Official Report: Minutes of Evidence

The Chairperson (Mr McKay): I welcome to the meeting Des Armstrong, director of the Central Procurement Directorate (CPD), and Gareth Johnston from the policy and performance division in CPD. Gentlemen, will we go straight to questions, or are there some comments that you want to make at the start?

Mr Des Armstrong (Department of Finance and Personnel): We have provided a paper for our attendance. Thank you for the opportunity to come along and talk to the Committee. We are happy to take questions.

The Chairperson (Mr McKay): OK, we will go straight to questions. The issue of social clauses is something that the Committee has looked at on a number of occasions. Reference is made in the briefing paper to social clauses providing for apprenticeships and work placements for the unemployed, students and trainees. What other types of social or community benefit can potentially be derived from public contracts?

Mr Armstrong: Through the Programme for Government, we have focused on the issue of social clauses. In previous briefings with the Committee, I have pointed out that we have a number of clauses that are standard to all contracts. Those usually relate to equality, health and safety. We are doing some work as to how we reference human rights. Those are the standard clauses. Then there is the opportunity to link social clauses and community benefit to the subject matter of a contract. That is where it gives a Department the opportunity to look at what role it might have and, therefore, shape up a community benefit or a social clause specifically related to its function.

We produced some guidance for Departments that gives them a list of things that they could look at when they start to consider the types of community benefits or social clauses that they want to put into a contract. That involves looking at the role of the Department, its legal obligations and what have you. Specifically, the sort of things that we think can be brought forward are, obviously, training opportunities and bringing apprentices through, but we also looked at how the impact of the contract would produce benefits for communities financially. For example, a Department might not accept tenders that are abnormally low, or make sure that there is a fair-payment practice and ethos right through the contract and that that spreads out through the organisations into the community. There are a number of things that we have been able to address in terms of community benefits. The focus today is on social clauses and that is where that report goes to.

The Chairperson (Mr McKay): What type of social clauses work best, in your experience?

Mr Armstrong: Let me first outline this point. In Northern Ireland, the requirement is to include social clauses in all contracts. We have been looking very closely at what is happening in other jurisdictions. We now see the outworkings of legislation coming through in other jurisdictions. They are starting to place a requirement for social clauses in contracts at a higher financial level than we have in Northern Ireland. That presents this issue: at what value of contract is it reasonable or effective to put in social clauses that are different from the standard clauses that I mentioned at the start? In Scotland, the Procurement Reform (Scotland) Act 2014 contains the requirement that projects above £4 million be considered for this. The Public Services (Social Value) Act 2012, which applies in England and Wales, looks purely at service contracts above the EU threshold, which is around £100,000 or £110,000.

We have struggled to get effective social benefit clauses into contracts of low value or short duration. They have been most effective in construction, particularly where an organisation might have a long programme of work ahead of it, such as the maintenance and development of the government estate, where a framework is in place. That gives us an opportunity to work with the contractor to bring forward opportunities for employment and to encourage apprenticeship take-up and that type of thing. There is an issue around the size of the contract and the benefit that we can put into it. It can be limited by virtue of value and duration.

Mr McQuillan: My question is on the social clauses as well. You sort of touched on it; I want to know what you can add to make sure that apprentices are covered. The construction industry is always saying that there are no apprentices coming through. The place to address that is at the signing of the contracts.

Mr Armstrong: We agreed with the industry — probably when the industry was a bit more buoyant than what it is in Northern Ireland now — a specific linkage between the number of apprentices who would be brought forward and the contract values. That worked well when the industry was buoyant. Obviously, the industry has been in a reasonably steady decline. We have spoken to the industry again about going back to a situation where the clauses that we put in contracts are more related to employment than to training opportunities. As part of that discussion, we want to talk to it about apprenticeships. Lots of the main contractors in Northern Ireland are working across in England, Scotland and Wales, so while we may be able to ask them to take on apprenticeships, those apprentices may have to work outside Northern Ireland. There are issues that make it a bit more complicated when trying to create the opportunities that are going to be effective in Northern Ireland.

Mr McQuillan: Is there anything that you could do at your end to make it any easier?

Mr Armstrong: Again, it goes back to the duration and size of some of the projects that we have in Northern Ireland. Where we have a continuing programme of work is where we should target the opportunities to maximise the benefits from training opportunities. If you have a social housing programme that is x number of units per year, we should be looking to see how we can work with housing associations to see whether that opportunity can be brought forward. If we are developing the education estate or the government estate over a period, we certainly must look at those sorts of areas to make sure that we have squeezed the benefit out of them.

