1. At its meeting on 16 January 2024, the Delegated Powers and Law Reform Committee considered the delegated powers contained in the Budget (Scotland) (No.3) Bill ("the Bill") at Stage 1.

2. The Committee submits this report to the lead Committee for the Bill under Rule 9.6.2 of Standing Orders.

3. The Bill was introduced by the Deputy First Minister and Cabinet Secretary for Finance on 21 December 2023. The lead committee is the Finance and Public Administration Committee.

4. The Bill makes provision for the financial year 2024-2025. It authorises the use of resources by the Scottish Ministers and bodies whose expenditure is funded directly out of the Scottish Consolidated Fund (“SCF”). The direct-funded bodies are the Scottish Parliamentary Corporate Body (“SPCB”) and Audit Scotland.

5. The approval of the Parliament for the use of resources by the Scottish Ministers and direct-funded bodies is required under section 1 of the Public Finance and Accountability (Scotland) Act 2000 (“the 2000 Act”). Provision is also made for accruing resources separately to non-accruing resources in accordance with the 2000 Act.

6. Schedule 1 of the Bill sets out the purposes for which the Scottish Administration may use its resources, grouped by Ministerial portfolio, up to the overall limits of £59,171,026,458 (non-accruing resources) and £8,644,500,000 (accruing resources). Section 7 allows the purposes and the amounts ascribed to them to be modified.

7. The Bill also provides authorisation for cash expenditure from the SCF, in accordance with section 4 of the 2000 Act. Furthermore, it makes provision for the Scottish Ministers to authorise contingency payments required in the public interest in circumstances where it would not be practicable, for reasons of urgency, to utilise the normal budget revision process.

8. The Bill confers one power to make subordinate legislation upon the Scottish Ministers.

9. The Scottish Government has prepared a Delegated Powers Memorandum (“DPM”). It sets out the reasoning for taking the delegated power and for the procedure chosen.

Section 7 – Budget revision regulations

Power conferred on: the Scottish Ministers

Power exercisable by: regulations made by Scottish statutory instrument

Parliamentary procedure: affirmative

Provision

10. Section 7(1) of the Bill provides that the Scottish Ministers may by regulations amend the amounts specified in section 4(2) and 4(3) and schedules 1 to 3.

11. Regulations made under section 7(1) will be subject to the affirmative procedure.

12. Section 4(2) and 4(3) of the Bill specify the amounts of overall cash authorisations which can be drawn from the SCF by the Scottish Administration and each of the direct-funded bodies respectively. Schedules 1 and 2 of the Bill specify the authorised purposes and the amount of resources which can be used by the Scottish Administration and the direct-funded bodies respectively for those purposes. Schedule 3 provides the amounts of borrowing available to certain specified statutory bodies under the enactments listed in that schedule.

Committee consideration

13. The Scottish Government states in its DPM that the power in section 7 of the Bill is necessary to allow the Scottish Ministers to amend the Bill to take account of changes to the Government’s spending plans during the 2024-2025 financial year. The Scottish Government considers that there is a need for a mechanism to allow Ministers to seek authorisation for such in-year changes. It further explains that since devolution began, subordinate legislation has been used to revise the Government’s spending plans and has become a regular part of the budget process. It states that each of the annual Budget Acts has been subject to at least one revision by subordinate legislation.

14. The Committee agrees that it is appropriate for a Budget Bill to contain a power for Ministers to make amendments to the amounts it specifies. It considers that such a power is standard practice in the budget process and is periodically used by the Government in the form of summer, autumn and spring revisions to the annual budget. It has been accepted in previous years that the taking of a power to revise the amounts specified in the budget is justified. It is not considered that circumstances have changed since previous budget bills were introduced and, accordingly, the Committee also agrees that the taking of a power to make budget revision regulations is similarly justified.

15. The Committee considers that the exercise of the power in section 7 of the Bill is appropriately made subject to the affirmative procedure. Use of the affirmative procedure provides an opportunity for a high level of scrutiny around budgetary issues, which is considered appropriate given the high degree of public and political interest generated by the Government’s spending plans. The Committee is therefore content that this is consistent with the objectives of the 2000 Act.