it's been based very much on the Scottish Index of Multiple Deprivation, which is an effective mechanism of identifying groups and areas of deprivation but not individual instances of deprivation, which the approach that we're taking on the distribution of the attainment fund resources in 1718 will enable us to do. We are taking a very mindful of the points that Mr Lochhead raises about the importance of ensuring that there is an approach taken that supports and assists the delivery of services in rural areas that will have a different character about them compared to urban areas. I've just got one more question, but just before we leave that theme, it would be helpful to look at the issue of transport costs for rural schools because clearly that's £10,000 that an urban school does not have to find for afterschool clubs and for closing the attainment gap. In terms of my final question, I raised with you before the potential mismatch between inclusive education and resources and additional support needs. Over a number of years, we have changed the nature of the classroom through inclusive education, but clearly that can lead to some teachers being overstretched or schools because if the resources are not there to ensure that additional staff are there to help the additional support needs, that can put a lot of pressure on the classroom. I wondered whether, again going forward, that is something that you're going to be looking at. I'm going to look at that very carefully. We've given commitments in Parliament to do that. Again, I come back to my point about the foundations of education policy. If we genuinely are aiming to get it right for every child, we have to make sure that we make the correct judgments and the correct judgments are made for every young person. The presumption of mainstreaming has been pursued vigorously. I think that there are outstanding examples of good practice in the country where that approach to mainstreaming has had a profoundly beneficial effect on the young people with additional support needs but also on the young people who do not have additional support needs and enhancing their perspectives of the world, the community and their fellow citizens. We have to make sure that the correct judgments are made and that we have to satisfy ourselves that that is the case. It's certainly an issue that I know is very much to the fore in parliamentary consideration, and it's an issue that I intend to look very carefully at in the period ahead. Excuse me, thank you. Can I just further to Richard's line of questioning ask you to confirm, cabinet secretary, that the draft budget introduces the new specific grant to local authorities of the £120 million that you have mentioned to be paid as a ring-fence grant as part of the local government settlement? Is that technically correct? Yes, I think that that would probably be a description. Is it on top of that? You mentioned in your opening remarks that it is on top of £50 million since the existing budget, so there is actually a £107 million, correct me, but does that mean that there is a £107 million for the budget next year? How is that audited? How is it audited? Yes. It will be audited as part of the £50 million. All of it is audited as part of the assessment of the Government's accounts by the Auditor General. Indeed, but what I am driving at is that it is audited in that sense by government, the £170 million that will be audited by government, not by local government, to obviously have responsibility for their own spending on education. Well, within the £50 million, local authorities will be receiving some of that money directly, so I suppose that the best way to explain it is that it will be a shared process, because the Government will be audited on the distribution of the resources to local authority, but the local authority will be audited on the basis of how it spends that money. The Government is not specifying it precisely within grant conditions, but the local authority must operate within those grant conditions, and so must the school operate within those grant conditions. Is it accountable to you as the Cabinet Secretary for their delivery against those said grant conditions? Certainly, we would want schools to be using those resources in accordance with the guidance that we set out, which is guidance that will inform how the resources can be used to improve attainment. Will you be prepared to share that guidance with the committee so that we can see after the year what has actually happened, or at some point what has actually happened? Obviously, we are in active discussion with local authorities about these points just now, but any information that the committee requires on that would be happy to provide. Thank you. Further to Richard Lockhart's broader point about local government spending, the table that we all members got when the budget was given last week in relation to local government spending, so the money specifically forced for councils, has that been overtaken by another table? Has there been changes to that since that table was issued to members? There was, after dialogue with COSLA at the end of last week, there was a revised table issued. In those circumstances, Michael Cook, when he gave evidence to the local government committee in relation to teacher numbers, said, and I quote, on teacher numbers policy, that gives us considerably less flexibility in terms of how we employ that resource. Is that a fair observation? I think that it is pretty clear—I do not think that there is much secret about the fact that the Scottish Government and local government have not exactly seen eye to eye about teacher numbers. Local government has wanted to reduce teacher numbers, and the Government has put in place the mechanisms to make sure that that did not happen, and that it did not happen in the census that we just published last Tuesday. I do not think that it is a particular secret that we have not seen eye to eye on that issue. It might be fair to say that some local councils have chosen to want to reduce teachers, not all by any means, but that aside, do you recognise the point, though, that there appears to some that there is an increasing direction of travel here that is leading towards government having more direct control over what is going on in education at the local level, and the budget is being used to further that objective of policy? The Government has set out an approach on education improvement, which is demonstrated by the national improvement framework, which was first set out by the First Minister in January of this year. I fulfilled the statutory duty that we have to publish a national improvement framework last Tuesday by publishing the document that I published to Parliament. That sets out how the Government takes forward its statutory responsibility to set the direction for Scottish education and to take the necessary and legitimate steps to make sure that that is pursued around the country. Within that document that you published and spoke to in Parliament last week, there were, and correct me if I am wrong, six new initiatives that I could count as I went through the proposals within that document. I could read them, but they all have resource implications, would that be fair? What they are designed to do is to give direction to the way in which we take forward improvement in Scottish education. I will ask about the resource implications of those directions. We allocate significant amounts of resources to enable the delivery of educational priorities around the country. Continuing on the theme of local government funding, I do not want to repeat the debate that has happened since the last week on the proportion of the cut to local government, but if we are to take the spice briefing for this meeting as a basis and take the amount that has been cut from the local government budget and assume that it would be cut proportionally from their education spending, it comes to around £106 million, I was wondering what the cabinet secretary thinks the impact of that will be. What I think the government has done has been to enhance the capacity of local authorities the spending capacity of local authorities in Scotland, and that has been enhanced by a number of different measures, whether it is about the changes to the banding of council tax that the government has taken forward and secured parliamentary support for, or whether it is the decision that the government has taken to enable increases in council tax to take place of a routine level, or whether it is the transfer of resources to support health and social care integration. I think that all of those initiatives have helped to boost the spending power of local authorities. With respect, that is not really the question that I asked. What impact do you think the cut will have on education being delivered by local authorities? What has got to be borne in mind is the fact that the resources that we are putting in place come from a variety of different funding streams, and the government is putting in central government resources, yes, but we are also enabling local authorities to raise more revenue to enhance their spending power at local level, and that will have a profound impact on local authority, a profound positive effect on local authority's spending power. The issue is that that empowerment is within the