PA/S3/11/2/A PUBLIC AUDIT COMMITTEE AGENDA 2Nd

Home , Highland games, Homecoming Scotland 2009, Tartan, The Gathering 2009

PA/S3/11/2/A

PUBLIC AUDIT COMMITTEE

AGENDA

2nd Meeting, 2011 (Session 3)

Wednesday 26 January 2011

The Committee will meet at 10.00 am in Committee Room 5.

1. Section 23 report - Review of orthopaedic services: The Committee will consider a formal response from the Cabinet Secretary for Health and Wellbeing to the Committee's report entitled "Review of orthopaedic services".

2. Section 23 Report - The Gathering 2009 (in private): The Committee will consider its approach to written evidence and a draft report on the Auditor General for Scotland's Report entitled "The Gathering 2009".

Jane Williams Clerk to the Public Audit Committee Room T3.60 The Scottish Parliament Edinburgh Tel: 0131 348 5390 Email: [email protected] PA/S3/11/2/A

The papers for this meeting are as follows—

Agenda item 1

Note from the Clerk including Scottish Government response PA/S3/11/2/1

Agenda item 2

PRIVATE PAPER PA/S3/11/2/2 (P)

The Gathering 2009 - written evidence PA/S3/11/2/3

PRIVATE PAPER PA/S3/11/2/4 (P)

PA/S3/11/2/1

PUBLIC AUDIT COMMITTEE

2nd Meeting 2011 (Session 3), 26 January 2011

Review of orthopaedic services – Scottish Government response

Cover Note from the Clerk

Background

1. On 16 November 2010, the Public Audit Committee published the report on its inquiry entitled Review of orthopaedic services. This inquiry followed an Auditor General for Scotland (AGS) section 23 report of the same name, which was published in March 2010.

2. Attached to this paper, as Annexe A, is the formal response to the Committee’s report by Nicola Sturgeon MSP, the Deputy First Minister and the Cabinet Secretary for Health and Wellbeing.

3. The purpose of this paper is to assist members to consider whether to take any further action in light of the response and to invite the Committee to consider whether it wishes to receive an update on any aspect of the response as part of any “progress reports” from the Scottish Government.

4. As the next “progress report” is due in Session 4, the Committee may wish to consider including any agreed update request in its legacy paper.

The Response

5. The Scottish Government’s response has been summarised below. The full text of the Scottish Government’s response is contained in Annexe A.

Trends in investment and activity in orthopaedic services 6. In its response the Scottish Government comments that the 12% increase in orthopaedic activity quoted in the Audit Scotland report groups together outpatient, day case and inpatient activity. This results in undue emphasis being placed on the less expensive outpatient activity and gives equal weight to an outpatient visit costing £100 and complex inpatient activity costing thousands of pounds. The Scottish Government have asked Audit Scotland to consider this when developing future studies of this kind.

7. In response to Committee recommendations relating to benchmarking and comparing productivity and activity with other NHS Boards, the Scottish Government highlights: • The Scottish Government’s Efficiency and Productivity Framework which supports NHS Boards to bench mark their performance; • The role ISD plays in making available a range of official statistics and analytical tools across a range of input, output and outcome indicators (including the costs book, workforce official statistics, New Ways the Navigator tool and national Tariff Benchmarking Tool);

PA/S3/11/2/1

• The statistics provided in the Scottish Arthroplasty Project Annual Report 2010; • the latest update of Better Quality Better Value (BQBV) Indicators which highlight any variation in current performance between NHS Boards and Hospital sites and identify potential productive opportunities; • the British Association of Day Surgery tool which enables NHS Boards to compare their activity and same day surgery performance on a range of procedures; • its work with ISD to develop a measure of the change in aggregate output of NHS Scotland in line with the Atkinson review – “Measurement of Government Output and Productivity for the National Accounts”.

8. The Scottish Government confirm that its revision to the Health Information Strategy will be published in spring 2011 after wider consultation with all users.

9. In relation to the Committee’s comments on how the Costs Book review will address data quality the Scottish Government explains: • That data quality is also being focussed on in the Efficiency and Productivity Programme (an ongoing programme with specific targets on a short and medium term basis); • the purpose of the Costs Book Manual Review Group and confirms that the outputs from the group were used in the collection of data for the 2009/10 Costs Book. A separate and longer term piece of work on community data within the Costs Book still has final timescales to be set.

10. In relation to meeting the new waiting time targets, the Scottish Government comments on the work of the Improvement and Support team and on Demand, Capacity, Activity and Queue management support to NHS Boards.

11. The Scottish Government confirms that the issue of monitoring the entire patient journey is being considered through the work to develop a health and care information strategy for Scotland, which is due to report in spring 2011.

Variation in orthopaedic activity across Scotland 12. In responding to the Committee’s concerns regarding variation in the orthopaedic activity across Scotland, the Scottish Government comments that: • A number of programmes and new approaches are being used which are further strengthened by the revised Efficiency and Productivity Framework; • In addition to a range of national data available to boards, the Scottish Government are also providing practical support to NHS Boards; • The work of the 18 Weeks Improvement Team has highlighted variation and areas of good practice for boards.

PA/S3/11/2/1

13. The Scottish Government comments on the use of Estimated Discharge Dates in hospitals in reducing the overall length of stay for patients and confirms that ISD will consider collecting length of stay data by procedure as part of its consultation on the future content and frequency on acute activity statistics.

Purchasing of surgical implants 14. The Scottish Government provides assurances that National Procurement are already supporting a number of Health Boards in understanding how best value can be realised from the surgical implant purchasing arrangements based on the NHS Greater Glasgow and Clyde’s experience of the mini procurement process and Board’s local requirements.

15. In addition, the Scottish Government explains that the NHS Efficiency and Productivity framework is being revised to apply to particular focus to high volume, high cost specialities including orthopaedics. This framework will be the locus for ensuring that wherever possible, progress which drives efficiencies is accelerated.

Use of the private sector 16. The Scottish Government confirms that it will develop quarterly management information on retrospective independent sector surgical activity and spend on key specialities. The first management information is planned for early 2011.

17. In relation to the Committee’s recommendations on utilising the Golden Jubilee, the Scottish Government explains that it has established a quarterly forum for Golden Jubilee and NHS Boards to promote the effective and efficient rise of capacity in NHSScotland. The Guidance for NHS Boards referrals to Golden Jubilee is being refreshed. The Scottish Government is also working with NHS Boards on the development of management information on forecasting surgical activity and spend in the independent sector which will support discussion between the Golden Jubilee and NHS Boards to optimise the effective and efficient use of capacity.

The role of other services 18. The Scottish Government comments on the role of rehabilitation co- ordinaters and explains how the effectiveness of these roles will be measured.

Progress Reports

19. At its meeting on 25 June 2008, the Committee agreed to request progress reports from the Scottish Government on key recommendations arising from all its reports twice per session (in Session 3 those dates were May 2008 and September 2010). The Committee also agreed that, on receipt of responses to its reports, the Committee would identify which recommendations, if any, it wished to see included in such progress reports.

PA/S3/11/2/1

20. Given the next Scottish Government progress report will be due in Session 4, the Committee may wish to consider and agree any issues it wishes to include in its legacy paper.

RECOMMENDATIONS

21. It is recommended that members:

A: Consider the attached response from the Scottish Government and indicate whether they wish to take any further action. Options: • Note the Scottish Government’s response; • Reply to the Cabinet Secretary’s response; • Invite the Accountable Officer to give oral evidence.

B: Consider and agree any issues to be included in the Committee legacy paper so that the Session 4 Public Audit Committee can consider whether to request an update on those issues in the next Scottish Government progress report.

PA/S3/11/2/1

Annexe A: The Scottish Government’s response to the Committee’s report

LETTER FROM NICOLA STURGEON MSP, THE DEPUTY FIRST MINISTER AND THE CABINET SECRETARY FOR HEALTH AND WELLBEING TO HUGH HENRY, CONVENOR OF THE PUBLIC AUDIT COMMITTEE, 11 JANUARY 2011.

Dear Hugh,

Public Audit Committee Report on the Review of Orthopaedic Services

I am writing to respond to the Public Audit Committee Report on the Review of Orthopaedic Services which was published on 16 November. I welcome the Auditor General for Scotland’s first report of its kind which focuses on the economy, effectiveness and efficiency of a particular clinical specialty within the NHS. As you are aware, we are taking action to address all its recommendations. These recommendations chime well with the principle of eliminating waste which is at the heart of our Efficiency and Productivity framework. The Efficiency and Productivity framework has supported NHS Boards to deliver significant savings.

We need to look behind the headline 12% increase in orthopaedic activity over the decade from 1999/2000 quoted in the Audit Scotland report. The 12% increase in orthopaedic activity statistic groups together outpatient, day case and inpatient activity. It takes account of volume, but does not take account of the differential cost of activity. This results in undue emphasis being placed on the less expensive outpatient activity. The methodology gives equal weight to an outpatient visit costing approximately £100 and complex inpatient activity costing thousands of pounds. We have asked Audit Scotland to consider this when developing future studies of this kind.

The Scottish Government has recently worked with ISD to develop an aggregate measure of the change in health service output which takes account of both the cost and volume of activity. This new method provides an output series from 2003/04. In 2004/05, the Scottish Government introduced challenging cash releasing efficiency savings for NHS Boards to allow reinvestment in frontline services. Since then, estimates derived from the improved measure show that increases in output have matched the 17% increase in real terms spend. We have also seen improved quality, including dramatically shorter waiting times, and mortality at 90 days after hip arthroplasty is now at its lowest level ever.

The Efficiency and Productivity framework has supported NHS Boards to exceed their efficiency targets year on year, through accelerated improvements in key areas, including the 80% same day surgery target, reducing the number of unnecessary return outpatient appointments, and reducing emergency length of stay across all acute specialities.

In addition, we are supporting NHS Boards to benchmark performance through the provision of data on a comprehensive range of efficiency and quality indicators. Many NHS Boards have also joined ‘benchmarking clubs’ which allow them to compare their performance, across a range of indicators, with other hospitals and NHS Trusts in the rest of the UK. This benchmarking information provides the starting point for improvement by highlighting potential areas of productive

PA/S3/11/2/1

opportunity. Clinicians and service managers meet with other hospitals; and explore the reasons behind differences in performance, agreeing and implementing service redesign where necessary. In considering this benchmarking information, managers and clinicians will be considering the geographic distribution of hospitals and the populations they serve, the design of their services, the skill-mix of the whole team, and the types of treatments they offer.

A large amount of activity, cost and quality outcome statistics are published by ISD which form part of the benchmarking information. However, we recognise (as highlighted in the Committee’s Report) that there is an ongoing challenge to improve the quality and relevance of these statistics. The current work to develop a health and care information strategy for Scotland will identify key areas in which we will want to accelerate progress, while recognising that we need to minimise bureaucracy and concentrate resources on the frontline.

We agree with the Committee and Audit Scotland that there are further efficiencies to be made, and the refreshed Efficiency and Productivity framework which is due to be published in February 2011 will set out how we will support NHS Boards going forward.

As the Committee is no doubt aware, we accept and are addressing all the recommendations in the Audit Scotland report and our response to the Public Audit Committee Report on the Review of orthopaedic services is set out below.

NICOLA STURGEON

PA/S3/11/2/1

Trends in investment and activity in orthopaedic services

28. The Committee notes that this AGS report was the first report to focus on the economy, effectiveness and efficiency of a particular clinical specialty within the NHS.

29. The Committee also acknowledges the Scottish Government’s commitment, given in oral evidence, to fully accept the challenge to implement meaningfully the recommendations of the AGS report within the shortest possible timescale.

30. The Committee was, however, disappointed to learn that issues with data collection meant that NHS Boards are not able to confidently compare their productivity and activity with other NHS Boards. The ability to accurately compare performance across NHS Boards is vital if boards are to be able to share best practice and to drive down costs whilst improving productivity and maintaining quality.

31. The Committee also felt increasingly frustrated that data collection at a national level is not consistent or robust enough to allow meaningful conclusions regarding productivity in orthopaedic services to be identified.

NHS Boards are continually developing their orthopaedic services to meet the needs of local populations. NHS Boards take account of the demand for different types of orthopaedic treatment and take decisions on the optimal way to meet this demand through the provision of local services, purchasing treatment from other NHS Boards, and as a last resort purchasing treatment from the independent sector when there are spikes in capacity or demand.

The geographic distribution of hospitals and the populations they serve, the history and design of their services, the skill-mix of the whole team, and the types of treatments they offer mean that it is difficult to draw conclusions about whether one NHS Board’s orthopaedic service is more productive than another NHS Board’s based on a single labour productivity calculation. At the PAC meeting on 8 September, John Connaghan set out the Scottish Government’s approach which was to use a range of indicators to compare performance across Boards and to tailor responses to increased productivity and efficiency accordingly.

The Scottish Government’s approach, as set out through the Efficiency & Productivity Framework, is to support NHS Boards to benchmark their performance; this provides a starting point for exploring potential efficiencies, and agreeing and implementing service redesign to improve both efficiency and quality.

Scottish Government and ISD make available a range of official statistics and analytical tools to allow NHS Boards to benchmark their services across a range of input, output and outcome indicators.

PA/S3/11/2/1

The Inpatient, day case and outpatients activity official statistics include:

• NHSScotland and NHS Board 10 year orthopaedic trend information on total outpatient attendances; new outpatients; Review to new ratio; and percentage Did Not Attend for new appointments. • NHSScotland and NHS Board 5 year orthopaedic trend information on number of day cases, elective inpatients, emergency inpatients and transfers. • NHSScotland and NHS Board 13 year orthopaedic trend information on number of hip and knee replacements. • NHSScotland and NHS Board by age and gender 5 year trend diagnosis statistics on diseases of the musculoskeletal system and connective tissue. • NHSScotland and NHS Board 3 year trend statistics on new and total attendances at Allied Health Professionals, including physiotherapists. • NHSScotland and NHS Board 6 year trend same day surgery statistics on 21 orthopaedic treatments.

The Scottish Arthroplasty Project Annual Report 2010 provides NHSScotland and NHS Board official statistics on the number of arthroplasties, patient demographics, laterality data, time of surgery and length of stay, orthopaedic complication rates, and anaesthetic complication rates.

ISD also publish the Costs Book which enables analysis of approximately 94% of the NHSScotland net operating costs, presenting information on the boards that provide hospital and community care directly to patients. For 2009/10, this reflects health care expenditure within the 14 health board areas and at two special boards, namely the State Hospital and Golden Jubilee National Hospital - amounting to £9.7 billion. The Costs Book has financial information from each board for hospital and primary care services. The primary care service is split into "community services" and "family health services". The range of services covered in each sector include:

• hospital services - ranging from complex surgery by consultants at large city hospitals to outpatient clinics at rural community hospitals • community services - home visits by district nurses, for example, or prevention services such as breast screening and health promotion • family health services - provided by the family doctor (GP) service and the "High Street" dentists, opticians and pharmacists

Hospital expenditure and related activity information is available in a series of reports on specialties including orthopedics outpatients, day cases and inpatients.

ISD publish a wide range of workforce official statistics, including

• NHSScotland and NHS Board 10 year trend statistics on the headcount and WTE consultants by speciality. • NHSScotland and NHS Board 10 year trend statistics on the consultant contract by speciality, including the numbers opted in and total programmed activities. • NHSScotland and NHS Board 4 year trend on the numbers of orthopaedic nurse specialists.

PA/S3/11/2/1

ISD publish New Ways waiting times which include official statistics on the waiting times experiences of elective outpatient, day case and inpatients.

The Scottish Government also produce analytical tools to support NHS Boards to improve productivity and efficiency.

The latest update of the Better Quality, Better Value (BQBV) Indicators consists of:

• Average length of stay (ALOS) for high volume specialties • Pre-operative bed days for surgical specialties • Outpatient Did Not Attend (DNA) rates for high volume specialties • Outpatient return to new ratios for high volume specialties • Daycase rates for surgical specialties

The purpose of BQBV is to highlight variation in current performance between NHS Boards and Hospital sites and identify the potential productive opportunities. These opportunities are calculated at hospital/specialty level only and summed to give NHS Board totals. High volume specialties included: Cardiology, Dermatology, Ear, Nose and Throat (ENT), Gastroenterology, General Medicine, General Surgery, Gynaecology, Ophthalmology, Rheumatology, Trauma and Orthopaedics, Urology. The potential productivity opportunities are estimated by calculating the savings that could be achieved, if hospital sites (not currently performing at the mean and upper quartile level) moved to perform at the mean and upper quartile for Scotland. The productivity opportunities are measured in occupied bed days for ALOS and pre- opstay, to reduce return outpatient appointments for the return to new ratio and to reduce DNAs by saving new outpatient appointments. The cash releasing potential is calculated by applying information supplied in the latest Costs Book.

The British Association of Day Surgery (BADS) Tool enables NHS Boards to compare their activity and same day surgery performance on the full range of procedures included in the BADS directory.

NHS Boards have access to ISD’s Navigator tool which includes consultant level activity data which NHS Board Clinical Managers use to assess performance of local services.

ISD have developed a national Tariff Benchmarking Tool (TBT) which is issued to all NHS Boards each year enabling comparison of NHS Board costs at specialty level against national average.

The Scottish Government has been working with ISD to develop a measure of the change in aggregate output of NHS Scotland, in line with the findings of the Atkinson Review – ‘Measurement of Government Output and Productivity for the National Accounts’. The new measure is a cost-weighted index of the annual change in the volume of health service activity and now forms part of the Scottish Government quarterly GDP series. Future work aims to develop a quality adjustment for the output measure and to develop a measure of the change in aggregate inputs, to facilitate the calculation of the change in aggregate productivity.

PA/S3/11/2/1

32. The Committee would welcome an update from the Scottish Government on how its revision to the health information strategy (due to be completed at the end of 2010) will improve the comparability of data between NHS boards.