The Construction Industry Training Board (CITB) has a pilot scheme around shared apprenticeships. We are certainly very keen to see how that works out. That is where an apprentice is taken on and is given work across a number of contractors. Obviously, if you are an apprentice bricklayer, joiner or whatever, you need continuity of work. In more buoyant days, contractors would have had an order book that would allow them to be moved from one job to the next. Obviously, that does not appear to be there at the minute. We are in discussion with the Construction Employers Federation and other representatives at the Construction Industry Forum for Northern Ireland (CIFNI) to see how we can maximise the benefit that we can get from it.

Mr McQuillan: Chair, I do not know whether you touched on this, but, clearly, you know that the Programme for Government is set, and it is then passed on to individual Departments to ensure that that is in the business case. How can the Executive be sure that each Department is doing that? When a business case is presented to you, is it a matter for you to ensure that the boxes are all ticked for the social clauses?

Mr Armstrong: I go back to the Executive's definition of "best value for money". It indicates that it is a combination of cost, quality and sustainability. The sustainability has to be considered in the business case and linked to the Programme for Government. The Executive direction is in place. We have provided guidance in CPD as to how social considerations can be brought forward into contracts. The procurement board has agreed that Departments should set targets for what they will achieve through their procurement spend. More recently, we have been in discussion with financial colleagues in DFP to produce a guidance letter to the finance directors that indicates to them how they should address social considerations and sustainability at business case level.

Mr McQuillan: Do you see any resistance to that at departmental level?

Mr Armstrong: I am not sure whether it is resistance or a difficulty, as I mentioned, with the way in which the programmes are shaped up. If you talk to folk about creating benefit through contracts for Northern Ireland, growing the economy and helping folk along, everybody is on board. Difficulties present themselves when you start to move into the application of some of those policies. We have been trying to use a system of simplifying the requirement, making sure that we can measure it and building that as a case study to encourage others to do that. We have some good examples in the construction area of where we have been able to bring those things through.

The Chairperson (Mr McKay): Des, you made reference to the business case stage of this. The previous Committee inquiry into procurement identified that as being vitally important. Can DFP apply any leverage at that stage in terms of whether to approve departmental business cases involving procurement projects?

Mr Armstrong: The letter that has gone to finance directors states that, when a Department has to refer a business case to DFP for approval, there will, as part of the approval process, be a consideration of how sustainability has been considered as part of best value for money. It has produced a list of the types of things that should be looked at in the business case across social, economic and environmental. There is some guidance to finance directors, who, ultimately, are responsible for ensuring that the business case process in Departments is effective and proportionate and that it tests the concept of best value for money.

Mr Gareth Johnston (Department of Finance and Personnel): It is a stage of the procurement process that we want to focus on more. A lot of work has been done in policy development in the procurement stage from when you put out a tender to when you let a contract. The stage before that — the commissioning stage — is getting much more attention in other jurisdictions. That is the stage where we can work a bit more with Departments to encourage people to think about things like social clauses and about what, as a whole, they want to get out of the procurement. We are trying to encourage people to move away from like-for-like procurement — going with the same thing that you bought five years ago — because the world, or technology, might have moved on. We are looking at how we can encourage more market engagement at that stage. That was a big message that came out of an innovation lab just before Christmas. In the same way, if we can build the support that is available for people in Departments who are involved in the commissioning, guidance, advice and training that is available, that will have benefits for the identification of social clauses as well.

Mr Armstrong: I might touch on this when we talk about the new directives and regulations that are coming through. We did a fair bit of work with the CBI in terms of some of the issues that it felt its members had with the procurement process. We developed a model that broke the procurement process down into three stages. One is the commissioning stage. You then have the regulated bit in the middle, which is the process that you have to go through to comply with European legislation to award a contract. You then have the contract delivery stage. We have had a fair bit of focus on the middle bit in terms of our interaction with Departments and the centres of procurement expertise (COPEs) as to how we make sure that we are compliant with that type of regulation. The new regulations and some of the reviews that we are doing alongside that gives us the opportunity to look at the other two stages a bit more and to try to focus our guidance, encouragement and reassurance — if you need it — to commissioners as to how they might take that. We will get some local examples that we can broadcast around the system and say, "Look, this is what works". Things like the Peace Bridge are good, solid examples that we can explain.