constraints of a broken local taxation system, but taking that aside, the amount that has been cut, taking this briefing on board, and this briefing gives a more generous figure than some others from the government's perspective, it comes to roughly equal to the attainment fund, £106 million, £120 million. Is it fair then to brand the attainment fund as additional funding for local government, for schools directly, when, in fact, it comes to roughly the same amount as being removed from the budget anyway? I am just going to repeat the points that I have made already, because I am not in agreement with Mr Greer on his analysis here. The government is putting in place grant in aid, we are adding to that financial flexibility at local authority level, which the government sought a mandate for in the election, which the government has taken through Parliament, and that enables local authorities to raise more revenue from council tax, and we are also enabling local authorities to raise the council tax by up to 3 per cent. We are also investing resources in health and social care integration, and the consequence of all of that is to increase the spending power of local authorities by £240 million. I do not think that we are going to be able to resolve that disagreement, so perhaps I will come back in later on. I want to say something about the evidence that the committee heard on SQA in Education Scotland. I understand that, as a Cabinet Secretary, you are far too busy to go and read. I would not expect you to read all the detail of that, but I am concerned that somebody in your department thought that it would be a good rebuttal to count the number of survey responses and compare that with the number of teachers. I genuinely ask you to look again at what teachers were saying. It took me three hours to read the evidence and what came through it very strongly were genuine concerns by committee professionals that the system was not working. I would urge you not to try to find, I am except in officials, explaining a way of that, but rather to reflect on it. I note that the justification for the cuts to the budgets to SQA has been halved on the grounds that, quote, budget decrees stem from a maturity of the curriculum for excellence and completed implementation of the new national qualifications. Do you not accept that that statement is probably one that very few people in Scotland agree with? That CFA has come from a maturity of CFA when, in fact, a lot of the evidence that we have got was a sense of huge uncertainty in the sector and amongst parents about what is happening in our schools. The first thing is that, to answer John Lamont's point, I am simply making a contextual point about the scale for responses to the online survey of the committee. I look very carefully at feedback from the teaching profession and I am in dialogue with the teaching profession at all levels on a very sustained basis. Many of my actions are driven by those conversations with the teaching profession. That informs the judgment that I make about where we have reached in the process of implementation of curriculum for excellence, which informs the budget decisions. The concept of curriculum for excellence essentially began about 14 years ago. That is not the question that I am asking. That is about implementation and the lack of certainty among a whole range of people about curriculum for excellence. You might take feedback from teachers. I accept that. The association of geography teachers described the exam paper to capture its views. It is a shambles. To say that it is a shambles and for people to be highlighting to the Government their concerns about curriculum for excellence, frankly contextualising it in the way that it has been done, is inadequate. In some ways, it is not your door. It is about SQA and education in Scotland as well. In response to questions, the SQA said that teachers do not want to change. I am very concerned that you are making budget decisions in understanding what the concerns are around curriculum for excellence, which contextualises being frivolous. Do you accept that there is a serious question here and that to have a budget to follow a view of what the problem is, when the problem is a lot deeper, is, as has already been said, a significant risk? The first thing is that John Lamont used the word frivolous. That is not a word that I would use. I want to put that on the record firmly. That is not a word that I would use. I take forward very seriously my engagement with the teaching profession and I listen carefully to the teaching profession. As a consequence of that, in August, I directed that guidance be given to the teaching profession about what I described in my own covering letter to every teacher in the country was the definitive guidance on delivery of curriculum for excellence, the definitive guidance. That was to empower the teaching profession to disregard vast amounts of stuff that had been put in their way, which I accepted. Accepted was duplicative and cumbersome. I have to say, and the committee is free to go and test what I am about to say with the teaching profession if it wishes to do so. The feedback that I have had from teachers about that guidance in August was that it was enormously helpful in simplifying the guidance and the approach that the teaching profession was operating within. I offer that honestly to the committee. That is the feedback that I have had. I go about my consultation and dialogue with teachers in a fashion that invites them to tell me and contradict me if I am not reflecting what they are saying to me, but that guidance has been viewed by the teaching profession that has made its reviews known to me as being of enormous assistance in simplifying the curriculum and the guidance that is available. That is a sustained programme of ensuring that the guidance is relevant for the teaching profession. What has happened over the past few years is that, as the curriculum for excellence has been rolled out, there have been calls for more clarity and more guidance and that has been offered on a number of occasions. I have made this point to the committee and I have made it to Parliament. It has become a cumulative burden for the teaching profession and I am now setting about ensuring that clarity is delivered. We have started that process and I intend to sustain it. The point that I was making was a question of whether, in the context of where we now are and we accept that there has been change, a halving of the budget is wise. I want to ask a related matter, because I think that it is around the budget. EIS, in one of its submissions, pointed out that there had been a 500 per cent increase in certification external to Scotland by the SQA. When we raised that with the SQA, in essence, as well as to help balance the budget, the concern must be that, in order to deal with the shortfall on the budgets, we have to do more external work, which I would have thought would dilute the focus on the real job, which is to give confidence in the examination system in Scotland. Do you think or would you at least look at the issue of whether the SQA were clear that one of the reasons that it was doing that was in order to bolster its budgets? Is that advised at a time when you are cutting the budget to the SQA when people still have grave concerns about curriculum for excellence? There are two points in response to that. One is that I will continue the practice of my predecessors in assessing the performance of the SQA budget during the course of the financial year to determine whether or not the judgments that we have made at this stage are judgments that can be sustained. The second point is that the SQA is very clear from the guidance that it is given by ministers that international activity can only be undertaken in a fashion that does not distract from the core purpose of delivering quality accreditation within Scotland. Thank you very much. Fulton, you wanted to come in with a short supplementary, then Daniel with a very short supplementary body. Thank you, convener. I was going to come in earlier on Daniel Johnson's point, and it sort of moved on, but Joanne brought it back. It is going back to the survey that we have spoke about. We did get a lot of feedback in that it was negative, but I disagree with Joanne on one, and I think that the cabinet secretary putting it in a context today has been useful. You have two arguments. Are those 200-odd folk that have responded, are they talking for everybody, or have the 95 per cent, or whatever, who have not responded, are they the majority? I wonder whether the cabinet secretary thinks that maybe the SQA is doing its own sort of quantitative research on it, and among all the other things that the SQA is doing would be useful, because I do think that it is important that whatever teachers' views are, that it is important that they have faith in that particular organisation. The point that I would make here is that the SQA does a significant amount of engagement with members of the public and the teaching profession about the work that they undertake. I think that it is crucial that they learn lessons from the feedback that comes from that, and I know that Janet Brown and her team are committed to doing so. The second point that I would make is that I would be the first to accept—I do not think