The Scottish Government and ISD are working together to develop a health and care information strategy for Scotland. A Strategic Oversight Group has been set up to oversee and guide progress and met for the first time in November 2010. The process of collating users' views to inform the priorities for the information strategy has commenced. It is intended that the information strategy will be published in spring 2011 after wider engagements with all users. However, initial findings from a small number of users highlighted two key priority areas: being able to link community care, primary care and secondary care data; and information to support the quality strategy. In parallel with the health information strategy, ISD plan to consult stakeholders on the future content and frequency on acute activity statistics in early 2011.

33. The Committee would also seek further information from the Scottish Government on how the review of the Costs Book will address data quality issues, as well as how NHS Boards are involved and the timescales for the review.

The Efficiency and Productivity Programme is currently focusing on, and making significant progress in, improving the quality of costing (and tariff) data in order to improve consistency across NHS Boards and promote the use of costing data/tariff as a tool for identifying efficiency savings. This is an ongoing work programme with specific targets on a short and medium term basis.

In the short term (i.e. over each annual cycle), data quality work is being taken forward in partnership with NHS Boards through the Tariff Reference Group (TRG) and a Costs Book Manual Review Group. The work to date has included identifying key data quality issues, documenting and reviewing data quality work carried out to date, reviewing and updating the detailed guidance manual for completing the Costs Book returns, and carrying out an in-depth review of two specialities (ENT and geriatric assessment) in order to identify and address specific data quality issues.

A Costs Book Manual Review Group was set up in September 2009 to review the guidance manual for the Costs Book in order to improve the read across between the new Chart of Account, AFC job profiles and the Costs Book; improve presentation by making it more user-friendly and recognisable; and increase consistency between boards in completing the Costs Book, a major concern expressed by NHS Boards. The outputs from the group were used in the collection of data for the 2009-10 Costs Book and will be further reviewed by the Group to make ongoing changes and improvements.

A separate and longer term piece of work is being carried out to review community data within the Costs Book in conjunction with NHS Boards. Final timescales have still to be set for this work.

PA/S3/11/2/1

40. The Committee welcomed the improvements in waiting times but is concerned that, without an improved understanding of the factors influencing productivity, NHS Boards may find it difficult to meet the new waiting time targets in a time of financial constraint.

The Scottish Government’s Improvement and Support Team is working with NHS Boards to improve patient pathways, eradicating unnecessary administrative delays and removing unnecessary steps in the patient’s pathway. In addition, NHS Boards have been supported to further develop their capability in Demand, Capacity, Activity and Queue management, which ensures that capacity is in place to meet demand in an efficient manner. Designing patient pathways and understanding flow, demand and capacity are fundamental to sustaining waiting time improvements and all NHS Boards are working with the Improvement & Support Team on the detail of their systems of care to ensure this.

For example, NHS Grampian has identified Orthopaedics as a priority speciality and agreed protected time for staff to study the patient journey and interaction of disciplines, focusing on the first stages of the patient journey. This includes AHP pathways as well as secondary care referrals. Led by the Better Care Without Delay (BCWD) Team, this work was undertaken over a six week period. Referrals received into Orthopaedics were examined and the triage decisions recorded by Orthopaedic consultants and GPs. Patient pathways were mapped out using software and important issues logged. Physiotherapy, Podiatry, Radiology and Rheumatology also participated. The geographic location of all GPwSI (GPs with a special interest), radiology facilities and AHPs were also mapped to understand the potential for MSK community based services across Grampian. There was also involvement from e- health analysts to understand the administrative, IT and clinical pathways with a view to transforming the whole process from ‘stage of treatment’ management to an 18 week pathway. The Orthopaedic department identified an opportunity to improve administrative and booking processes through a centralised booking office. This has led to more consistent management of waiting lists, equitable access for patients and more efficient use of theatres. Staff were given refresher courses for the main systems in operation to ensure data was accurately collected. The triage process was improved to ensure consistency of decision making. Physiotherapists and GPwSI are also now involved in vetting so patients can be appropriately directed straight to the right healthcare professional. It is this very detailed and collaborative approach to change that will ensure the sustainability of waiting time improvements.

51. The Committee acknowledges that changes in working practices and junior doctors’ hours may have contributed towards the relatively small increase in consultant activity when compared to the significant increases in funding.

52. However the Committee is concerned that whilst these explanations may be relevant, the available national data is not comparable or robust enough to investigate this fully.

PA/S3/11/2/1

cost of activity carried out and places undue emphasis on the less expensive outpatient activity. The methodology gives equal weight to an outpatient costing approximately £100 and complex inpatient activity costing thousands of pounds. We have raised this methodological issue with Audit Scotland.

The Scottish Government has recently worked with ISD to develop an aggregate measure of the change in health service output which takes account of both the cost and volume of activity. This new method provides an output series from 2003/04. In 2004/05 the Scottish Government introduced challenging cash releasing efficiency savings for NHS Boards to allow reinvestment in frontline services. Since then, estimates derived from the improved measure show that increases in output have matched the 17% increase in real terms spend.

Orthopaedic activity and real cost increase index Baseline = 2004/05 20% Real cost increase 15% Acitivity increase

10%

0% Increase 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 -5%

-10%

-15% Real term cost increase from Costs Book Activity increase derived from improved measure of healthcare output

We have also seen improved quality, including dramatically shorter waiting times, and mortality at 90 days after hip arthroplasty is now at its lowest level ever. Orthopaedic patients now benefit from a maximum wait of 12 weeks for outpatients, and inpatients and day cases; and hip fractures are now operated on within 24 hours. In March 2005, around 35% of orthopaedic patients waited longer than 26 weeks for inpatient and day case treatment. The proportion of hip fractures operated on within 24 hours increased from 80.4% April 2006 to more than 98% in May 2008.

53. The Committee recognises the concerns of witnesses that data collection needs to become more sophisticated so that the entire patient journey is monitored, including primary, community and secondary care. The Committee believes that this information is vital if NHS Boards are to utilise service redesign to improve their productivity and deliver best value.

PA/S3/11/2/1

54. The Committee would therefore welcome an update from the Scottish Government on how ISD intends to address this issue.

The issue of monitoring the entire patient journey is being considered through the work to develop a health and care information strategy for Scotland which is due to report in spring 2011.

(See reference to the health and care information strategy above – paragraph 32).

Variation in orthopaedic activity across Scotland

67. The Committee notes that the way in which orthopaedic services are configured, including the impact of the physical infrastructure, can result in variation in activity across NHS Boards in Scotland.

68. However if NHS Boards are to achieve efficiency savings and improve services they must be able to better identify and understand the causes of this variation.

69. The Committee is unconvinced that sufficient robust and consistent data exists at national level to enable NHS Boards to identify savings that can be made from adopting more cost effective and efficient approaches used by other NHS Boards.

70. The Committee would therefore welcome information from the Scottish Government on how it intends to support NHS Boards to monitor their performance and benchmark against other boards.

NHS Boards are being supported to review orthopaedic services and to identify and address unwarranted variation through a number of programmes and new approaches. This will be further strengthened through the revised Efficiency & Productivity Framework. The response to points 30 & 31 concerning data highlights the range of national data that NHS Boards have available to them to begin the process of benchmarking and analysis that leads to improvement. In particular, NHS Boards have the National Benchmarking Scorecard, the Better Quality, Better Value indicators, British Association of Same Day Surgery Directory, Navigator, Theatres Benchmarking Data and the 18 Weeks Patient Journey analyser tools all geared towards driving improvements.

Having the data is a useful starting point. We are also providing practical support to NHS Boards who are seeking to make improvements.

Our focus on improving waiting times through the 18 Weeks Improvement Team has focussed on orthopaedic reports over the last few months highlighting variation and areas of good practice for boards including: Interim Report from Orthopaedics Task and Finish Group1, Musculoskeletal (MSK) audit on carpal tunnel syndrome, arthroscopy audit and an enhanced recovery audit. This information provides NHS Boards with significant data on variation, identifies areas for potential

1 http://www.18weeks.scot.nhs.uk/how-to-achieve-and-maintain-18-weeks/task-and-finish-groups/orthopaedic- services/ 13

PA/S3/11/2/1

improvement and provided a significant number of examples of good practice across Scotland on a wide range of areas including: effective referral communication between primary and secondary care, improvements in patient DNAs, Enhanced Recovery uptake, reducing administrative delays, and improving theatre utilisation. Examples of improvements flowing from this approach include –

NHS Forth Valley has introduced an advanced practitioner-led community screening service for GPs to refer directly to the advanced practitioner in primary care. This has reduced the number of referrals to the Orthopaedic outpatient clinic and allowed the patient to be managed in a primary care setting. In a sample of 213 referrals, the advanced practitioners were able to manage (or further refer within primary care) 72% of referrals, with only 18% requiring orthopaedic consultant outpatient appointment.

NHS Lanarkshire has established a single system of pre-admission assessment for all planned surgical procedures. This facilitates consistent, standardised assessment and preparation at each of the acute hospital sites. Achieving 100% pre–admission assessment for all elective surgical patients at August 2009, increased the level of day case rates across all specialties. There is also further development of one-stop clinics.

NHS Borders applied LEAN methodology to improve theatre utilisation and increase patient throughput by streamlining processes. Outcomes of the work have produced earlier surgical start times and quicker patient turnaround times, improved theatre throughput managing three major cases/list. Improved processes delivered 16 additional minor cases per month, reduction in list over runs in theatre and an increase in staff morale.

The revised Efficiency and Productivity Framework will build on the above progress and take forward a whole systems approach of orthopaedics services carefully exploring the areas for improved efficiencies ensuring this links closely with the recommendations of the Audit Scotland report and of course the Quality Strategy. This work will cover Primary and Acute care, workforce productivity, evidence based care and prescribing, procurement and shared/support services. The approach will be underpinned by additional benchmarking to identify any unwarranted variation and will address the recommendations of the Audit Scotland Report.

78. The Committee agrees with the AGS that reducing the overall length of hospital stay for patients, without compromising the quality of care, is better for patients and can help the NHS Boards to make better use of available resources.

79. The Committee finds it unacceptable that patients remain in hospital because of the unavailability of public transport and recommends that NHS Boards examine the barriers to people leaving hospital when they are fit to do so.

Published statistics show that the average length of stay is reducing. Over the last four years, the Scottish Government has promoted the use of Estimated Discharge Dates (EDD) in hospitals. EDD includes a checklist which displays when patients are likely to leave hospital in advance of their discharge; information on whether relatives

PA/S3/11/2/1

and carers have been informed; the transport arrangements; medication needs; social services intervention; and AHP interventions. It also includes the actual date and time of discharge and the reasons for any differences to support further improvement.

80. The Committee also notes the evidence of witnesses that length of stay data by procedure would be of use to NHS Boards in identifying possible efficiencies. The Committee therefore recommends to the Scottish Government that ISD should consider collating and reporting this information.

The Scottish Government agrees that this information will be of use to NHS Boards to supplement existing published statistics and benchmarking tools. We will ensure this recommendation is captured within ISD’s consultation on the future content and frequency on acute activity statistics in early 2011.

Purchasing of surgical implants

104. The Committee noted that savings had been achieved by better procurement of surgical implants through the national procurement contract. However, the Committee was not convinced that this had achieved the best value possible during phase one given NHS Greater Glasgow and Clyde were able to achieve greater savings through mini-procurement.

The framework and the mini-competition are part of the same solution. The framework is designed to allow individual organisations to determine specific requirements. The mini-competition builds on the framework and reflects the quality of data and clinical and managerial focus within this NHS Board to maximise the efficiencies made possible through the overarching framework at the earliest possible stage.

105. The Committee would seek assurances from the Scottish Government that any best practice lessons identified through the NHS Greater Glasgow and Clyde mini procurement process are able to be applied elsewhere in the NHS.

The Scottish Government can provide assurances that National Procurement are already supporting a number of Health Boards in understanding how best value can be realised from the arrangements based on the NHS Greater Glasgow & Clyde experience and Board’s local requirements . The revised Efficiency & Productivity framework places an emphasis on procurement within its approach to Orthopaedics and will ensure that lessons learned are identified and progressed.

106. The Committee recognised that, if greater savings are to be achieved in future, NHS Boards will need to agree with their consultants the core range of surgical implants that are necessary to meet local clinical need.

Agreed. There will need to be agreement locally supported by national collaboration involving the profession, National Procurement and representatives of NHS Boards. The consequences of decisions, such as establishing local audit and training requirements will also need to be taken into account to ensure that quality of care is maintained and changes to working practices are supported.

PA/S3/11/2/1

107. The Committee notes that such clinical debates will be taking place over the next two years as part of phase two of the contract but is concerned at the pace of these discussions, given the current financial climate.

The NHS Efficiency & Productivity framework is being revised to apply a particular focus to high volume, high cost specialties including orthopaedics. The Programme will take a direct interest working with National Procurement, NHS Boards and the Orthopaedic profession to ensure that where possible and within the context of maintaining the quality of care, progress which derives efficiencies is accelerated.

108. The Committee would request further information from the Scottish Government on how it will support NHS Boards to reach agreements with consultants as soon as possible about the surgical implants needed to meet local need.

The NHS Efficiency & Productivity framework will be the locus for ensuring that wherever possible, progress is accelerated. The framework contains a commitment to reduce unwarranted variation and prioritise orthopaedic services. As part of this process, NHS boards will be asked to identify the support they need – from the profession, National Procurement or from the Improvement & Support Team to progress these local discussions.

Use of the private sector

119. The Committee notes the improvement in cost and activity data collection in relation to NHS referrals to the private sector although it notes that the cost and activity information by specialty for each NHS Board is currently not held centrally.

120. The Committee recommends that the Scottish Government should hold individual NHS Board private sector cost and activity information by specialty to enhance transparency in relation to the total cost to the NHS of referrals to the private sector.

The Scottish Government has put in place steps to address this recommendation, and is working with ISD and NHS Boards to develop quarterly management information on retrospective independent sector surgical activity and spend on key specialities. The first management information is planned for early 2011.

121. The Committee notes the comments of witnesses that it is preferable and more economic to treat patients within the NHS and that the Golden Jubilee has capacity to treat more patients, potentially more cost effectively, if referrals are better managed.

122. The Committee therefore requests that the Scottish Government reports back on how it will support NHS Boards to better manage referrals with the Golden Jubilee.

The Scottish Government has established a quarterly forum for Golden Jubilee and NHS Boards to promote the effective and efficient use of capacity in NHSScotland. The Guidance for NHS Boards referrals to Golden Jubilee is being refreshed. In

PA/S3/11/2/1

addition, the Scottish Government is working with NHS Boards to develop quarterly management information on forecast surgical activity and spend in the independent sector which will support discussions between the Golden Jubilee and NHS Boards to optimise the effective and efficient use of capacity.

The role of other services

131. The Committee notes the comments of witnesses that access to other services such as rehabilitation are important in reducing the length of stay in hospital and recognises that access to rehabilitation is particularly important in relation to falls prevention.

132. The Committee notes the provision of rehabilitation co-ordinators but is unclear how the effectiveness of these posts will be monitored to demonstrate whether they do, in the longer term, improve rehabilitation services, including falls prevention.

133. The Committee would therefore request an update from the Scottish Government on how it proposes to measure the effectiveness of these posts in monitoring the quality of rehabilitation and the provision of that service; and in ensuring that sufficient support is available to patients returning home.

As part of the implementation of the rehabilitation framework, specific high impact areas have been identified – specifically falls prevention, musculoskeletal (MSK) redesign and vocational rehabilitation services. The effectiveness of rehabilitation co-ordinator posts will be measured by the development of these services.

The key outputs from the MSK model are: • Standardise self-referral through NHS24. • Incorporate work status within assessments and outcomes. • Reduce sickness absence and facilitate readiness to work • Shift extended scope practitioners (ESP) capability into the community. • Reduce inappropriate MRI use. • Reduce inappropriate referrals to Orthopaedics, thereby reducing outpatient appointments and increasing conversion rates for surgery. • Development of protocols for all ‘exit routes’ to appropriate professionals. • Develop explicit links to the Working Health Services Scotland pilots

The following measures are in place: • Increase % of patients accessing physio via self referral. • National dataset patient outcomes through journey which will provide economic evaluation. • Reduce volume of MRI investigations. • Increase conversion rate to surgery.

The following patient benefits and staff / organisational benefits have been identified: • Rapid access to community services for patients. • Equitable access to all services. • Early referral into employability services where necessary

PA/S3/11/2/1

• Fewer hand-offs between different professionals and services throughout the patient’s journey. • Cost savings.

ISD Official Statistics

Inpatient, day case and outpatients activity statistics http://www.isdscotland.org/isd/3409.html

Scottish Arthroplasty Project Annual Report 2010 http://www.arthro.scot.nhs.uk/Reports/Main.html

Costs Book http://www.isdscotland.org/isd/360.html

New Ways http://www.isdscotland.org/isd/4508.html

Workforce statistics http://www.isdscotland.org/isd/796.html

Task & Finish Reports

MSK audit http://www.18weeks.scot.nhs.uk/how-to-achieve-and-maintain-18-weeks/task-and- finish-groups/orthopaedic-services/

PA/S3/11/2/3

Public Audit Committee

2nd Meeting, 2011 (Session 3),

Wednesday 26 January 2011

The Gathering 2009 – written evidence

Background

1. Following its meeting on 1 December 2010, further written evidence has been received from the following and is attached to this paper:

• Michael Russell MSP, Cabinet Secretary for Education and Lifelong Learning;

• Sir John Elvidge, Former Permanent Secretary, Scottish Government;

• Paul Bush OBE, Chief Operating Officer, EventScotland;

• Jim Inch, Director of Corporate Services, City of Edinburgh Council; and

• Sir Peter Housden, Permanent Secretary, Scottish Government.

