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Scottish Parliament

Review of SPCB Supported Bodies Committee

Tuesday 24 March 2009

[THE CONVENER opened the meeting in private at 10:31]

12:04

Meeting continued in public.

Review of SPCB-supported Bodies

The Convener (Trish Godman): I welcome the witnesses, who are John Swinney, the Cabinet Secretary for Finance and Sustainable Growth; Tom Harvie-Clark, who is the head of the Scottish Government's water industry branch; and Gordon Kilpatrick, who is the head of the sponsorship and review branch in the Scottish Government's offender management strategy division. I thank John Swinney for coming to give further evidence to the committee. Before we move to questions, would you like to make a brief statement, cabinet secretary?

The Cabinet Secretary for Finance and Sustainable Growth (John Swinney): I am pleased to be here again with the committee. With your permission, convener, I would like to make a brief opening statement.

The Government's interest in the review of bodies that are supported by the Scottish Parliamentary Corporate Body focuses predominantly on the handling of complaints. A significant amount of work was undertaken through the Crerar review and the fit-for-purpose complaints system action group, which was chaired by Douglas Sinclair. The output of Douglas Sinclair's action group identified the way forward—correctly, in my view—as being to expand the role of the Scottish Public Services Ombudsman to lead the way in developing effective and efficient complaints-handling systems, thereby simplifying the experience for the complainant and ensuring that public bodies can best learn from the errors that they make. The focus that Douglas Sinclair's action group brought to the issue was particularly helpful.

The intermediary roles that are at present played by the Scottish Prisons Complaints Commission and Waterwatch Scotland are the focus of the Government's proposals. The proposal to transfer their functions to the Scottish Public Services

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Ombudsman and Consumer Focus Scotland is a sensible rationalisation that accords with Professor Crerar's view that bodies that have similar roles and responsibilities should, wherever possible, be brought together to make them easier to understand and access. The proposals for the prisons and water complaints systems accord with those principles.

The SPCB proposals, which the committee discussed again with Mr McCabe a couple of weeks ago, are the other major element that the committee is considering. I notice, from the discussions on the proposals, that Mr McCabe advanced a change, in that he argued for the creation of a single standards body that would cover several bodies that currently report to the Government. It might be helpful if I tell the committee that the Government is broadly supportive of such a move and that I would be content for my officials to work closely with the committee on how such a proposal might be progressed. I also noticed from the committee's discussions that the argument was advanced that it would be advantageous for the bodies that currently report to the Government to report to the Parliament rather than to ministers. The Government thinks that that change would be sensible and is happy to support it.

As I have said previously, the committee is on the receiving end of a significant amount of evidence that has been gathered through the inquiry that the Finance Committee in the previous session of Parliament undertook, the Crerar review and the Sinclair report. I hope that we can, in the light of the available evidence, move co-operatively to create a more efficient complaints-handling system for the benefit of members of the public in Scotland.

The Convener: Which of the Scottish Prisons Complaints Commission's current functions is it proposed will be transferred to the Scottish Public Services Ombudsman and what will happen to the remainder? Not all the functions will be transferred.

John Swinney: We propose that all the functions that are currently exercised by the Scottish Prisons Complaints Commission be transferred to the Scottish Public Services Ombudsman. The element that is perhaps a grey area relates to complaints about disciplinary decisions that are taken in the Scottish Prison Service. Such complaints are currently not considered by the prisons complaints commissioner, so we do not propose to transfer that area of activity to the SPSO. Instead, those complaints will remain the responsibility of the Scottish Prison Service and ministers. However, in every other respect, we consider that the functions that are exercised by the SPCC are transferable to the SPSO.

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The Convener: The advantages that the Sinclair report argues would arise from transferring the commissioner's functions to the ombudsman are to do with responsiveness and consumer experience. Given that the ombudsman's turnaround times show that 31 per cent of investigations were completed within 12 months and that the latest customer satisfaction rating showed that there were more dissatisfied customers than satisfied ones, is the Government aware of any other advantages that would justify the transfer?