that anyone could accuse me of not accepting this—that there has been a need to reduce the amount of guidance that is percolating around the system, and that is precisely what I am doing in response to the views and attitudes of the teaching profession. I am sorry, cabinet secretary. I thought you were still talking. The cabinet secretary cast out on our survey results on the basis of the numbers received, and you have just said that you have had positive feedback from teachers on the basis of your improved guidance. How many teachers have you had that from? Probably thousands of teachers, to be honest, because I am in schools every single week, several schools every single week. I spent a lot of time at the Scottish Learning Festival, just simply walking around the festival, talking to teachers who were there, and talking to them about those issues. I can see that I have touched a raw nerve in the committee about the survey, but I am simply making the point that we have to keep in context some of the points of feedback that we look at and make sure that we are taking a broad, comprehensive view of all those questions. I might say that, again, we should view your report back of informal conversations at a similar level of caution. What I invited the committee to do was to go away and check them, so Mr Johnson could take me a view of your report back of informal conversations. Daniel Johnson would hear his questions. I have a couple of things before we move on to further education and higher education. One is just for clarification, the 211—it was the last time that we had just mentioned—the 211 was about Education Scotland, and the larger figures were about the SQA. I was at a school in my constituency just recently, and I have to be honest, they were very complementary about the CFA and could see the impact now of a positive outcome for kids who were coming through the CFA—a different attitude from them and the others, which I thought was good in giving some of the stuff that we have heard recently. I thought that we should put in the record, but I wanted to come in on the attainment fund and the money that is going direct to headteachers. Will they be able to use that in such a way that, for example, I went to see a mentoring project in Glasgow, would schools be able to use some of the money from that fund to be able to access something that is out with the immediate education authority to bring in something with that mentoring project? Forgive me, convener, if I do not give a definitive view on examples of purposes that could be used. I understand the point that you are making to me about the broader context of how this resource could be used to improve attainment. Subject to us being confident that such measures would assist in improving attainment, then, obviously, there is flexibility for such an approach to be taken. When Keith Brown was in front of this committee, he confirmed that it was the Scottish Government's intention to abolish the Scottish funding council. Could you tell us on what evidence that decision is being proposed, and could you tell us, once it is abolished, what will be in its place? What we are undertaking is a review of the enterprise and skills activity within Government, and how we can produce greater alignment between all the different activities that are undertaken by a range of bodies. At the conclusion of the phase one process, we have identified, and I think that Keith Brown's letter to the committee marshals, the feedback that this view is based on, the need for there to be greater and clearer alignment between the work of the different bodies in focusing on improving productivity within Scotland, and the mechanism that the Government has identified to do that, based on the dialogue that has been undertaken as part of the phase one process, is around a single strategic board that can drive that process. That is about making sure that our interventions and our approaches are aligned to that common purpose of improving productivity and strengthening the performance of the Scottish economy as a consequence. The phase two of the exercise is to look in detail at the questions that arise out of that in principle view, and that is the work that has now been taken forward by the ministerial group. The cabinet secretary will know that we asked Keith Brown if we could be provided with additional evidence to support that view. As yet, I do not think that this committee is satisfied that it is there. Are you satisfied that the evidence is strong to abolish the SFC and to replace it with something else? The evidence is strong, yes, because the problem that we have is that we do not have strong enough alignment between the different aspects of our agenda that we take forward as a country. We have a productivity challenge within Scotland that we have to take steps to try to address. We have gone through a process of dialogue and consultation to identify what would be steps that would help us to create that greater focus on improving productivity, and what Liz Smith has asked me about has been the product of that discussion. Yes, I think that there is the opportunity to do that, but we have to look at a lot of the detail to make sure that, in focusing on that aligned agenda and improving productivity, we take all of the correct decisions to address all the public policy questions that follow from it. That is in phase 2. Can I ask a few questions about the budget? I should also clarify to Liz Smith that there is no question of us abolishing the funding council, which is what she put to me. You are abolishing its board, which is, as I understand it. I just want to make that distinction that there would be a funding council role and responsibility continuing, but there is the prospect of a single board looking at the activities of all of the constituent organisations to provide that necessary alignment. Can I just ask for a little bit of clarity on that? What you are saying, cabinet secretary, is that there is an overarching board that will combine the enterprise agencies and the Scottish funding council, but the Scottish funding council, as it is now, will not exist. Is that correct? Well, the role that has got to be undertaken by the funding council in an interface with higher and further education bodies will have to continue, but what we are proposing is the establishment of a single overarching board to look over all of the issues that are involved and the agendas that are involved in those relevant bodies. I am not sure that that is what we had before, but anyway, thank you for that. Can I ask some questions about the budget? Professor Andrea Nolan said that this settlement does not enable recovery towards sustainable funding of universities' core teaching and research, which ties in with the observations that were made in the Audit Scotland report early in the year, in part 2, in paragraph 4, in which it was making the same point that achieving the policy ambitions of the Scottish Government are exceptionally challenging because of the Scottish budget constraints, and I stress that at this point it did acknowledge that Brexit obviously has an input on that, too. Does the cabinet secretary agree with those concerns that have been raised and the point that was made very plain by Alistair Sim at the Audit Committee of this Parliament on 1 December that the university sector is facing very considerable risks because of the current Scottish budget financial situation? Let me just work my way through quite a number of the issues that are involved here. The funding settlement for universities for higher education is a cash increase in total between resource and capital dell compared to the budget in 2016-17. That is the first point. It is a cash increase in total. That is because there is a £20 million uplift in capital, and I accept that there is a £13 million reduction in resource. Within that £13 million reduction in resource, there is about £8 million, which will be reduced, but we have made changes to the ability of universities to increase income, which will enable them to raise resources to replace that lost income in Government funding. The net reduction in resources is £5 million in the forthcoming financial year. The Audit Scotland report published in July recorded that the overall financial health of the sector in 2014 was good. It said that universities had an income of £3.5 billion, and that the sector's overall income increased 38 per cent in real terms between 2005-6 and 2014-15. The sector had made an overall surplus of £146 million in 2014-15, with most universities generating a surplus every year in the past decade. The overall reserves stood at £2.5 billion. That is the context into which a reduction of £5 million of resource has to be considered as part of an overall consideration, whereby the cash resources that are available to universities will have increased from 2016-17 to 2017-18. I do not think that anybody disputes the statistics that you have just read out. The comments from both University of Scotland, particularly the exchange that Alistair Sim had with John Kemp at the Audit Committee, and what Andrea Nolan is saying here. In order to maintain the academic excellence and the competitiveness of the Scottish universities, which is so renowned, and which is a prime priority to ensure that that is maintained, the funding