LETTER FROM MICHAEL RUSSELL MSP, CABINET SECRETARY FOR EDUCATION AND LIFELONG LEARNING TO THE CONVENER OF THE PUBLIC AUDIT COMMITTEE, 21 DECEMBER 2010.

You wrote to me on 7 December following the Committee’s consideration of my oral evidence to the Committee at its meeting on 1 December 2010.

In response to that letter, I can confirm that, prior to the Scottish Government’s decision to award a short-term loan of £180,000 to The Gathering 2009 Ltd, I was not aware of any previous business failures involving Lord Sempill or Jenny Gilmour.

The Clerk to the Committee subsequently contacted my officials asking for a detailed written briefing on the issue of State aid and de minimis aid; and details of the financial information provided to the Scottish Government by the directors of The Gathering 2009 Ltd in April 2009.

Turning first to State aid, this is a European Commission term which refers to forms of assistance from a public body, or publicly-funded body, given to undertakings on a discretionary basis, with the potential to distort competition and affect trade between member states of the European Union. The 'State aid rules' are set out by the European Commission and comprise various articles of the EC Treaty, regulations, frameworks and guidelines - which set out what aid can be given.

The Scottish Government’s view is that the public funding provided to The Gathering 2009 Ltd was likely to constitute a State aid but that the funding could be provided using the regulations, frameworks and guidelines in a compatible way.

The European Commission considers that public funding to a single recipient of up to €200k over a three year fiscal period has a negligible impact on trade and competition and does not require notification. As the Committee noted in its meeting on 1 December, the letter that was sent to the company making the offer of the short-term loan referred to the funding as de minimis aid and asked the company to confirm any other de minimis funding received during the previous three years.

We do not have on our files any record of the company declaring other de minimis aid, but the Scottish Government considers that the £100k grant provided by EventScotland to the company and the £10,500 grant provided by the Heritage Lottery Fund would likely have fallen into this category.

As such, the Scottish Government identified an alternative way of providing allowable funding to the company. Under the European Commission’s Temporary Framework, public funding can be awarded to an undertaking up to a maximum of €500,000 as Small Amounts of Compatible Aid. The timeframe for awarding aid under this scheme is between 01/01/2008 and 31/12/2010.

We consider that the Scottish Government’s £100k grant to the company in December 2008 and £180k short-term loan in June 2009 were allowable state aid under this framework, together with the £80k funding awarded to the company by EventScotland as part of the Homecoming programme.

I turn now to the question of the financial information that was provided to the Scottish Government when they first reported a cash flow difficulty resulting from the World Pay issue in April 2009. As the Committee is aware, following my meeting with the Directors on 28 April 2009, the Directors produced a paper setting out their financial situation in some detail. Officials who were involved at the time recall that the financial information provided to the Government included the company’s overall budgetary position, its cash flow position, the amount being held by WorldPay at that point in time and future projections; and the terms of the agreements with WorldPay.

As the Permanent Secretary has already confirmed to the Committee, the Scottish Government does not hold a copy of that paper on its files so I am unable to provide a copy. I would however point the Committee to the evidence provided to the Committee by Jenny Gilmour and Jamie Sempill on 15 September 2010 in which they reported that they had provided the Scottish Government with both the overall budgetary position, and the cash flow position.

LETTER FROM THE CONVENER OF THE PUBLIC AUDIT COMMITTEE TO MICHAEL RUSSELL MSP, CABINET SECRETARY FOR EDUCATION AND LIFELONG LEARNING, 7 DECEMBER 2010.

AUDITOR GENERAL FOR SCOTLAND REPORT – THE GATHERING 2009

Following consideration of your oral evidence to the Committee at its meeting on 1 December, the Public Audit Committee agreed that it would seek further written evidence from you on the following issues which arose during the meeting. http://www.scottish.parliament.uk/s3/committees/publicAudit/or-10/pau10-2101.htm

The Committee agreed that it would be helpful if you could confirm whether, prior to the Scottish Government decision to award a loan of £180,000 to The Gathering 2009 Ltd, you were aware of any previous business failures involving Lord Sempill or Jenny Gilmour.

I would be grateful for your response by no later than Monday 20 December 2011. Please do let me know if this time frame presents you with any difficulties.

Should you require any further information please do not hesitate to contact the Clerk, Jane Williams on 0131 348 5390 or by email at [email protected].

LETTER FROM SIR JOHN ELVIDGE, FORMER PERMANENT SECRETARY, SCOTTISH GOVERNMENT TO THE CONVENER OF THE PUBLIC AUDIT COMMITTEE, 29 DECEMBER 2010.

INQUIRY INTO THE AUDITOR GENERAL FOR SCOTLAND REPORT – THE GATHERING 2009

Thank you for your letter of 7 December.

My letter to you of 17 November provides the basis for the answer to the Committee’s further question. The Capital City Fund was one specific mechanism suggested to me by Mr Inch at our meeting on 13 October 2009 as a potential means for the Scottish Government to convey funds to the Council in respect of The Gathering Ltd.

As I indicated in my letter of 17 November, I considered the issues of principle involved, from my Accountable Officer perspective, rather than issues of mechanics. As I note Lord Stephen identified in his relevant exchange with the First Minister during the Committee’s hearing on 1 December, an addition to the Capital City Fund would not have had the vital characteristic of the funding route offered to the Council, that it should meet the requirement that Scottish Government funding could only properly relate to the costs of a future repetition of the Gathering event.

The communications with the Council described in my letter of 17 November would have enabled the Council to understand that the funding option in respect of the costs of a future event put to them on behalf of the Scottish Government was exclusive of other funding options with a potentially wider application.

I hope that this is helpful to the Committee.

LETTER FROM THE CONVENER OF THE PUBLIC AUDIT COMMITTEE TO SIR JOHN ELVIDGE, FORMER PERMANENT SECRETARY, SCOTTISH GOVERNMENT, 7 DECEMBER 2010.

INQUIRY INTO THE AUDITOR GENERAL FOR SCOTLAND REPORT - THE GATHERING 2009

At its meeting on 1 December 2010, the Public Audit Committee took oral evidence from the First Minister and Michael Russell MSP, the Cabinet Secretary for Education on The Gathering 2009.

I attach the relevant weblink to the Official Report for that meeting: http://www.scottish.parliament.uk/s3/committees/publicAudit/or-10/pau10-2101.htm

At that meeting the Committee discussed with the First Minister the methods that the Scottish Government had considered to provide funding to the City of Edinburgh Council (col 2359). In particular, the Committee sought clarification of whether the capital city fund was discussed as a mechanism by which the City of Edinburgh Council could receive an additional payment from the Scottish Government in recognition of their meeting the private sector liabilities of The Gathering 2009 Ltd. The First Minister confirmed in evidence that you would be best placed to respond to this query.

I would be grateful if you could confirm whether the capital city fund was considered by the Scottish Government as a mechanism to provide an additional payment to the City of Edinburgh Council in relation to The Gathering 2009 and if so, why this option was then rejected in favour of the offer for funding of a future Gathering event (made in the letter dated 12 November from Deborah Smith, acting Director, Scottish Government to Mr Jim Inch, The City of Edinburgh Council). It would also be helpful if you could confirm when the City of Edinburgh Council was informed that the capital city funding option had been rejected.

I have attached a web link to that letter below (it forms part of an FOI request by Mr Simon Johnson): http://www.scottish.parliament.uk/s3/committees/audit/inquiries/the%20gathering/20100 804DailyTelegraphFOI_thegathering1.pdf

I would be grateful if you could respond to this letter no later than Wednesday 5 January 2011.

Our normal practice is to publish relevant evidence that is sent to us on our website and we may also include it in the hard copy of any committee report. Therefore, if you wish your evidence to be treated as confidential, or for your evidence to be published anonymously, please contact the Clerk to the Committee, before you submit your evidence. Further information on the publication of written submissions is contained in the enclosed policy on the treatment of written evidence by committees. Please take time to read this policy. We welcome written evidence in English, Gaelic or any other language.

Should you require any further information please do not hesitate to contact the Clerk to the Committee, Jane Williams on 0131 348 5390 or by email at [email protected].

LETTER FROM PAUL BUSH OBE, CHIEF OPERATING OFFICER, EVENTSCOTLAND TO THE CONVENER OF THE PUBLIC AUDIT COMMITTEE, 5 JANUARY 2011.

INQUIRY INTO THE AUDITOR GENERAL FOR SCOTLAND REPORT - THE GATHERING 2009

Please find below my response to your letter of 7 December 2010 in which you ask for information relating to the above inquiry.

I can confirm that EventScotland was verbally advised of the Scottish Government’s loan to The Gathering 2009 Ltd. on or around 18th May 2009 by Mrs Vicky Carlin of the Scottish Government. As this information was received verbally, we have no formal record of it. I can also confirm that there was no discussion about whether EventScotland should, or should not disclose information about the loan, as this was a matter between the Scottish Government and the Directors of The Gathering Ltd.

As stated in the Auditor General’s report, the role of the Steering Group was to provide public partners with a forum to assess the progress of The Gathering 2009 against the key performance indicators set by each funder.

EventScotland reviews as a matter of course its procedures in awarding grants to events and in the light of the Audit Scotland report into The Gathering, has further reviewed the governance arrangements around the support of major events like The Gathering 2009. Included in the review was the role of public partners in scrutinising the financial arrangements of the events they support, and additional robust measures have since been put in place to identify with partners any similar potential problems in the future. These have been agreed by both the EventScotland subcommittee as part of the VisitScotland Board and the VisitScotland Audit and Risk committee.

I hope this information is helpful to the Public Audit Committee’s inquiry and I look forward to reading the Committee’s report in due course.

LETTER FROM THE CONVENER OF THE PUBLIC AUDIT COMMITTEE TO PAUL BUSH OBE, CHIEF OPERATING OFFICER, EVENTSCOTLAND, 7 DECEMBER 2010.

INQUIRY INTO THE AUDITOR GENERAL FOR SCOTLAND REPORT - THE GATHERING 2009

At its meeting on 1 December 2010, the Public Audit Committee took oral evidence from the First Minister and Michael Russell MSP, the Cabinet Secretary for Education on The Gathering 2009.

I attach the relevant weblink to the Official Report for that meeting: http://www.scottish.parliament.uk/s3/committees/publicAudit/or-10/pau10-2101.htm

At that meeting the Committee sought clarification from the First Minister and Cabinet Secretary as to who had been told about the Scottish Government loan of £180,000 to The Gathering 2009 Ltd. The First Minister and Cabinet Secretary confirmed that EventScotland had been informed of the loan at that time but that it had been the decision of EventScotland not to inform the Gathering 2009 Steering Group of the loan. The Steering Group was an advisory group established by the three principle public sector funders of the Gathering 2009 – namely The City of Edinburgh Council, VisitScotland and EventScotland together with the Directors of The Gathering 2009 Ltd – Lord Sempill and Jenny Gilmour.

I would be grateful if you could confirm when EventScotland were informed of the loan of £180,000 to The Gathering 2009 Ltd and by whom.

The Committee would welcome confirmation as to whether EventScotland were advised by the Scottish Government not to disclose to the Steering Group that a loan of £180,000 had been made to The Gathering 2009 Ltd and if so, by whom.

If Event Scotland was not advised in this way by the Scottish Government, then I would be grateful if you could provide further information as to who, in EventScotland, decided did not disclose to the Steering Group that a loan of £180,000 had been provided to The Gathering 2009 Ltd. It would helpful if you could provide the reasons for this decision.

I would be grateful if you could respond to this letter no later than Wednesday 5 January 2011.

Should you require any further information please do not hesitate to contact the Clerk to the Committee, Jane Williams on 0131 348 5390 or by email at [email protected].

LETTER FROM JIM INCH, DIRECTOR OF CORPORATE SERVICES, CITY OF EDINBURGH COUNCIL TO THE CONVENER OF THE PUBLIC AUDIT COMMITTEE, 5 JANUARY 2011.

INQUIRY INTO THE AUDITOR GENERAL FOR SCOTLAND (AGS) REPORT – THE GATHERING 2009

Thank you for your letter of 7 December to Tom Aitchison, Chief Executive of the City of Edinburgh Council, requesting further information in respect of The Gathering 2009. Tom retired from the Council at the end of December and asked that I respond to your letter on his behalf.

Firstly, you requested copies of all correspondence (including emails) relating to The Gathering 2009 between the City of Edinburgh Council, the Scottish Government and DEMA in the period 12 October 2009 to 27 January 2010. The relevant correspondence held by the Council is attached. The relevant email correspondence provided previously to the Committee, on the approval process for the press release, has been omitted.

You also asked the Council, in response to the First Minister’s oral evidence to the Public Audit Committee on 1 December, to confirm that it was clear in its understanding that the Scottish Government could not provide retrospective funding or grants to the Council to recompense for the Council meeting the private sector liabilities of The Gathering 2009 Ltd.

As stated in my oral evidence to the Public Audit Committee on 3 November 2010, it was made clear from the outset of discussions between the Council and the Scottish Government that neither the Council nor DEMA could be financially disadvantaged in any way by any arrangement to take on The Gathering. It was a critical matter to achieving an acceptable solution involving the purchase of The Gathering 2009 Ltd that the Council or DEMA would not be responsible for the private sector liabilities of the company, and that the Scottish Government would need to find some means of providing the funds to meet these commitments.

Finally, you asked the Council to confirm its understanding of the Capital City Supplement as an option for the Council to receive additional funding from the Scottish Government in relation to the Gathering 2009. In response to the specific points you raised I can confirm that:

 at the meeting between myself and the then Permanent Secretary on 13 October 2009 I specifically mentioned the Capital City Supplement as a means by which the Scottish Government could provide additional funding to the Council;

 in response the then Permanent Secretary suggested that there were a number of options for providing the Council with the necessary funds. He did not dismiss the Capital City Supplement idea at that stage; and

 through discussions and correspondence with the then Acting Director for the Culture, External Affairs and Tourism Directorate between 10 and 12 November 2009 it became clear that the Scottish Government were not able to give explicit written assurances about any funding option. The correspondence which you have copies of makes the point very clearly. The Council was prepared to accept the cash flow consequences of paying off creditors in advance of receiving recompense from the Scottish Government but the qualifications in the correspondence together with the reference to the availability of funds introduced significant and unacceptable risk to the Council.

LETTER FROM THE CONVENER OF THE PUBLIC AUDIT COMMITTEE TO TOM AITCHISON, CHIEF EXECUTIVE, CITY OF EDINBURGH COUNCIL, 7 DECEMBER 2010.

INQUIRY INTO THE AUDITOR GENERAL FOR SCOTLAND (AGS) REPORT - THE GATHERING 2009

At its meeting on 1 December 2010, the Public Audit Committee took oral evidence from the First Minister and Michael Russell MSP, the Cabinet Secretary for Education on The Gathering 2009.

I attach the relevant weblink to the Official Report for that meeting: http://www.scottish.parliament.uk/s3/committees/publicAudit/or-10/pau10-2001.htm

At that meeting the Committee was made aware of correspondence which had been exchanged between the Scottish Government, the City of Edinburgh Council and Destination Edinburgh Marketing Alliance Ltd (DEMA) between 12 October (when a meeting was called to discuss the future of The Gathering 2009 Ltd) and 27 January 2010 (when The Gathering 2009 Ltd went into liquidation).

The Committee therefore agreed it would be helpful if you could provide copies of all correspondence (including emails) which relates to The Gathering 2009 between the City of Edinburgh Council, the Scottish Government and DEMA between 12 October 2009 and 27 January 2010.

At the meeting on 1 December, the First Minister was clear that, following the Gathering 2009, the Scottish Government could not retrospectively provide funds or a grant to the Council in recompense for the Council meeting the private sector liabilities of The Gathering 2009 Ltd (col 2345, Official report 1 December 2010). Please could you confirm that the City of Edinburgh Council was also clear in its understanding that the Scottish Government could not provide the Council with retrospective funding or grants for such purposes.

The Committee would also welcome further information in relation to the capital city funding route as an option for the Council to receive additional funding from the Scottish Government in relation to the Gathering 2009. In particular could you confirm:  why the Council believed that the capital city funding route was an option by which the Scottish Government could provide additional funding to the City of Edinburgh Council?

 whether the Council believed that this option was being considered by the Scottish Government (and if so, why the Council believed this was the case).

 when (and by whom) the Council was told that capital city funding option would not be pursued any further by the Scottish Government.

I would be grateful for your response by Wednesday 5 January 201. Please do let me know if this time frame presents you with any difficulties. Further information on the publication of written submissions is contained in the enclosed policy on the treatment of written evidence by committees.

Should you require any further information please do not hesitate to contact the Clerk, Jane Williams on 0131 348 5236 or by email at [email protected].

Annexe A - Correspondence (including emails) relating to The Gathering 2009 between the City of Edinburgh Council, the Scottish Government and DEMA in the period 12 October 2009 to 27 January 2010.

LETTER FROM SIR PETER HOUSDEN, PERMANENT SECRETARY, SCOTTISH GOVERNMENT TO THE CONVENER OF THE PUBLIC AUDIT COMMITTEE, 20 JANUARY 2011.

INQUIRY INTO THE AUDITOR GENERAL FOR SCOTLAND REPORT – ‘THE GATHERING 2009’

Thank you for your letter of 7 December which, following the Committee’s 1 December meeting when it received oral evidence in relation to The Gathering 2009 from the First Minister and the Cabinet Secretary for Education and Lifelong Learning, requests:

 copies of all correspondence (including emails) which relate to The Gathering 2009 between the Scottish Government, The City of Edinburgh Council (CEC) and Destination Edinburgh Marketing Alliance (DEMA) between 12 October 2009 and 27 January 2010; and  copies of internal Scottish Government communications which relate to The Gathering 2009 from between 12 October 2009 and 27 January 2010.

