Finance Committee

Meeting date: Tuesday, March 2, 2010

Official Report 404KB pdf

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Public Services Reform (Scotland) Bill: Stage 2

Amendment 217, in the name of David Whitton, is grouped with amendments 218 to 222. I invite David Whitton to move amendment 217 and to speak to all amendments in the group.

I am sure that we can—

Do you want me to do it for you?

The question is, that amendment 217 be agreed to. Are we agreed?

Members: No.

There will be a division.

For

Chisholm, Malcolm (Edinburgh North and Leith) (Lab)

McCabe, Tom (Hamilton South) (Lab)

Whitton, David (Strathkelvin and Bearsden) (Lab)

Against

Brownlee, Derek (South of Scotland) (Con)

Fabiani, Linda (Central Scotland) (SNP)

FitzPatrick, Joe (Dundee West) (SNP)

Welsh, Andrew (Angus) (SNP)

Abstentions

Purvis, Jeremy (Tweeddale, Ettrick and Lauderdale) (LD)

The result of the division is: For 3, Against 4, Abstentions 1.

Amendment 217 disagreed to.

Amendments 218 to 221 not moved.

After schedule 14

Amendment 222 not moved.

After section 98

We will have a short suspension to allow Mr Ewing and his officials to take their seats. I thank the cabinet secretary and his officials for their presence and information.

15:02 Meeting suspended.

15:03 On resuming—

Thank you convener. Good afternoon to you and fellow members.

Amendments 210 and 212 are designed to ensure that we have a regulatory regime for charities in which the public can have confidence. Both are the result of recommendations by the Office of the Scottish Charity Regulator.

Amendment 210 introduces a requirement that a charity that has a website must display certain information relating to its charitable status on such pages as may be specified in regulations. Websites are becoming a common way for the public to find out information about bodies and it is only right and proper that the public have as much information as possible about those bodies. By including websites in the list of documents on which a charity has to declare its status, we are ensuring that the public can be assured that they are dealing with a bona fide, properly registered and regulated charity.

I will now describe what amendment 212 seeks to do. We need to ensure that the regulatory regime that was put in place by the Charities and Trustee Investment (Scotland) Act 2005 is robust enough to deal with unscrupulous people who are or have been involved in the management of charities. The 2005 act allows the Court of Session to remove from their position a person who is in the management or control of a charity. As a result, they are disqualified from being a charity trustee in future. However, the power of the court applies only when the person is still in the management or control of the charity; if they have left the charity, or the body is no longer a charity, or it has ceased to exist, the power of the court no longer applies. That is wrong, because it allows a person to escape sanction on a technicality. If we are serious about effective regulation and protecting the charity brand in Scotland, we must ensure that someone who has been at it in a charity cannot escape the consequences of their actions. The court must have the power to deem someone removed and, in so doing, disqualify them from being a charity trustee in future even if they are no longer involved in the management or control of their charity. I therefore urge the committee to accept the amendment.

Amendments 223, 224, 225, 226 and 230 are consequential changes to the bill as a result of amendments 210 and 212. Amendments 223, 224, 225 and 226 would add references to the 2005 act and define what that means; amendment 230 would amend the long title to ensure that it captures all the charity law amendments.

I move amendment 210.

Amendment 211, in the name of the minister, is grouped with amendments 213 to 216.

I gather that it will be an operational practice. Indeed, OSCR has confirmed that to us, perhaps in anticipation of members’ interest in the matter. That practice will govern OSCR’s operational actions in this area. Plainly, no one would wish to impose unwanted or unwelcome trustees on a charity. In the kind of situation that the provision is envisaged to assist, I am sure that a trustee would be anxious to find a colleague who shared his or her interest in the charitable purposes. They would work together to see that the charitable acts and purposes can be continued.

The amendments are all recommendations for change that the Office of the Scottish Charity Regulator made in its recent annual report, following its experience discharging its functions. They are designed to assist charities in certain circumstances.

A key feature of our charity legislation is that it does not automatically award charitable status to any particular class of body, but neither does it exclude any type of body—except political parties—from being a charity. It is left to OSCR, our independent regulator, to decide whether a body meets the charity test. That applies as much to bodies that are already charities as it does to bodies that are applying to become charities. OSCR will look at those that are already charities under the rolling review to ensure that they continue to meet the charity test. When OSCR decides that a charity no longer meets the test, it has two options: it can direct the charity to make any necessary changes in order to meet the requirements of the test, or it can remove the charity from the register.