settlement does not provide that sustainability. That is the issue that they are raising. Because budgets are often on a one-year basis rather than a three-year basis, they are making a very strong point that they would like to see a review of the principles that underpin funding. Is that something that you will move to ensure? I have been having a lot of discussion in my previous role as the finance secretary and I have had a lot of discussion as the education secretary with the universities about a combined and collaborative agenda to ensure that they can fulfill their potential. I recognise and have made it clear publicly and made it clear to the universities the extent to which I believe they represent a significant critical economic resource and economic asset for Scotland. I am keen to make sure that we work on an agreed agenda that will strengthen the sector in the years to come. Obviously, I understand very clearly the arguments for longer-term financial settlements, but this is a one-year budget that has been undertaken. That is the decision that the Government took in this context. When I met the university, we have a higher education strategic funding group, which is principally a meeting between some principals and other officials from the university sector and my own officials and the Scottish Funding Council. On a couple of occasions, the minister and I have interacted with that group. A lot of good work has been undertaken to get us to this financial settlement that was put in place. Those options and issues have been part of the discussion that we have talked about. The income generation opportunity that I refer to is one that has been discussed with the higher education strategic funding group. I am keen to make sure that we proceed with an agreed collaborative agenda to make sure that the universities can continue to make the strong contribution. I believe that this financial settlement enables them to do so. My final question is based around the fact that you said it this morning in your opening remarks that the Scottish Government has taken a decision for domiciled Scots that it will go to university on the ability to learn rather than the ability to pay. We understand that. We do not agree with it in some cases, but that is the decision that has been made. We know that, between 2010 and 2015, the demand for Scottish domiciled students increased by 23 per cent. We know that there are more Scottish domiciled students at university than before, but we also know that the offer rate has only increased by 9 per cent. In other words, because of the capped system, there are more Scottish domiciled students who are finding it very difficult to get a place at a Scottish university and much more difficult to find it in Scotland in comparison with other parts of the UK. The US cabinet secretary still agree that the capped system is acceptable, particularly in light of some of the funding constraints that you outlined before? I do, but the point that has to be borne in mind is the fact that the participation in higher education is not just undertaken at universities in Scotland, and there is a very significant amount of higher education activity undertaken within the further education sector in Scotland. That is where we get into the points about the comparison of participation. We have to have a more comprehensive view in Scotland than can be made as a direct comparison with England because of the difference in routes that individuals take to secure higher education qualifications, where there are much greater reliance on further educational opportunities to pursue that than exclusively in the higher education sector, which I think would undermine the figures that Liz Smith put to me this morning. Those are universities in Scotland. No, but my point is about the analysis of those figures. We have to take into account the route that individuals take through the further education sector, which is more significant within Scotland. I would like to look a little bit at the governance round the SFC. As far as I can see, the SFC carries out four different functions. One is regulatory, one is funding allocation, one is policy advice to the Scottish Government, and they also seem to have a role in challenging sometimes the Scottish Government in terms of some of the decisions made. Does that seem like a good mix within one organisation? Should there be an element of separation there? Is there any problem with transparency in that mix? I certainly think that the funding council exercises all of those functions. It is an arms-length body from government that is able to operate impartially. The legislation requires the SFC to carry out its role in securing the provision of high-quality and further education through universities and colleges and to provide advice to the Scottish Government on those and other questions. In my experience, it is able to do so. I think that the remit of the funding council has been pursued in that context through my experience. The element of the regulatory side of the SFC has perhaps historically been seen as being a bit weak. Looking at how that could be strengthened at the moment, the regulatory side of the SFC, as far as universities are concerned, seems to be almost non-existent. For colleges, the only thing that they can really do is to reduce funding. By putting about financial penalty in place, that hits the students more than the actual college itself. Are there any thoughts as to how to beef that up? The SFC gets into some territory that has vexed Parliament on different occasions in the past, because, ultimately, that relates to the independence of those educational institutions. The Government's view is that universities and colleges are independent institutions. To be in receipt of public money, they must have good and robust governance in place, and the funding council, although not being able to intervene in institutions, certainly has an obligation to ensure that institutions are taking due account of the requirements of good governance as part of their process. The other aspect of the work that is being undertaken is the roll-out of outcome agreements, so that there is a broader agreement about what is being hoped to be achieved as a consequence of the investment of public resources that the Government is making and what educational institutions will agree to deliver. Those are the types of steps that I think are consistent with respecting the fact that those institutions are independent institutions. Those institutions have acquired their status and deployed their approach within our society on the basis of that independence, and the Government would not want any states to jeopardise that. On the budget, there has been some discussion about the way that depreciation is handled within the colleges. This year, for example, there is £30.1 million being allocated for the 2017-18 financial year to cover depreciation, and depreciation is not a cash element in the budget. It seems an anomaly against other accounting processes across the public sector that it is handled in this way. The £30.1 million is being used to address shortfalls in their funding, albeit with the agreement of the Scottish Government, because it has to apply to be able to use it for specific purposes. Is there going to be a review of that? Can that be brought into a normal public sector financial settlement process? Essentially, what we are dealing with here is the implications of the classification of colleges' essential government bodies by the Office for National Statistics. Those are requirements not applied by ourselves but by that wider classification discussion. There is a review that is under way on the particular issues involving colleges' Scotland, the Government and the funding council to try to ensure that we get to a position of what I might describe as greater clarity than we need. Those are immensely complex arrangements as a consequence of the classification decisions. We have that review under way to try to establish how that could be done in a clearer and more comprehensive fashion. The four functions that Mr Beattie rightly mentioned are the responsibility of Scottish funding council. Are they going to stay in one body? That is where we come back to the point that I was discussing with Liz Smith. The funding council in its executive function will remain as the funding council, but we are talking about changes to board governance to provide greater alignment and cohesion of policy. The functions would still be exercised by that executive arm of the funding council. I want to ask some questions about the funding council's budget, in particular in relation to the student wars agency for Scotland. If I read that correctly, in the last three financial years there has been an in-year transfer from the funding council to SAS of about £20 million a year. I was just wondering why that was. That will be to provide the resources that are required for particular programs of support as demand becomes clear during the financial year. It has been roughly the same amount each year. Is there not something that has gone slightly amiss with the budgeting if it always has to happen that way? Shouldn't that now be baseline into the SAS budget rather than a line coming out of the Scottish funding councils? We wrestled with some of those judgments and I