Architecture and Design Scotland review: background report

Functional Assessment summary

Rapid Functional Assessment (RFA) Process

The functional assessment tool contained questions structured around the following 3 key areas:

Part A: Form, function & delivery: This examined the requirement for a clear mandate, which is up to date and relevant.

Part B: Vision, leadership & governance: this considered appropriate and effective delivery as well as exploring assurance on strategic and operational governance and sponsorship arrangements.

Part C: Alternative delivery models: this examined alternative delivery models

Functional Assessment Summary

Architecture and Design Scotland:

• is generally performing well in line with its agreed objectives
• has appropriate and robust governance procedures in place
• engages proactively and positively with SG sponsor team
• has potential to reform its role and activities to increase impact

Potential risks include:

• significant and increasing projected budget deficits risking viability
• limited capacity to reduce costs
• too broad a remit and limited resources
• a particular focus on facilitation and place promotion, to the cost of its support for architecture and design
• low visibility with key stakeholder groups
• overlap with sponsor team and other public/ third sector activities
• a need for greater evidence on impact

Areas for further exploration identified include (but are not limited to):

• identifying potential additional funding sources
• potential structural reform options to deliver budget sustainability and increase impact
• rationalisation of the role and functions of A&DS
• consideration of the ability of A&DS to support economic growth/ sector development
• more direct support for Ministerial priorities, in particular the Housing Emergency and Climate Emergency

RFA Findings: Part A - Form, function & delivery

Meeting the ‘Three Tests’

2.0 A&DS meet one of the government’s ‘Three Tests’ through the provision of a technical function, (design advice) which requires external expertise to deliver.

2.1 The current role of A&DS in providing design advice requires this function to be external to SG in order to avoid the potential prejudicing of planning decisions that may subsequently be referred to Scottish Ministers. However, this is to some extent qualified as a proportion of current A&DS activity has moved towards general facilitation focused on place-based working.

2.2 The role of a national architecture and design body such as A&DS is common to many^[2] European countries and is widely seen as important in supporting imperatives around how architecture, design, and development support net zero, sustainable growth, prevention agenda and public health outcomes. The principle of such a body is viewed by stakeholders as valuable.

2.3 Some European countries^[3] provide this function through a Chief, or State Architect role. Some Chief/ State Architect roles work in partnership with external arms-length bodies, others operate independently depending on the functions performed. The current role of the Scottish Government Chief Architect is not resourced to support the level of activity undertaken by A&DS.

Simplification

2.4 There is scope for significant simplification and refinement of the scope and focus of the organisation in order to achieve best value. A&DS is a small organisation with a vision to make the Place Principle an everyday reality in Scotland. This is an extremely broad ambition, and at a practical level A&DS is not sufficiently resourced to achieve this aim. Arguably this extends beyond the remit of an organisation intended to support architecture and design and overlaps with the role of other, partner organisations.

Focus and priorities

2.5 A significant element of A&DS’s current role focuses on supporting spatial planning and place-based working. Although there is a strong relationship between planning & place and architecture & design, the focus and priorities of A&DS have largely moved away from directly supporting the core function of architecture and building design. (The exception to this is work undertaken on school and healthcare design which is funded separately to core Grant-in-Aid.)

2.6 The result of this is twofold – firstly meaning that there is, at least a perception that A&DS activity overlaps with the general role and functions of other public bodies engaged around place, (e.g. Scottish Futures Trust, Improvement Service, Public Health Scotland), third sector organisations (e.g. Planning Aid Scotland/ Corra Foundation) and private planning and engagement consultancies. Additionally, the balance of resource being focussed on planning and place-based working means that there is a relative absence of direct support for architecture and design priorities.

2.7 Although the context set by Creating Places policy supports a focus on ‘place,’ A&DS is a small organisation and delivering the Place Principle involves work that extends well beyond architecture and design. A specific role to support design can be undertaken within the broader place context, rather than placing wider responsibility on the body to embed the Place Principle.

