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Where would the third sector fit in with those shared services? We took evidence from the Health and Social Care Alliance Scotland last week, and it said that it fears that additional costs would be incurred in order to meet information standards and data sharing requirements and to update software and undertake training. While noting that those costs might be modest relative to the overall scale of costs, the alliance stressed that it would be significant for individual providers and could affect the viability of third sector organisations, so there is concern that that could be an unintended consequence.

Indeed. I now open up the meeting to questions from colleagues around the table.

I call Douglas Lumsden.

Okay—thank you. Do you wish to make any final points before we wind up?

Indeed. The independent review said that there was a huge level of consensus that a national care service was required to achieve consistency and quality. However, the Fraser of Allander Institute has said that the new system that is being developed is unlikely to be any better unless it is funded to be better.

There are real issues about the overall funding of the Scottish Parliament; we know what pressures we are under. Last week, we saw the Deputy First Minister reprofile some £70 million with regard to the policy. How likely is it that we will see the positive changes that you want? Can they happen without investing the sums of money that are required or without impacting on other services?

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.