wrestled with a lot of them in my former role about whether to make baseline transfers or whether to, for a clear line of sight, establish continuity of baselines. There is never a perfect science in all of this but the judgments that are made here are made to reflect circumstances as they arise during the financial year and that may vary from year to year. Although I do take the point that when a pattern begins to emerge there may be an argument for baseline transfers and indeed the budget involves some baseline transfers going in different directions as a consequence of that analysis. In terms of a committee or anyone's ability to scrutinise properly the funding of SAS, when a pattern has gone on for three years, you'd at least accept that there's something that might be needed to be looked at. I do take the point that when patterns let that emerge there is a point to explore. At this stage, during the budget that we're about to go into, does the Government have plans, therefore, to again follow the same pattern in other words to have another in-year transfer if justifications? If circumstances require it, we will have to look at that question. You'd accept that it would be four years and there's something that needs to be addressed. I think that the general point is a fair point that when patterns emerge of that type. If I give Mr Scott another example, in the budget document, in the section on higher education, for example, on the funding council table 6.06, Mr Scott will see that the 2016-17 budget is 1027 and then there's another column that says 2016-17 budget says 1081. What that represents is the product of in-year transfers to deal with medical education, for example, which happens every year, but it rather skews the numbers. There is a judgment to be applied about what is the right moment and the right time to make baseline transfers of that type. To return to Liz Smith's first question, there have been some pretty significant concerns around the implications for research funding of moving the Scottish funding council into the purview of this overarching board, specifically around charitable foundations, those based down south, the welcome trust being a good example, which would give less and be far less likely to give when there's a perception of being too close to government. From what you've said today, cabinet secretary, and from what Keith Brown had said previously, is it fair to characterise that as being that in phase one you decided to take this approach of the overarching board and in phase two you will find out what the implications of that are? We'll explore the detail and the implications of that decision in phase two. Was it responsible to take a decision and give yourself essentially no wiggle room to get back out of it to only then find out what the damage of that decision could be? What we're looking at is what can help us to focus and direct the measures and interventions that we can make to support improvements in productivity in Scotland. That's the purpose and the drive of this reform. That's what's led us to take the decisions that we've taken. We will, of course, explore all of the issues to ensure that we properly and fully address any of the issues that have been raised as part of the consultation and dialogue. I feel to see how it helps to take a decision and then look to gather the evidence about the implications of that decision. That doesn't look like a responsible process. The decision that we've focused on is answering the question that is inherent in the enterprise and skills review, which is how can we strengthen and improve productivity within the Scottish economy. That's been the question that we have explored to try to take the measures to ensure that that is the case. I accept that, cabinet secretary, but there are other significant implications from the decision that you've taken, which you don't seem to have even looked into before taking that decision. There are other relevant policy considerations. The Government will not take decisions. Is there a relevant phase one? There are relevant phase one, and they've been reflected in the steps that the Government has taken. For example, to make it clear that the independence of higher education institutions is not something that we wish to in any way affect. The nature of that commitment then affects the nature of how we operationally take forward the announcements that have been made in phase one of the enterprise and skills review. The conclusions of phase one have taken into account a variety of different policy considerations to enable us to focus on how we can give greater attention to improving productivity within Scotland. It seems like a worrying process, but I think that the committee would benefit if you were able to provide further evidence of what implications you concluded in phase one, what the implications would be in phase one. The Government will be very happy to take forward further discussions with the committee on the conduct of the enterprise and skills review, and ministers will be happy to participate in that process. It's emerged that there was a £50 million underspend in the higher education budget. Indeed, Universities Scotland said that news of a £50 million underspend will be concerning for universities, given that there are real-term cuts to overall teaching and research budgets last year. They went on to say that having a £50 million right now would be a significant help in starting a climb back to sustainable funding levels. Can I just ask why this clawback took place and what your reflections on those comments from Universities Scotland would be? The first thing to say is that the funding council made it clear to the Government that it was carrying an underspend of £50 million within its resources. That is part of the obligation of all Government organisations to be transparent about underspends that they are carrying. It was something that I required of all Government activities when I was the finance minister, as did all of my predecessors. As we looked at that, we satisfied ourselves that the financial commitments that had been made to universities and colleges had been met in full. The resources that were available to them were the resources that had been promised to them as part of the budget settlements. Essentially, where the resources had been generated from was the difference of timing between the delivery of resources to the funding council in a financial year and the distribution to institutions in an academic year. Those are two different timescales. The resources had been generated in that way. Every financial commitment to every institution was met in full, but an extra £50 million has been held with the funding council. I judged that that had to come back into the centre because budgets should operate on the basis that resources should be available to the Government to deploy as it sees fit. That obviously was the process that was concluded as part of the consolidated accounts for 2015-16 which were lodged with Parliament in September. In relation to the comments of Universities Scotland, I am not surprised that Universities Scotland made comments that they would like to have more money. Not many organisations have sat in front of me and asked for less money, in my experience. Flee asked one supplementary comment to Ross Greer's line of questioning about scope. We understand the enterprise and skills review relates to productivity, but Scottish funding council has primarily an interest in education. In answer to Tavishes Scott's line of questioning about STEM subjects and the impact of those moves, Keith Brown said that those considerations were outwith the scope of the review. I am a little bit confused as to where those educational aspects and elements lie in relation to the review. Are they in scope or are they not? Have they been considered or have they not? The issues are about alignment in supporting economic development in our country. If you look at, for example, the research activities of our universities and one of the things that we have been able to guarantee in the, well, we have been able to guarantee a number of things in the higher education funding settlement. We have guaranteed resources for teaching, research, resources for widening access and the £5 million of budget reductions that we are seeking will come out of the strategic projects that are taken forward by the funding council. Teaching and research and widening access will be assured. The research content of the universities has a profound impact on our economy and the links from that to the business community are something that I certainly hear from the business community. It is an area of great aspiration to ensure that there is more collaboration and more partnership to ensure that the fruits of that research activity are felt profoundly within the Scottish economy. That is the scope of the review and what we are trying to achieve as a consequence. What consider the education impacts? We will be looking at a number of questions in relation to the learner journey, which again we flagged up in the programme for government. It was an issue that was material for the government to take forward and we will be engaging very actively with the education sector on all of those activities. I think that that is not yet. I have to say that I look more