Enterprise and Culture Committee, 09 Sep 2003

Meeting date: Tuesday, September 9, 2003

Official Report 221KB pdf

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Budget Process 2003-04

The second item on the agenda is our consideration of an options paper on the budget process. The paper begins by outlining the process, with which most members will probably be familiar. It then notes that this year the process has been curtailed because of the election, describes the budgets that the committee deals with and gives us some options as to how we might approach our budget scrutiny in future.

One option is that we undertake two formal meetings each year, while another possibility is that we concentrate on particular budget areas and build up a body of knowledge over the four years of the parliamentary session. Alternatively, we could move away from the budget timetable altogether and simply receive briefings throughout the year. Of course, members might have other proposals that they wish to make.

Another recommendation is that we should appoint a budget adviser. Other committees have found that to be helpful in the past. The budget adviser will be appointed not for one year but on an on-going basis. We could call on his experience as necessary.

It is suggested that in our necessarily truncated consideration of this year's budget it might be an idea, in addition to having the ministers appear before the committee, to concentrate on one item of the budget. There is an interesting and rather large "Other" category in the enterprise and lifelong learning budget; it might also be illuminating to probe that in detail.

Members can now comment on the budget scrutiny process. First, I want to know what approach you want to take in general to budget scrutiny in the future—from among the options that I have outlined or any other options that you suggest.

I would welcome opportunities for the committee to receive an informal briefing as a precursor to a formal meeting. Unless I have missed it, I do not think that the report includes that option. If we start at first base in formal questioning to ministers and others, we do not get far. If members who wished to had the opportunity—it need not be obligatory—to meet Executive officials and/or the committee's adviser to receive an informal briefing, that would be valuable and make formal meetings more productive.

I support that suggestion. It is important that the committee not only does the scrutiny that it should do, but that we understand the background to the way in which the budget is worked out. It is better for that to be done in an informal briefing than in a formal committee meeting.

I would like us to mix and match the options in the report on the budget scrutiny process. There are advantages in having a single evidence-taking session but there are also advantages in undertaking detailed scrutiny of one element of the budget each year. It should not be a case of either one or the other. I also agree that we should appoint an adviser and I support investigating the "Other" category of spending.

I have a question on the list of planned expenditure in annex A. Does that include any European money that might be bid for to support any of the activities or is it exclusive of European moneys?

I do not have any great objections to the proposals. However, one point that bothers me is that the paper does not mention the committee producing alternatives to the budget. A criticism that was levelled at the Parliament and its committees in the previous session was that almost no substantial amendments to the budget were produced at the committee stage of the process. Those of us who have experience of local government might suggest that it is the role of the Opposition to do that. However, that is not the situation in the Parliament. The role of the committee is to scrutinise what the Executive is doing and to suggest that ministers might want to consider doing something else.

The committee is not necessarily being asked to produce an alternative budget, but a mechanism must exist to make that possible. If we cannot do that, the process does not fulfil the principles laid down by the financial issues advisory group. That would be a weakness in the process. It might help that we have the privilege of having on the committee two former ministers, who can bring their experience to our scrutiny of the process. The lack of opportunity to produce amendments to the budget is a weakness. If we focus on only one element of the budget each year, that might not facilitate that process.

That was partly what lay behind my suggestion that we familiarise ourselves with how the budget is made up. The report states that it is difficult to get a single, comprehensive figure across the range of activities and range of departments involved in funding the areas that the committee covers. It is incumbent on the committee to do what it can to ask the right questions of Executive officials so that we get that comprehensive figure and can understand what is being funded and from where the money is coming. If there are alternative suggestions, it is our job—whether we are members of parties in the Executive or otherwise—to consider alternatives.

I am interested in Brian Adam's comments about amending a budget. In my opinion, the structure and nature of committees militates against their proposing amendments to a budget. Part of the reason for that is that, for committees to produce amendments, it is necessary to achieve a cross-party consensus on changing the programme. That requires a committee essentially to take itself out of the usual procedures, agree what it might do that is different and propose the amendment.

As Christine May suggests, if there is to be any possibility of amending a budget, we would have to focus on a small part. It would be too hard to go for amendments across the board, because it is in the nature of committees to break into party divisions on issues relating to spending programmes. If that happens, amendments are unlikely to be made to the budget, because the Executive parties have the majority of votes on the committees.

I agree that the danger that Brian Monteith outlines exists. However, we have to be clear when we are talking about making amendments that the budget is finite. The overall Scottish Executive budget cannot be changed. If we propose changes to the budget, we have to be clear in our minds about what we are saying. Are we suggesting that some money should be taken away from one of our non-departmental public bodies and given to another or are we saying that money should be taken from the health budget and given to the sport budget? I use that example deliberately, as it might be possible to categorise something that is included in the health budget as sport related or having to do with physical exercise and therefore make the case that it should be included in the sport budget.

I accept what Brian Monteith says about the difficulty in reaching cross-party agreement on the overall enterprise budget. However, if we focus on one area of the budget each year and conduct a major inquiry into another area into which we believe that funds should be redirected, we might be able to come to an agreement on an amendment.

