���˿���

We all support the policy ambitions but let us look more at the finances of the proposal.

One of the issues that witnesses have brought to our attention is the scale of uncertainty about the costings. Last week, for example, the Fraser of Allander Institute said that one of its concerns was that there were no workings beneath the costs in the financial memorandum to show how the costs had been arrived at or why we had such a breadth of costs. The Auditor General for Scotland supported that point, too. We realise that there is uncertainty and that there will be secondary legislation, but it is a matter of concern that the financial memorandum, which is what we are taking evidence on, does not contain more detailed costings for delivering the care service.

I do not think that anyone would accuse you of making up your mind too early. People just want to ensure that the bill goes forward with solid financial foundations. That is the issue that I think we are grappling with. For example, there are a number of areas where the financial memorandum fails to give any indication at all of the likely scale of costs. Audit Scotland lists a number of areas where no indication of costs has been provided, and those are significant. They include

“the costs of any national care boards ... transition costs for Local Authorities and Health Boards, including double running ... the impact of changes to VAT treatment ... the impact of any changes to pension scheme arrangements and associated contribution costs arising from pay harmonisation/rationalisation ... the extent of potential changes to capital investment and maintenance costs ... the cost of the health and social care information scheme.”

There is also the issue of transfer of assets.

There are real issues on which more information could and should be forthcoming, surely, at this point.

I point out that, in evidence to us, the Society of Local Authority Chief Executives and Senior Managers said:

“The financial memorandum does not represent the outcome of the Feeley review or the national care service consultation. You cannot see the total costs. You are not able to look at what the priorities would be within them or to properly compare alternative models against what is laid out in that financial memorandum.”—[Official Report, Finance and Public Administration Committee, 25 October 2022; c 33-4.]

One of the things that came out of the evidence is the potential impact on the viability of local authorities as an unintended consequence. The ultimate aim of the policy is to deliver for the people who require the service. If there is a conflict between the viability of a local authority and delivering the service, where would we be?

Some local authorities have smaller management teams than others, and those teams have a wide range of roles. If expertise is transferred—potentially for very good reasons—that local authority might not be able to deliver on other areas of its services. How much time has been spent looking at that issue?

The issue is not about funding having a neutral impact. If a management team is reduced, it will have a difficulty in delivering those services. It might be that some local authorities must retain similar-sized management teams. You would end up with diseconomies of scale. If you transfer some services but, ultimately, you need to leave much the same team behind, you must fund additional staff for the new services. You would surely end up with a more costly and, some might think, more cumbersome delivery.

I am aware of that, and I have also noticed that you are being very careful with your language, in saying that you will “take account” of inflation and look at its prevailing rate. I understand that you are not in charge of the budget, but huge sums of money will be dedicated to setting up the structure of the service, and those who will be in receipt of that money will be looking to see whether it will be hobbled from the start.

Given that this is a flagship policy for the Government, one would have thought that ensuring that it delivered, even against the financial odds that we are currently facing, would be an absolute priority. It alarms me somewhat that, even at this stage, there seems to be no guarantee that that will be the case.

I would appreciate that, minister, but I know that other members, including me and Daniel Johnson, want to ask about co-design. We will be exploring the issue further as the meeting progresses.

The last question is the $64,000 question from some of the people who have given evidence to us, and it refers directly to the financial memorandum. SOLACE said that a lot of the Scottish Government’s response to its concerns has been

“to say either, ‘We’ll cross that bridge when we come to it,’ or, ‘That’s a decision that can be taken locally.’”

It went on to say that

“the proposal is well intentioned, but it does not give us any certainty that we are going to get to something that will deliver consistent care services across Scotland.”—[Official Report, Finance and Public Administration Committee, 25 October 2022; c 42.]

COSLA said that, in its view, the financial memorandum delivers

“an unacceptable lack of clarity.”

When I asked COSLA, CIPFA and SOLACE whether they thought that the financial memorandum should be revisited, each of them said yes. What is your response to that?

Thank you for that opening statement. As is traditional, I will start with some open questions before we move to questions from colleagues.

You began by saying that the bill’s stated purpose is to improve the quality and consistency of social services in Scotland, and it has been the view of everyone throughout the evidence sessions that that is what we want to see. However, why is this particular structure the best way of delivering that? If certain issues are affecting consistency and quality of care in some local authorities, why is that is not being addressed?

The committee has tried to tease out that issue in its questions, but we have not had all the answers that we would have liked. As I asked when Ms Bennett and Ms Bell previously gave evidence, why not name and shame the local authorities that are not stepping up to the mark to deliver the services that they should be delivering instead of creating this new all-encompassing structure?

Obviously, though, if the VAT situation is not resolved, we will have the same situation as with the police and fire services, whereby millions of pounds have been contributed to the Treasury in VAT when it could be much better spent on local services.

One issue that came out in the evidence from your officials was that not all staff may transfer. We are talking about a national service, but some staff may stay with the local authorities and some may move. Is that correct?