When we get to the contacting bit, we want contractors to understand that these are obligations that must be delivered in the same way as any of the harder bits of the contract. Our strategy will be to try to settle that we have done what we need to do in the middle bit and look at the commissioning bit and at what has actually been delivered through contracts. I think that we have got a good start on how social clauses can be delivered, and we need to encourage Departments to come up with their ideas. We sit in the centre, and we cannot anticipate or understand all the complexities and requirements that Government have scattered across their Departments, but we want to focus now on trying to free up some of the stuff that we think you could put alongside contracts. For example, in health, projects are now within CPD. We want to look at how we improve the health of the workforce that is actually building the installations, as well as at training opportunities, employment opportunities and doing something so that, when young men go to building sites, we look at their health and give some health advice. That is the type of thing that I think —

The Chairperson (Mr McKay): Can you expand on that a bit more? What do you mean?

Mr Armstrong: It is a concept that we need to think about. We need to look at how we do things better for the folk who are involved in the construction process. Those folk are usually in the community, because that is way the construction works. Those are the types of things. We want to encourage Departments to come up through innovation and not to think about things on the basis of like-for-like procurement but to think of things that are directly related to what the Department has to deliver, and then see if we can put that through under procurement spend. That is the sort of stuff that we want to talk about.

The Chairperson (Mr McKay): You mentioned health. Can you elaborate on what you are thinking about?

Mr Johnston: One example is that there has been a programme for children and young people who have come up through the care system, looking at whether, where hospital projects and health care projects are ongoing, there could be work experience or employment opportunities for them. Some work has started on that, and I know that further consideration is being given to it. We are trying to encourage Departments by saying, "You have an aim as a Department. What creative ways might there be of furthering that aim through the process of public procurement?"

Mr McQuillan: Gareth, you said "encourage" two or three times. What happens if encouragement does not work? Is there a stick as well?

Mr Armstrong: I do not think that we have a stick. Our role is to produce guidance and make sure that it is fit for purpose and is properly consulted on as we put it in place. CPD has a role in that, when we provide a service through our two COPEs, we make sure that the guidance that we suggested should be put in place is actually followed. We will encourage that through the activity of our COPEs, and we are very keen on making sure that, as a senior management team in CPD, we discuss the performance on social clauses going into contracts and what is being organised on that. In the e-tendering system, we will have direct access to management information in terms of contracts going through without the social clauses being put in place. That gives us a bit more leverage, but there is no sanction.

Ms Boyle: You are very welcome. I have a couple of questions. What further detail is available on the Strategic Investment Board (SIB) review, and what specific areas will it focus in on? Why will the review only focus on the potential for larger contracts? What is the definition, and how was that defined?

Mr Armstrong: The terms of reference are with SIB. It is an SIB review. We discussed it at the last procurement board, and we have feedback in terms of where we are on social clauses. We pointed out the limitation of CPD's role, which is to produce the guidance and then monitor. It does not give us a role to suggest that the outcome is not the outcome that it should be, because that runs back again to the policy owner. We want a clearer understanding of the best way to take the thing forward. We realise that we will be involved in procurement as long as there is government procurement to be done, so we have an opportunity to refresh how we take that forward. I think that a key decision is whether this will be better targeted to contracts at a certain size? That will be a smaller number, which will be easier to monitor in output terms, rather than a blanket, which someone could write off and say, "It does not work for my contract because it is too small in duration". I assume that we could share the terms of reference.

Ms Boyle: Can the Committee get a copy of the terms of reference?

Mr Johnston: There is a briefing paper, which the SIB is preparing. I can certainly suggest that it might want to share that with the Committee. It is really around just assessing the progress in the use of social clauses and what should be put in place in the future to make them more impactful. SIB has got Richard Macfarlane involved in this issue. He has done a lot of work nationally and internationally on the use of social clauses, particularly in encouraging employment and taking people off the long-term unemployed register and getting them into jobs. So there is a fair amount of wider expertise going into the review, which is very helpful. I know that they are just going into a stakeholder engagement phase, so I think that there will be an opportunity for a variety of interests.

Ms Boyle: Who will be involved in that? Who will have an input around that?

Mr Johnston: It is being led by the SIB as an independent review, so the SIB staff are involved, but in respect of stakeholders, I know that they are talking to people across the procurement community in the centres of procurement expertise. They have been talking to us in CPD as well. They are very keen to engage with a wider range of interests, and I have heard just in the past week or two of a couple of third-sector interests who were going to make sure that they were making their views known to the SIB.