John Swinney: I will make two points. First, if members of the public are dissatisfied with their experience of the ombudsman's service and are concerned about the turnaround timescale, that must be tackled as a whole and not just for the sake of the folk who interact with the SPSO. That position cannot be satisfactory or acceptable to any of us. My general conclusion is that if the level of performance is not desirable, it needs to be tackled and improved.

My second point is that that should not distract us from improving how we handle complaints in general in the system. Just because the current performance of the SPSO is poor, that should not mean that we should not attempt to rationalise the handling of complaints and to develop a proper, efficient and clear system while we tackle concerns about performance. I make the general point that the argument for undertaking the review is that it will help to simplify the system, to reduce the number of bodies and to address the confusion that exists about where to take particular complaints.

Johann Lamont (Glasgow Pollok) (Lab): You need, however, to have a view on why levels of dissatisfaction are where they are. If it is not to do with the personnel—I contend that it is not—and you do not have an explanation for why there is a problem, then adding to the SPSO becomes a challenge. You cannot just say that it would be good if the situation was better—we all want complaints to be handled properly. Is there something structural about bodies that deal with complaints that leads to that level of dissatisfaction? If that is the case, is it wise to add to the SPSO other bits of complaint handling?

John Swinney: Clearly, we could look at the matter both ways. We could say that we should, given that there is dissatisfaction with the SPSO, take away from it the handling of a range of complaints about different policy areas, but that would undermine the fundamental instinct that drove Parliament to establish the SPSO, which was the desire to draw together a number of diverse and disparate complaints-handling functions. I am simply arguing for a continuation of Parliament's view when it founded the SPSO,

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which was that we should have a more integrated structure of complaints handling through the SPSO.

Johann Lamont's other point was about whether I have an opinion on why there is a high level of dissatisfaction with the SPSO. I can offer an observation, although it is not a body that I supervise or scrutinise. I imagine that an element of the dissatisfaction with the SPSO is to do with the fact that some people will not have obtained the remedies that they wished to obtain, which is a general problem with complaints handling. I quite understand that feeling—I deal with constituents who go through that experience.

Another category of people might not have had a good experience when they went to the SPSO in that their cases might not have been examined in the fashion that they expected. Frankly, such issues are the responsibility of the SPSO, who has a duty to Parliament to ensure that we have an effective complaints-handling system. We get into difficult territory—in my view, it is the wrong territory to get into—if we confuse poor performance by the ombudsman with whether, in principle, the ombudsman is the body that is best placed to carry out an integrated complaints-handling function. That was certainly my impression of Parliament's motivation when it established the SPSO in the first place.

Jamie Hepburn (Central Scotland) (SNP): I want to explore the transfer of functions from the Scottish Prisons Complaints Commission. I understand that the Government's response to the action group reports suggests that responsibility for investigating clinical prison complaints should be transferred. Will you set out your current thinking on the issue? Are you recommending that that responsibility be transferred to the SPSO or to NHS Scotland?

12:15

John Swinney: That is an issue on which the Government has not yet come to a final view. We are consulting on which option would be preferable. The argument in favour of that function going to the SPSO is that it would integrate another element of complaints handling into that body. The argument for that responsibility going to NHS Scotland is that the national health service might have greater technical and clinical expertise in handling clinical complaints. The SPSO handles NHS patients' general complaints about the NHS, so there is obviously a level of expertise within the organisation that means that it should be equipped to handle such issues. I am keen to draw our deliberations on the matter to a close shortly.

The Convener: Our officials have been advised that no legislation is required to transfer the

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functions of the Prisons Complaints Commission to the ombudsman. Why not simply make the necessary arrangements?

John Swinney: That is correct, but the prisons situation is at odds with a number of other types of complaint that have statutory foundations. Police complaints, social work complaints, housing complaints and health complaints all have a statutory basis, which means that prisoner complaints are the odd ones out. Our giving them a statutory basis will give us the opportunity to ensure that all such complaints are handled equally.