If OSCR issues a direction to a charity that no longer meets the charity test, setting out the changes that the charity must make—as it has done in the majority of cases—it is not able to take account of new information, a change in circumstances or an unforeseen event, and to change the direction. For example, if the charity had almost made the changes that OSCR had told it to make but lost the paperwork involved in a fire or flood, so that it was unable to put in place the final piece of the puzzle and to prove to OSCR that it had made the necessary changes, at present OSCR would have no option but to take it off the register. That does not seem right or fair and does not seem to fit with OSCR’s duty to be a proportionate regulator. Is it not better that, in such a situation, the charity should be able to ask OSCR to vary the terms of the direction that has been issued—for example by giving the charity more time to comply with it? That is part of what amendment 211 seeks to allow.

The other part of the amendment gives a charity the right to request a review of OSCR’s decision to issue a direction to it. Currently, charities do not have that right. A charity has the right to a review of a decision to remove it from the register, but only after it has not done or has refused to do what the regulator told it to do to meet the charity test. Surely it makes more sense to allow a review to be carried out earlier, after the direction has been given.

In short, amendment 211 does two things: first, it allows OSCR to vary or revoke a direction that has been issued to a charity; secondly, it gives the charity the right to a review of the decision to issue a direction to it.

Amendment 214 makes a change to the charity reorganisation provisions in the 2005 act, which allow charities that have outdated purposes to modernise them, as long as they do not move too far from the original purpose, and to make changes to their founding document, where it contains administrative provisions to which effect can no longer be given or that are no longer desirable. However, the provisions do not allow a charity to add a new administrative provision. That can have a detrimental impact on a charity that is trying to modernise its administration, as it allows only the removal or amendment of an existing provision. With amendment 214, we propose to rectify the difficulty. The amendment allows the insertion of a new provision that will enable the charity to be more effectively administered. To ensure that the amendment is not used as a means of getting around the restriction on substantially changing the purposes of the charity, the amendment prevents OSCR or the Court of Session from approving the reorganisation scheme if it would allow changes to the purposes that are not within the spirit of the constitution.

Amendment 215 introduces a new power for OSCR to approve a variation or removal of a restriction that has been placed on the use of an asset. That means that charities that were given funds for a particular purpose—for example a church that was given money to provide coal for the poor at Christmas—will be able to modernise those funds and put them to good use in a more modern context, subject to certain conditions and limitations. OSCR would not be able to approve the reorganisation if the charity had not taken reasonable steps to contact the original funder or donor, wherever possible. The amendment aims to give OSCR more power to approve the variation of the use of charitable funds, to allow them to be used more effectively for the benefit of the public.

Amendment 216 will allow OSCR to appoint additional charity trustees to help charities when they are unable to operate because they have a lack of charity trustees and no mechanism for appointing additional trustees. However, OSCR may appoint a charity trustee only if three conditions are met: first, the charity has insufficient charity trustees to appoint further charity trustees; secondly, it has no mechanism for the appointment of additional charity trustees in the circumstances; and thirdly, it has asked OSCR to act. The amendment will allow charities in that situation to become operational again, which would clearly be to the benefit of the public.

Amendment 213 delegates the power in amendment 216 to the Scottish Housing Regulator in respect of registered social landlords.

I move amendment 211.

Mention of these ancient charities reminds me of the time when I was provost of Angus.

15:15

My question is on amendment 216, under which OSCR can appoint charity trustees. I recognise the conditions that have been made, but will a charity retain the right to refuse a suggested trustee if it feels that the person is unsuitable for the role?

Yes. My advice is that we would expect the charity to approach OSCR with the name of someone whom they would like to be appointed rather than OSCR making suggestions of individuals who may be unknown to the charity. The provision is designed to enable OSCR to work with a charity that has insufficient trustees to enable the charity to appoint more trustees and thereby continue to carry out its charitable purposes.

Will that be noted in the operating agreement that OSCR has with charities in Scotland?

I welcome back to the committee John Swinney MSP, Cabinet Secretary for Finance and Sustainable Growth, and his officials, for the conclusion of stage 2 proceedings.

After section 100

Amendments 66 and 67 moved—[John Swinney]—and agreed to.

There is a degree of irony that Mr Brownlee should move such an amendment and concern himself with the number of special advisers, given that his party is never likely to be anywhere near government—unless, of course, he has plans to formalise his arrangement with the party of government. On the basis that that is not going to happen, however, I suggest that people with experience of such matters know that the number of special advisers was set for good reasons, and that there is no reason for changing it at the moment. I urge members to reject the amendments.

The two amendments in the group seek to reduce the ceiling on the number of special advisers who may be appointed by the First Minister at any one time from 12 to 10. Although I am entirely sympathetic to the thinking behind the amendments, bearing in mind that the present Administration has reduced the number of special advisers to 10, I do not think that there is a requirement for the measure to be put in place. We have no intention of appointing any more than 10 special advisers at any one time, and I am happy to give the undertaking that we will not do so during this session.

I point out that the Parliament approved a legislative consent motion—Derek Brownlee referred to it—in respect of the UK Constitutional Reform and Governance Bill on 28 January. Among other things, that bill, if passed, will remove the current ceiling of 12 on the number of special advisers who may be appointed by the First Minister.