With regard to the first part of your request, please find enclosed the following correspondence:

 Letter of 28 October from the First Minister to Cllr Jenny Dawe.  Email of 30 October from Martin Hutchison of CEC to Scottish Government officials with a copy of a report on The Gathering’s education programme.  Letter of 12 November from the Scottish Government’s Acting Director of Culture, External Affairs and Tourism to Jim Inch of CEC.  Letter of 23 December from Cllr Jenny Dawe to Iain Smith MSP and copied to the First Minister.  Email of 4 January from Jamie Sempill of The Gathering 2009 Ltd to the Scottish Government’s Deputy Director, Promotion of Scotland and Tourism Division.  Email exchange of 8 January between Scottish Government officials, Jim Inch of CEC and PricewaterhouseCoopers LLP (PwC) regarding a PwC report.  Letter of 26 January from Jim Inch of CEC to the Scottish Government’s Director of Culture, External Affairs and Tourism.

This represents all the correspondence (including emails) between the Scottish Government, CEC and DEMA relating to Gathering over the period stipulated that we hold on our files. Aside from the 4 January email from Jamie Sempill and the emails of 8 January relating to the PricewaterhouseCoopers LLP report, all of these documents have previously been released by the Scottish Government.

With regard to the second part of your request, please find enclosed the following communications:

 Email of 13 October from the Principal Private Secretary to the First Minister to the Deputy Director for the Promotion of Scotland and Tourism Division enclosing note of the 12 October meeting between the Scottish Government, the Royal Edinburgh Military Tattoo, CEC and VisitScotland.  Email of 13 October from the Principal Private Secretary to the First Minister to the Deputy Director for the Promotion of Scotland and Tourism Division.  Email of 16 October from the Director of Police and Community Safety to the Justice Communications team.

St Andrew’s House, Regent Road, Edinburgh EH1 3DG www.scotland.gov.uk 

 File note of 19 October from Acting Director of the Culture, External Affairs and Tourism Directorate.  Email exchange of 22 October between the First Minister’s Private Office and Culture, External Affairs and Tourism Directorate officials regarding a letter from Iain Smith MSP to the First Minister.  Email exchange of 16 and 17 November between the Private Office of the Minister for Culture, External Affairs and the Constitution and Culture, External Affairs and Tourism Directorate officials regarding an email from Martin Hunt of Tartan Silk PR.  Email of 26 November from the Promotion of Scotland and Tourism Division to the First Minister’s Office with a draft letter and report for the First Minister to send to Iain Smith MSP.  Note of 10 December from Promotion of Scotland and Tourism Division officials to the Director of the Culture, External Affairs and Tourism Directorate.  Email of 27 January from the Assistant Private Secretary to the First Minister to the Deputy Director for the Promotion of Scotland and Tourism Division.

Not included with the enclosed papers are communications relating to policy advice from Scottish Government officials to Ministers or my predecessor. These papers have been withheld as I have judged that to release them would be likely to inhibit substantially the free and frank provision of advice.

I hope the information that has been provided is of assistance to the Committee in its consideration of the Auditor General’s report on The Gathering 2009.

PETER HOUSDEN

LETTER FROM THE CONVENER OF THE PUBLIC AUDIT COMMITTEE TO SIR PETER HOUSDEN, PERMANENT SECRETARY, SCOTTISH GOVERNMENT, 7 DECEMBER 2011.

INQUIRY INTO THE AUDITOR GENERAL FOR SCOTLAND (AGS) REPORT - THE GATHERING 2009

At its meeting on 1 December 2010, the Public Audit Committee took oral evidence from the First Minister and Michael Russell MSP, the Cabinet Secretary for Education on The Gathering 2009.

I attach the relevant weblink to the Official Report for that meeting: http://www.scottish.parliament.uk/s3/committees/publicAudit/or-10/pau10-2101.htm

The Committee therefore agreed it would be helpful if you could provide copies of all correspondence (including emails) which relates to The Gathering 2009 between the Scottish Government, The City of Edinburgh Council and DEMA between 12 October 2009 and 27 January 2010. I would also be grateful if you could provide any internal Scottish Government communications between these dates which relate to The Gathering 2009.

St Andrew’s House, Regent Road, Edinburgh EH1 3DG www.scotland.gov.uk 

I would be grateful for your response by Wednesday 5 January 2011. Please do let me know if this time frame presents you with any difficulties. Further information on the publication of written submissions is contained in the enclosed policy on the treatment of written evidence by committees.

Should you require any further information please do not hesitate to contact the Clerk, Jane Williams on 0131 348 5236 or by email at [email protected].

St Andrew’s House, Regent Road, Edinburgh EH1 3DG www.scotland.gov.uk 

Howie J (Joanne)

From: Smith DR (Deborah) Sent: 28 October 2009 17:24 To: Pentland MK (Malcolm) Subject: Fw: Letter to Cllr Jenny Dawe

Attachments: JD.pdf

JD.pdf

Sent from my BlackBerry Wireless Handheld

----- Original Message ----- From: Davies D (Diana) To: Smith DR (Deborah) Cc: Watt K (Karen); Aberdein G (Geoff); Govan S (Sarah) Sent: Wed Oct 28 17:22:01 2009 Subject: Letter to Cllr Jenny Dawe

Deborah

The attached letter issued today. Please arrange to save onto Objective.

Diana

Diana Davies Correspondence Secretary Office of the First Minister +44 131 244 2527

The First Minister's preferences can be found at: : http://intranet/InExec/ AboutU s/MinisterialPrivateOffices/FirstMinister/Intro

All e-mails and attachments sent by a Ministerial Private Office to another official on behalf of a Minister relating to a decision, request or comment made by a Minister, or a note of a Ministerial meeting, must be filed appropriately by the primary recipient. Private Offices do not keep official records of such emails or attachments.

-----Original Message----- From: Scottish [email protected] [mailto: Scottish _Government_ [email protected] .uk] Sent: 28 October 2009 17:09 To: Davies D (Diana) Subject: Delivery of Scanned document

Your recently scanned document JD.pdfis attached.

1 To store this document in Objective, select 'Actions', 'Store in Objective' from the Outlook menu.

This document was scanned on 28/10/2009 17:09: 13

2 Rt Hon Alex salmond MSP First Minister of Scotland ~ St Andrew's House, Regent Road, Edinburgh EH13DG T: 0845 7741741 The Scottish Government

CUr Jenny Dawe The City of Edinburgh Council City Chambers High Street Edinburgh EH11YJ

[)~12October 2009

Dear Jenny

I am writing to you to signal how grateful we are for the continued co-operation between the . City of Edinburgh Council and the Scottish Government in relation to the future of The Gathering.

I am delighted that the Council has recognised the significance of the economic benefits which can be realised from future Gathering events and I very much appreciate your foresight in this regard. I know that you are working through some complexities in the transaction, and I very much look forward to working hand in hand with the City of Edinburgh Council to ensure that the maximum economic benefit can be achieved for both Edinburgh and Scotland in the years ahead. I y

ALEX SALMOND

Howie J (Joanne)

From: Martin Hutchison [[email protected]] Sent: 30 October 2009 11:20 To: Younie CMJ (Carolyn) Subject: Hello Attachments: Gathering education programme word. doc

Hi Carolyn, Hope you are well and settled into new job. I have attached a short report on the Gathering education programme for info. it went superbly well so again thanks for the support.

Can I also ask who took over your post? Always worth knowing who's who in Scottish Govt. cheers

Martin

************************************************************************

This email and files transmitted with it are confidential and are intended for the sole use of the individual or organisation to whom they are addressed.

If you have received this eMaii in error please notify the sender immediately and delete it without using, copying, storing, forwarding or disclosing its contents to any other person.

The Council has endeavoured to scan this eMail message and attachments for computer viruses and will not be liable for any losses incurred by the recipient.

**********'**************************************************************

This email was received from the INTERNET and scanned by the Government Secure Intranet anti- virus service supplied by Cable&Wireless in partnership with MessageLabs. (CCTM Certificate Number 2009/09/0052.) In case of problems, please call your organisationDs IT Helpdesk. Communications via the GSi may be automatically logged, monitored and/or recorded for legal purposes.

***********A AAI.J. A4AAAAAA*******************************************

This email has been received from an external party and has been swept for the presence of computer viruses.

*******************************************************************

08/12/2010

The Gatherin2 2009 Education Pro$!ramme

2009 was designated by the Scottish Government as the year of Homecoming Scotland with The Gathering 2009 being one of the flagship events taking place in Edinburgh on 25 & 26 July. To compliment the event the Gathering 2009 Education Programme ran between May - July and involved Nursery Schools, Special Education Schools, Primary schools, Secondary secondary schools and adults in a programme of events which explored and celebrated Scotland's heritage and culture. Activities included poetry, music, Scottish Country Dance, Storytelling, an introduction to Highland Games and discovering the Geography of the clans.

Proiect Obiectives

The Gathering 2009 aimed to promote and celebrate the contribution that the clans have made to the history, heritage and culture of Scotland.

On 25 and 26 of July an unprecedented international gathering of clans people witnessed a world class Highland Games and Festival of Scotland in the stunning surroundings of Holyrood Park. Their is no greater affiliation to Scotland and it's ancestry or heritage than the worldwide clan system. The Gathering 2009 was a contemporary celebration of what Scotland and the clan system has given to and will continue to give to the world.

To compliment this event The Gathering 2009 Education Programme was set up in partnership between a number of City of Edinburgh Council Departments, The Gathering 2009, voluntary organisations, the private sector and external funders.

The aim of the project was to create a unique educational programme of events and activities involving schools and community groups in the lead up to the Gathering 2009 which would:

• promote and celebrate the contribution that the clans have made to the history, heritage and culture of Scotland • explore the notion of identity and celebrate the diversity of cultures in a 21st century Scotland • use a wide range of expressive arts to engage children, young people, and adults in identifying and exploring the contribution that Scots have made across the globe • encourage the development literacy and communication skills through the use of poetry • use the Gathering 2009 as a catalyst and resource for teachers to develop the theme of Scottish culture in the year of Homecoming Scotland.

The activities included:

The Gathering Poetry Competition in association with The Scottish Poetry Library and The Scotsman: Schools were invited to participate in a national and international poetry competition entitled 'The Gathering'. Participants were encouraged to express themselves in a creative manner using poetry. A judging panel, including author Alexander McCall Smith and the Edinburgh City Makar, selected winners with the winning entries being published in The Scotsman and the winners receiving a volume of published poetry from the SPL.

Storytelling in association with The Scottish Storytelling Centre:

A series of short storytelling sessions aimed at children and families exploring and celebrating Scottish traditional culture and heritage including clan history and legacy through a combination of story, song, music, and puppetry, with complementary art and craft activities.

Discover the clans in association with Mapland Scotland

Pupils learned about the location and origins of each clan. Mapland Scotland is the largest ordinance survey map of Scotland ever produced. It is made up of 167 giant jigsaw pieces covering the whole of Scotland which pupils can walk over. Working with the Gathering 2009, a specially-designed interactive programme involved pupils in working together to discover the history and geography of Scotland's clans.

Scottish Country Dance in association with the Royal Scottish Country Dance Society (RSCDS)

Primary schools pupils were introduced to Scottish Country Dancing and the history of it's origins as part of a wider programme on Scottish cultural heritage.

Introduction to Highland Games Activities in association with Edinburgh Leisure and The International Highland Games Federation:

School pupils were given a unique opportunity to work with professional Highland Games Athletes and try out a number of activities included in the Gathering 2009 Highland Games. These included Tossing the Caber and Putting the stone. The activities were specifically designed for children and included lessons on the history of the Highland games.

Value of the oroiect to oarticioants and others

Educational establishments including nursery schools, primary schools, secondary schools, youth and community groups and the general public were invited to participate in a programme which celebrates the diversity of Scottish culture, explored the notion of identity through the clan system and initiated further discussion on a number of topics related to Scotland's heritage and culture.

Approximately 3250 pupils participated in or attended these events between May - June. 75 sessions were delivered. This included: 6 nursery schools, 13 primary schools, 1 secondary, 2 special educational needs schools. A further 45 schools attended the Edinburgh Youth Games which involved the highland games activities.

A further 1800 people (2/3rds of whom were children engaged with Mapland) and another 800 attended storytelling sessions during the Gathering 2009 event in July.

Involvement in the Gathering 2009 education programme had a number of direct benefits to pupils and schools who took part : • there was no cost to schools or pupils involved therefore children from a wide range of social and economic backgrounds could participate • it increased children's knowledge of their rich cultural heritage • supported children through the use of arts and creativity to develop a greater understanding of the history of the Scottish clans and explore the notion of identity in today's society • use a wide range of creative tools including dance, poetry, storytelling, mapland and Highland games to increase self confidence, working as part of a team and encourage literary skills.

Comments from teachers and staff include:

'The Mapland team spent the whole day at Drummond CHS delivering workshops to S1 pupils. From a visual perspective the map itself was impressive and really highlights the geographical and demographical characteristics of Scotland in a way that no textbook ever could. The mapland team allowed students to work collaboratively, exploring Scotland in a highly active and kinesthetic way. Would highly recommend mapland Scotland in any educational context'. Drummond CHS.

'our teachers and pupils absolutely loved Maplands. It was geared perfectly to the kid's age groups, especially the primary 4s, who are doing Scottish Geography this term as their project, so guess who will be asking them to come back next year! What an amazing map. Thanks again for contacting us. It was well worth it'. Bruntsfield Primary

The children, some parents and all staff went to the Storytelling Centre at the Netherbow on 1st June where Senga Munro told us stories in Scots. Everyone was engaged and enthralled for the whole hour. For some of the children and adults English is an additional language. They thoroughly enjoyed their opportunity to listen to and use the richness of the Scots tongue.

In the nursery we celebrate the Scottish language and culture and in this year of the Gathering have also held a Burn's Night Ceilidh and planted our garden with a Saltire and a French flag, in the manner of the floral clock, to celebrate our French immersion project.

We would like to thank all those involved in the organising of the school's programme for our entertaining and educational day. Grassmarket Nursery School It was a great idea, and a great event. We managed down the High St with a group of nearly thirty three and four year olds, and the storyteller and staff at the story telling centre were very welcoming. She kept the children engaged with a rendition of 'Three Craws' then a lovely story which she seemed to weave out of answers they gave to questions she asked. Very special, very Scottish and very close, but for us, such a treat as usually we would have to ask each child to pay, and so we really valued this opportunity to take the whole group. Cowgate under 58 Centre

Our children very much enjoyed the storytelling and the associated activities. Many of our children are bilingual and those that aren't are aware that words can be said in different languages, so the style of story really supported the ongoing work at Hope Cottage. Hope Cottage Nursery

On behalf of Libetron Primary School, I would like to thank you so much for providing our Primary 1 and 2 children with the Scottish Country Dancing sessions on Monday. Our PE Teacher greatly valued the opportunity of participating in the fIrst session and observing how you organised and led the session. The feedback I got from the teachers was all very positive and one commented on how wonderful it was for the children to dance to music played by your pianist. The children loved the sessions and it was great to see how involved they were. Thank you once again for giving the children such a rich learning experience. Liberton Primary

Effective use of resources

Creating an educational and community based programme both in the lead up to and during the Gathering 2009 event developed from joint discussions with The City of Edinburgh Council's Children and Families Department, Corporate Services Events Unit and The Gathering 2009

From the outset we were keen to ensure that we engaged as many childrenj young people and adults as possible in some aspect of the programme. In order to do this we set out to fInd the resources which would allow us to create a high quality programme of activities and events that was diverse in nature and would attract a wide range of participants from across Edinburgh.

Once the content and structure of the programme was identifIed we set out to fInd the fInancial and operational resources that were necessary to have in place before the project could take place.

The project was developed and managed by a member of staff from Schools and Community Services working with The Gathering 2009 in conjunction with Corporate Services Events Unit. Additional support was provided from the Arts and Learning Unit

Funding was identifIed and secured for this one off project from: The City of Edinburgh Council's Corporate Services Events Unit The Scottish Government The Heritage Lottery Fund The John Watsons Trust

Other partners provided support and venues including; The Scottish Poetry Library The Scotsman Edinburgh Leisure The Scottish Storytelling Centre Mapland Scotland The International Federation of Highland Games The Royal Scottish Country Dance Society (RSCDS)

Schools who took art included: Grassmarket Nursery St Leonards Nursery High School Yards Hope Cottage Nursery Cowgate Under 5s Stanwell Nursery

Abbeyhill Primary P1I2 Liberton Primary Sciennes Primary Royal Mile Primary Craigentinny Primary Leith Primary Preston St Primary Gorgie Mills Redhall (SEN) & Longstone Primary Niddrie I St Francis Primary Brunstane Primary Bruntsfield Primary Westbum Primary Wardie Primary

Drummond Community High School

A further 46 primary and secondary schools took part in the Edinburgh Airport Youth Games which adopted the clans as a theme and Edinburgh Leisure worked with the Gathering 2009 to incorporate Highland games and Scottish country dance into the event

What makes this oroiect uniaue

The programme was a completely new project that was created to specifically involve children, young people and adults in The Gathering 2009 and as a celebration of Homecoming Scotland.