The Convener: In oral evidence, we were warned that the transfer would require that the ombudsman be given access to "top-quality legal advice" and we were given other indications of heavy legal spending by the Scottish Prisons Complaints Commission. However, the subsequent written response to our question on that suggested that no legal expenses were incurred prior to the current year and that there would be spending of £30,000 this year. Will you confirm the position on the need for legal advice and whether the Scottish Government would meet those costs in the future, should a transfer of functions occur? There was a bit of dispute about whether that would happen.

John Swinney: The need for access to legal advice would depend entirely on the character and elements of each complaint. Exactly the same applies at present to the ombudsman, who may require legal advice in certain complex and difficult cases. If I recall correctly from my experience on the Finance Committee in the previous parliamentary session, there was always a great debate about what budget provision should be made for legal advice that was required by the ombudsman: should the SPCB allocation to the ombudsman contain an allowance for significant legal costs or should funding for such costs be considered when the circumstances arose? If my memory serves me right, the SPCB took the view that, when there was a need for sophisticated legal advice, it would consider the arguments in favour of that need and make financial allocations based on that judgment.

If a function that is being carried out by the Government is transferred to the SPSO, I would assume the same role as the SPCB assumes with the Scottish Public Services Ombudsman. If there is a requirement for sophisticated legal advice, the Government would consider that request and determine whether it should be supported. I am expressing that as helpfully as I can. I do not want to sign a blank cheque—you would not expect me to. However, it is reasonable to propose that if a function is being transferred by the Government—where the Government carries the financial

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responsibility—to the SPSO, we would consider the requirement for legal advice when that arose.

The Convener: I refer back to the question that Jamie Hepburn asked. You will appreciate that the committee is reaching the point at which we will consider our report. We need to make a recommendation. Do you have any idea when you will consider transferring responsibility for the clinical prison complaints to the ombudsman or the NHS?

John Swinney: I cannot give you a specific date, but I will be happy to explore the timescale and notify the committee in writing.

The Convener: That would be helpful.

I am sure that every member has read Waterwatch Scotland's submission to the Sinclair report. Given that Waterwatch was not consulted prior to the Sinclair recommendations being made, why do you consider that a transfer of Waterwatch's functions is in the best interests of the consumer?

John Swinney: There are two factors at work here. Waterwatch has two responsibilities: one is complaints handling and the other is promotion and protection of the consumer interest. You can argue it any way you want, but the current situation essentially draws together the complaints-handling function and consumer interest protection in one organisation. In trying to reduce the number of bodies, we are trying as far as possible to put all the complaints-handling issues into the same organisation. When members of the public are dissatisfied with something that has happened to them, their first port of call, which will be able to deal with the overwhelming majority of such concerns, will be the Scottish Public Services Ombudsman. That function and role mean that the SPSO can be promoted and marketed as the place to go when one has a complaint.

Other organisations in Scotland are involved in promotion of the consumer interest. Consumer Focus Scotland is very much at the core of that activity.

The arguments for doing what the Government proposes—and what the Sinclair group recommended—are about simplifying access to the complaints system and making it as easy as possible for members of the public to go to one place where they make their complaints and they are dealt with, rather than their having to think, "If it's health, I'll go to the SPSO and if it's water, I'll go to Waterwatch." If we want people to exercise their rights properly, we have to ensure that the ombudsman in Scotland is promoted properly, so that folk know that the ombudsman exists to deal with their concerns, and we must ensure that Waterwatch is promoted, so that members of the

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public know that if they have a water complaint, they can go to Waterwatch. That leads to duplication at a time when the Government is keen to simplify the approach.

The Convener: Waterwatch investigates complaints against all water providers in Scotland, a number of which are private companies. We believe that legislating to transfer Waterwatch's functions would not be completely possible. We understand that about 36 per cent of the complaints are about private companies. By whom would future complaints be handled?

John Swinney: I envisage such complaints being handled by the SPSO.

The Convener: By the SPSO?

John Swinney: Yes.

The Convener: Are you talking about complaints about the private companies, too?

John Swinney: Waterwatch currently undertakes some of that responsibility. Essentially, we are transferring the Waterwatch functions to the SPSO and giving it an integrated complaints-handling function.

The Convener: I have been told that that is not legislatively possible.