Furthermore, it would be inappropriate for the Parliament to seek to bind the hands of any future Government, which would have to defend any decision to appoint additional special advisers and to incur expenditure in doing so. For those various reasons, I do not think that the issue is one on which it would be right for us to seek to legislate.

Amendment 80 also seems to raise issues of legislative competence.

For my part, I am happy to give an undertaking that the present Government will appoint no more than 10 special advisers at any one time for the duration of this session. I invite Mr Brownlee to withdraw amendment 80—also given the issue of legislative competence—and not to move amendment 110.

Amendment 111, in the name of Derek Brownlee, is grouped with amendment 112.

These amendments are grouped together but are quite different in nature. Amendment 111 would, in practical terms, place the agreement between the Finance Committee and the Scottish Government on a statutory footing, allowing either the committee or the full Parliament to require specific information on budget proposals, either in relation to the financial unit in question or more generally. That would help to maintain the balance of power between Parliament and Government.

Amendment 112 is rather more detailed and reflects a section of the Finance Committee’s report on the 2010-11 budget in relation to capital projects. The intention behind the amendment is to place on a legislative basis the requirement to provide information on capital projects over a longer-term horizon than has been the case so far. That has been a live issue in discussion of the 2010-11 budget. I understand that, inevitably, the further out we get from the current financial year, the more assumptions will creep into information that is held in government. When the committee agreed the section of its report to which I have referred, it accepted that, to some extent, there would be issues with the availability of information.

The purpose of amendment 112 is simply to place the requirement on a statutory footing. It is arguable that, in the same way, amendment 111 would allow the committee to make a request for whatever level of detail on whatever capital projects it wished. If the committee thinks that amendment 112 is too prescriptive to be part of primary legislation, it may be possible to achieve the same result by approving an order under paragraph (b) of subsection (1) of the new section that amendment 111 would insert in the bill.

I move amendment 111.

I am grateful to members for expressing their views. On amendment 112, I appreciate what the cabinet secretary said about information on capital projects. We have seen the information that is provided to the Public Audit Committee, although—if memory serves me correctly—it is not broken down by financial year in every instance; in some multiyear projects there is no breakdown of spend by financial year, which would be helpful.

A balance must always be struck over how prescriptive primary legislation is. I entirely accept that amendment 112 might seem too prescriptive to some people. On the basis of what the cabinet secretary said, I am inclined not to move amendment 112. I am less inclined to seek leave to withdraw amendment 111, which would provide an important safeguard in the context of the Parliament’s power in relation to the Government, by putting more power behind a request from the committee or the full Parliament.

On the point that Jeremy Purvis made, I do not think that amendment 111 can be fairly viewed as permitting the Parliament, by requesting less detail, to prevent the Government from providing the current level of detail. It is clear that amendment 111 would place a minimum requirement on the Government but would not prevent the Government from going above and beyond that, as indeed the current agreement does not prevent the Government from going beyond its terms. I do not share Jeremy Purvis’s concern.

I press amendment 111.

Amendment 227 is a technical amendment, which will enable ministers to make necessary orders to ensure effective implementation of parts 6 and 7 of the bill. Amendment 228 is a technical amendment to the long title of the bill and is required to reflect the provisions in the bill as amended last week in relation to the Mental Welfare Commission for Scotland.

I move amendment 227.

Amendment 227 agreed to.

Amendment 81 moved—[Derek Brownlee]—and agreed to.

Section 102, as amended, agreed to.

After section 102

Amendment 200 is a probing amendment.

In 2008, the regulatory review group published its interim report, which recommended replacing the existing regulatory impact assessments—it considered that such assessments happened only occasionally and were done in a box-ticking fashion—with new business impact assessments. The intention was that such assessments would be mandatory for all legislation and subordinate legislation that would have an impact on business, and to produce more focused assessments of the costs of legislation. Although the report was published in April 2008, we have yet to see any movement to business impact assessments.

In considering the bill, we have already taken into account the views of the regulatory review group, which has been a successful attempt to bring together people with interests in achieving better regulation. Its report was widely welcomed as a sensible contribution to the debate on regulation.

As I said, amendment 200 is a probing amendment. The aim is to chivvy the Government along. An amendment that I have lodged to another piece of legislation would do rather more than chivvy the Government along; it would place a statutory obligation on it to produce business impact assessments. However, I hope that getting to that stage will be unnecessary, given that the regulatory review group’s recommendations were not particularly controversial when they were produced.

I move amendment 200.

The Scottish Government already completes proportionate and justified full regulatory impact assessments. Those assessments include assessments of the impacts of proposed measures on the competitiveness of Scottish business that thoroughly analyse the sectors and the number of businesses likely to be affected and set out the associated costs and benefits to businesses. As a matter of course, completed assessments are laid before the Parliament and published on the Government’s website. Codifying those established procedures in a limited fashion in the bill may inhibit the wider development and implementation of better regulation best practice.

