Seòmar agus comataidhean

Good morning, Auditor General, and thank you for joining us. I just have a couple of questions, as I am mindful of the time. The first is a slightly technical question that follows on from Mr Hoy’s questions. In the update that it gave in December 2024, the Government stated that it was taking

“a cascade approach to savings”.

What is your understanding of the implications of that, in the light of the fact that all change programmes that are under way anywhere in Government are arguably now part of public service reform?

I accept what you are saying. In future reports, would you be prepared to actively consider culture as specific and measurable, for the reasons that we have outlined?

In your evidence thus far, it sounds as though the position is very complex, and the data that you have cited probably confirms that we are not entirely certain of the impact of the rise. Therefore, to pick up on the issue that the convener was probing earlier, is it reasonable and accurate to say that we do not have complete transparency—probably for a very good reason—about the impact of the original rise in ADS and that you therefore have not been able to model the potential impact of a subsequent rise from 6 per cent to 8 per cent?

Okay. Convener, I should have drawn committee members’ attention to my entry in the register of members’ interests.

If I may, I will follow up one area in relation intra-landlord activity. There is evidence that, over time, quite a number of landlords have exited the market across the whole of the United Kingdom. That was triggered by the UK Government’s withdrawal, some years back, of mortgage interest tax relief. More recently, some landlords have been choosing to exit the market but to sell with the tenant in situ, so that another landlord buys the property. That is done for the very good reason that the property is somebody’s home. Surely a by-product of the increase in the rate of ADS will be more tenants being evicted, because a landlord will be less likely to buy properties. To what extent have you factored that consideration into any scenario planning that you have done?

Correct.

I still think that you are making my point for me. It perhaps goes back to Michael Marra’s observation about a range of numbers.

There is no denying the amount of work that you have put into the bill. We listen to a lot of people presenting financial memorandums, and the only thing that we can be certain of is that they are always wrong, because that is their nature. [Laughter.] What is your best guess—I suspect that your laughter means that you agree with that—as to where your FM is probably wrong, on balance and all things considered? It is okay to tell the committee, because we like that—

I am intrigued by your comment, Sandy, and I have to say that I do not disagree with you. However, to what extent do you think that the complexity around public sector reform is understood? My perception is that the conversation has coalesced around the need for it, but that is arguably the easy bit, and, as soon as you start talking about the how of it, the issue suddenly gets complicated and will bring up the question of priorities, which is what John Mason was alluding to. As someone who is across a lot of this stuff, to what extent do you think the discussion is starting to mature in a way that involves the consideration of complex issues as well as issues of cost?

I will probably be quite quick. I have been listening with interest to all the questions thus far, and I have just a couple of questions. First, I want to explore a bit more the extent to which you have considered such a significant culture shift and how risk is managed within it. Earlier, you mentioned a level of peer support for people who are administering it. When people think about being involved in such events, they often say, “If I was to do that, this is how I would behave”, but the truth is that people do not really know. When it is the antithesis of the Hippocratic oath that medical professionals undertake, how they will react remains uncertain. My first question is therefore about trying to put a number on such a significant culture shift, given that antithesis to the Hippocratic oath.

Secondly, on risk, we have talked about safeguarding, but we have not looked at it from the point of view that any organisation that is worth its salt would make sure that it buttoned down its processes to protect itself from any kind of legal challenge.

To get both of those areas right could introduce extra costs. We are talking about this as though all things are equal, when it is a dramatic shift for what is quite a small-c conservative country—Scotland. I want your reflections on how actively you have considered both of those elements as part of the financial memorandum.

If you do not mind me saying so, you are almost making my argument for me. My argument is that such a cultural shift will take place. Of course that is happening, but there is a financial cost to it. This is not your bog-standard bill. I am glad to hear that that is happening because it is extremely important but, given that it is happening, the work that will require to be done across the whole range of things that we have covered today will probably be more expensive, because it goes into areas that people might not necessarily have thought about previously. It is quite a big shift.

You are highlighting, I suppose, the upside of being able to utilise the shared learning around a PMO—the downside is the change management processes that come with that.

I want to pick up on a point that my colleague Kevin Stewart made when you used the term “added GVA”. I am not going to have another go at you; I simply note that, with regard to the announcement by PetroChina, the figures that we have for the impact on jobs is that more than 400 direct jobs will be lost, and the Scottish Government has referred to a wider impact amounting to nearly 3,000 jobs. That surprises me, given that—you can correct me if I am wrong—the £10 million from the Scottish Government for greener Grangemouth was in essence for increasing community wellbeing, instead of specifically seeking to replace jobs. There was reference to the supply chain, and some of the businesses involved were SMEs that provided hamburgers and so on nearby. What are your thoughts on the decision-making processes that led to the focus on community wellbeing rather than jobs, which was the point that Kevin Stewart was making?