John Swinney: It would be perfectly possible for complaints about, for example, Business Stream—which is a Scottish Water subsidiary—to be handled through that mechanism. We will explore the details of the process to determine whether there is a problem.

The Convener: We might need to explore the issue further and perhaps clarify it in correspondence.

Jamie Hepburn: The cabinet secretary will be aware that Waterwatch's role is wider than the investigation of specific individual complaints. It acts as an advocate for consumers and can undertake more systemic investigations, which the ombudsman currently cannot. How would those functions remain?

John Swinney: It comes back to the fundamental point about Waterwatch having two distinct areas of activity. One is complaints handling and the other is the promotion and protection of the consumer interest, which takes it into the sphere, to which Mr Hepburn referred, of carrying out inquiries into performance in a particular area. That area of activity is entirely within the sphere, the outlook and the perspective of Consumer Focus Scotland, which will be able to look at the matter from what is essentially a specialist consumer perspective to see what the experience is in a number of different sectors and ensure that people's general concerns about the performance of the water industry are articulated and considered.

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Jamie Hepburn: I have another question on the funding of Waterwatch's functions. I understand that it is funded by what is termed an industry levy. I think that the SPCB has some difficulties with the concept of taking on that responsibility. Do you have sympathy with its view? If so, how do you propose future costs will be met?

I have a wider question. I am not sure that members of the general public would identify the funding mechanism as being an industry levy—for example, my understanding is that the vast majority of the funding comes through Scottish Water, so in essence it comes through water rates. Do you accept that it is an industry levy?

John Swinney: I do not consider that it is an industry levy: it is paid for predominantly by Scottish Water, so although the Government obviously makes a contribution to Scottish Water, the funds will predominantly come through water charges that are levied on householders and businesses. The cost will emerge in the costs of Scottish Water, so it is essentially a consumer cost.

On the position of the SPCB and the concern that it will be left with financial liability, I am obviously anxious to avoid that, in whatever legislative arrangement we put in place. If the industry is currently paying for the vehicle—Waterwatch—that should be how the situation remains. There should be no increase in the SPCB's financial liability or in the costs to the SPCB. We can consider the best arrangement for doing that: should the payment be made direct from Scottish Water to the SPSO without going anywhere near the corporate body, or should it go via the corporate body to be passed on? Obviously, the most administratively straightforward approach would be best, in the circumstances.

12:30

Ross Finnie (West of Scotland) (LD): You will understand, cabinet secretary, that what has been said does not immediately lend itself to a belief that there will be administrative simplification. If it is simpler and better to have an industry levy—perhaps we should be a little clearer about how the money is sourced—the levy holder will be rather anxious to know, bearing in mind the accountability to them, that Waterwatch Scotland will be retained as a discrete entity for the purposes of its accounting functions. If there is a merger and Waterwatch Scotland becomes part of the SPSO, it is not easy to see how that will be achieved when there is the need to be able to tell the levy holder the purpose for which expenditure has been used.

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John Swinney: We can take the view that that issue cannot possibly be overcome because if we decide to take that route we cannot attribute costs to water complaints in our accounting structures in the SPSO, but that would ignore a range of different elements that enable costs to be attributed in the fee-charging and accountancy structures with which we are all familiar in our modern society. If we did not go down that route, we would inevitably end up with separate and distinct bodies and accounting units. That would not reflect practice in today's society.

Ross Finnie: I was really making a suggestion the other way round. It seems to me that our present accounting systems can properly attribute costs but that some functions will have to be merged if there are to be any savings from bringing all the bodies together. It has been recommended that a large number of people should be brought into the SPSO. Some of the bodies are not very big in an administrative sense, but the case in question is rather unusual in that fees are levied and what happens must therefore be accounted for. Indeed, the issue of the 36 per cent of complaints to the public sector about private companies and the levy remains unresolved. I think that there would be unnecessary complications.

John Swinney: We can look at the matter either way: there could be unnecessary complication or we could miss an opportunity to rationalise the complaints-handling infrastructure in Scotland.