We intend to go further by introducing changes to impact assessment arrangements that will enhance in a proportionate way how we work with businesses to develop legislative proposals. We intend to replace the existing RIA process with a business and regulatory impact assessment from 1 April 2010, as recommended by the regulatory review group chaired by Professor Griggs.

I understand the thinking behind amendment 200, but cannot recommend it to the committee. I hope that what I have said about the implementation of the regulatory review group’s recommendations will persuade Mr Brownlee to seek to withdraw the amendment.

That ends stage 2 of the Public Services Reform (Scotland) Bill.

15:44 Meeting suspended.

15:47 On resuming—

Amendment 209 is intended to bring about a simpler, more consistent and more effective approach to dealing with complaints about public services. Amendment 229 makes a consequential change to the long title. The changes that will be made were recommended in the Crerar review in 2007, considered in a parliamentary debate, and considered in detail last year by the ad hoc Review of SPCB Supported Bodies Committee. That committee recommended that the Government introduce the required changes through an amendment to the Public Services Reform (Scotland) Bill at stage 2.

The provision will place Scotland as a world leader in its approach to the handling of public service complaints. First, amendment 209 gives Parliament a key role in approving a statement of principles concerning relevant complaints-handling procedures of bodies and persons that are listed in schedule 2 to the Scottish Public Services Ombudsman Act 2002. Secondly, the ombudsman will have powers to publish model complaints-handling procedures and to specify who must comply with them. That will allow the ombudsman the flexibility to design procedures for specific sectors and to target improvement where it is most needed. The ombudsman may make a declaration of non-compliance if a listed authority has not complied, and will have a duty to promote best practice, to co-ordinate training for relevant service delivery staff and to report on outcomes and on how lessons can be learned.

At the Finance Committee’s meeting on 26 January, David Whitton asked about prisoner complaints; it might help if I respond briefly on that to make the position clear. The committee is aware that the ombudsman’s role in relation to prisoner complaints is within the scope of the Scottish Parliamentary Commissions and Commissioners etc Bill. It will be for the Parliament, through its consideration of that bill, to decide how best to ensure that the ombudsman’s existing powers are adjusted to fully accommodate the prisoner complaints that were formerly dealt with by the Scottish Prison Complaints Commission.

In summary, amendment 209 confers new duties and powers on the ombudsman to ensure that bodies and persons within his remit deal with complaints simply, consistently, quickly and locally and that best practice in complaint handling is promoted and encouraged.

I move amendment 209.

Amendment 209 agreed to.

I declare an interest as a member of Unison. I support the proposals that David Whitton has put forward because of my experience of the existing pay and negotiating system. I am sure that I am not the only member whose constituents have been annoyed and frustrated by protracted negotiations that have led to long delays before pay settlements were agreed. Such issues were reflected in the Finance Committee’s report on public sector pay, which was published before I joined the committee. The fundamental point is that the current process is lengthy, costly and has a detrimental effect on staff and therefore on the delivery of public services.

The proposals would streamline the pay process and avoid the time-consuming and expensive charade of local negotiations on matters that are really decided elsewhere. It is quite difficult to understand the current process, whereby there appears to be local negotiation but everything has to be referred, sometimes many times, to a central point in the finance department. That is inefficient and costly. The objective of the amendments in David Whitton’s name is very much in keeping with the Government’s wish to streamline government and make it more efficient. The approach would reduce costs and bureaucracy and help to deliver better public services in Scotland. I am keen to support the amendments.

Amendment 231 is probably rather tortuous to read, but its purpose is relatively straightforward: it is to prohibit publicly funded bodies from spending money on public relations outwith their core remit—in effect, that is the Government-lobbying-Government argument. It does not seek to prevent public organisations from spending on public relations in its entirety. Spending on PR that is directly related to the organisations’ functions would be untouched by the amendment. The amendment does not seek to prevent any public authority from participating fully in discussions in Parliament or providing evidence to committees. The purpose is to draw a line around which forms of PR are acceptable and which are not. In what everyone accepts is an increasingly tight financial climate, preventing public bodies from spending money on PR that is not core to their functions seems a sensible move. That is what amendment 231 seeks to do.

I move amendment 231.

I am always reluctant to turn down any offer of consensual assistance from Mr Whitton but on this occasion, although I have, as I will explain, some sympathy with the thinking behind amendment 217, I must recommend that the committee does not support it.

Amendment 217 seeks to build on trade union support for an all-embracing collective bargaining arrangement, which Unison has suggested to the committee. Under the proposals for a pay bargaining committee, Scottish ministers would, as members, become directly involved in NDPB pay negotiations; Mr Purvis talked about unintended consequences, and I certainly think that that is one.