broadly at what we need to achieve and I do not put education into a silo away from industry. I would prefer to say that the Enterprise and Skills Review has been born out of many, many years of industry and workplaces commenting on the fact that we are not providing people with the right skills to fill the skills gap. We have not been having people being career ready and that this is an attempt to join up both sides of the coin in making Scotland a more productive place. I agree with the point about the fact that we need to look at different services within a broader context. Education plays a significant role and makes a significant contribution towards our economic development. It is vital that we establish the connections and the links that enable that to happen. That is the purpose of the Enterprise and Skills Review to enable us to have that more profound economic proposition that can support the development of opportunities within Scotland. Skills is a crucial part of that. In my dialogue with different sectors of the economy, it is a point that is made fairly frequently to me the importance of ensuring that the skills generated within the economy are able to make that contribution to our society. We refer to say that there is more strategic planning in Cabinet across all the portfolios. Obviously, there are skills gaps being identified across a lot of the portfolios and what the Government is trying to achieve. Education is going to play a key role in that. We need to reflect that across the Cabinet table, yes. I was going to ask the Cabinet Secretary in relation to the debate yesterday that we had in the chamber the route and branch review. How does he think that will impact in terms of the budget financially on the child protection aspect and local authority delivery of services? Obviously, there is a very welcome opportunity for us to ensure that we properly and effectively deliver an approach to supporting looked-after children arising from the debate yesterday in a way that builds on a lot of the good practice that exists within Scotland today, but ensures that we deliver better outcomes for many of those young people. I think that the Parliament had a very constructive debate yesterday on how that might be taken forward. Our objective is to make sure that our—and some of this goes back to what Richard Lochhead asked me about earlier on—goes back to how we align all of the different interested parties to focus on the needs of the child and ensure that that child is central to the support and the judgments that are made and that we take forward a reform in the system in a fashion that will ensure that we can improve the outcomes for individuals concerned. Would the Cabinet Secretary think that by expanding the Root branch review and by doing the Root branch review that will broaden the child protection process as well for young people? There is an opportunity here. If we improve the outcomes and the roots of support for Root-after-Children, we have an opportunity to significantly reduce the caseload experience of young people within the care system and, as a consequence of that, ensure that they are better supported as part of that journey. I think that some of the costs that can be associated with not focusing on the child, but on services that have not been joined up around a young person, is one of the issues that we want to explore within the looked-after review and to make sure that young people get the support that they require. We think that there are significant opportunities to improve outcomes as a consequence of that approach. I was conscious that I was going to ask a further question on the child protection framework. I realise that there is one more on the budget, so I will leave it at that. I think that some of this is about policy rather than budgets, but just to make the observation, I wonder if you would at least reflect on this, that young vulnerable people who may be in care and may be out of care, may be moving into care and out of care and may be at risk. How does the need to have services around those young people and the ability to respond quickly match with a desire to drive responsibility down terms of governance to individual schools and with a regional board? Will you not accept that, if you look at the question of a young person, you may be going to different schools and all the rest of it, that creating services in a coherent way around them can be supported by the current model of local authorities rather than the one that is being proposed? I think that we have got to take great care to make sure that the dangers that John Lamont raises as possibilities do not materialise. Equally, in my experience, and I see a number of very good examples of this, schools have been absolutely central to providing the foundations of support to young people who are vulnerable and meeting their needs, and essentially being a central hub of how that support is marshalled for young people. My experience of the schools of Scotland is that they are very focused on the wellbeing and the development of young people and to make sure that young people are properly and fully and effectively supported. I think that that approach is an approach that will be of enormous assistance in making sure that we improve the opportunities and the outcomes for young people. I have no doubt that individual schools do a lot to support individual young people. The point that I am making is that, very often, these young people are across a whole range of schools and that the support services within individual schools have been reduced. The capacity for a local authority to support and have policy around this range of young people surely has enhanced by being able to work across a local authority rather than breaking it down into individual schools. It is a genuine concern and I think that you can have an argument about governance around individual children but, for vulnerable groups, where local authority services come from social work, housing and all sorts of groups, is there not a risk at least or at least would urge you to reflect on the possibility that that group of young people who do not sit in the one school for the whole of their education but are maybe moving around the authorities of capacity to identify patterns? Would that not be something that we should maybe reflect on? There is nothing in the governance review on education that, in any way, challenges the role of local authorities in exercising that essential role of acting as a corporate parent for vulnerable young people. I think that the questions that we have to make sure are properly aligned is that schools interact—if schools have greater discretion and greater decision making capability—that they are able to exercise that consistent with the way in which local authorities exercise their responsibilities for the wellbeing of vulnerable young people. That brings us to the conclusion of the evidence session on the draft budget. At this point, I say thank you to Aileen McEachney, but I know that the Cabinet Secretary and Ms McLeod are staying with us for the next item. We will suspend for a few moments. The third item is scrutiny of the Government's role in relation to the Scottish Child Abuse Inquiry. I start by putting on record my thanks to the survivors groups that the deputy convener and I have met over the last couple of weeks. I also thank the clerks who have done a great job in making sure that we have had that opportunity. We met in-casts, White Flowers Albat and FGBA. All groups have provided comments for the committee, so other members are cited on issues raised in these meetings. Before moving to questions, can I remind members and witnesses that, for the purposes of the Standing Order rule in subjudice, no mention should be made to any live cases during this debate or any issues that could prejudice the proceedings of live cases? I will move straight to questions. I suspect that the questions will come from myself and Joanne, who I have met with the survivors groups. FGBA suggested that a reference group made up of survivor groups and others could usefully act as a means of promoting understanding to survivor groups of the work of the inquiry and also advise the inquiry panel on the sensitivities that the inquiry needs to take into account in its operations. Do you have a view on that suggestion from a Government perspective? The first thing that I should say at the outset is that this is a proposal that relates to the inquiry. I want to steer as far away from expressing a view about what the inquiry should or should not do. In general, the more dialogue that happens in this whole area of policy, the better, because it creates a better understanding of some of the issues that are at stake and of concern to individuals. Obviously, the decision about whether such reference group should be established would be a decision for the inquiry. Obviously, I do not have operational responsibility to influence that decision. I am going to ask you another question where you are going to caveat your response with exactly the same thing, I suspect. I spoke to White Flowers Albert and they highlighted the Australian model, which takes a modular approach moving through different sectors in each module and with a commission at the centre with oversight of issues coming from each module. Do you have a