Profile and impact

2.8 A&DS’s own analysis suggests that their role and the value added is not well understood beyond a core audience. Stakeholder engagement with the design sector has highlighted a lack of knowledge of the activities, role, and priorities of A&DS.

Summary of Part A Findings

• the provision of a resource delivering technical expertise on architecture and design is important and should be retained
• change is likely to be required to the focus and priorities of A&DS in order to fulfil this role most effectively, transitioning away from place facilitation, towards core architecture and design interests that align with SG priorities
• an external, arms-length body is an appropriate model for the delivery of this function. However, it is not the only model, and consideration should be given to alternatives, including the role of Scottish Government
• the low visibility and awareness of A&DS functions amongst key architecture stakeholders is significant and is an indication of a divergence from the original purpose of a body intended to support architecture and design
• however, it should be noted that the drift in scope has been a direct consequence of direction from Ministers to support the place agenda as well as the context created by significant changes within the spatial planning policy context

RFA Findings: Part B - Vision, leadership & governance

2.9 Annex B questions highlighted that A&DS:

• is generally performing well in line with its objectives set out in the Corporate Strategy 2021-31
• has appropriate and robust governance procedures in place
• engages proactively and positively with SG sponsor team
• has potential to reform its role and activities to increase impact

Evidence and Impact

2.10 There is a lack of detailed evaluation, and the impact of the organisation is hard to determine as evaluation and monitoring work has generally been geared towards the analysis of project activity, rather than the impact of the organisation at a strategic level. More specific metrics and measurable evidence is required and is likely to strengthen the value and impact of the organisation. This should be developed in line with any changes to the focus and priorities of the body.

2.11 Simplification and a focus on setting out clear benefits, based on evaluation and evidence, may support greater alignment between the functions of the body and potential public funding opportunities. Further work on setting baselines for the quality and level of service may be of benefit in identifying areas of impact and potential improvement.

Creating value in public investment

2.12 A&DS has good, relevant experience of contributing to the creation of value in public sector building projects and this has been recognised by partner organisations through feedback undertaken for this Review. There is opportunity for A&DS to help drive increased value, particularly in the longer term and increase/ maintain quality in public sector capital building programmes through supporting good design processes. Careful consideration should be given to the respective roles of other public bodies, such as Scottish Futures Trust (SFT) and NHS Scotland Assure.

Shared services

2.13 As a small organisation with pressure on corporate and delivery resources, there is potential to improve efficiency and effectiveness through exploration of shared services and pooling of resources with other public bodies.

Financial viability

2.14 With current Ministerial commitments to non-compulsory redundancy, and a very low core staff turnover due to the specialist nature of the work, the organisation has extremely limited flexibility to reduce overall expenditure on salaries. This has become a live issue as future budget deficits are projected, despite significant recent savings in other parts of the business. There is a significant and increasing risk for the viability of the organisation.

2.15 A&DS relies on funding from multiple policy areas within Scottish Government, each generally supporting different strands of activity. Given that around 90% of A&DS budget is allocated to staff and other fixed operating costs, this funding arrangement places risk on the organisation, with a reduction in funding from any particular policy area likely to have a disproportionate effect and potentially jeopardising the wider viability of the organisation. In previous years this was managed to some extent by the recruitment of temporary staff to work on fixed term projects. Pressure on the current budget has resulted in fixed term appointments being terminated.

2.16 Achieving budget sustainability is likely to require exploration of all opportunities including seeking additional sources of funding, structural reform of the organisation, delivering efficiencies (albeit recent savings exercises have all but exhausted realisable cost reductions), shared services and income generation.

Digital innovation

2.17 There is scope for A&DS to play an active role in embedding a culture of digital innovation across the sector. This could be supported by a focus on combining data and digital working with A&DS’s core skills on design and has potential to increase the capacity and impact of the organisation.