Under existing arrangements, individual bodies have the freedom to negotiate their own pay settlements within the context of an overarching pay policy set by ministers. That raises an important point. Mr Chisholm referred to the inefficiency of some arrangements, which is partly a result of pay policy not being available to settle pay remits by 1 April and the protracted discussions that then arise. I assure Mr Whitton and the committee that, in all circumstances in which it is able to do so, the Government intends to ensure that pay policy is available in advance of the start of the financial year so that proper discussions can be undertaken.

Our position is that ministers should not have a role in negotiations, because we are not the employers. Pay negotiations are properly undertaken between staff and the employers at the body in question. I also do not agree that it makes sense for the Government to impose its view of what the pay bargaining landscape should look like. Although we agree with the Finance Committee that it makes sense to have fewer pay bargaining units, we want to achieve that through consensus, not by imposition.

Last September, after a meeting with Unison, I asked NDPB employers for their views on how to achieve fewer pay bargaining units. They indicated that although they supported moving to fewer units, especially by reducing the number of very small units, they wished to retain the flexibility to agree pay arrangements that took into account their individual organisations’ specific needs. We will continue to discuss those important matters with trade unions and the bodies concerned.

I assure the committee that we will continue to improve processes so that pay remits are agreed quickly and efficiently, which is fair to employees and the bodies themselves. There is really no excuse for dragging our heels on such matters.

Against the background of consultation and of progressive improvements in the current arrangements, we have to take the view that imposing pay bargaining arrangements by statute is not the right way ahead. I am also concerned that such an approach would, as Mr Purvis pointed out, carry with it pressures for pay harmonisation, with the inevitable cost implications that that would bring at a time when public bodies would simply be unable to afford them.

I acknowledge that David Whitton’s objective is to simplify and streamline processes for settling pay across NDPBs. We are making progress with public bodies, their staff and staff representatives towards that objective, but we have further to go. However, we do not believe that imposing new arrangements by statute is the correct approach. On that basis, I invite David Whitton to withdraw amendment 217 and not to move the other amendments in the group.

I knew that it was too good to last and that the spirit of consensus would falter.

I hear what the cabinet secretary has said. However, a very strong case for streamlining the process was made to the committee, and amendment 217 seemed to be a good way of doing that. Just for the record, I point out that the Government’s pay unit is apparently a month late in processing the agreement for the care commission, and staff at Skills Development Scotland have still to receive a pay offer for 2009-10, even though the settlement date was October 2009. There is clearly a problem, and I believe that one of the ways of addressing it would be to simplify the pay bargaining process.

I hear what Mr Purvis has said and accept that he believes that we lodged these amendments in good faith. He says that the issue should be addressed in a different bill, but I still think that this bill, which is about public service reform, gives us an opportunity to do so. After all, reforming the way in which pay is negotiated and dealt with is a key element in all this.

As a result, I press amendment 217.

Amendment 231, in the name of Derek Brownlee, is in a group on its own.

It seems to be a rule of politics that an amendment drafted by the Government is always clear and exceptionally well drafted and that any amendment proposed by an Opposition member always contains a glaring loophole that will lead to the end of the world as we know it. Having said that, I understand some of the concerns that the cabinet secretary raised and the good point that Jeremy Purvis made about joint working, which none of us would want to be prohibited.

There is an issue that will become clearer over time as budgets are squeezed, but I am happy to withdraw the amendment and consider the cabinet secretary’s offer on greater transparency and whether it might be more appropriate to redraft the amendment and try again at stage 3.

Amendment 231, by agreement, withdrawn.

I was involved with the committee that put the OSCR legislation in place. It was always recognised that it would be sensible to see how things panned out a few years down the line and whether any legislative changes were necessary. It is useful that some of the anomalies that were forecast at the time have now been picked out.

Minister, do you wish to respond?

No.

Amendment 211 agreed to.

Amendments 212 to 216 moved—[Fergus Ewing]—and agreed to.

Section 99—Charity trustees’ indemnity insurance

Amendments 223 to 225 moved—[Fergus Ewing]—and agreed to.

Section 99, as amended, agreed to.

After section 99

Amendment 226 moved—[Fergus Ewing]—and agreed to.

Section 100 agreed to.

Amendment 80, in the name of Derek Brownlee, is grouped with amendment 110.

I have no wish to get on the wrong side of a group of very important people, and I recognise that special advisers have a role. Indeed, some of them have gone on to very distinguished careers—and some of them have gone into elected politics. Nonetheless, there is a serious issue in relation to expenditure on special advisers, and I am sure that all parties agree that there is a balance to be struck between how much can be spent on special advisers and the role of the civil service more generally.