That has been one side of the SIB's work. The other side was a major launch last week of a toolkit around social clauses. It was launched in the Titanic with a range of interests right across public, private and voluntary sectors. Richard Macfarlane was involved in the launch and preparation of the toolkit, and that is now available as a resource for commissioners. It is an online toolkit, so it will be added to in the years to come.

Ms Boyle: Is it a stage-by-stage process? What is the timeline for the review?

Mr Johnston: I emphasise that it is an SIB review, but, as I understand it, it is planning to engage over the next couple of months, with a view to finalising things before the summer. It is not an elongated timescale.

Mr McCallister: One of the problems is around the data. You have identified the fact that the accuracy and completeness of the figures are very low. How do you see that being addressed? I know that you are hoping that the SIB review will not be a long-drawn-out process, but is there anything in the interim that you would suggest doing to try to improve that?

Mr Armstrong: In terms of the requirements going into contracts?

Mr McCallister: Yes.

Mr Armstrong: As contracts are brought through on the new e-tender system that we have in place, information will be gathered as to which contracts include social clauses and others.

Mr McCallister: Even from monitoring the returns from some Departments, you have identified —

Mr Armstrong: There are issues. Some Departments have not given us the information.

Mr McCallister: Do you have any idea as to how you address that? The Department of Education has not provided you with any information. Has it given any reason?

Mr Armstrong: No. It was just not prepared to make a return.

Mr Johnston: At this stage, we are pretty keen to see what comes out of the SIB review. A lot of work and effort goes into the reporting, particularly on the construction side because it is within CPD. We have visibility of the contract management stage as well as the procurement stage. For those contracts in the construction sector that CPD is dealing with, I could give you the figures broken down all sorts of ways. That has been fairly thorough, but we want to wait and see what comes out of the SIB review. That will allow us to construct the monitoring arrangements accordingly. As Des said, alongside the new e-tender system we are developing a business information module that will give us a means of collecting that and assimilating it much more easily. I will be keen to see what comes out of SIB so that we target it properly.

Mr McCallister: If a Department does not cooperate, will that not make it more problematic for you to meet PFG targets?

Mr Armstrong: There are two things on that. First, in terms of input into contracts, the Programme for Government commitment is to place social clauses in all contracts. As I mentioned, the standard forms of contract that we have will allow that to happen. We are involved in providing advice, and we provide advice to the Department of Education and most Departments. As part of our role as a COPE, we will be promoting social clauses in the contracts. It is not as if the lack of reporting back in terms of overall figures means that there is no activity. The review being carried out through SIB and the new regulations coming into play, which are designed to facilitate policy through procurement, gives us another chance. "Fresh start" is probably a bit strong, but it gives us an opportunity to focus on how we are going to do this in terms of the mandate for the next Programme for Government.

Mr McCallister: I accept that there might be activity going on in the Department, but it is very hard to evaluate or assess how effective something is if you have only part of the information. Not only for Committee scrutiny but even for you guys in your role in saying how effective it is, whether we are getting what we need where we need it and whether we are getting the social clauses in will be difficult if it is problematic getting the returns in or if some Departments are not cooperating.

Mr Armstrong: I accept that it is difficult to monitor if you do not have a report. It is not a complete monitoring exercise then.

Mr Weir: Thank you, gentlemen, for your evidence so far. You mentioned earlier the issue of apprenticeships and the flow-through in terms of work placements. It is dealt with in your report. I appreciate that some of this strays into the detail from a DEL point of view, but in terms of ensuring that we are getting the number of people at the appropriate level in terms of the work placements, DEL has been rejigging what it is providing, and there has been the closure of the Steps to Work programme, which I think you identified as being at the core of work placement. Part of the process will be a review of arrangements. I have two or three questions in relation that. What is the impact of the closure on targets? From your understanding of the position on the review of arrangements, what is being put in in the interim while those are taking place and what do you see as the timescale for that review, and therefore for something to be up and running to take the place of Steps to Work?

Mr Armstrong: There is clearly an issue with the existing contracts, because there is a contractual commitment to comply with that scheme, and that scheme is no longer available. That produces, from a contract law point of view, a variation of the contract. We need, almost on a contract-by-contract basis, to negotiate with the contractor as to how a replacement might be put in place in the contract that is equivalent or produces some social benefit. We have to look at that exercise with contract managers.