Summary of Part 2 Findings

• greater emphasis on evaluation and more specific metrics/ measurable evidence is required and is likely to strengthen the value and impact of the organisation
• A&DS has a good track record of driving improvement in capital investment projects through embedding design thinking, particularly at briefing stages. This should be developed and capitalised on, linking with related activity across other organisations.
• current and projected budget position suggest that the long-term viability of A&DS requires meaningful change to the current funding approach, and likely the size and focus of the organisation
• developments in technology provide good opportunity to increase the impact of design through combination with digital platforms. A&DS has not been resourced to develop digital skills to date, but consideration should be given to the potential role of digital in developing reform options

RFA Findings: Part C – Alternative Delivery Models

2.18 It is clear that the delivery model for A&DS activity will be influenced by any alteration to the role and activities of the organisation. The functional assessment explored a range of high-level delivery models as part of the review process but did not set out potential structural reform options to be examined in detail.

Income generation and cost recovery

2.19 The scope for A&DS to generate income - such as through charging programme fees for design advice services - has not been assessed in detail. However, there are comparable models^[4] where income generation operates effectively, and this opportunity should be explored.

2.20 It should be recognised that the current constraints around public finances mean that income generation from public sector clients is likely to be challenging, in the short term at least. Similarly, effective income generation via private sector clients would likely require strong evidence of how A&DS services, and wider investment in supporting good design can deliver practical benefits. The identification of key potential service users and related opportunities, constraints and motivations would require to be considered as part of a model for income generation.

Structural composition

2.21 A&DS budget projections identify a potential future operating deficits and there is a need to consider structural reform options in order to secure long term financial viability for the body. Structural reform options should consider improvements in impact as well as financial efficiencies.

2.22 A&DS currently benefits from its identity as an arms-length and independent organisation. However, there is opportunity for any future structural reform to see the body integrated as part of another public body or with a much closer and formalised partnership, potentially as part of a larger umbrella organisation. A ‘nested’ approach may be an appropriate structure, whereby A&DS would exist as a distinct entity within the structure of another body.

2.23 There are a small number of public bodies which may support a merger or nested approach for A&DS. Detailed consideration should be given to the appropriateness of any organisation to act as a host for A&DS activity. Careful consideration should be given to this and to the changing nature of some public body activities, due to ongoing public service reform activity.

Academic partnership and research

2.24 In May 2024, A&DS relocated their offices to the Edinburgh Futures Institute building, part of the University of Edinburgh. This relocation provides opportunity to examine stronger association, and potential structural connection, to academia. Similar models to this exist, where publicly funded functions are delivered through strategic partnerships with universities, such as the V&A Dundee (a registered charity and partnership between University of Dundee, Abertay University, V&A museum, Dundee City Council and Scottish Enterprise).

2.25 Other models of academic/ research partnerships may provide a basis for developing the role, capacity, and remit of A&DS. For example, the Design Council operates as an independent charity with income derived from a combination of grants, partnerships and commissioned, paid-for services.

2.26 In 2022, the Design Council entered a framework agreement with the Arts and Humanities Research Council (AHRC) to receive an annual grant for a three-year period. The move is intended to strengthen the connection between the Design Council and AHRC, who share the common objective of furthering the role of design within the UK.

2.27 A&DS do not currently have specialist research skills nor a history of delivering research. However, the move to EFI, and the development of wider academic partnerships with universities across Scotland may help to develop the potential for the body to access support through AHRC or other sources. Developing research and evidence around design, and design value, may also help to promote commercial interest and increase the ability of A&DS to generate income through paid-for advice.

Summary of Part 3 Findings

• A&DS is a small organisation with a distinct remit around architecture and design - this is generally welcomed and valued by stakeholders. There are relevant links to other public bodies and exploration of potential ‘nesting’ may provide benefits and support existing and/ or reframed priorities. Any potential nesting arrangements should focus on long term outcomes alongside analysis of short-term benefits and ongoing viability
• models of income generation through provision of chargeable design advice should be explored
• development of academic relationships may help to transition A&DS towards additional income streams via research funding, as well as developing a more strategic approach to activities of the organisation