I will pre-empt the minister, who will tell me that amendment 80 has a gaping flaw in it, which is that the Civil Service Order in Council 1995 is in the process of being amended. Having seen that, I lodged amendment 110, which would insert into the bill a prohibition on budget proposals that would fund more than 10 special advisers. That would achieve the same means by a different end, and I am sure that all members will accept that as a reasonable way to deal with the issue.

I move amendment 80.

We are certainly into, if not deep, then devious waters.

The question is, that amendment 110 be agreed to. Are we agreed?

Members: No.

There will be a division.

For

Brownlee, Derek (South of Scotland) (Con)

Against

Chisholm, Malcolm (Edinburgh North and Leith) (Lab)

Fabiani, Linda (Central Scotland) (SNP)

FitzPatrick, Joe (Dundee West) (SNP)

McCabe, Tom (Hamilton South) (Lab)

Purvis, Jeremy (Tweeddale, Ettrick and Lauderdale) (LD)

Welsh, Andrew (Angus) (SNP)

Whitton, David (Strathkelvin and Bearsden) (Lab)

I understand why Derek Brownlee has lodged these amendments and have considerable sympathy with both of them. However, amendment 111 does not necessarily strengthen the agreement between the Finance Committee and the Government, which is based on an understanding between the two bodies, given that the amendment would enable a majority of members of the committee at a particular time to vote to reduce the level of detail that we receive. We want to guard against that. I know that that is not at all the intention behind amendment 111, but I would like Mr Brownlee to reflect on that, because we want to increase the level of detail rather than reduce it. It would be possible to reduce the detail under the amendment, but it is harder to do that under the current agreement between the Government and the committee, which has evolved over time and is based on the Parliament’s founding documents from the consultative steering group and the financial issues advisory group.







15:30

Amendment 112 could be presented in a stronger way. It relates to

“capital projects which the Scottish Ministers are undertaking”,

but there is no definition of what that means even though, as we know, the vast bulk of capital projects in Scotland are carried out by bodies such as the health boards, Transport Scotland and other agencies that receive their funding from the budget but are not necessarily

“projects which the Scottish Ministers are undertaking”.

For example, I do not think that amendment 112 would have allowed any information to have been provided on how the town centre regeneration fund—which was a capital initiative—was delivered, what its consequences were and how the resource was found to pay for it.

Even though the intentions are good, there are problems with both amendments, unfortunately.

The question is, that amendment 111 be agreed to. Are we agreed?

Members: No.

Amendment 200, in the name of Derek Brownlee, is in a group on its own.

I am grateful to the cabinet secretary for that clarification, which is welcome. The review group’s recommendations were welcomed, and it will be good to see them put into practice. On the basis of what the cabinet secretary has said, I am content to seek to withdraw the amendment, but I would like to reflect on the specific details of what the Government will produce before I consider my position on my amendment to the other piece of legislation.

Amendment 200, by agreement, withdrawn.

Section 103—Short title and commencement

Amendment 186 moved—[John Swinney]—and agreed to.

Amendment 82 moved—[Derek Brownlee]—and agreed to.

Section 103, as amended, agreed to.

Long Title

Amendments 228 to 230 moved—[John Swinney]—and agreed to.

Long title, as amended, agreed to.

The next item is our final consideration of the Public Services Reform (Scotland) Bill at stage 2. I welcome back to the committee John Swinney, the Cabinet Secretary for Finance and Sustainable Growth, and his officials.

As with the proceedings on the bill during the past few weeks, we move straight to consideration of amendments. Our target for today is to finish consideration of the bill at stage 2.

After section 98

Amendment 209, in the name of the cabinet secretary, is grouped with amendment 229.

Thank you, convener—I will do that, if I can find my speaking note.

No, I am fine—luckily, I have found it. I am grateful for Linda Fabiani’s offer of help; I hope that she will show the same support when we come to the vote in a minute or two, but I fear that I may be barking up the wrong tree.

Amendments 217 to 222 are intended to tackle a problem that the committee identified when it considered the issue of public sector pay in the summer of last year. Members will remember that we heard evidence from Unison in March about the problems that it has experienced in reaching timely settlements, especially for its members who are employed in non-departmental public bodies.

14:45

Unison pointed out that the negotiating process was tied very much to civil service process and the civil service pay unit, which deals not only with the normal civil service pay deal but with more than 40 separate agreements with non-departmental public bodies. Unison suggested the solution that there should be one negotiating table for the civil service and civil service-related NDPBs, and a separate negotiating group for those NDPBs that have little or nothing to do with the civil service. In his evidence to the committee, Dave Watson, senior officer of Unison, explained the advantages of such a system, which would enable human resources professionals from organisations such as Scottish Water and the Scottish Environment Protection Agency to operate on the employer side. Members will recall that the lack of HR expertise in the civil service pay unit was criticised. The pay bargaining committee’s approach would be like the approach that is taken in the local government health service negotiations. Of course, there would still be a role for the finance department of the Scottish Government.