view on that approach? They seem to think that it would allow certain things to happen at certain times. That is a wider question, convener. I have looked with care at the Australian inquiry that was established. The characterisation that has been given to you by White Flowers Albert is, in my view, accurate. It is a broadly based inquiry looking right across society in Australia at the experience of a number of situations with the ability to gather that evidence in different areas of policy and then to reflect on that at a general level. I acknowledge that the accuracy of that characterisation of the inquiry in Australia. The origins of our inquiry here in Scotland were somewhat different. The origins of the inquiry essentially came from a process of examining the role of the state in the delivery of care to individuals who were in care in the care of the state, where the state was essentially replacing the role of parents. When we go back to 2004, that was the basis of the apology that was given by the then First Minister to individuals who had been ill-served by the state's exercise of its responsibilities in care. That led to an interaction process that involved survivors, which ultimately led us to the establishment by my predecessor of the Scottish Child Abusing Inquiry, with a remit focused on addressing the experience of individuals within care. Obviously, when I took office and with the issues that have emerged, I, in dialogue with survivors, agreed to consider whether or not we should broaden the scope of the inquiry. As I explained to Parliament in my parliamentary statement, I was mindful of the commitments that had been made to people who had been in care, who were expecting this inquiry to take its course and to proceed. If I would have broadened the inquiry remit, as has been suggested to something either slightly broader or as comprehensive as the Australian Inquiry, we would inevitably have lengthened the timescale within which this would have been undertaken. I felt that it was unfair to those survivors who were expecting the inquiry to take its course on that focused remit in relation to the in-care system, if I were to take such a decision, which is why I decided not to do so. In the context of a wider inquiry, if the module system had been used, would you have been able to use the in-care cases as a module to deal with them that way? That might have been possible, but the inquiry was established on a different basis with a very clear and focused remit in relation to in-care. I felt that the commitment and the obligation that we should make would be to fulfil the commitments that are made to the in-care survivors. I will touch briefly on redress, but I know that Joanne has a couple of questions about that. I think that I suggest that redress could be considered by the inquiry itself, to ensure that those who are engaging with inquiry feel progress in their cases have been made, and to prevent them from having to revisit their experiences through testimony to two processes. Do you have a view on that suggestion? I think that that question involves essentially two different elements that have to be considered. One is the principle and the details of any redress system. Secondly, if I understand your question correctly, convener, decisions on particular awards to people as a result of their testimony, I think that it would be difficult for two such processes to be undertaken under the umbrella of the inquiry. In fact, I have made it clear to Lady Smith that it is not my plan to ask her to consider the issue of redress. I think that that is an issue that the Government has got to consider in consultation with survivors groups, which is the process that we are embarking upon. We have to establish what is our approach to redress, and then, quite separately from that, to make decisions about the determination, the application of any implications of that for individuals in relation to the cases and the experiences that they have had. One of the things that did come across when we met with the survivors groups that we met with was that they all were keen on redress, but there was seems to be a different criteria from each individual group about who should be able to get it and when they should be able to get it. I do accept it as a difficult one, but it is a very important one. I committed when I last saw the survivors groups to a process that will involve Celsus at the University of Strathclyde in helping us to work our way through those questions. There are difficult questions involved in all that, and that is not to say that they have not to be embarked upon, but they have to be looked at. I hope that, with the assistance of Celsus and the participation of the survivors groups, we can make progress on that. On the question of redress, it is a theme that I think came from all the groups that we met. Would it be reasonable perhaps to ask Lady Smith not so much that this individual should have redress, but her views coming out of the inquiry and what that redress system might look like and what we will ask her for some recommendations around that. I know that the groups that we met with said that they had already provided their officials with very detailed views on redress. I wonder if you have a timescale for responding. I think that people need confidence. I accept that it is not going to be part of the inquiry, but the sense that there is progress within Government around the question of redress. At what point would you be sharing your views on what that redress system might look like? The first point is that I understand the importance of addressing this issue and I want it to be done in a timely fashion, so I want to give reassurance that that is something that we are determined to take forward. I am reluctant to ask the inquiry to do this, because I weighed up this question and I felt that it might be perceived as if I was passing a responsibility that Government should properly exercise to somebody else to do so, which is why I decided not to ask the inquiry to look at this. I did not want to give the inquiry more questions to address, given the fact that I was wanting to concentrate their efforts on addressing the substance of the experience of individuals and to make recommendations accordingly. When I last met the survivors, which must have been 9 November, I think that if I have got my date correct on that, I said that we would establish a process of which would involve the Government and survivors groups. I am going to involve Celsus in that as well to essentially look at the proposals that have come from the survivors groups and to work our way through those questions. I reassure the committee that that is a priority that we are taking forward and we are taking forward timuously. We have had discussions with Celsus about this and we want to engage the survivors on that process. It is something that I would rather that I would like to do in as collaborative a way as I possibly can do to try to make sure that we address properly the issues that were raised by the survivors groups in the different propositions that they have raised with us. Are you open to the option of interim payments, given the nature that many of the survivors are very elderly in? That is a material question in how we take this forward. I should probably add also that although I have said that I have not invited Lady Smith to look at these questions, Lady Smith would be free of course to make whatever comments she wished to make about this, so there is nothing that inhibits Lady Smith from making those points. Can I maybe go on to this question of the remit? There is clearly a range of views on this and probably the most compelling argument against extending the remit is timescale and ending up trying to do everything and failing to do anything, but would you accept at least that when you talked about the role of the state in terms of young people and care, what survivor groups have also flagged up to the extent to which other parts of the system then let them down, whether it was the police or the prosecution services and the sense in some areas that has been a cover-up and is something that is not unique to Scotland. Is the inquiry able to go where the evidence takes it around not just what happened to young people and care, but the way in which the system then closed down concerns that were when they were being expressed? My view is yes, because the inquiry has to look at the experience of young people in care, and the extension of the remit that I made just in November was to make it clear beyond any doubt that, for example, if a young person was in care and they were abused outwith the boundaries of that care home, that abuse should be considered by the inquiry. That had to be part of its scope to make that absolutely clear. I think that the wider understanding of what has happened, how issues were considered, what was done and more appropriately what was not done at the time, all of that is within the scope of the inquiry and, in my view, must be examined. That requires a whole range of different bodies to be engaged with the inquiry on these questions, and the inquiry has the powers to make sure that that is the case. I think that it is a society where we are more comfortable with the idea and we use comfortable in the vertical commas with individual predators, but