Jane Williams Clerk, Public Accounts committee Room T3.60 Scottish Parliament Edinburgh EH99 1SP. 10 January Dear Jane
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1 Address: 110 George Street Edinburgh EH2 4LH Website: Telephone: Jane Williams Clerk, Public Accounts committee Room T3.60 Scottish Parliament Edinburgh EH99 1SP 10 January 2014 Dear Jane Following our evidence session at the Public Audit Committee on 4 December 2013, I am pleased to provide the information requested during the discussion of our report on Scotland's public sector workforce. I include details on: which bodies have increased their staff numbers the outstanding value of equal pay claims (broken down by council) the head count number reduction for the sectors included in the report the 12 organisations that have used compulsory redundancies. For all of this additional information, it is important to recognise that, given the focus and scope of our audit work, we are not in a position to provide explanations, or to provide the full context, for all individual bodies. For example, we have listed the 18 organisations identified in our work that increased staff numbers between 2009 and 2013 and there will be a number of reasons why organisations increase staff numbers. We did not explicitly ask for an explanation of the changes they reported to us, but we have included information on this where the organisations provided it. In relation to the query on the rise in administrative costs noted at Exhibit 7 in our report on Scotland's Colleges, this information was drawn from the college accounts for 2010/11 and 2011/12. Unfortunately, these accounts do not show a breakdown of this expenditure and so we are unable to identify what, specifically, has contributed to the increase in administrative costs. The project team has, however, prepared a short summary to explain what types of costs are included in this category, which may help with this query, and this is attached. I indicated at the meeting that we have asked the appointed auditors in local government to gather additional information about ALEOs, to provide a position statement and assess progress since the report was published, as part of the 2013/14 annual audit. The information will be collated during April/ May 2014 and we would be happy to provide the Committee with a private informal briefing on the early outcomes from the work after that. For information, our earlier report on ALEOS How Councils Work Arms Length External Organisations Are you getting it? can be found at Yours sincerely Fraser McKinlay Controller of Audit and Director, Performance Audit and Best Value
2 Scotland s Public Sector Workforce The bodies increasing workforces between 2009 and 2013 were: Central government bodies Increase (WTE) Increase as a per cent of 2009 workforce Notes Historic Scotland 17 2 No further information. Scottish Enterprise 23 3 No further information. Royal Botanic Gardens 6 3 No further information. Scottish Prison Service Further change predicted due to new prison projects. Scottish Legal Aid Board Increased staff numbers in the Public Defence Solicitor Service, Civil Legal Assistance Office and the Solicitors Contact Line. Scottish Qualifications No further information. Authority Highlands and Islands Airport Ltd TUPE transfer of security staff in Architecture Design 9 35 No further information. Scotland Scottish Social Services Council No further information. NHS boards Increase (WTE) Increase as a per cent of 2009 workforce Notes Special boards Scottish Ambulance 3 less than 0.5 per cent Service NHS Health Scotland 11 4 No further information. NHS Waiting Times Centre Board 58 4 Further increases expected due to expansion in ophthalmology and orthopaedics Healthcare Improvement Scotland Due to re-structuring NHS Delivering additional services. NHS Education for Scotland Responsibility for GP speciality training registrars was brought into NHS Education for Scotland Territorial boards NHS Lothian 78 less than 0.5 per cent NHS Shetland Hospitality services brought in house NHS Highland Due to changes in health and social care provision
3 The outstanding value of council's equal pay claims: How much councils paid out on equal pay claims in 2012/13? (,000) The value of equal pay provisions on balance sheets at 31 March 2013? ( 000) Aberdeen 70 2,440 No Aberdeenshire 0 4,936 No Angus 0 0 No Did councils include a contingent liability note for equal pay claims in 2012/13 accounts? 1 Argyll & Bute Yes Clackmannanshire Yes Dumfries & Galloway 0 7,985 Yes Dundee Yes East Ayrshire 0 Not disclosed Yes East Dunbartonshire 0 3,899 Yes East Lothian No East Renfrewshire 227 1,046 Yes Edinburgh 15,263 13,152 Yes Eilean Siar 0 0 Yes Falkirk 1,048 4,618 Yes Fife 0 4,486 Yes Glasgow Yes Highland Yes Inverclyde 1, No Midlothian 422 2,624 Yes Moray Yes North Ayrshire Yes North Lanarkshire 3,325 9,073 Yes Orkney 0 0 No Perth and Kinross Yes Renfrewshire 6,240 3,428 No Scottish Borders No Shetland 0 0 Yes South Ayrshire 299 6,374 Yes South Lanarkshire 0 0 Yes Stirling 406 1,228 No West Dunbartonshire 1,319 3,360 Yes West Lothian Yes 1 Contingent liabilities are possible obligations which will only be confirmed by future events not wholly in the control of the council. This includes circumstances where it is not probable an outflow of resources will be required, or the amount cannot be measured reliably. For equal pay this is mainly due to uncertainty regarding future tribunal outcomes and possible further claims. They are additional to equal pay provisions.