I return to my earlier point that we focus on the outcome to which every citizen is entitled. Every citizen should be reasonably aware of where to go if they have a complaint. If we are to fulfil our duty in that respect, we will end up having promotional campaigns for the Scottish Public Services Ombudsman and Waterwatch Scotland so that everyone is aware of where to take a complaint, but that would miss an opportunity to make efficiencies by promoting the SPSO to members of the public as the place to go with the overwhelming majority of complaints.

When people phoned the SPSO service, it could say, "What is your complaint about? Is it about housing, health or water?" The person could say what the complaint was and be put through to the right person or fill in material in the right fashion. There is an opportunity to generate efficiencies, and we should be able to account for those efficiencies in a relatively straightforward fashion and ensure that the costs are properly attributed to the different parts of the public sector. Surely we have an interest in trying to reduce the costs that are associated with that activity if we can do so without diminishing the effectiveness of the complaints-handling process.

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The Convener: I would like to clarify something. The levy covers both the consumer protection and complaints aspects of Waterwatch. How will you split up those aspects? Let me say as an aside that a water bill tells a person about Waterwatch. I suppose that that could be removed, but what you have said is slightly confusing me. How will the consumer protection and complaints aspects be split?

John Swinney: Quite easily, because they are two completely different things. The complaints function involves the handling of complaints about the quality or effectiveness of service, whereas the consumer protection function involves ensuring that water companies and the water industry act in the spirit of the public interest. Those are two fundamentally distinct elements of the process, and I do not see the great insurmountable difficulty in distinguishing between the two.

Johann Lamont: Has there been consultation with consumer watch about its taking over the role?

Tom Harvie-Clark (Scottish Government Climate Change and Water Industry Directorate): Do you mean Consumer Focus Scotland?

Johann Lamont: Yes.

Tom Harvie-Clark: Yes. We have had informal discussions.

Johann Lamont: Is it happy?

Tom Harvie-Clark: Yes. It is keen to do it.

The Convener: It is happy to take over the role.

Tom Harvie-Clark: Yes.

The Convener: The Sinclair report recommended that Waterwatch Scotland's investigatory function should be transferred to the SPSO. Given that Waterwatch's turnaround times and customer satisfaction rates are significantly better than those of the SPSO, how will the proposed transfer improve customer service? I refer to my earlier question about the dissatisfaction with the SPSO's turnaround times.

John Swinney: The purpose of the Government's proposal is to encourage the effective and efficient handling of complaints, not to deliver a diminished customer service to individuals. I return to an answer that I gave earlier: if there is concern about the performance of the Scottish Public Services Ombudsman, we need to get it into a better state of affairs. The fact that it is not performing effectively should not restrict other policy and structural choices that we might want to make, such as the combining of various functions to improve customer awareness and wider efficiency in the public sector.

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The Convener: You accepted the justification for transferring Waterwatch, but you decided not to recommend the transfer of police complaints because, as the Sinclair report expressly comments, the police complaints commissioner for Scotland is a recent creation. Given that Waterwatch went live in April 2006 and the police complaints commissioner for Scotland went live in April 2007, can you explain what principle Sinclair adopted for determining whether a body should be transferred to the SPSO?

John Swinney: The reasoning of the Sinclair group is the reasoning of the Sinclair group—it is not our reasoning. My view is that the introduction of independent police complaints handling involved not only the creation of a new organisation but a new element of our processes as a country, and we arrived at the judgment that we must ensure that the approach can find its feet and operate effectively. The approach is a new one for everyone, including members of the public, the police and the public authorities, and we judged that it is too early in the process to change things.

That does not mean that the switch could not be made at some point in the future, but police complaints have not been handled independently before and, bearing in mind the significance of the debate on the concept of introducing independent police complaints handling—it is a long-standing issue that has been debated for a long time—our judgment was that now is not the time to change the arrangements.

Jamie Hepburn: This question relates to an earlier one. Can you indicate what evidence was available that justified the fit-for-purpose action group to recommend that the SPSO should lead on a range of functions and be given responsibilities to co-ordinate training and issue guidance, given that its performance on turnaround times and customer satisfaction is inferior to that of other groups?