Mr Weir: That will have to be done on contract-by-contract terms rather than in a holistic way.

Mr Armstrong: We hope to persuade contractors that they had an obligation in the contract to produce social value through their engagement in the contract, and we should ask them to come forward with some alternatives. In normal construction practice, if you hit an obstacle, it is usual that you will go to the contractor and say, "Give me a proposal for getting around the obstacle and give me your costs associated with it." That is the type of conversation that will normally go on in terms of a contract change.

Mr Weir: I appreciate that some of these things are maybe still at the discussion stage. Is the problem from the point of view of the employer, at least if they are involved with the contract, working out reasonably well in terms of those discussions? Are you meeting much resistance? Are there any problems? Is it too early to say, or has the response maybe been a bit of a patchwork?

Mr Armstrong: It is too early to say, because the closure of the scheme has happened. We have been trying to see whether we can come forward with a standard approach to solving that particular issue, but we have not been able to do so. We intend to put some scenarios together that will inform the approach taken by contract managers. In normal contracting operations it would not be unusual to have some sort of change on the contract that needs the contract manager to discuss it. We will provide advice to those who are managing a contract and do not have that.

Going forward, the feedback we have had is that there is a preference for a shift towards paid employment rather than training opportunities. Again, we have started to engage in the construction area with the Construction Employers Federation and others through the Construction Industry Forum for Northern Ireland (CIFNI) about moving back to a situation where £X of contract value means one paid employment place. That produces an easier bit of monitoring if you can identify an individual who has come off a long-term unemployment placement into a work placement. That is the way that we would intend to move forward.

Mr Weir: I appreciate that if a DEL official was sitting in front of me it might be easier to answer, but from the feedback you are getting, what is the potential timescale for the review of the arrangements that DEL has put in place to come to a conclusion?

Mr Johnston: When it comes to the interim arrangement moving forward, as Des has said, you have to negotiate the existing contracts one by one; you do not have any other choice. For anything new that is now being let, we have been talking to the construction industry about an arrangement that would mean that for so many pounds of labour value there would be one person taken off the longer-term unemployment register. We should be going out with guidance on that in the next few weeks; we have just been finalising our discussions on it.

In the longer term, we will look to see what comes out of the SIB review and we will think about the longer-term policy in light of that. The important thing is that, for the meantime, we have got something that provides social benefit and is impacting on the pretty large number of people from the construction sector who went out of work over the last years with the dip in the market so that we can bring some of them back into the market who have been unemployed for some time.

Mr Ó Muilleoir: Thanks very much, Des and Gareth. It is great to see people at the heart of the procurement directorate focused on social clauses, because this is where the rubber hits the road. You are aware that there is some cynicism out there about our reviews and analysis and continuing guidance on this and that there is not enough delivery. I am glad to hear that we are up and running with more advice and a new toolbox launched in Titanic Belfast, where we created 10 social clause jobs out of a £100 million spend. It is the appropriate place to be involved in that, and Belfast City Council was at the heart of that because we gave £10 million for that project, so the blame starts here. To break it down very simply, how many contracts have had social clauses in them in the last two or three years, and how many people got jobs as a result of those social clauses? Do we have a ballpark figure for those?

Mr Armstrong: I do not know whether we have those. You have asked for figures for the last couple of years, so we would need to come back with those details.

Mr Ó Muilleoir: Just any period at all. Is it 10 or 1,000 contracts that have had social clauses in them?

Mr Johnston: I am just looking at the construction contracts. We will have fuller figures for supplies and services after the end of the financial year. On the construction side, looking from November 2013 to September 2014 — just under a year — 411 construction contracts were awarded. At paragraph 7 of the paper we supplied, we have set out what would be the work placement weeks and what would be the apprenticeships. For example, 152 contracts have a target for the provision of apprenticeships. Those input figures are there.

The issue that we have had — this is really what led to the thoughts on the SIB review — was that we just do not know how many people are getting jobs because of that. Our responsibility in CPD under the Programme for Government has been to make sure that contracts have social clauses put into them. It is very difficult to link the people who have been on Steps to Work programmes under government contracts through to who is in work at the minute.

The SIB review will look at what information there is on impact. I rather suspect that there is not an awful lot of information about, but if we are in the business of moving from a work placement arrangement through to an actual job arrangement, it becomes much easier to show the impact that you are having because you are directly creating jobs for people who have been longer-term unemployed. It is much easier to see the impact and it is much easier to monitor.

