Seòmar agus comataidhean

I point members and the Auditor General to my written question S6W-30005, to which I received a response late yesterday afternoon. Ahead of today’s evidence session, I asked the Scottish Government to comment on the Auditor General’s report. The reply from minister Graeme Dey is quite illuminating with regard to the Government’s thinking on issues that we have just talked about. In the second paragraph of the answer, the minister writes that

“It is the responsibility of each college to manage its operations in line with”

its funding and that the Government expects colleges to “reassess” their models

“and explore avenues for cost reduction”.

However, in the first paragraph, he also says that ministers recognise the role of colleges with regard to students’ development but also with regard to Scotland’s economic growth. Those two statements do not exactly seem to match up, shall we say? Perhaps that is more of a comment than a question.

I might come back in later to talk about wider reform, but I am sure that other members have questions in the meantime.

Good morning, Auditor General and guests. The college sector is very important to the experience of young people in Scotland, workers and the general wider economy. You highlighted that very well in your report.

I want to drill into the meat and bones of the numbers and the state of the funding. I will use the word “crisis”, but I will leave it to others to use their own language.

In your opening statement, Auditor General, you mentioned that we have had three years of cash freeze and, this year, a reduction in funding, which equates to an overall reduction of 17 per cent in real terms. I want to tease out what you think the effect of that has been. I have not been on the committee for long, but that issue has been raised by Audit Scotland for a number of years. My impression is that it is not a new problem and that it seems to be getting worse.

Finally, in my research for today’s evidence session, I came across an article in The Herald from the principal of Edinburgh College, Audrey Cumberford. I am not sure whether you have read the editorial, but it is an interesting and eye-opening piece that touches the issues that we have been discussing of the role of colleges and the funding situation that you refer to in your briefing. I hope that she will not mind my quoting the article, which says:

“The potential of the Scottish college sector is often misunderstood, undervalued and, as a result ... suffers from underinvestment. ... it’s vital that”

we understand

“colleges for what they are: a cornerstone in the country’s future prosperity.”

I think that that nicely sums up our conversation this morning. I presume that you agree with everything that Audrey Cumberford has said.

Shona Struthers actually used the word “dire” in her editorial, which I think perhaps sums up the situation better.

Okay. Would there be any reason why it would not? I am not picking on it—it is just that it has been flagged as the only council in Scotland that does not participate.

I have two slightly random questions. With the advancement of the ability to read and calculate data using artificial intelligence, have you seen much of a move towards AI over the past five years?

We have often talked about that side of audit and the potential benefits of using AI to speed up processes and improve the quality of analysis—of course, we have also talked about the potential for effectively putting nice, well-paid auditors out of work. Are there any potential advantages to the further use of AI in the work that you do with regard to identifying large amounts of data from nearly 120 public bodies, all of which submit data in different forms and formats, using different technologies?

It is not always fraudulent activity that you flag up. For example, I presume that bodies that participate in the NFI submit data sets and your analysis flag up issues such as duplicate payments. The report says that around £750,000-worth of duplicate creditor payments were identified. Do you know how much of that was erroneous, or what number of payments were identified as duplicate matches of data but were actually valid? For example, as you say, you could buy a £2,000 laptop from a creditor and the next day do exactly the same thing again. That would perhaps be flagged as an erroneous payment and potential fraud, but it could be a valid payment made by a body. What work do you do thereafter to match or marry up the value in that data identification with what happened next or the follow-up activity?

That would be good—thank you.

I have two quick questions. Housing benefits and pensions are quite big pieces of work as part of the initiative. I perhaps did not understand some of the terminology, as there is a lot of jargon in the report. Talk me through what it means when we are told that the average individual value of overpayments for housing benefit rose from just over £2,000 to £6,500 in a short period. Is that to do with the value of payments or with the level of potential fraud?

I appreciate that, since 2018, there has been a marked shift from a bespoke housing benefit payment, for example, to universal credit, which has perhaps mopped up some of the more individual benefits. However, I could not quite get my head around the situation with housing benefit fraud, such as whether you have identified a rise or decline.

If fraudulent housing benefit claims are picked up through the work that you do, do you tell the DWP or the local authority about that?

Does Audit Scotland charge fees for that work?