For example, if, having conducted an inquiry into the area, we felt that the balance within—I stress that I mean within—the Scottish Enterprise part of the budget was wrong, but had chosen to focus our scrutiny on the tourism part of the budget that year, how would we have the expertise to make the amendment that we believed necessary?

I accept that there will be party-political influences. Nevertheless, if, following an inquiry, the committee wants the Executive to change its direction, there would have to be changes to the financial arrangements. I do not want us to lock ourselves into procedures for scrutinising the budget that would prevent that from happening. Indeed, I want us to create the opportunities for doing precisely that. I think that that was the intention behind the recommendations of the financial issues advisory group, but we have failed to fulfil that aspiration in the first four years of the Scottish Parliament.

In response to Christine May, I should point out that the figures come from the Scottish Executive's budget document. By definition, therefore, they are simply expenditure from the Scottish block. If the organisations concerned are getting money from other sources, that is fine, but it is nothing to do with the budget that we are scrutinising. Of course, it might be of interest if an organisation had a slush fund somewhere.

The figures do not include lottery funding, for instance.

Clearly, we do not approach the budget with the intention of changing it simply to show how macho we are. On the other hand, I certainly think that we will get the kind of information and detail that we need only if we hone our focus down to particular bodies. However, if we decide that we want more money to go to the area that we have examined, that creates the difficulty that we do not necessarily find out where to get that money from. To know that, we have to have examined another area in which we think that there is a surplus. We obviously could not have reasons for thinking that until we had examined that area.

My point relates to something that Mike Watson said. The issue is not necessarily the existence of a surplus. Everywhere in officialdom there is a wish to hang on to funds and, if they are not necessary for their original purpose, to use them for something else in the same silo. The committee's remit extends across a number of departments. Mike Watson makes a good point about money for something that is currently in the health budget but could arguably be covered under the sport budget. Sometimes, the reason why it is still in health is because it has aye been in health. It is like getting blood out of a stone trying to make it move from health to somewhere else. There is a good deal of scope for questioning on that sort of issue—as much as there is for saying, for example, "Should Scottish Enterprise put X per cent more of its global funds into tourism rather than cluster development?"

If we wanted to do something like that—and we might be able to consider it—we would have to ask the Minister for Health and Community Care or his deputy to come before the committee to find out what he thought about it.

Brian Adam is right about the FIAG recommendations. I do not think that any committee at any stage in the four years of the previous session made any changes to the budget. There were no amendments moved at any stage—they could only be moved at stage 1 or 2—of the budget. It never happened.

I remember only one amendment to the budget in those four years, which came not from a committee but from an individual member.

That was on the haemophiliacs.

Yes, on hepatitis C.

I am not sure that the discussion has been helpful in giving me a steer about what to do—did I expect anything else? In due course I will suggest to the committee an item to add to the work programme, and we will find out at that stage whether it fits with members' wishes.

Are we moving on from discussion of the paper? I have one or two points on other aspects of it.

I am trying to agree some of the points in it first of all. For this year, are members content to have the minister before us to try to scrutinise the "Other" heading in the enterprise and lifelong learning budget? If not, they should tell me what they would like to do instead.

In addition to that, can we pick up on Susan Deacon's point about having some sort of informal briefing for those members who are interested in the structure of the budget?

Under the heading "Year-round approach", the paper refers to

"scheduling briefings throughout the year."

That point is meant to have been covered. That is normal.

I note the reference and appreciate it, but I still have difficulty answering your question in the absence of the basic information. Forgive me: I know that some of the information will be available in the Executive's budget documents, and I readily confess that I have not yet interrogated the section on enterprise of my own volition, but I do not feel able to answer the question about the "Other" heading without knowing a wee bit more about what is under that heading. Half a side of A4 might give me enough information to address my questions. On the other hand, I can readily think of a number of huge questions in other areas. Do we have to button the matter down right now? The answer to that is yes, I suppose.

The other reason why I included the "Other" heading is that although much of our budget is under the control of agencies and NDPBs, that section is under the minister's control, and I thought that, given the truncated time scale, we could manage to scrutinise it in the time available.

I appreciate that clarification and, although I still have some anxieties—I would like to have some more information before I give an answer—I can see the logic in your plan for this year.

We might discover that what is under the "Other" heading is trivial, but, if the heading does deal with trivia, it is £100 million-worth of trivia.

I do not think that I used the word "trivial".

What written information will we request or receive from the Executive in advance to short-circuit the process and to ensure that we are as well armed as possible beforehand?

We will probably seek an informal briefing first to inform our public meeting. We will try to obtain in advance as much documentation as the Executive is able to provide—at least level 3 figures, but more if they are available.

The Executive should fulfil the undertaking that it gave to the predecessor committee on outturn figures. When those are available at the end of the year, we will want them to inform our scrutiny process.

I take it that we have agreed recommendations 1 and 2. Do we agree to appoint an adviser for the budget process, as outlined in recommendation 3, and the specification, as outlined in recommendation 4?

Members indicated agreement.

Do we agree to invite the minister to appear before us?

Members indicated agreement.

We have agreed recommendation 6.