Scottish Commission for Public Audit, 16 Sep 2009

Meeting date: Wednesday, September 16, 2009

Official Report 138KB pdf

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Audit Scotland Autumn Budget Revision 2009-10

Agenda item 2 is Audit Scotland's proposal for the 2009-10 autumn budget revision. I welcome back the Audit Scotland team, and I invite Mr Black to make a further opening statement.

I like to think that the document speaks for itself, so I will be brief. We have not made any new bids this year. All the money that we requested is for continuing with projects that have been approved in previous years. We have revisited those bids, and we have reduced them where possible. The proposal this year is for end-year flexibility of £500,000. Last year's bid was for £2.5 million, including the £1 million that was rebated back to clients. I like to think that we are performing against our commitment to get that sum down as quickly as possible. Inevitably, there are a few items for which we require EYF to continue into the next year; those are detailed on pages 2 and 3 of the document before you.

I will start by exploring the information that you have given us regarding best-value development. You will understand that I look at these matters from a rather rudimentary perspective. I can well understand why you would want to use EYF for the work that needs to be done on the lifts, for example. That is the equivalent to work that might need to be done on the roof at home—we do not always anticipate such things, which tend to be one-off, larger capital costs. Could you say a bit more about the best-value development work? Why are there additional costs there, which might not be incorporated in your day-to-day work?

We have spoken about some of these issues in the past, when we were making the original EYF bids. It is not possible for Audit Scotland to carry balances over financial years. Therefore, we have an extremely restricted financial regime within which to operate. From time to time, developments need to take place that require funding. The only alternative would have been an adjustment to the level of fees that we charge on audited bodies. A short-term peak in development activity had to be funded somewhere. The easiest and most convenient way to do that by far was to use end-year flexibility. We have been most grateful to the commission for agreeing to that in the past, and we now have a commitment to continue with that.

In last year's autumn budget revision, we explained that we intended to appoint additional staff for a short period to help us do the work, and that we thought that the total cost in 2009-10 and 2010-11 might be about £482,000. We are now able to reduce that sum by almost £100,000 to £385,000. During 2009-10, we have started the pathfinder audits in five councils, as we described earlier in relation to the annual report. The extra staffing resource is helping us with that. We have been developing shared risk assessments with other scrutiny bodies and all Scottish councils and supporting a joint scrutiny forum. By far and away the most efficient way to do that is to continue with EYF, albeit at a lower level than that which the commission agreed might be appropriate last year.

I want to follow up the point that was made about the lifts at 18 George Street. Do you have exclusive use of 18 George Street?

No.

Are other tenants paying a part of the costs?

Yes.

Why is the landlord not meeting the cost of such a substantial capital investment?

That is tied into the nature of the lease. We have a standard long-term lease, which means that we and the other tenants have to meet the repair costs.

Have you explored moving away from Edinburgh city centre, which clearly has premium rental rates?

We have explored that many times.

Yes. When Audit Scotland was created, we looked at that possibility. However, we had to get up and working in a short period of time and we were tied into leases that we could not break terribly easily. The problem is that, being a public sector organisation, we could not afford—the public purse could not afford—to bear the penalty of breaking leases early. When we come back to the SCPA in the autumn with our budget requirements for the following year, we will be able to explain to you more fully what we have in mind to review and rationalise our accommodation costs over the next few years, as the leases run out.

When does your lease at 18 George Street expire?

In 2014.

Because of the nature of Audit Scotland, you are not part of the Scottish Government's investigations into relocation.

That is correct, formally.

We have discussed the fees strategy in previous years. Will an updated fees strategy be produced alongside the 2010-11 budget proposal in due course?

Yes.

Okay. Thank you very much. That was a rather brief return for the Audit Scotland team. I appreciate your time and co-operation, and your illuminating answers.

Meeting closed at 11:38.