The origins of Scottish clans stretch back beyond the Roman invasion of Britain almost 2000 years ago. Long before then they evolved among Scotland's indigenous Pictish and Celtic inhabitants from whom whose ancient language comes the word clann: which means family

We wanted to make the project educational and inspirational - the challenge for us was how to do that in a stimulating and creative manner that would introduce elements of Scottish heritage and culture, initiate discussions and have a lasting impact on all those involved. We believed it was important to relate events of the past such as the history and geography of the clans, traditional Scottish Country Dance and Highland Games events to today's society and use it to explore the the past and present of Scotland 'We made a huge shield to represent our clan, we decided to call ourselves Abernethy because we'de all been there. We're really from Deanpark Primary in Balerno'. Pupil from Deanpark

'I tried lifting the big stone but I couldn't even get it off the ground. You are supposed to lift it on to a barrel'. P7 pupil from Clan Kirkliston

'We had entries from all over Scotland and some of them have been stunning, especially among the 12-15 group. While adult entries, which came from as far as Canada and America, tended to focus on the clans, the young people were far more inventive, talking about various types of gatherings and their impact'. The Scottish Poetry Library

The children's learning experiences at Liberton Primary School have been greatly enriched through a wide range of educational initiatives as a result of the association we have had with The Gathering 2009. These experiences have included our first Highland Games, where children were able to watch professional athletes demonstrate these sports and participate in the games themselves; Shinty for P5-P7; Scottish Country Dancing from Nursery-P7; Story Telling for PI and P3; Mapland for different age groups. In addition, children in P3-P5 took part in the Gathering Poetry Competition and one of our P5 children, Chloe Thorburn won the Under 12 category with her poem 'Football Match'. We were extremely lucky to have Lord Jamie Sempill and Gavin Hastings at our Celebration Assembly on 29th May to talk to the children. Feedback from the children, the staff and parents has been incredibly positive children and they have all greatly enjoyed the stimulating learning environment and celebrating our Scottish culture and heritage. We aim to continue to build on these experiences and links to further enrich our curriculum for the future. Liberton Primary

The Gathering 2009 was an ideal opportunity to create a programme which stimulated children's interest in Scottish culture and heritage. It was a unique event which may never happen again and was the perfect opportunity to explore Scotland's cultural identity in a manner which was exciting, educational and fun. Culture, External Affairs and Tourism Directorate

T: +44(0)131-244 5504 F: +44(0)131-244 «1625Fax» ~ E:[email protected] The Scottish Government

Mr Jim Inch Directorof CorporateServices City of EdinburghCouncil Waverley Court 4 East MarketStreet EDINBURGH EH88BG

12 November 2009

Dear Jim

THE GATHERING

Further to our meeting last week where we discussed the future of The Gathering, I agreed to put in writing the Scottish Government's thoughts in terms of our partnership to ensure the success of any future Gathering event.

Given that the economic assessment undertaken by EKOS demonstrated net additional expenditure of £8.8m at the Edinburgh level and £10Am at the Scottish level, it is clear that there are economic benefits associated with the event which go beyond the City of Edinburgh, and where therefore the Scottish Government should have a role in ensuring the success of future events. In addition to the direct economic and tourism benefits, we would consider that the Gathering has a role in supporting national outcome 13, ie the development of a strong, fair and inclusive national identity.

On this basis, it would be the Scottish Government's policy intention to provide financial support to a future Gathering event or related events, subject of course to the submission of a satisfactory business plan and the agreement of Scottish Ministers. Assuming that the Council propose a future event of comparable or greater ambition to the original, we would take as our starting point that the economic benefits falling outwith Edinburgh would be at least £1.6 million at 2009 prices and would be interested in proposals to boost that figure. We would also accept that the available evidence is that the benefits do not necessarily include direct revenues to the promoter sufficient to cover the costs of the event. Consequently, it would be reasonable to assume that Scottish Government financial support would be no less than the £380,000 actual support provided in various ways by the Scottish Government and its funded bodies for the original event; and that a case for a higher level of

Victoria Quay,Edinburgh EH66QQ www.scotland.gov.uk financial support is likely to be sustainable, in view of the opportunity for a second event to generate larger and wider net economic benefits than the original. The exact level of that funding would be dependent both on the articulation of the benefits of the event beyond Edinburgh, and the availability of funds, but will fully recognise the importance of the event to Scottish Government economic and national identity objectives.

Kind regards,

Yours sincerely

Deborah Smith Acting Director

Victoria Quay, Edinburgh EH6 6QQ www.scotland.gov.uk Howie J (_Jo_a_"_"_e.> _

From: Davies D (Diana) on behalf of First Minister Sent: 21 January 201010:18 To: Pentland MK (Malcolm) Subject: FW: The Gathering Letter

Attachments: Smith (Gathering).doc

Smith (Gathering).doc Malcolm

Copy letter from Cllr Jenny Dawe

Diana

Diana Davies Correspondence Secretary Office of the First Minister +44 131 244 2527

The First Minister's preferences can be found at: : http://intranet/InExec/ AboutU s/MinisterialPrivateOffices/FirstMinister/Intro

-----Original Message----- From: Helen Johnston [mailto:[email protected]] Sent: 21 January 2010 10: 15 To: Davies D (Diana) Subject: The Gathering Letter

Diana

Copy attached. regards helen johnston 5293191

************************************************************************

This email and files transmitted with it are confidential and are intended for the sole use of the individual or organisation to whom they are addressed.

If you have received this eMail in error please notify the sender immediately and delete it without using,

1 copying, storing, forwarding or disclosing its contents to any other person.

The Council has endeavoured to scan this eMail message and attachments for computer viruses and will not be liable for any losses incurred by the recipient.

************************************************************************

This email was received from the INTERNET and scanned by the Government Secure Intranet anti-virus service supplied by Cable&Wireless in partnership with MessageLabs. (CCTM Certificate Number 2009/09/0052.) In case of problems, please call your organisation's IT Helpdesk. Communications via the GSi may be automatically logged, monitored and/or recorded for legal purposes.

*******************************************************************

This email has been received from an external party and has been swept for the presence of computer viruses.

*******************************************************************

2 Councillor Jenny Dawe Leader of The City of Edinburgh Council

23 December 2009

OUR REF: ISMITH lain Smith, MSP Convener The Scottish Parliament Edinburgh EH99 1SP

Dear Mr Smith

I refer to your letter to the First Minister dated 15 December and copied to me and the Council's Chief Executive for our information.

I am aware of the ongoing consideration of the future of The Gathering 2009 Ltd and the efforts to resolve the associated legacy issues.

You accurately describe the private sector companies' vulnerability in this situation but I do not consider that the Council, or indeed DEMA, have a responsibility to resolve the difficulties. I have always made it clear that, while I have sympathy for the creditors, this Council's financial situation precludes us taking on the debts of a private company.

DEMA has been consistently enthusiastic about getting involved in the future development of The Gathering but have been equally clear that they do not intend to take any responsibility for dealing with the 2009 legacy. I would point out that it is my understanding that the 'high profile' DEMA resignation which you refer to was not caused by the Company's consideration of The Gathering alone.

Much has been made of the News release on 15 October 2009, and having reviewed the process involved in compiling the article I consider that it was rushed and contained references which were both premature and somewhat misleading.

City Chambers High Street Edinburgh EH1 1YJ Tel: 0131 529 4987 Email: [email protected] Councillor Jenny Dawe Leader of The City of Edinburgh Council

At the time of the news release, discussions with the Scottish Government and with DEMA were at a very early stage and the necessary due diligence had not been completed. It follows that this has created confusion in some quarters and expectations in The Gathering Company and with its creditors who believed that a solution had been arrived at.

Discussions between senior officers of the Council, the Scottish Government, The Gathering 2009 Company and DEMA are continuing in the hope that a way forward can be found which protects the gathering brand and affords the Company's creditors at least part recovery of what they are owed. This requires the preparation of an independent valuation of the gathering brand and the development of a business case for sustaining the brand in the short term. This work is in hand.

I should emphasise that the Council's involvement in any arrangement to secure The Gathering would require Council approval.

While I am aware I have not answered all of your questions in detail, I hope I have clarified the Council's position in relation to The Gathering Company 2009.

Yours sincerely

COUNCILLOR JENNY DAWE LEADER - THE CITY OF EDINBURGH COUNCIL

Cc A Salmond, First Minister Page 1 of2 \.::;S<".•.·_) g~2'"2.

Howie J (Joanne)

From: Jamie Sempill [email protected]] Sent: 04 January 2010 11:43 To: Carlin V (Vicky) Attachments: Panalba Roadshow outline business plan.doc

Vicky

Happy New Year. I hope that you had an enjoyable break. As you can imagine I had mixed feelings about welcoming in the New Year. Anyway, I just hope that a final decision on The Gathering is made by the City within the next 2 weeks. I have been very concerned about how to ensure that the legacy is secured, and I have drafted an outline plan of how to build on the goodwill that the event created amongst the international clan networks. I have had a meeting with Phillip Riddle, who suggested that I forward you a copy of the plan. I would be grateful for your initial reactions and would be keen to discuss it further with whoever you would recommend. Phillip made it very clear that there is no funding available from VisitScotland, but suggested that you may have some other leads that I could follow up.

I look forward to hearing from you.

Jamie Sempill Director The Gathering 2009 27 Queen Charlotte St Edinburgh EH6 6AX

T: +44 (0)131 5611323 M: +44 (0)7803 128510 E: [email protected] W: www.thegathering2009.com

This message contains confidential information and is intended for the individual named. If you are not the named addressee you should not disseminate, distribute or copy this email. Please notify the sender immediately if you have received this email by mistake and delete this email from your system.

Email transmission cannot be guaranteed to be secure, or error-free, as information could be intercepted, corrupted, lost, destroyed, arrive late or incomplete, or contain viruses. The sender does not therefore accept liability for any errors or omissions in the content of this message which arise as a result of ernail transmission. If verification is required, please request a hard-copy version.

This email was received from the INTERNET and scanned by the Government Secure Intranet anti- virus service supplied by Cable& Wireless in partnership with MessageLabs. (CCTM Certificate Number 2009/09/0052.) In case of problems, please call your organisation's IT Helpdesk. Communications via the GSi may be automatically logged, monitored and/or recorded for legal purposes.

This email has been received from an external party and has been swept for the presence of computer viruses.

14/12/2010 Page 2 of '2

14/12/2010 Panalba Roadshow outline business plan

Background panalba was initially set up in early 2009 as a social network for all those people around the world interested in their Scottish roots and heritage. Its 8000 plus membership was largely driven by the Gathering 2009. The directors always planned to run a series of events that would appeal to the membership, however, on closer examination of the membership profile it was felt that developing the North American market place would prove to be more commercially attractive.

The plan: Panalba Ltd is to visit between 10-20 Highland games in the USA and Canada during the course of 2010.

The company will generate income through a combination of sponsorship fees and retail sales at the games. It will also build membership for the Panalba social network site.

The panalba Roadshow is a promotional vehicle for Scotland. It is intended to structure a formal relationship with tourism and heritage organisations, plus a commercial arrangement with a select group of Scottish businesses.

Objectives • To develop a profitable promotional business • To promote ancestral tourism to Scotland • To build the membership of Panalaba.com • To build on the legacy ofThe Gathering

Positioning the Panalba Roadshow.

The Roadshow has to be seen as a genuine Scottish operation. It needs to have the full endorsement of the Scottish government and its appropriate agencies. It has to be seen as an additional attraction to the North American Highland Game circuit. It plans to represent organisations such as The NTS, The SCSC,and The National Archives (Scotland's people).

This will enable the Roadshow to have a distinctive and important role, and will not be seen as just another vendor. JS( Lord Sempill) will act as an ambassador for Scotland. JSwill undertake to deliver a series of talks, primarily on subject matters relating to Scottish Heritage and to visiting Scotland.

The Roadshow would be promoted through the Panalba website, building awareness as the tour progresses, and creating additional interest amongst the "Scottish American" community.

The operation

The tour would be co-ordinated by a small management team, based in Edinburgh and Charlotte, NC. panalba would structure a commercial relationship with Great Scot International, a privately owned American based company, specialising in supplying quality Scottish Food products to retail outlets in the USA. The tour would be based at their offices in Charlotte.

The.tour would be staffed by 2 to 3 people, and would look to recruit volunteers at the Games. Management team

Lord Sempill was a Director of The Gathering 2009 Ltd. He is on the executive of the Standing Council of Scottish Chiefs. He has over 32 years of commercial management experience in marketing and communications, having worked for major corporations at home and abroad. He has good experience of the Highland Game circuit in both The USA and Canada.

David McNicoll is a regular contributor to Panalba. Highly knowledgeable about Scotland. He has worked for one of the top tour companies and in 2004, decided to set up and run his own tour company - Scottish Routes. As well as his business, he is also an avid walker, follower of St Johnstone Football Club, and a member of the Duke of Atholl's Private Army - the Atholl Highlanders.

Lucy-Rose Walker worked as the coordinator ofThe Gathering 2009. She studied Psychology at Glasgow University. Her first job took her around the highland games of North America promoting a Tartan Credit Card to the Scottish diaspora, alongside Lord Sempill. Having experienced the passion and enthusiasm for Scotland felt by so many North American Scots she went on to conceptualise & develop the board game Scottish Quest.

Budget

A cash flow projection is attached.

Initial cash flow shows an estimated cost of £57k to visit 10 major Highland Games between April and October.

The objective is to raise this money, probably as sponsorship, from the organisations and businesses that sign on for the initial tour. It is intended to raise further revenue frorn sales at the Games. These would be generated by sales of DVDs, books and merchandise.

However, income is also generated through the Panalba website. This income stream is highly dependent on the growth of the membership. Whilst the sponsors get the benefit of free advertising on the website throughout the tour, Panalba would actively seek advertising revenue from other companies. The site would also carry promo videos.

Next Stage

• To confirm the first commercial relationship • To get the endorsement of VisitScotland and other gov. bodies eg Scottish Development International • To raise seed funding • To confirm partnership with Great Scot International • To plan the itinerary and book into the games • To promote the Roadshow Howie J (Joanne)

From: Hepburn F (Frances) Sent: 21 January 201011:18 To: Pentland MK (Malcolm) Subject: FW: The Gathering- report on IPR value Attachments: The Gathering IP valuation (final si.gned).pdf

Malcolm, Is this what you ate looking for? Frances

Frances Hepburn Tourism Team

Promotion of Scotland & Tourism Division Area 2J~North, Victoria Quay, Edinburgh EH6 6QQ

Tel: (0)131 2442437 Fax: (0)131 244 1498 Email :f-r@_nc.~,s,H.e.pb_urO@s(;Qt.!~.I.J..d.,gsj_,g9.V,uk

Save a tree ... don't print this e-mail unless you really "eed to

From: colin,tait@uk,pwc.com [mailto:[email protected]] Sent: 08 January 2010 17:34 To: [email protected],uk Cc: Arnott RJ(Richard); Neilson K (Ken); Pentland MK (Malcolm); Carlin V (Vicky) Subject: Re: The Gathering- report on IPR value

Dear Jim,

Further to Richard's e-mail, please find attached our signed valuation report regarding the intellectual property owned by The Gathering 2009 Limited. The hold harmless letter that we require to release our report was signed and returned to us in October and therefore nothing further is required by Edinburgh City Council. However, should you wish to pass our report on to any other party, including you advisors, we shall require a seperate hold harmless letter from them.

If this is necessary, please can you send me the details of the company and who the letter should be addressed to and I shall arrange for this letter to be signed.

Kind regards.

Colin.

(See attached file: The Gathering IP valuation (final signed).pdf)

Colin Tait Assistant Director Valuations

PricewaterhouseCoopers LLP Erskine House 68 - 73 Queens Street Edinburgh EH2 4NH

Direct Line: +44 (0) 131 524 2440

08/12/2010 Page 2 of3

Mobile: +44 (0) 7921 108 469 Facsimile: +44 (0) 20 7804 4993 Email: [email protected]

Alternative contact: Faisal Anwar Direct Line: +44 (0) 131 5242275 Email: [email protected]

Action (To), Colin TaitJUK/CFRJPwC@EMEA-UK 08/01/2010 17:11 Information (cc), , , SubjectThe Gathering- report on IPR value

Jim Inch (City of Edinburgh Council)

Colin Tait, Price Waterhouse Coopers

This email is sent as I have been unable to contact both of you by phone- apologies.

Jenny Gilmour contacted this office to ask that we arrange for a copy of The Gathering IPR valuation be provided to CEC and its agents. At this time I cannot locate an electronic final version.

Price Waterhouse Coopers were commissioned by VisitScotland to carry out a valuation of The Gathering IPR in December 2009.

CEC has now asked for agreement for a copy of the valuation report to be provided to a third party - who may I understand then carry out further valuation work. I confirm that the VisitScotland has indicated to me that there is no objection to this report being passed on to CEC and the third party- as long as appropriate Hold Harmless correspondence with PWC has been completed.

I am therefore intending that between you (Colin and Jim- or your offices), you could make appropriate arrangements for release of the fmal report- following an exchange of correspondence between you. If necessary, Ken Neilson (VisitScotland) is willing to act as go between- as the original commissioner of the report.

I understood that CEC has already completed a "hold harmless" letter, but I am unable to locate a final version of the report. If the appropriate letter has been completed, I'd be grateful if Colin could provide a final version to Jim Inch directly. Ifnot, Colin will need to contact Jim to arrange completion of the hold harmless letter by CEC- and presumably anyway by the third party.

I would be grateful if this could be carried as soon as possible.

I can be contacted as below if needed. Thanks for your assistance.

Richard Amott

Tourism Team

Promotion of Scotland and Tourism Division

Culture, External Affairs and Tourism Directorate

Scottish Government

08/12/2010 Page 3 of3

Ext 41433 or 0131 244 1433

Area 2J (N) Victoria Quay, Edinburgh [email protected]

This e-mail (and any files or other attachments transmitted with it) is intended solely for the attention of the addressee(s). Unauthorised use, disclosure, storege, copying or distribution of any part of this e-mail is not permitted. If you are not the intended recipient please destroy the email, remove any copies from your system and inform the sender immediately by retum.

Communications with the Scottish Govemment may be monitored or recorded in order to secure the effective operation of the system and for other lawful purposes. The views or opinions contained within this e-mail may not necessarily reflect those of the Scottish Govemment.