4 TOTAL 32,148 73,155 Changes in workforces between : headcount and WTE Our audit on Scotland's public sector workforce did not include those employed in the police and fire service, and in colleges, as these services were subject to major reform at the time of our audit. The public sector workforce report states that councils, the NHS, the Scottish Government and other central government bodies reduced their workforces by 26,600 whole time equivalent staff between 2009 and The equivalent figures in terms of headcount (number of people employed) is 27,400 over the same period. 2 The 12 councils that have used compulsory redundancy between 2009 and 2013 are: Our audit identified that 12 of the 32 councils in Scotland used compulsory redundancy between 2009 and Councils using compulsory redundancy used it in conjunction with a range of other workforce management approaches. We did not collect information on why councils had used this option or how many staff had left through compulsory redundancy. Councils Aberdeenshire Argyll and Bute East Lothian City of Edinburgh Fife Council Highland Council The Moray Council North Lanarkshire Council Orkney Islands Council Perth and Kinross Council Shetland Islands Council Comhairle nan Eilean Siar 2 Source:
5 Scotland s Colleges 2013 Colleges' expenditure in and Expenditure category Examples of constituent costs Known and possible reasons for variance in spend between 2010/11 and 2011/12 Recurring staff costs Salaries and other staff costs of teaching, management and administration staff. 2011/12 expenditure comprises: * salaries and wages million * social security costs 26.3 million * pension costs 46.0 million. Reduction in full time equivalent staff of 1,200. As Exhibit 8 of our report demonstrates, teaching staff numbers reduced the most. Teaching activities Accounts do not contain a more detailed breakdown but costs will include text books, classroom materials and other equipment directly related to education provision. Administration Accounts do not contain a more detailed breakdown but costs will include office supplies and equipment, noncapitalised IT equipment, software licences, photocopying, payroll and personnel services etc. Premises Accounts do not contain a more detailed breakdown but costs will include energy and heating costs, buildings maintenance, rent and rates etc. Depreciation Depreciation and impairment charges associated with property, plant and equipment. No obvious explanation but small reduction in FTE student numbers may have played a part. No obvious explanation although rate of inflation of some cost categories may have been higher than GDP deflators used to calculate real term costs. Reduction in expenditure likely to have been influenced by rationalisation of college estate offset by cost increases higher than the GDP deflator, especially in relation to energy costs. Reduction is largely due to exceptional depreciation charge of 44.8 million at the City of Glasgow College in 2010/11
6 Expenditure category Examples of constituent costs Known and possible reasons for variance in spend between 2010/11 and 2011/12 Other Costs (incl. exceptional costs) Interest payable on borrowings, overdrafts etc. Reduction in expenditure likely to have been influenced by lower borrowing costs, less borrowing, fall in use of overdrafts etc Other Residencies - operating expenditure, other than staff costs and premises costs, associated with catering and residential services Other expenditure - costs not attributed to other headings (Accounts do not contain a more detailed breakdown but costs will include agency costs, expenses associated with other income generating activities, merger costs etc). No obvious explanation although variation in expenditure is not great. Most of the increase in expenditure can be attributed to the City of Glasgow ( 1.0 million), Banff and Buchan ( 1.2 million) and Barony Colleges ( 0.7 million). Contributing cost increases include the provision of childcare facilities for students, spend on furnishings and fixtures and farming activities at Barony College Exceptional costs - staff severance payments. Reduction in expenditure likely to be associated with the number of severance packages in 2011/12 and the circumstances of the individual staff member leaving i.e. salary, number of years service etc Exceptional costs - loss on asset revaluations, loss on asset sales etc. Increase is largely due to Forth Valley College 3.4 million write down of non-capital costs (paragraph 13 of our report), Kilmarnock College 1.0 million new build campus and asset write down costs, and Telford College 1.7 million exceptional provision in relation to a student accommodation contract Total costs
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