I start by thanking our clerks, our researchers and my fellow committee members for all the work that they have done over the budget process.
This debate is a new development in the Parliament’s budget scrutiny process, arising—as we have heard—from the implementation of recommendations made by the budget process review group.
The 2019-20 budget marks the first year of the operation of the new process, which is designed to take account of the new revenue-raising powers that have been devolved to this Parliament. Although the revenue-raising powers are important, it is also important that the expenditure proposals in the budget are fully scrutinised. I welcome the opportunity to provide the perspective of the Culture, Tourism, Europe and External Affairs Committee on the spending proposals that fall within our remit. I recognise that this is the first year of a new process and that it will take time to bed down. In future years, this debate should provide an opportunity to consider how well the new process is functioning in practice.
Debates on the budget naturally tend to focus on changes in the numerical allocations. Gordon Lindhurst quoted a Democratic Vice President, Joe Biden. I am going to quote a Republican President, George W Bush, who is not someone I would normally quote. He once remarked:
“It’s clearly a budget. It’s got a lot of numbers in it.”
President Bush is remembered for many things, but perhaps not his love of financial detail. However, the purpose of this debate is to dig down into the detail of the finances. The 2019-20 budget that covers culture, tourism, Europe and external affairs is essentially a standstill budget. I therefore wish to consider some of the broader policy themes within the committee’s remit that the budget seeks to support.
On culture, the new budget process places a significant emphasis on scrutiny of outcomes. The national performance framework contains an outcome on culture, which is welcome. However, how outcomes are directly attributable to culture portfolio spend is at best opaque.
The Cabinet Secretary for Culture, Tourism and External Affairs, Ms Hyslop, said:
“the Scottish Government plans to undertake work to understand how the activities that are directly attributable to the Culture portfolio budget contribute towards”
the national outcome on culture. The committee considers it imperative that work on this issue is concluded rapidly if the committee is to be able to scrutinise the budget from an outcomes perspective.
Ms Hyslop also said that the work on outcomes
“will be aligned with the forthcoming culture strategy”.
The committee has noted that the culture strategy was due for publication last year and as yet, there is still no timescale for its publication. The culture strategy will provide a key means via which to assess the Scottish Government’s cultural priorities and how the budget will support those priorities. Therefore, the committee would welcome a timescale for the publication of the culture strategy.
Scottish Government support for the screen sector in Scotland has been a key area of scrutiny by my committee in 2018, as the finance secretary alluded to in his remarks. We welcome the £20 million of support for the sector that is maintained in the 2019-20 budget.
My committee has undertaken considerable scrutiny of the Scottish Government’s screen sector policy. We consider that the sector has significant growth potential and that it is ideally placed to be a key business sector in Scotland. Currently, Scottish Government financial support for the screen sector is provided by Creative Scotland and Scottish Enterprise. A key recommendation in our screen sector report was that those budgets should be brought together under the sole control of the screen unit within Creative Scotland, in order to maximise the impact of Scottish Government support.
Of course, the committee continues to argue that the screen unit should eventually become a stand-alone agency. At the very least, there is a significant need for Scottish Enterprise support to be seen to be more effective in meeting the needs of the sector. I would welcome the finance secretary’s view on that issue.
The committee recognises the considerable financial pressures that local authorities face when it comes to supporting cultural provision in their localities. The committee recognises that Ms Hyslop is keen to reconvene meetings with the group that brings together local authority culture conveners under the auspices of COSLA. The committee shares that objective as a means to encourage strategic dialogue on how best to support cultural provision at a local level.
The finance secretary has clearly set out that the Brexit process could have significant implications for the 2019-20 budget. The committee recognises that position and, over the coming year, we will continue to scrutinise the implications of Brexit for areas of the budget within our remit. As part of its response to the challenges that Brexit presents, the Scottish Government proposes to increase the external affairs budget from £17.2 million in 2018-19 to £24 million. However, Ms Hyslop has confirmed to the committee that that increase is a consequence of total operating costs being included in the budget. Therefore, the committee would welcome the details of the exact amount of operating costs that are contained in the external affairs budget.
The budget contains details of funding levels for the international hub offices that are supported through the external affairs portfolio. Importantly, the budget includes an increase in the budget for the Brussels office, which reflects the impact of the Brexit process. Funding for the hub offices in China, Canada, Paris and the United States are also contained in the level 4 figures for the portfolio budget. However, the hub offices in Dublin and London and the new hub office in Berlin are funded through the finance, economy and fair work portfolio. The committee has explored with Ms Hyslop the rationale for that dual portfolio approach to the funding of hub offices, but it remains an area that the committee wishes to scrutinise further in the coming months.
More generally, the committee wishes to explore further the rationale for the choice of location for hub offices. How the Scottish Government evaluates the performance of those offices is an area that the committee has returned to regularly. Ms Hyslop highlighted to the committee that the Scottish Government is in the process of developing business plans for each of the Scottish Government offices. In evidence to the committee, she emphasised that evaluating the work of the offices in monetary terms would be problematic, because much of the offices’ work is on building relationships and influence. Specifically, she said:
“When we look at the business plans, we will consider how we evaluate the power of influence and relationships, which is not necessarily done in monetary terms.”—[Official Report, Culture, Tourism, Europe and External Affairs Committee, 10 January 2019; c 11.]
The committee looks forward to scrutinising those business plans once they have been published.
Tourism also falls within the committee’s remit. As Mark Twain said,
“Travel is fatal to prejudice, bigotry, and narrow-mindedness”.
The budget for tourism is, in essence, the money that the Scottish Government provides to support the work of VisitScotland. It is proposed that in 2019-20, the budget for VisitScotland will be £45.3 million, which is essentially a standstill budget, as that has been its budget since 2016-17. The committee recognises that there has been a substantial increase in visitor numbers in recent years as a result of a variety of factors, including the weak pound, as well as the successful promotion of Scotland as a destination. Of course, that includes a contribution that is related to visitors being attracted to locations that have been the subject of successful screen productions filmed in Scotland.
Although that rise in numbers is welcome, the committee recognises that it can result in significant impacts on localities. The impacts of tourism on cities such as Edinburgh, as well as more rural locations such as the north coast of Scotland, are well documented. A key debate is taking place about the ability of local communities and, critically, local authorities to respond to the capacity and infrastructure challenges that increasing visitor numbers can present. The committee has taken evidence on the proposal for a transient visitor levy, which is more commonly known as the tourist tax. To date, the committee has not taken a position on the proposal, but we have sought to provide a forum for the articulation of views on the issue.
As ever, consideration of the budget raises as many questions as answers. The committee intends to undertake a range of work over the coming months that will contribute to our pre-budget scrutiny for next year, but which will also enable us to ascertain the outcomes from the 2019-20 budget. Ultimately, the budget sets out spending plans. It will be the outcomes that arise from the budget that most concern my committee and, indeed, the people of Scotland.