***-************************************ •• ****.****.***'*

The original of this email was scanned for viruses by the Government Secure Intranet virus scanning service supplied by Cable&Wireless in partnership with MessageLabs. (CCTM Certificate Number 2009/09/0052.) On leaving the GSi this email was certified virus free. Communications via the GSi may be automatically logged, monitored and/or recorded for legal purposes.

------End of message text ------

Things change. What matters is you stay ahead. http://www.pwc.co.uk/stayahead

This email is confidential and is intended for the addressee only. If you are not the addressee, please delete the email and do not use it in any way. PricewaterhouseCoopers LLP does not accept or assume responsibility for any use of or reliance on this email by anyone, other than the intended addressee to the extent agreed in the relevant contract for the matter to which this email relates (if any). PricewaterhouseCoopers LLP is a limited liability partnership registered in England under registered number OC303525, with its registered address at 1 Embankment Place, London WC2N 6RH. It is authorised and regulated by the Financial Services Authority for designated investment business. PwC may monitor outgoing and incoming emails and other telecommunications on its email and telecommunications systems; by replying to this email you give your consent to such monitoring.

Visit our website http://www.pwc.comluk This email was received from the INTERNET and scanned by the Government Secure Intranet anti-virus service supplied by Cable&Wireless in partnership with MessageLabs. (CCTM Certificate Number 2009/09/0052.) In case of problems, please call your organisation's IT Helpdesk. Communications via the GSi may be automatically logged, monitored and/or recorded for legal purposes.

This em ail has been received from an extemal party and has been swept for the presence of computer viruses.

*************************************************_***************111'.

08/12/2010

Page 1 of2 ~y;ql(2 b¥

Howie J (Joanne)

From: Osowska F (Francesca) on behalf of Director for Culture, External Affairs and Tourism Sent: 27 January 201010:42 To: Carlin V (Vicky) Cc: Director for Culture, External Affairs and Tourism Subject: FW: The Gathering Importance: High Attachments: Letter to Francesca Osowska img04068[1].pdf

Vicky,

To see attached. Grateful if you could use this as an update to Ministers.

Thanks.

Francesca Director for Culture, External Affairs and Tourism x40319

From: Jackie Wright [mailto:[email protected]] Sent: 27 January 2010 09:37 To: Director for Culture, External Affairs and Tourism Subject: The Gathering Importance: High

Ms Osowska

Please find attached letter from Jim Inch, Director of Corporate Services, in respect of the above.

Jackie

Jackie Wright / Executive Office Secretary / Director of Corporate Services' Office / Business Centre 2/7 / The City of Edinburgh Council/ Waverley Court /4 East Market Street / EDINBURGH EH8 8BG / Tel: 0131 469 3334/ Fax: 0131 4693010

**********************************************************~.****

This email and files transmitted with it are confidential and are intended for the sole use of the individual or organisation to whom they are addressed.

If you have received this eMaii in error please notify the sender immediately and delete it without using, copying, storing, forwarding or disclosing its contents to any other person.

The Council has endeavoured to scan this eMaii message and attachments for computer viruses and will not be liable for any losses incurred by the recipient.

****************************************1t*******************************

08/12/2010 Page 2 of2

This email was received from the INTERNET and scanned by the Government Secure Intranet anti- virus service supplied by Cable&Wireless in partnership with MessageLabs. (CCTM Certificate Number 2009/09/0052.) In case of problems, please call your organisation's IT Helpdesk. Communications via the GSi may be automatically logged, monitored and/or recorded for legal purposes.

***************,..\.1 .•.A"AA·AJ.. A*****************************************

This email has been received from an external party and has been swept for the presence of computer viruses.

*********""*************************'********************************

08/12/2010 ·€DINBVR.GH· THE CITY Of EDINBURGH COUNCIL

CORPORATE SERVICES

Francesca Osowska Date 26 January 2010 Director of Culture, External Affairs and. Tourism Our Ref JI/Osowska(Gathering) Scottish Government Victoria Quay Your Ref EDINBURGH EH6 6QQ

DirectorCEA [email protected]

Dear Francesca

J refer to previous correspondence and discussions about the future of the Gathering. In particular I am aware that I have not formally responded to your colleague, Deborah Smith's letter to me dated 12 November 2009. In this letter she placed on record the Scottish Government's position in relation to our mutual wish to ensure the success of any future Gathering,

As you know, since 12 November 2009 there has been a great deal of activity directed towards considering the way ahead for the Gathering Company. In parallel there has been much press speculation and you will be aware that the matter has been the subject of a number of Parliamentary questions and considerable political interest.

I have had regular .contact with the Directors of the Company, Lord Sempill and Jenny Gilmour, and they in turn, in difficult circumstances, have endeavoured to keep their creditors informed of what is going on.

I believe I have now explored every poSSible way of achieving the twin objectives of:-

(I) protecting the Gathering brand for the future; and

(ii) minlmising any potential financial loss to the local creditors of the 2009 event.

To bring this matter to a conclusion the Council recently commissioned an independent evaluation of the worth of the event from BTG Forensic. I have now received their report.

JIM INCH DIRECTOR OF CORPORATE SERVICES Business Centre 217, Wavertey Court, 4 East Market Street. Edinburgh EH8 8BG Tel 0131 4693067 Fax 0131 4693010 e•.mail: .im.;n inbuf1 h. ov.uk As you know there has been a number of independent reports prepared on the Gathering at different times, for different purposes and by commissioning this further work it was our intention to re-examine the data already collected augmenting that wherever possible. This was intended to assist me to determine whether or not to advise the Council to acquire the brand with the intention of the Council. working alongside the Scottish Government and other partner agencies, including Destination Edinburgh Marketing Alliance (DEMA). to arrange and promote a future 'gathering' event.

The independent assessment of the worth of the Gathering has concluded that:-

(i) the company has no share value;

(ii) the value of the intellectual property rights of the Company is at best £1OOk;

(iii) the economic impact of the Gathering 2009 was particularly high both at a Scotland and Edinburgh level. In particular the event generated excellent return rates when compared with other events supported by the public sector; and

(iv) the private sector debts of the Company are in excess of £300k.

I am sure none of this will surprise you. It simply confirms the dire financial position of the Company on the one hand and the impressive economic impact generated by the event on the other.

The City of Edinburgh Council will fix a budget for 2010-2011 at its meeting on 11 February 2010. The administration is contemplating reducing staff numbers by 700, withdrawing or reducing support to many organisations and taking radical steps to curtail expenditure across the board. You will appreciate that in these circumstances the scope for investing in the Gathering brand is at best problematic.

I have no doubt that the Council, together with DEMA and in partnership with others, could put together a very compelling business case for holding a future gathering event. However the potential time lag between investment and income. and the remaining uncertainties associated with the state of public finances, represent significant risks and militate against intervention at this time.

While it is clear that the Scottish Government and The City of Edinburgh Council have ccommon cause' over this matter I very much regret that despite all of our best endeavours we have failed to find a satisfactory way to achieve our mutually agreed objectives. I suggest that our respective communications teams discuss and, if possible, agree a communication strategy to deal with the inevitable media interest.

Happy to discuss.

t t L ~ (JIM INCH , Director of Corporate Services

Howie J

From: Osowska F (Francesca) on behalf of First Minister Sent: 13 October 200912:33 To: Carlin V (Vicky) Cc: First Minister; Cabinet Secretary for Finance and Sustainable Growth; Minister for Culture, External Affairs and the Constitution; Dickson DT (Darren); Minister ~ r Enterprise, Energy and Tourism; Permanent Secretary; DG Economy; DG Finance and orporate Services; Smith DR (Deborah); Richards M (Mark); Glover 0 (Derek); Brown S Sheena); Baird A (Andrew); Robson J (Jane); Aberdein G (Geoff) Subject: Restricted: commercial in confidence - The Gathering

Attachments: Meeting with EMT 12 October (4).doc

Vicky, copy as above,

Please note that this e-mail and attachment are marked restricted and should not be circul ed further.

Please see attached note of meeting held last night to discuss The Gathering and list of actions b

• Outcome of meeting to be discussed with Chief Executive of Historic Scotland (Permanent Se retary);

• Urgent work to explore any legal, financial and state aids implications of the proposal being ta en to the EMT board on Wednesday (Vicky Carlin, Mark Richards, Derek Glover, Sheena Brown);

• Preparation / update of handling plans, planning for both EMT Board to approve the proposal nd for the Board to reject the proposal (Andrew Baird, Jane Robson, Geoff Aberdein);

• Edinburgh Military Tattoo to be provided with a copy of the valuation of the intellectual prope owned by the company (VisitScotland to provide);

• Further work relating to write off of public sector debt including exploring possibility of converti g the debt to aid allowable within the temporary framework for state aid rather than writing it off (Derek Glover, heena Brown, Vicky Carlin).

Thank you, I would be happy to discuss.

Meeting with EMT 12 October (4 •.•

Francesca Principal Private Secretary to the First Minister x45218

First Minister's preferences can be found at: http://intra netll nExecl AboutUs/Min isterial PrivateOffices/FM/FirstM inister1/fmintrod uction

All e-mails and attachments sent by a Ministerial Private Office to another official on behalf of a Mi ister relating to a decision, request or comment made by a Minister, or a note of a Ministerial meeting, must be filed ppropriately by the primary recipient. Private Offices do not keep official records of such e-mails or attachments.

1 RESTRICTED - COMMERCIAL IN CONFIDENCE

Meeting with representatives of the Edinburgh Military Tattoo, City of Edin urgh Council and VisitScotland - 12 October 2009,st Andrew's House

Attendees

First Minister

Richard Hambleton, Managing Director, Edinburgh Military Tattoo Euan Loudon, Chief Executive, Edinburgh Military Tattoo Donald McGougan, Director of Finance, City of Edinburgh Council CUrSteve Cardownie, City of Edinburgh Council Jim Inch, Director of Corporate Services, City of Edinburgh Council Philip Riddle, Chief Executive, VisitScotland Marie Christie, Director of Homecoming, EventScotland

Sir John Elvidge, Permanent Secretary Francesca Osowska, Principal Private Secretary to the First Minister Geoff Aberdein, Special Adviser to the First Minister Andrew Baird, Head of News, Scottish Government Vicky Carlin, Deputy Director, Promotion of Scotland and Tourism

1. The First Minister outlined the very positive results from the independent e onomic impact analysis of The Gathering, which had been one of the signature events of Ho ecoming. The event had generated economic impact of £8.8m to Edinburgh and £10Am to cotland, with a 1:21 return on public sector investment and very high satisfaction rates. As a ne off event, it was one of the most successful that Scotland has seen. However the financial anagement of The Gathering 2009 Ltd, the company behind the event had not been as sue essful and had liabilities of around £600k. The company has realisable assets of around £1 Ok, intellectual property worth £40k - £100k, but both would be diminished in the event of Ii uidation of the company.

2. The Scottish Government's aim was to be able to ensure the event was able t happen again and generate equivalent or greater economic impact, without tarnishing to t e goodwill that exists for the event. For this to happen, another operator of the concept w uld need to be found that could bring the necessary financial management and control to the ent. The First Minister wanted to explore whether the Edinburgh Military Tattoo might be the 0 ganisation that could bring this rigour to the management of the event, given its track record a d its interest in expanding its range of activities.

3. Major General Euan Loudon noted that the Edinburgh Military Tattoo Bo rd (which was meeting on 14 October) would need to approve any course of action. He noted that the strengths of the EMT lie in its connection to the military and the use of the dipl matic network, and that the EMT was itself entering a more complex stage of its organisationallife because of the grandstand project and links to the 2012 cultural Olympiad. Euan Loudo noted that the issues likely to be discussed at the Tattoo Board meeting would include: th organisational capacity of the EMT to become involved; financial exposure were the EMT to b come involved; and whether the Gathering could be core to the EMT's purpose.

4. Councillor Cardownie noted that from the City of Edinburgh's perspective, th administration was keen for the Gathering to remain in Edinburgh given the significant econom c benefit to the City. The City of Edinburgh was committed to the event in the same way it ha demonstrated commitment to the Tattoo over the years, and was keen to work together with t e Government and the Tattoo to find a solution.

5. Richard Hambleton asked whether it was possible for a phased solution to found, which might involve winding up The Gathering Ltd in its current form, and then movin on to the next phase which might involve EventScotland or another body taking the concept fo ard. RESTRICTED - COMMERCIAL IN CONFIDENCE

6. A range of ptions were discussed with the goal of preserving The Gathering brand for future events, but ensuring that the financial situation in which The Gathering Ltd currently found itself could be re ularised.

7. The First inister summarised the final position reached, noting that the EMT had agreed to take a prop sal to its board involving:

• Once t e public sector had written off the amounts owed to it by The Gathering 2009 Ltd, the Edi burgh Military Tattoo would buy The Gathering 2009 Ltd for a notional £1, and in so doing, i herit its assets and liabilities; • The Cit of Edinburgh Council would provide organisational help to deal with assets and liabilitie , and the Scottish Government would explore ways of ensuring that the EMT was not left inancially exposed including through contingent liabilities; • The Cit of Edinburgh Council, VisitScotland and the Scottish Government would work togethe to develop a new delivery vehicle to deliver future Gatherings, and once this was in place the EMT would sell The Gathering 2009 Ltd (again for a notional sum) to the new vehicle, with the EMT retaining a connection to the new vehicle, including the possibility of advisin on the business model to ensure synergy between EMT and future Gathering events.

8. The Edinb rgh Military Tattoo would report back after its Board meeting on Wednesday 14 October. I the meantime, all parties would refrain from public or media comment. The Directors 0 The Gathering 2009 Ltd would be invited to do likewise, restricting their comment to the fact hat they were in discussions about their future and hoped to be able to comment later in the eek.

13 October 20 9 Promotion of S otland and Tourism Division Howie J

From: Osowska F (Francesca) on behalf of First Minister Sent: 13 October 2009 18:33 To: Carlin V (Vicky) Cc: First Minister; Cabinet Secretary for Finance and Sustainable Growt ; Minister for Culture, External Affairs and the Constitution; Dickson DT (Darren); Minister or Enterprise, Energy and Tourism; Permanent Secretary; DG Economy; DG Finance and orporate Services; Smith DR (Deborah); Richards M (Mark); Glover D (Derek); Brown (Sheena); Wright AG (Aileen); Baird A (Andrew); Robson J (Jane); Aberdein G (Geo Subject: RE: Restricted: commercial in confidence - The Gathering FO

Importance: High

Vicky, all,

PLEASE NOTE RESTRICTED MARKING OF THIS E-MAIL

An update on where we are and resultant actions:

• We believe that there is a mechanism in place for the City of Edinburgh Council through Des ination Edinburgh Marketing Alliance (DEMA) to purchase the Gathering. (Final confirmation still required.) • The public sector debts would be written off at this point. Action: further investigation by S eena and Aileen on the write off I state aids issue. • DEMA would manage the private sector liabilities that they would inherit. • DEMA, with potentially other public (including VisitScotland and the Edinburgh Military Tattoo and private sector partners, would deliver future Gathering events.

HandlinQ

Jane and Andrew to lead on handling plan whereby City of Edinburgh Council lead on making th announcement. Comment required from other public sector partners and the Government role explained.

Suggested timing for an announcement is Thursday morning. Jane - grateful if you could follow P with the City of Edinburgh Council and others.

The BBC have been in regular contact with The Gathering Ltd and it had originally been suggest that Jamie Semple from The Gathering Ltd could appear on GMS. This does not now seem to be necessary, althou h it may be helpful for the City of Edinburgh Council to trail an announcement to the BBC. Jane - could you follow u this point. If there is any press conference, it might be helpful if Jamie Semple was part of this.

For those at the recent meeting on this subject, I have clarified that the meeting of the Board of T ustees of the Edinburgh Military Tattoo will take place between 1000 and 1530 tomorrow.

Thank you, I would be happy to discuss.

Francesca Principal Private Secretary to the First Minister x45218

First Minister's preferences can be found at: http://intranet/ln Execl AboutUs/MinisterialPrivateOffices/FM/FirstM inister1 Ifmintrod uction

All e-mails and attachments sent by a Ministerial Private Office to another official on behalf of a M nister relating to a decision, request or comment made by a Minister, or a note of a Ministerial meeting, must be file appropriately by the primary recipient. Private Offices do not keep official records of such e-mails or attachments.

From: Osowska F (Francesca) On Behalf Of First Minister Sent: 13 October 2009 12:33 To: Carlin V (Vicky) Cc: First Minister; Cabinet Secretary for Finance and SustainableGrowth; Minister for Culture, External A airs and the Constitution; Dickson DT (Darren); Minister for Enterprise, Energy and Tourism; Permanent Secretary; DG Econo ; DG Financeand 1 Corpo te Services; Smith DR (Deborah); Richards M (Mark); Glover D (Derek); Brown S (Sheena); Baird A (Andrew); Robson J (Jan ); Aberdein G (Geoff) Subject: Restri 00: commercial in confidence - The Gathering

Vicky, copy as above,

Please note that thl e-mail and attachment are marked restricted and should not be circulated further.

Please see attached ote of meeting held last night to discuss The Gathering and list of actions below.

• Outcome of mee ng to be discussed with Chief Executive of Historic Scotland (Permanent Secretary);

• Urgent work to e plore any legal, financial and state aids implications of the proposal being taken to the EMT board on Wedne day (Vicky Cartin, Mark Richards, Derek Glover, Sheena Brown);

• Preparation I upd te of handling plans, planning for both EMT Board to approve the proposal and for the Board to reject the propos I (Andrew Baird, Jane Robson, Geoff Aberdein);

• Edinburgh Milita Tattoo to be provided with a copy of the valuation of the intellectual property owned by the company (VisitS tland to provide);

• Further work rela ing to write off of public sector debt including exploring possibility of converting the debt to aid allowable within t e temporary framework for state aid rather than writing it off (Derek Glover, Sheena Brown, Vicky Carlin).