the idea that there could be organised abuse, which then involved other parts of the system, is supposed to be just the individual place where children are placed in care. I think that that is an area that certain organisations would hope that the inquiry could look at. I think that that is entirely within the scope of inquiry. Can I ask a couple of other points? I am grateful for your indulgence, convener. You have met survivors groups, and it was reflected in our meetings when the people appreciated that, particularly in the meeting in July. When survivors felt that they had been blindsided, that had happened, and you have followed on from that. We have a submission from OpenSecret, which says that it has a number of clients that work with them in terms of their support needs, who would also like to be part of that process, who would like to have the opportunity to meet with you now and accept the constraints on your diary. I wonder whether there is a means by which you are able to hear from other groups than ones that you have not already heard. If you were open secret, you would be happy to liaise with your office on that. It is a very difficult balance, but it is the extent to which you are able to test it with survivors, individual survivors, what is going on within reasonable capacity for you. I hope that you would look at that question. I am very happy to engage as much as I can. I was grateful that Johann Lamont attended the meeting that she referred to in July. I was grateful for her presence on that occasion, because I think that her characterisation of the mood of the survivors at that time was absolutely accurate. I have obviously worked over the summer to try to address that. I have also met three principal groups that I have been meeting on what I would call a regular basis. I have also met other individuals, aside from them, who have just asked to see me and I have spent time listening to their experiences to absolutely test that I had the full understanding that I needed to have in making the decisions that I have made. I will be happy to meet others, so I will take steps to address the issue that Johann Lamont raised. I think that some of this issue will be around what the nature of support is for survivors, as well as the inquiry. I should also, just for completeness, point out that some of those questions I will need to involve other ministerial colleagues in, because, essentially, there are three of us who are involved in this area of policy. Annabelle Ewing has the responsibility around the limitation bill, Maureen Watt carries the responsibility around some of the survivors' funds, and my portfolio sponsors the inquiry. I would like to assure the committee, as I have assured survivors, that three ministers are working very closely together in making sure that the decisions that we take and the evidence that we are hearing enables us to be acting in a joined-up fashion. I think that there is a question of visibility around progress, so I think that, if we were getting some public statement around redress, that would help. I wonder if you agree with me that there needs to be some kind of progress statement by the inquiry around—I think that it is a sense that some survivors have been interviewed. We are not clear how many, we are not clear at what stage the inquiry is, and I think that that would give people some confidence. A number of the groups have said they felt that they did not really know what was happening. My final point is that I understand that the Scottish Government has said that it does not want to extend the remit to, particularly because we would argue around those for a duty of care that has been highlighted as an issue obviously because of the revelations that are now coming out around sport, in particular in football. I simply ask if you are willing to remain open-minded, if not to attach it to this inquiry, to look at the possibility of a further inquiry on this question, specifically around young people who were abused, where there was a duty of care? On the first point about the progress of the inquiry, if John Lamont will forgive me and the committee forgive me, it is really a matter for Lady Smith to express her view about us to what information she considers appropriate to share. Lady Smith gave some information the other day about the arrangements for hearings in January, and we will hear more from Lady Smith in that context. On the second point that John Lamont raises, this is an issue that I have thought about long and hard. I came to the view that the inquiry that we had commissioned should remain focused on the questions that essentially had given rise to the origins of that inquiry, which was the public apology in 2004. As we have seen the terrible revelations emerging, most recently about football, but there are other situations that have emerged. Particular inquiries have been set up. The Catholic Church established a review body on those questions, and I invited the former moderator of the General Assembly, Andrew McClennan, to explore those issues. I also saw the next stages of that process being taken forward by Barnas Hel Llyddell, who I thought wrote a very deeply personal and effective and impactful article about the aspirations that she has to take forward in relation to the Catholic Church and the herald just the other week there. In a sense, I thought Barnas Llyddell's article, in a sense, made the point more effective than I could, that she was making the point that, as a member of the Catholic Church—I do not have the article in front of me, Barnas Llyddell said something like, I do not really want to have to do this, but I feel I have to do it because the Church has been so damaged by what has been said. What has happened? To me, that is an example of how those issues can be taken forward within a particular organisation that has got a duty to address those points. I take the same view with football, but there has to be confidence in the process that is advanced. It has to be done with independence. It has to be done with authority to give people confidence in that process. There may well be issues that emerge from those processes that the Government has got to take into account. I certainly give the assurance to the committee today that the Government will not do exactly that as we look at those issues. You would keep an open mind to the possibility of a separate inquiry in those questions. The reason I ask that is because I think that there is a question of confidence among survivors. I say this genuinely. I have not read Helen Llyddell's piece and I am sure that it would be very thoughtful, but there is a sense in which an organisation, whether it is football or whatever, feel that they are now so damaged that they have to address the question. It is slightly different from how we address that injustice. We have all wrestled with whether there should have been a public inquiry in relation to in-care survivors, and it ultimately came down to the issue of confidence of survivors themselves. I will ask at the stages whether you would be willing to remain open minded to the possibility that there would need to be an inquiry, which was not by the individual organisations, but might be informed by those individual organisations and inquiries into that broader question of the breach of duty of care. A schoolteacher is employed by the state. If that schoolteacher abuses a child, there is a responsibility on this state. If there is a failure there, we can see that. All I am asking is that the state should remain and keep that option open. I cite the examples that I cite because I think that it is important that I agree entirely with John Lamont on that. The approaches that are taken are required to ensure that justice is done. I have not said this in the course of my evidence to the committee today, but there is, of course, the importance of criminal prosecution within all of this, which must be considered as a first step in all of those issues. I set out my point of view to make sure that organisations address the issues that have to be addressed from the perspective of the justice of individuals who have been so ill-treated, but that has to be done with independence and authority to give confidence to survivors, because I accept totally that survivor confidence is crucial in this process. Can I finish off by asking a question about the panel membership, cabinet secretary? Can you explain to the extent to which you consider the assessors can contribute to the inquiry process now that we have gone from three to two, and there is going to be more use of it? There is an option for Lady Smith if she chooses to appoint assessors to assist her in the task that she has got to undertake for assessors' input. My judgment, having discussed the issue of panel membership with Lady Smith, was that that option gave her the flexibility that would be required to take forward the inquiry and that there was no necessity to add a third member to the panel. Obviously, Lady Smith will make judgments about that and will make public comments appropriately. The law provides that for Lady Smith to undertake that. Okay, thank you very much. In that case, can I bring this session to closing? Thank you both for your time. It's one of the very lengthy sessions, a very useful session. Thank you. That's a public session closing.