A one-stop negotiating table for non-civil service NDPBs would speed up a process that is often dogged by delay. In paragraph 59 of its report on public sector pay, the committee quoted Unison’s comment that the approach would be

“entirely consistent with Scottish Government policies around streamlined processes, efficient government and the Crerar review.”

I remind members that the committee recommended without division

“that the Cabinet Secretary explores ways of reducing the number of bargaining areas and the practicability of direct negotiations with other representative bodies involved.”

In a spirit of consensus, I offer the cabinet secretary a solution, which would reduce bargaining areas from the current 42 to just two, thereby streamlining the process and saving time and money into the bargain.

Amendment 217 would establish the non-departmental public bodies and public corporations pay bargaining committee and its remit. Amendment 218 would establish the committee’s constitution and membership; amendment 219 sets out the procedure for orders; amendment 220 provides for the procedure on orders to establish the committee; amendment 221 provides for procedures to modify the list of bodies; and amendment 222 sets out the list of NDPBs and public corporations that would be covered by the new committee.

I move amendment 217.

I am tempted by the amendments, which have been lodged in good faith as a result of evidence that the committee heard. However, I am worried that they could have unintended consequences. We have witnessed, through agenda for change, the difficulty of job matching across different functions and divisions in the health service. There is the potential for difficulty in trying to do that across all other public bodies.

I understand that the thrust of the amendments is to do with simplifying the negotiation process. That might be better done through a wider review of the Scottish Government’s pay policy, in line with the committee’s recommendation for a thorough review of pay bargaining mechanisms throughout Government and the role of the Government’s finance department. It might be better to take forward reforms that I think we probably all want to see in such a context rather than through the bill.

I understand the rationale behind amendment 231, but, as with David Whitton’s amendments in the previous group, there could be unintended consequences. If I understand it correctly, the limit would make it illegal for communications staff to do what could be termed promotional activity to promote the policies of another public body. In my constituency, a local authority communicated on behalf of the health board under a shared initiative to transform older people’s services. Unfortunately, that would have come within the scope of amendment 231, which would have made it illegal. I am not sure what the penalty would be if a public body were to breach that rule—Mr Brownlee might be able to say. I understand why the amendment has been lodged, but I do not think that it is that well drafted.

I understand the thinking behind amendment 231, which Mr Brownlee has explained, but I can see a number of legal and practical difficulties with the proposal as it stands. First, the definition of “public authority” is wide and not entirely clear, as it would include

“any person whose functions comprise or include functions of a public nature”.

On the face of it, that would catch private contractors providing services that could be regarded as public functions, which might include anything from private prisons to private care homes. Without further definition, it is certainly not self-evident exactly what constitutes

“functions of a public nature”

in this context.

The definition of

“use of resources on public relations”

is also both wide and arguably somewhat subjective, as it includes

“work undertaken by communications or other staff”

and

“any other promotional activity”.

If we intend to prohibit a public authority from incurring expenditure on certain types of activity, we need to be clear and precise about exactly what type of expenditure will be caught by that prohibition.

Finally, it is important that statutory public bodies continue to have the flexibility to do things that relate either directly or indirectly to the exercise of their functions. If any such body acts outwith its powers, it may be subject to judicial review by the courts.

15:00

If amendment 231 is intended to prohibit expenditure by public bodies that relates to the exercise of their functions but only indirectly, we are in danger of creating a very difficult and essentially subjective test of whether expenditure is lawful or unlawful. The distinction between expenditure that is directly related to a particular purpose and that which is indirectly related is by no means clear or straightforward.

I am therefore unable to support amendment 231 as it stands, although I fully agree with Mr Brownlee that there is a need for greater transparency in this area, as in others. An alternative approach would be to create an additional duty on ministers and public bodies to publish information annually about expenditure on public relations. That would fit in very well with the duties that Derek Brownlee has already proposed, and which the committee has agreed, to publish annually a range of financial information. That would mean that chief executives could be held to account by the Parliament and the public for the decisions that they and their organisations take, without giving rise to difficult legal issues about what expenditure should or should not be prohibited. If that approach commended itself to the committee, I would be happy to work with Mr Brownlee and the committee with a view to lodging a further amendment at stage 3. On that basis, I invite Derek Brownlee to withdraw amendment 231.

I welcome to the committee Fergus Ewing, the Minister for Community Safety, and his officials.

Amendment 210, in the name of the minister, is grouped with amendments 212, 223 to 226 and 230.

I do not wish to butter up those who were involved with it—more than one is present—but the 2005 act is a solid piece of legislation. As Linda Fabiani suggests, these relatively minor and technical amendments are designed to improve minor aspects of it.

Amendment 210 agreed to.

Do you wish to wind up, minister?

There will be a short suspension to allow a changeover of officials.