Mr Ó Muilleoir: It is wonderful to see the focus on social clauses. We have been around long enough to remember Inez McCormack introducing and pioneering them in the Royal Victoria Hospital. Do you agree that we need to bring out to the public that 1,000 people — preferably long-term unemployed people — got work through our contract? Do you agree that that is the figure that we need?

Mr Armstrong: When an individual who has come through on a social clause tells a room full of people about the impact that that has had on their life, that is a very powerful story to hear. How you actually get that information is the issue. We struggle with management systems that allow us to trace individuals through that system.

Mr Ó Muilleoir: Do you agree that it is vital that we find a way to do that? We need a solution to that. The public are pleased that we are now focused on social clauses. The priority issue of our time is providing employment, especially to areas that have suffered long-term unemployment. Are all the other reviews not going to be a waste of time if we cannot say that 4,000, 2,000 or 400 people got jobs?

Mr Johnston: That was really one of the points that the procurement board was making the last time we discussed this with it in November. There is an obligation across government and the Civil Service to monitor the impacts of policies. We did not seem to be in a position where we able to do that in terms of what had happened to date. It is identified as a priority for the future.

Mr Ó Muilleoir: I suspect that you will share my frustrations. If we went through the section 75 categories, we would see that we clearly do not have figures for how many Travellers and other ordinary people did or did not benefit from social clauses. You mentioned young people in care. We have the target to get 75% of them into education, training or employment. I take it that we have no figures to tell us how we are doing in that regard. If we do not have the figures, we do not have a breakdown of section 75 categories.

Mr Johnston: We do not have a section 75 breakdown, but, again, it is an issue for the future.

Mr Ó Muilleoir: Thank you, gentlemen. I repeat that it gives me great heart to see this issue on the table. You are clearly very professional, and you are working very hard on it. You can be sure that the Committee will be pushing behind you to get the answers you want and to get monitoring returns back so that you can deliver on that pledge of government.

Mr Cree: It has been on the table for a while now, as everyone knows.

Turning to developments elsewhere in maximising social benefit from public procurement, the Committee has noted changes in other places, such as Great Britain and the Republic of Ireland, including legislative changes. What risk is there that our approach, which relies solely on administrative means, is less robust and effective than in other jurisdictions?

Mr Armstrong: There is a general decision to be made as to whether you want to take forward a particular policy initiative through administrative means or legislation. When the Executive agreed the policy way back in 2002, they made the decision that they were set on pushing things through in terms of administrative action, which is the sort of thing that we have put through in our procurement guidance notes. I mentioned earlier that the legislation that we have seen taken forward in England, Wales and Scotland has higher threshold levels before it requires an intervention in terms of social clauses. So, when you are framing legislation, you need to be much clearer as to where it will start to impact. Gareth is probably better at legislation impact than I am. However, the point I want to make is that the new directives have come from Europe with a policy intent available in them, in terms of social and economic clauses. So, the regulations that will come into place in the next wee while will allow for social, economic and environmental measures to come through. Whether the legislation itself carries a sanction, and what sanction is used to enforce it, is a different matter.

Mr Johnston: No sanction is attached to the legislation in England, for example, as I understand it. Personally, I think that, if you do can something by administrative means, it gives you a more flexible solution, and it is easier to change it in light of changing circumstances than if you have primary legislation. However, I should say that this is one of the specific issues that the SIB study will cover, so we will need to see what recommendation comes from that.

Mr Cree: Will the SIB's study include, for example, the EU directives that Des mentioned?

Mr Johnston: It includes the question of legislation versus administrative action, yes.

Mr Cree: Is that in that study? You mention, in your pack, the environmental aspects of the whole exercise. Will that be a problem?

Mr Johnston: The EU directives, and the new regulations, which we expect to be laid in Parliament any time now, make more explicit the fact that you can be thinking about social and environmental concerns. European law has been developing over the last 10 or 15 years on that. It is now very explicit. It is not quite saying, at this stage, that it is an expectation, but there is lots of stuff in the recitals of the European directive that is focused on social and environmental concerns. I think that is something that we can build on in moving forward by emphasising that this is now becoming standard across Europe, not just here, and we very much want to be in line with and, indeed, ahead of the trend.

Mr Cree: Thank you.