John Swinney: Again, I cannot speak for all the reasoning behind the Sinclair group's recommendations, but I imagine that the reasoning was based on the fact that Parliament set up the SPSO as an organisation to be at the core of complaints handling in Scotland. The Sinclair group would have made the fair assumption that there is an opportunity to ensure that the ombudsman is at the core of ensuring that quality advice and expertise is available across the board.

Ultimately, we come back to the point that I have made a number of times in response to the convener's questions, which is that we have an issue to tackle if the ombudsman service is not operating to a greater degree of satisfaction,

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because members of the public are entitled to better quality than it appears they are getting.

The Convener: It has been suggested that implementing the Sinclair recommendations will involve substantial resources. One recent estimate for the website to meet the recommendation to establish a cross-sectoral network of complaints handlers and a website to allow complaints handlers to share best practice in complaints handling was of start-up costs of £1.5 million and annual running costs of £500,000. Do you have an estimate of the costs to implement all the recommendations affecting the ombudsman? Will the Government commit to meet the costs in full given that the website seems much more expensive than mine?

John Swinney: And mine, convener. I cannot imagine what £1.5 million would be spent on, but there we are. I do not know much about it, but it seems to me an extraordinary cost.

You cited costs that were included in the Sinclair recommendations, but they are essentially a gross figure because they do not take into account savings made by rationalising the complaints-handling functions. In my experience, we need to interrogate the costs clearly and carefully and to pressurise people to ensure that they think properly about all the issues because some costs of changes do not materialise once the initial projections are properly interrogated. I would certainly want to ensure that we properly interrogated all the numbers in any change to ensure that the costs were appropriate and justified.

The Convener: Do you have any views on whether the recommendations of the Finance Committee report in 2006 on governance and accountability should be fully implemented?

John Swinney: I am very familiar with that report because at that time I was a member of the Finance Committee, which took a lot of evidence on the whole landscape. I thought that the report was well reasoned and recommended a number of important approaches to take on governance and accountability. If memory serves me right, the committee unanimously accepted the report—in fact, I think that there was some dissent from Mark Ballard, one of our former Green colleagues—and there is a lot of good substance in it. Of course, many issues are not for the Government but more for Parliament in considering how it interacts with the ombudsman and other bodies.

12:45

The Convener: Do you think that commissions have benefits when compared with individual commissioners?

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John Swinney: We must focus on the outcome of the process. None of us wants there to be any diminution in the ability of individuals or our society to feel the benefit of the independent scrutiny that can be undertaken through the various channels of inquiry. However, as the Finance Committee reported in 2006, there are opportunities for a great deal more common working and to generate efficiencies within the process. I would be keen for that agenda to be pursued without diminishing the extent to which individuals in our society are supported by the relevant bodies or the ability of those bodies to articulate fully the views of those individuals.

Jamie Hepburn: One proposal that the SPCB placed before us was the amalgamation of the functions of the children's commissioner and the Scottish Human Rights Commission into a new rights body. Do you have any thoughts on that proposal, particularly with regard to its possible effect on the functions of those offices?

John Swinney: As I said to the convener, none of us wants any diminution of the ability of groups and individuals in our society to benefit from the work of relevant commissioners or appointees, but there is scope for us to generate efficiencies in the way that that work is done. Essentially the purpose of the inquiry is to determine whether and how that can be undertaken, which is properly a matter for the Parliament, not ministers.

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Jamie Hepburn: We are aware that the Government is examining the landscape around the bodies that it has responsibility for. Can you update us on the proposed timing of the forthcoming public services reform bill and give any further indication of what it might contain?

John Swinney: The bill will be introduced to Parliament in late May. It was delayed from February in order to take account of the inclusion of the provisions on creative Scotland. It will deal with the simplification programme, the establishment of creative Scotland and a range of associated issues.

The Convener: We have no further questions, so I thank you for your attendance, cabinet secretary. If there are any matters that we would like to clarify once we have read the Official Report, we will write to you.

12:49

Meeting continued in private until 13:09.