Thank you, I would b happy to discuss.

« File: Meeting with EMT 12 October (4).doc»

Francesca Principal Private Secr tary to the First Minister x45218

First Minister's prefer nces can be found at: htt ://intranetll nExecl boutUs/Min isterialPrivateOffices/FM/FirstM inister1/fmintrod uction

All e-mails and attach ents sent by a Ministerial Private Office to another official on behalf of a Minister relating to a decision, request or c mment made by a Minister, or a note of a Ministerial meeting, must be filed appropriately by the primary recipient. Pri ate Offices do not keep official records of such e-mails or attachments.

2 Howie J

From: Hogg KJ (Kenneth) Sent: 16 October 200916:10 To: Communications Justice Cc: Smith C (Christie); Wilson F (Fiona) (Communications); DG Justice nd Communities; Carlin V (Vicky); Glover D (Derek) Subject: FW: The Gathering costs

Importance: High

Fiona

Here is the statement which Lothian & Borders police have released to the Scotsman, fol owing the Scotsman's query.

Kenneth

-----Original Message----- From: [email protected] [mailto:[email protected]. uk] Sent: 16 October 2009 16:07 To: Hogg KJ (Kenneth) Subject: FW: The Gathering costs Importance: High

Kenneth - as discussed with Mike.

Trish -----Original Message----- From: Hanlon Trish (71179) Sent: 16 October 2009 15:58 To: Media Relations Cc: ACC McCormick (11351) Subject: The Gathering costs Importance: High

Robert - see below. This line has been agreed with DCC McCormick. If you wish to si ply the language, feel free! As Mr Mc is leaving the office, please liase bye-mail and copy me in. Ta.

Trish

Lothian and Borders Police can confirm that we had intended to seek to recover salary co ts associated with some staff members working at the Gathering Event. This would be in line with our no al approach to the provision of police officers to support public order and safety at events organised on a pr fit-making basis. In respect of the Homecoming Event the Force has recently agreed not to seek payment i recognition of the unlikelihood of our being able to recover the sum involved. It is worth noting that it is n t unusual for us to assist with public safety policing without recovering costs and this decision is considered on a case-by-case basis. This email isprivileged.confidentialandsubjecttocopyright.Anyunauthoriseduseor·sc1osure of its content is prohibited. The views expressed in this communication may not necessarily b the views of Lothian and Borders Police.

******************************************************************* This email has been received from an external party and has been swept for the presence f computer

1 *************************************************** *************** ·S::!StuTA FILE NOTE: DEMA take over of The Gathering 2009 Ltd.

Weare now clear from discussions with CEC that Destination Edinburgh Marketi g Alliance (DEMA) are taking on The Gathering 2009 Ltd. The purchase will be taken orward by DEMA during the course of this week, and they will take on all resultant pri ate sector liabilities.

We need to ensure that in future discussions regarding the staging of future Gathe .ng events, we do not undersell the contribution made by the 2009 event in terms of its econo ic impact and positive consideration should be given to financial support for future Gathe 'ng events from this portfolio.

Deborah Smith Acting Director Culture, External Affairs and Tourism Directorate 19 October 2009

Letter from lain Smith MSP to the First Minister on the issue of The Gathering Ltd Page 1 of2 ~~SS~1

Howie J (Joanne)

From: Pentland MK (Malcolm) Sent: 22 October 200914:44 To: Smith DR (Deborah) Subject: FW: Letter from lain Smith MSP to the First Minister on the issue of The G thering Ltd Importance: High Attachments: 091022 - First Minister on The Gathering.doc

To see.

From: Stanley E (Eleanor) On Behalf Of Carlin V (Vicky) Sent: 22 October 200914:42 To: Pentland MK (Malcolm) Cc: Arnott RJ(Richard) Subject: FW: Letter from lain Smith MSPto the First Minister on the issue of The Gatherin Ltd

Hi Malcolm,

Are you able to take this forward?

Thanks,

Eleanor

Eleanor Stanley

PAl Vicky Carlin Promotion of Scotland and Tourism Division Area 2-J North Victoria Quay Edinburgh EH66QQ

0131 24 (41466)

From: Douse K (Karen) On Behalf Of First Minister Sent: 22 October 200914:36 To: First Minister; Aberdein G (Geoff); Permanent Secretary; Minister for Culture, External A airs and the Constitution; Cabinet Secretary for Financeand SustainableGrowth; 'Leon Thompson'; '[email protected]'; Carlin V (Vicky); Baird A (Andrew); Watt K (Karen) Cc: NaseemZ (Zarina) Subject: FW: Letter from lain Smith MSPto the First Minister on the issue of The Gatherin

All,

We have received the attached letter from the Economy, Energy and Tourism Co mittee asking for written briefing from the Scottish Government on the situation surrounding t e Gathering Ltd and reports in the media (particularly in light of recent Scotsman reports)

Briefing has been requested "as soon as possible" - I suggest a first draft by clo e on Monday

08/12/2010 Letter from lain mith MSP to the First Minister on the issue of The Gathering Ltd Page 2 of2

for FM's return om leave on Tuesday. This material will also be required for next week's FMQ session.

Vicky can you I ad on pulling together the requested written briefing, with a factual summary of our involvem nt to date, the role played by Scottish Government and its agencies and the future plans for he Gathering, including implications for the budget.

Happy to discus

Regards

Karen

Karen Douse Assistant Private ecretary to the First Minister 0131 2442016

First Minister's pr erences can be found at: tLttp.1/ioJrane.tlJnE.G/~J2Q.\,J1U$lMinj$lerialErlY.a.te.Qffice$!FJl11Elr:~tMini$teJ1Llrnintro(;tYGtiOD

All e-mails and att chments sent by a Ministerial Private Office to another official on behalf of a Minister relating to a decisi n, request or comment made by a Minister, or a note of a Ministerial meeting, must be filed appropriately by t e primary recipient. Private Offices do not keep official records of such e-mails or attachments.

From: Stephen.! [email protected] [mailto:[email protected]] Sent: 22 October 2009 12: 11 To: First Minister Cc: DLMSP'[email protected];[email protected]; Janet.Anderson@ cottish.parliament.uk; NaseemZ (Zarina) Subject: Letter f m lain Smith MSPto the First Minister on the issue of The Gathering Ltd

************************ *************** This message has bee received from an external party and has been swept for th presence of computer viruses.

Please find att ched a letter from the Committee Convener to the First Minister on the issue of The Gatheri g.

«091022 - First inister on The Gathering.doc»

Janet - to log 0 correspondence file

Kind regards,

Stephen Imrie Clerk to the Ec nomy, Energy and Tourism Committee The Scottish P rliament Tel: 0131 348 207 Mob: 0771 30 3680 www.scottish. rliament.uk

08/12/2010 Economy, Energy and Tourism Committee

Rt. Hon Alex Salmond MSP The Scottish P rliament First Minister E inburgh The Scottish Government E 99 1SP St. Andrew's House Regent Road Tel: (0131) 48 5230 Edinburgh, EH1 3DG RNID Typetalk 18001 0131 48 5230 Fax: (0131) 48 5600 email: [email protected] ment.uk

Dear First Minister,

The Gathering Ltd

I write to you given your reported involvement in the discussions with repre entatives of The Gathering Ltd to ask for a written briefing from The Scottish Gove nment on the situation surrounding the company behind this year's events and the reports in the media about the transfer of the debts owed by the company to vario national public sector organisations and local authority bodies.

It was suggested in The Scotsman that the Scottish Government and vario s NDPBs such as VisitScotland, Historic Scotland, Homecoming Scotland an Scottish Enterprise have written off the finance provided to The Gathering Ltd. It was also suggested that a proportion of the debts have been transferred to the estination Edinburgh Marketing Alliance. However, today, The Scotsman is sugg sting that board members of the Destination Edinburgh Marketing Alliance do not wish this body to take on the debt.

I would be grateful if you could arrange to provide me with a briefing a soon as possible on the latest situation, the part played by the Scottish Governm nt and its agencies to date and any plans for the future and, in particular, th financial implications for the Scottish budget both now and for future years. This will assist the Committee with its current deliberations on the draft 2010-11 budget as ell as its more general responsibility for scrutiny of the tourism portfolio.

Kind regards,

lain Smith MSP Convener cc. Members of the EET Committee

Page 1 of5

McGeown D (David)

From: Nicholson MM (Mags) on behalf of Minister for Culture, Extemal Affairs and the stltullon Sent: 17 November 2009 11:34 To: MinisterialCorrespondence Unit Cc: Carlin V (Vicky); Pentland MK (Malcolm) Subject: FW: The GatheringJDEMA

For MCS please.

Thanks

Mags Nicholson Correspondence Secretary Minister for CultuTC. External Affairs and the COnstitution t 7 November 2009

All e-mails and attachment.~ sent hy Strategy and Mini.vterial Support Direc:torate tv a other qlfic:ial on behall of a Minister relating to a decLdon. request or comment made by a Mini.\'ter, or a note of a Mini..vterialmeeting, must befiled appropriately ~ the primary recipient. Strategy an Ministerial Support Directorate do not keep offlCial records o.fsuch e-mails or attachment." Tlum you.

From: Smith DR (Deborah) Sent: 17 November 2009 10:56 To: Minister for Culture, External Affairs and the ~n; Director for Culture, External irs and Tourism Cc: Carlin V (V'lCky)i Pentland MK (Malcolm) Subject: RE: The GatherlngjDEMA

Yes 1think so but Vicky and Malcolm will want to see now to be working on a respon ... It is also useful to see as the tone is not particuJarly helpfijl of the DEMA response and I will In tion this if I speak to Jim Inch over the next couple of days. I D

Deborah Smith Deputy Director: International Culture, External Affairs & Tourism Directorate Scottish Government I 0131244 5504

___ ~ •••• 0' ••••••• _, •• _ ••• ~._ ••• __ ._. _ •••••• w •• _ ••• 0 __ ; From: Dickson DT (Darren) On Behalf Of Minister for Culture, External Affafrs and the Co Ion Sent: 16 November 2009 20:29 To: DireCtOr for Culture, External Affairs and Touris ; Smith DR (Deborah) Cc: Minister for Culture, External Affairs and the C tlon SUbject: FW: The Gatheri1gfDEMA

Deborah

17/1112009 Page 2 of5

Grateful for ur thoughts on how to handle this correspondence. Acknowledge and put to MCS in th normal way?

Thanks

Darren

Private Secreta to the Minister for CuI re, External Affairs and the Constitutio &."'Ottish Govern ent 2N.05 51 Andrews H Edinburgh EH13DG Tel: 0131244 77 6 Mob: 07795 23 69

"'All emails and ttachments sent by a Ministerial Private ffice to another official on behalf of a Minister relating to a de sion, ret.luest or comment made by a M" . er, or a note of a Ministerial meeting must 'be filed appropria~ely b the primary recipient. Private Offices d not keep official records of such emails or attachments.

From: Martin H nt [mallto:[email protected]] Sent: 16 Nove ber 2009 17:22 To: mark.mada [email protected]. Cc: Minister for ulture, External Affairs and the Constitu on Subject: PN: Gatherlng/DEMA

( have just recei ed the out of office reply from the'Minist r please could you bring the following to his attention.

Kind regards

Martin

I~MARTIN IIU T MANAGING DJ ECTOR TA TANS ILK "V8~1 ~ElAt'I()NIO

TARTAN SILK [Jl RLIC RELATIONS 29 DUNDAS STREET EDI BURGH Em 6QQ TEL: (\1.'1 557 RK FAX: 11131:557 !C8Ji14 MOB: +44 (I)) 716 4017(..0 w: www.tart~~ilk.. \lk e: I1ll1rtir'@..tu..l:ta!'lS1 It.co.uk.

The Infotmallon transa cd in this e-maU and Iny atIa1:hed file bllntclldod only Ibr the person or enlhy 10 which It is addre..'Isedand may contain con liclcmtW and/nt'privileP mo I. Any opinions expressed in the I"'lI1ail m tho. ol'th~ Individual and not 1teCOS.'!IIril)'"fTartert Silk Limited. IryolIlW not II••: pllcndcd addrCSIICC.yo sllould not disclose. disseminate.. dlstribulc or copy this emaiI.lt.you have n:eei\-'ed Ihis clI1li1 in error. you ale notified !bat dhclol>;ng, dl..•

17/11/2009 Page 3 of 5

_____ ,.0 • .-- --- _

From: Martin Hunt Sent: 16 November 2009 17:14 To: '[email protected]' Cc: Ann Mitchell SUbject: The GatherlngjDEMA

Dear Mike

It was a great pleasure to see you on Friday night at the Consular Corps Dinner. an excellent eech and very good to see you.

I am writing to you however about the Gathering.

I am now seriously concerned about the level of debtowed to us for our work on the Gathering you will see below the response to my Director, Ann's emall (see.pelow) to Kenneth Wardrop of DEMA whi h frankly distresses me in It's tone and nature.

We like many other small businesses embrassed the:whole Homecoming concept and the real ty is that it now looks Increasing like a political game of football is being played to the deterement of those who In the current climate least deserve it

ft I would welcome your observations as it now appea~ everyone Is "passing the buck •

Yours Sincerely

Martin

--Original Message-

From; Kenneth Wardrop [m~.illQ;Kenneth.Ward~inburgh.9QUl~

Sent 16 November 2009 15:00

To: Ann Mitchell

Subject: RE: The Gathering 2009 Limited

Ann

Confirm DEMA has not taken on responsibility for the gathering 2009 ltel debts contrary to medi coverage.

Regards kenneth

Kenneth Wardrop BA (Hans) MBA MTS Head of Destination Edinburgh Marketing Alliance Ltd www.._QQio..b_l.!f9!.Hn..QPi.ri.ng~ta1!

Sent from my Palm® Treo 1M smartphone.

17/11/2009 Page 4 of5

~IAR1'lN HU l' MANAGING 01 E{'TOR . TA TANS ILK ,"VBll "UAtIONS __------:;;:r<:-:--_ --"--"-- ---.. -~:'::"_~-=.-:::_--=--:..---"'~....:---. ~--~ ....~ .--.- ~.:...--.------"'--.:..%~ TARTAN SILK Pl sLle RELATIONS 29 DUNDAS STREET EDI BURGH EH3 6QQ TEl.: OBI 55H8 FAX: 0131557 R884 MOB: +44 to) 776 4tH 1M) w: www.tul1Unsilk. '0, uk e: J!I.p.m.t\@.Ji).~MH .&'Q.,.P.l;.

'1'hf!:Inronnation 1_'11'1 WId ill tllis e-mail and all)l anacblld lile is Inle11d~d only for be pelS(llI or enllly 10 which illllllddre!tled III1cImay eontam confiJentiat lIIIdIor privi1e1ltd male I. Any <>!Iinions expmsed in Ihfl e-maU an: those ~)rthe ind vid~&I .00 nol necessarily oi"Tarlatl Silk Umiled. It'yoII Brc not t~ inlCndc:d addressee. y shoilid DOt disclose. d~ distribute ot copy this il. If yoII have n:ceh'Cdthis email in error. you AIY IIOtified rltaldi~losing, di$Jlribuling or co~in& ny Ct'JIIk:ntor /liking wly a.:lion based on Its conleftt is strie prohibited. Pleuc contacllbe _del- and

I sent: 16 N her 2009 13:28 To: Kenneth.W [email protected] Cc: Martin Hu Subject: The Importance:

I write to you ab ut the recent press coverage regarding e outstanding debts to creditors of The Gathering 2009 Limited an the subsequent involvement of DEMA.

Tartan Silk Limi d is a creditor of The Gathering and we ave received assurances from Lord Sempill that this debt would honoured. To date we have not been ntacted or received any correspondence to say the contrary, he verwe are increasingly anxious about e entire situation.

dVlse of when we can expect payment. r, who to contact in order to get an indication of nee will be released?

Thank you.

Yours sincerely

Ann E Mitchell

ITCHELL R 0= =INANG TARTANSILK --:---- ,><:--=.:---... PVILIC ItELATIQNS . --.------,.------~ --- ,

'n DU r)A~ '\TRFF- EDINBURGH FH~ 6QQ '=L 1)131 !>!I! 8Ba~ "AX 1)131 !t~1 88$4 w: ww .tartansilk.co.uk e: IInn@ r.t

"The Info tnmsmitted nthis a-maII and any attached file Is intended only for the person or entity to which It Is addressed and may contain """"' •••••• - -"". Any •••••• T10 ••••••••••• _"' ••••••••••••••• ""._~of

17/1112009 Page S of5

Tartan Sdk limited. If you are not the intended addressee, you should no( disclose, disseminate, distribute or eopy this emaH, If you hew nweived !hIs smail in MO(, you are notified that. disclosing, dittributlng or CQpylng any content or taking any baled on its eontent Is strk:tIy prohibited. Plea" contact the sender and delete this emaDand attached material tiom your &y$te •

Although Taman Silk Ltd 11;11 t8ken all fBallOll8b1e precautions to ensure no viNSes are trBl1$mltted by this emafl. 11 Silk Ltd does not acc;ept Uabtllty nor I81Jponslblflty for any loss or damage mIsI~ from the receipt, we r;K this emall Qr attachment •

lJ\tARllN IIUN'r MANAGING DIRECTOR TARTANS ILK ""ILl':: 1I11. •••110N$ .-----.--::><,----~:... ------~.....- -~--~-- --.::...------.--_._~::------. ..., .- ~ ---.:.~J ... _~~ -----

TARTAN SILK PlJBUC' Rm.ATIONS 2~ DUNDAS STREET EDINBURGH EIB 6QQ TEl.: 11131557 SR85 FAX: 01315578884 MOP: +44 to) 7767 4(171)() w: WWw..,.Jiirtansilk.co.uk c: JnaJ1in~t,lrt~sj~ ..cp'.I.I.1s

The Inrormadon uansnlltled In this e-mail and IIJIYatllICbccI fll~ is intended ~y fOr the pom>D or entity to whieb iJ Is addro!U!Cd and may lain emndcmial and/or pri\1leged material. Any Opinions C;(jIJ'CS~ in (he e-mail aretbosenftlJe.lndividualllDdlltlln~nlyofTartanSllkLimited.1 r ou arc 110tIbe inlct1ded add~ you shQUld not disclow, cfi¥1Iminalc. distrihpll! at copy ~Is eRI811. If you have m:eived Ihis email inmor.youa •••n.fiedthaldL.lClosing. disulbuting OJ I.:opying 1lIIYcontent or IIIkiJ1g any lIdIon iKIII:d on its CDnleot ii lllridly probibited. PICOIIIiC\XInll\Ctthe !lel1llcr and dcldc: Ilris ·1 Dod atJadled materiuJ Iionl your s~em.