15:17

Meeting suspended.

15:19 On resuming—

I am not sure whether to declare a decade-old interest as a special adviser to the first First Minister. It was certainly a job that I was privileged to hold at the time.

It is interesting that we are debating this point, as it has been pre-empted by the Conservative party press office—presumably there are no special advisers there—which has already issued a press release headed “Conservatives aim to curb wages of spin”. The press release even names me as a member of this committee and a former special adviser, and wonders how I will be voting. In order to disabuse Derek Brownlee, I can say that I will not be voting in favour of his proposal, and for a very good reason. The number of special advisers was set at 12 for a particular reason. They are not all press officers. That might be how the Scottish National Party Government uses them, but I know that most of them in the previous Administration were policy advisers, and only one or two were press advisers. For that reason, I oppose the move by Mr Brownlee.

It is interesting to see that I have managed to bring some unity to the committee, even if not quite in the way that I had intended. It is flattering to my good friends in the Conservative press unit to see how closely Labour members follow their actions but, unless something dramatic has happened since I came into the room at 2 o’clock, we are not in government and none of them is a special adviser.

I accept the cabinet secretary’s comments in relation to the current Government, although I note the caveat that they apply only to this session. Often we seek in legislation to bind future Governments; that is not an alien concept. On amendment 80, I accept the point that was made about legislative competence and the legislative consent motion in respect of the Constitutional Reform and Governance Bill, so I seek the committee’s leave to withdraw the amendment. However, I intend to move amendment 110.

Amendment 80, by agreement, withdrawn.

Amendment 110 moved—[Derek Brownlee].

The result of the division is: For 1, Against 7, Abstentions 0.

Amendment 110 disagreed to.

I have some concerns about amendment 112. Paragraph (a) of subsection (2) of the section that it would insert concerns

“projects which the Scottish Ministers are undertaking”.

However, paragraph (d) is about the intention to commence capital projects, so we require more clarification about the point at which detail would be required to be set out. I am aware of the role of commercial confidentiality, not just in protecting contractors but in enabling public works to get best value for money. I am also concerned that there is no detail about whether we are talking entirely about capital works costs or whether project costs would be included.

The amendment is generally flawed in that the information for which it asks is not clear enough to give any real terms of reference for any minister who was to lay out such information.

The present Government is committed to working closely and constructively with the Finance Committee and the Parliament as part of the budget process. I fully recognise and accept the importance of providing detailed and timely information in support of budget proposals to facilitate parliamentary scrutiny. There will always be scope for improvement in the way in which budget documents and supporting information are presented and I am happy to continue to work with the committee with that in mind.

We have already agreed to engage in a budget strategy phase with the Finance Committee at least once each parliamentary session to help to ensure that the Parliament has a proper evidence base to help with its scrutiny of future budget proposals. As part of the strategy phase that the committee announced on 9 February, my officials wrote to the convener on 3 February undertaking to provide a range of information, including information about progress against the national outcomes, efficiency and capital budgets.

Detailed written agreements and protocols are already in place governing the provision of budget information, including information on the cost of capital projects. I acknowledge that more can always be done to enhance that information and am happy to find other ways in which we can develop the capital information to the committee’s satisfaction.

We have committed to provide regular updates to the Public Audit Committee on our major capital projects. Our infrastructure investment plan provides details of proposed infrastructure projects over a 10-year horizon. As Mr Brownlee correctly acknowledges, that information becomes less definitive the further out in the plan it moves, but there would undoubtedly be an opportunity for us to provide by agreement a strengthened information base on capital projects if the committee sought it.

Against that background, I am not persuaded that it is necessary or desirable to legislate for specific statutory requirements in this respect. However, I am more than happy to give a commitment that we will continue to work constructively with the committee and the Parliament with a view to achieving continuous improvement in the quality, relevance and timeliness of the information we provide, particularly in relation to capital projects.

I hope that Derek Brownlee will be prepared to withdraw amendment 111 and not move amendment 112.

There will be a division.

For

Brownlee, Derek (South of Scotland) (Con)

Against

Chisholm, Malcolm (Edinburgh North and Leith) (Lab)

Fabiani, Linda (Central Scotland) (SNP)

FitzPatrick, Joe (Dundee West) (SNP)

McCabe, Tom (Hamilton South) (Lab)

Welsh, Andrew (Angus) (SNP)

Whitton, David (Strathkelvin and Bearsden) (Lab)

Abstentions

Purvis, Jeremy (Tweeddale, Ettrick and Lauderdale) (LD)

The result of the division is: For 1, Against 6, Abstentions 1.

Amendment 111 disagreed to.

Amendment 112 not moved.

Section 101 agreed to.

Section 102—Orders and regulations: Parts 6 and 7

Amendment 227, in the name of Shona Robison, is grouped with amendment 228.