This email was received ftom the INTERNET Scat1Ded by the Government Secure ntranet anti- virus service supplied by Cable&Wireless in ership with MessageLabs. (CCTM ertificate Number 2009/09/0052.) In case of problems, pI call your organisation's IT Helpd Ie. Communications via the OSi may be automati Iy logged, monitored and/or recorded or legal purposes. i

This emaP has been received from an external party and has been swept for the presence of computer viruses, •..••..•.•...... •..••.•...... _.._ ~ ...•.•.•---.._ .

17/11/2009

Stlulreachasa!1ulsean air an Taobh a-rnulgh, Cultar Is Turasachd Culture. Exte I Affairs and Tourism Directorate Roinn Ardacha h Alba is Turasachd Promotion of 5 otland and Tourism Division

FfT:0131~244 333 F:0131~244 1675 E:Tourism@sco land.gsi.gov.uk .

, I I Ar faidhle/Ouf ref: 2009/00353340R 23 November 2009

, Dear Mr Hunt

Thank you for your ~mail of 16 November 2009 to Michael Russell MSP, Minis er for Culture, E:xternal Affairs and the Constitution, co·nceming The Gathering 2009. I have been asked to reply on the Minister's behalf.

Thank you fot the support that Tartan Silk has shown of Homecoming Scotland and the Gathering event in particular. The Gathering in July attracted 47,000 visitors fr m around the world and an independent report produced by EKOS Ltd shows that the ev nt delivered a massive £1 b.4 million to Scotland's economy.

Unfortunately. while The Gathering event was a success, it became apparent a er the event that the company delivering the event,.The Gathering 2009 Ltd, had encountet'i d serious financial diffioulties. However, on 15 October the City of Edinburgh Council an ounced that Destination E[jinburgh Marketing Alliance was taking over The Gathering 2009 td given the positive economic impact of the event and the potential of future events. It also stated that DEMA would !be taking on The Gathering 2009 Ltd's remaining private sector 0 ligations. Our understanding is that the creditors of The Gathering are to be paid althoug we understand discussions are on-going at the City of Edinburgh Council.

Yours sincerely

. Carol Walsh Tourism Poliqy Officer

Cidhe BhictOria, DOn Eideann EH6 6QQ Victoria Quay, Edinburgh EH66QQ

www.scotland.gov.uk _IIIo

Letter from lain Smith MSP to the First Minister on the issue of The Gathering Ltd Page 1 of3 ~34-43~7,

Howie J (Joanne)

From: Pentland MK (Malcolm) Sent: 26 November 2009 10:26 To: First Minister Cc: Minister for Culture, External Affairs and the Constitution; Minister for Ente rise, Energy and Tourism; Director for Culture, External Affairs and Tourism; Smith DR Deborah); DG Finance and Corporate Services; Manzie S (Stella); Carlin V (Vicky); Arno RJ (Richard); Naseem Z (Zarina); Permanent Secretary; DG Education; Aberdein G (Ge ff); Pringle K (Kevin); Richards M (Mark); Glover D (Derek); Robson J (Jane) Subject: RE: Letter from lain Smith MSP to the First Minister on the issue of The Ga hering Ltd Importance: High Attachments: Homecoming - The Gathering - First Minister letter to EET Committee - No 09.doc; Homecoming - The Gathering - EET Ctte Briefing - 23 Nov 09.doc

PS/FM

Copy: as above

Since sending up the letter and report below, the Perm Sec has asked that he letter and report emphasise the point that the debts due by The Gathering were irrec verable and that this was the deciding factor in writing off the public sector debt. I un erstand that the previous versions of the letter and report have not been sent and am at aching slightly revised copies of both for FM's signature.

Thank you Malcolm

From: Pentland MK (Malcolm) Sent: 23 November 2009 10:27 To: First Minister Cc: Minister for Culture, External Affairs and the Constitution; Minister for Enterprise, Ene and Tourism; Director for Culture, External Affairs and Tourism; Smith DR (Deborah); DG Finance and Cor rate Services; Manzie S (Stella); Carlin V (Vicky); Arnott RJ (Richard); Naseem Z (Zarina); Permanent Secr ry; DG Education; Aberdein G (Geoff); Pringle K (Kevin); Richards M (Mark); Glover D (Derek); Rob n J (Jane) Subject: FW: Letter from rain Smith MSP to the First Minister on the issue of The Gathering Ltd Importance: High

PS/FM

Copy: as above

THE GATHERING 2009 LTD. - FIRST MINISTER REPORT TO EET COMMITTEE

Please find attached a draft report (2 pages) and covering letter (1 page) fr m the First Minister to lain Smith of the EET Committee in response to his letter of 22 0 tober (attached for reference).

Malcolm

08/1212010 Letter from lain mith MSP to the First Minister on the issue of The Gathering Ltd Page 2 of3

Malcolm Pentl nd Tourism Unit / Homecoming Scotland 2009

Tel: 0131 244 Fax: 0131 244

Homecoming Sc tland 2009: A celebratory programme of events across Scotland from 25 January to 30 November 20 9.

Spread the word and join our celebrations in 2009 - www.homecomingscotland2009.com

From: Douse K ( aren) On Behalf Of First Minister Sent: 22 October 200914:36 To: First Minister; Aberdein G (Geoff); Permanent Secretary; Minister for Culture, External Affairs and the Constitution; Cabi et Secretary for Financeand SustainableGrowth; 'Leon Thompson'; 'Barbara.clark@vi itscotland.com'; Carlin V (Vicky); Baird A (Andrew); Watt K (Karen) Cc: NaseemZ (Z rina) Subject: FW: Le er from lain Smith MSPto the First Minister on the issue of The Gathering Ltd

All,

We have receiv d the attached letter from the Economy, Energy and Tourism Committee asking for written brie ng from the Scottish Government on the situation surrounding the Gathering Ltd and reports in the media (particularly in light of recent Scotsman reports)

Briefing has be n requested "as soon as possible" - I suggest a first draft by close on Monday for FM's return rom leave on Tuesday. This material will also be required for next week's FMQ session.

Vicky can you I ad on pulling together the requested written briefing, with a factual summary of our involvem nt to date, the role played by Scottish Government and its agencies and the future plans for the Gathering, including implications for the budget.

Happy to discu

Regards

Karen

Karen Douse Assistant Private ecretary to the First Minister 0131 2442016

First Minister's pr ferences can be found at: htt :/IintranetllnE ecl AboutUslM inisterialPrivateOfficeslFMIFirstMinister1/fmintraduction

All e-mails and at chments sent by a Ministerial Private Office to another official on behalf of a Minister relating to a decis on, request or comment made by a Minister, or a note of a Ministerial meeting, must be filed appropriately by t e primary recipient. Private Offices do not keep official records of such e-mails or attachments.

08/12/2010 Letter from lain Smith MSP to the First Minister on the issue of The Gathering Ltd Page 3 of3

From: Stephen [email protected] [mailto: Stephen [email protected] Sent: 22 October 200912:11 To: First Minister Cc: DLMSP'[email protected]. uk; Katy [email protected] ament. uk; [email protected]; Naseem Z (Zarina) Subject: Letter from lain Smith MSP to the First Minister on the issue of The Gathering Ltd

This message has been received from an external party and has been swept for the presence of computer viruses.

*************" AI.A"" A'" A'" **************************1. AA"A"••.•••.••". "***********

Please find attached a letter from the Committee Convener to the First Minist r on the issue of The Gathering.

«091022 - First Minister on The Gathering.doc»

Janet - to log on correspondence file

Kind regards,

Stephen Imrie Clerk to the Economy, Energy and Tourism Committee The Scottish Parliament Tel: 0131 3485207 Mob: 0771 3063680 ww.w~~~tti§b~IliamentYJ~

08/12/2010 Rt Hon Alex Salmond MSP First Minister of Scotland

St Andrew's House. Regent Road, Edinburgh EH13DG T: 0845 7741741

Mr lain Smith MSP Convener Economy, Energy and Tourism Committee tt~in, The Scottish Parliament ~e,~

Edinburgh ,1Jili ~ ~'.~A' <: J,1 , EH99 1SP

November 2009

Dear Mr Smith

Thank you for your letter of 22 October regarding The Gathering 2009 Ltd and he article in The Scotsman of the same date.

The Gathering event staged in Holyrood Park in July was a great success and fantastic addition to the year long programme of over 400 events taking place in our Ho ecoming Year. An independent economic impact assessment carried out by EKOS Ltd as shown that the Gathering attracted 47,000 people from around the world to Edinburgh and generated £1 OAm in revenue for Scotland and £8.8m for Edinburgh.

Unfortunately, the company delivering the event, The Gathering 2009 Ltd, hav encountered serious financial difficulties. Given the circumstances of the company, the judg ment was taken that the debts were irrecoverable. As a result, Scottish Government, alo g with a number of other public sector creditors, took the decision to write off the amou s owed by The Gathering 2009 Ltd, with the additional intention that this might help secur the future of The Gathering as an event and the associated benefits to the Scottish econom that future events would present.

This action, along with their recognition of the enormous potential of future Gat ering events, has resulted in the City of Edinburgh Council and DEMA taking steps to take 0 er The Gathering 2009 Ltd so that the city can host similar spectacular events in the fu ure. We understand that discussions are ongoing at the council.

As requested, I am enclosing a two page briefing that sets out in detail the situ ion regarding The Gathering 2009 Ltd.

ALEX SALMOND THE GATHERING 2009 LTD: BRIEFING PAPER FOR THE ECONOMY, ENERGY AND TOURISM CO MITTEE

• The Gathering 2009 Ltd is a private limited company that de ivered The Gathering event on 25 and 26 June 2009.

• A range of public sector partners provided grant support to Th Gathering event in order to increase its economic impact. Specifically, p blic sector support was:

Scottish Government - £100K; EventScotland - £1OOK; Homecoming Scotland 2009 - £80K; City of Edinburgh Council - £1OOk; Scottish Enterprise - £100k; Heritage Lottery Fund - £10.5k.

The Scottish Government's decision to support The Gathering eve twas taken by Ministers on the basis of a detailed proposal submitted to he Scottish Government by The Gathering 2009 Ltd in June 2008. Th s detailed proposal included budget projections. The grant offer letter for the 100k Scottish Government funding was sent to The Gathering 2009 Ltd n 15 December 2008 and payment completed from the Europe and Ext rnal Affairs - Major Events and Themed Years budget line on 3 February 2009

• On 28 April 2009 the Directors of The Gathering 2009 Ltd m t with the Minister for Culture, External Affairs and the Constitution to dis uss issues relating to the broadcasting of The Gathering event. At that eeting the Directors reported that they were experiencing cash flow difficul ies due to WorldPay (WorldPay is the payment processing business of The oyal Bank of Scotland Group) holding income from ticket sales until after th event had taken place.

Short-term practical solutions to address the cash flow issues were explored and in June 2009 The Gathering 2009 Ltd was provided with a loan of £180k from Scottish Government. The Gathering 2009 Ltd agreed to the t rms of the loan on 5 June 2009.

• The Gathering event attracted 47,000 visitors from around the w rid and an independent report produced by EKOS Ltd (available on Even Scotland's website) shows that the Gathering delivered a massive £10.4 million to Scotland's economy (£8.8m to Edinburgh). This represented a re rn on the public sector investment of £21 for every £1 invested. The Eval ation also demonstrated that 73% of the 47,000 visitors to the Gathering eve t this year would be likely to return to a future event within the next four years.

• Although The Gathering Event was a success, it first became app rent within three weeks after the event that The Gathering 2009 Ltd had e countered serious financial difficulties. The full extent of these difficulties - d bts to the publi sector of £331k and the private sector of £341k - emerged in the weeks folio ing that.

• Disc ssions took place between a number of the public sector partners invol ed in The Gathering event and the judgement was taken that the debts wer irrecoverable. As a result, and in the light of the economic impact study, publi sector creditors including the Scottish Government, Historic Scotland and he Scottish Ambulance Service took the decision not to recover the amo nts they were owed. The additional intention behind this decision was that it may help ensure the future of the Gathering as an event and the asso iated benefits to the Scottish economy that future events would present. This decision was taken in line with Scottish Public Finance Manual proc dures. Lothian and Borders Police have also taken the decision not to see to recover the amounts owed to them.

• On 5 October 2009 the City of Edinburgh Council (CEC) issued a news rele se on behalf of the Destination Edinburgh Marketing Alliance (DEMA). That release stated that DEMA was taking over The Gathering 2009 Ltd given the ositive economic impact of the event and the potential of future events. It also stated that DEMA would be taking on The Gathering 2009 Ltd's rem ining private sector obligations. We understand discussions are at CEC are n-going.

• The cottish Government has written to CEC stating its policy intention is to prov de financial support to a future Gathering event or related events subject to t e submission of a satisfactory business plan and the agreement of Sco ish Ministers.

Culture, E ernal Affairs and Tourism Directorate 23 Novem er 2009 Howie J

From: Pentland MK (Malcolm) Sent: 10 December 2009 10:06 To: Director for Culture, External Affairs and Tourism Cc: Carlin V (Vicky); Manzie S (Stella); DG Finance and Corporate Service ; Smith DR (Deborah) Subject: The Gathering 2009 Ltd - Update

Attachments: Homecoming - Gathering - Update for Francesa Osowska - 8 Dec 09.d c

Francesca

Please find attached a short note updating you on developments in relation to The Gath ring 2009 Ltd.

Homecoming - Gathering - Updat.•.

Malcolm

1 Restricted

From: Malcolm Pentland Tourism Team, POST ivision

Francesca Osowska

Copy: Stella Manzie Deborah Smith Vicky Carlin

THE GATHERING 2009 LTD

1. You will recall that the City of Edinburgh Council (CEC) issued a n s release on behalf of Destination Edinburgh Marketing Alliance (DEMA) on 15 October, announcing that DEMA was taking over The Gathering Ltd and wa taking on the company's remaining private sector obligations. That transacti n has yet to take place and the purpose of this note is to update you on your eturn to the office regarding developments in relation to The Gathering 200 Ltd.

2. The First Minister wrote to Cllr Jenny Dawe on 28 October signallin the Scottish Government's gratitude to CEC for the continued co-opera ion between the two organisations in relation to the future of The Gath ring.

3. Deborah Smith, Derek Glover, Mark Richards and I met with Jim In h, Director of Corporate Services at CEC and Karen Kelly, Head of Fi ancial Services at CEC on 4 November to discuss the future of The Gathe ing.

4. In follow up to that meeting, Deborah Smith wrote to Jim Inch (12 N vember) setting out the Scottish Government's policy intention to provide fin ncial support to a future Gathering or related events, subject to our recei ing a satisfactory business plan and the agreement of Scottish Ministers. That correspondence set out that it would be reasonable for CEC to ass me that Scottish Government financial support would be no less than the £ 80,000 actual support provided in various ways by the Scottish Governmen and its funded bodies for the original event. The letter was also clear that case for a higher level of financial support would be likely to be sustainable iven the scope for a second Gathering event to generate larger and wider n t economic benefits than the original.

5. To date we have had no response from CEC to the 12 Novembe letter but understand that assurances of intended support from Scottish Gov rnment in relation to the staging of a future Gathering event may not be s fficient for CEC and DEMA to proceed with the take over of The Gathering 20 9.

6. lain Smith MSP of the Economy, Energy and Tourism Committee w ote to the First Minister on 22 October seeking a briefing on The Gathering 20 9 Ltd. The First Minister wrote to Mr Smith on 24 November.

7. You will also wish to be aware that on 10 November Kenneth Wardr pe, Head of DEMA, issued a statement that DEMA's Chair, Norman Springfor , had Restricted

indic ted his intention to resign from the Board at its meeting in December. Med reports at the time linked Mr Springford's resignation to the ann uncement about The Gathering but the statement from DEMA was clear that is decision to resign was taken because of the increasingly time cons ming nature of the role of chair and his not having the capacity to give this is full commitment given his other business commitments.

8. We pdated the First Minister and the Minister for Culture, External Affairs and he Constitution on the situation with regard to The Gathering 2009 Ltd on 24 N vember. That minute is being passed to the new Minister for Culture and xternal Affairs.

Malcolm Pentland 10 December 2009 Howie J

From: Douse K (Karen) on behalf of First Minister Sent: 27 January 201011:50 To: Carlin V (Vicky) Cc: First Minister; Minister for Enterprise, Energy and Tourism; Minister fo Culture and External Affairs Subject: Gathering 0- Ministerial Responsibility

Vicky

FM has confirmed that he is content for the Gathering to move into Mr Mather's portf lio

Best regards

Karen D

Karen Douse Assistant Private Secretary to the First Minister 0131 2442016

First Minister's preferences can be found at: htt ://intranetilnExec/AboutUs/MinisteriaIPrivateOffic /FirstMinister/lntro