Finance Committee, 05 Oct 2004

Meeting date: Tuesday, October 5, 2004

Official Report 220KB pdf

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Spending Review 2004

Agenda item 2 is a briefing from Arthur Midwinter on the outcome of the spending review, which was announced last Wednesday. I thank him for producing for us at short notice papers that allow us to discuss any issues that arise from the spending review.

Agenda item 3 has been affected by the Cabinet reshuffle, which makes it impossible for us to undertake full ministerial scrutiny today. I propose that we take the briefing from Arthur Midwinter, after which the Minister for Finance and Public Service Reform designate will introduce himself to the committee. I intend to invite him to return after the recess for the questioning that we meant to have today. That would fit the expected timetable for the efficient government statement, which I understand is unlikely to be made tomorrow, but will instead be made after the recess. Do members agree to that?

Members indicated agreement.

I am aware that we are running behind schedule, so I will be brief and concentrate on the three big issues. The trends of winners and losers in the budget show much continuity. As we can see, education and young people, health and transport have gained in three spending reviews. The only exception this year is the justice budget, which has been a concern in the past.

I argue broadly that economic growth has been treated as a budget priority. The programmes that Peter Wood identified as relevant in the departmental expenditure limit have gained roughly a third of the additional moneys. The only exception is the enterprise programme, which is standing still in real terms. I suggest that the committee may want to pursue the reason for that.

Of greater concern is the treatment of the local government budget, especially as local government is fairly central to two Executive priorities—improving public services and strengthening communities. Local government will receive a low increase of 9.7 per cent over three years. Contrary to the reply given to Mr Morgan in Parliament last week by the Minister for Finance and Public Services, that increase is in cash terms and it works out at less than 1 per cent per annum in real terms, which is in stark contrast to the other increases that are around. There is probably a lack of information about the figures in the draft budget at this stage; we need to pursue that information in order that we can be content with the figures. The Executive proposes improvement in education, police, free personal care, roads, and environmental programmes for waste disposal and collection. That is a lot of areas in which to propose improvements when there is a small amount of real growth.

When I saw the statement that the Executive has provided money to increase the number of teachers to 53,000, I went back to the press and to the previous partnership agreement. It was reported in the press that the current figure was 50,000 teachers, but the local government rating review states that we currently employ 52,400 teachers. It would be useful to get the real assumptions into the open so that we can see that the sums of money square with the number of teachers that people expect there to be. It is vital that we get the grant-aided expenditure figures for each of the big services, because I suspect that there is a big squeeze on the remaining part of the local government budget in order to give money to the bigger services. Given the high degree of dependence in local government on central grant, it would not be surprising if there were council tax increases above the level of inflation on the basis of this settlement, particularly given the way in which the grant system is operating. The non-domestic rate is being increased in line with inflation while spending is rising above inflation. That must put a squeeze on the other elements of the budget.

There is further information about efficient government in "Building a Better Scotland: Spending Proposals 2005-2008: Enterprise, opportunity, fairness". The savings targets in that document remain the same as those in the earlier announcement: £500 million by 2007 and £1 billion by 2010. Personally, I think that it is presumptuous to set targets for a year that falls after the next parliamentary election and for which no budget currently exists, but far be it from me to criticise that. The latest announcement that the savings are now to be £650 million—I understand that we will get information soon on how those will be delivered—still does not square the confusion that we discussed a fortnight ago about whether the targets are tougher than the ones at Whitehall. We need to clear the issue up. The UK document suggests that at least 60 per cent of savings across the UK should be cash releasing, but in fact departments made provision for greater cash savings than that—69 per cent of savings, which is equivalent to 5 per cent of the budget. The cash-releasing target for the UK programmes that are comparable to Scottish programmes is only 50 per cent of savings, which in cash terms represents 3.6 per cent of the budget. Overall at UK level, cash or productive time-releasing savings of more than 7 per cent are being sought. Whichever measure is used, it is transparent that the target that is being set for Scotland is not as tough as the targets that are being set for England. We need an explanation as to why it was suggested that the targets for Scotland were as tough.

The second point of interest for me is the suggestions that departments have made for how they will meet the targets. "Building a Better Scotland" narrows the focus a little to three areas, but those really cover four of the five areas identified previously. They include better procurement, shared support and transactional services, and streamlining bureaucracy, but do not include the productive time element that is being used in England. Some of the examples that the departments give appear to be difficult to fit into any of those categories. An example from tourism is

"implementing the outcomes of quinquennial reviews of the 3 National Institutions."

However, quinquennial reviews have gone on since the time of Mrs Thatcher, so they are hardly an innovation that falls under this exercise.

Another example is efficiency savings from Scottish Water, which we heard about last year. I find it difficult to see such savings as being part of the efficient government initiative. They may well be efficiency savings, but if those savings are within Scottish Water's operational budget, they have no impact on the public purse because that is the revenue side of the budget. I will wait to see the detail before I comment further, but some of the things suggested, such as exploring options to improve prescribing practices do not seem to be in the categories in the efficient government initiative—they are simply savings that might have been made anyway as part of the normal course of managing those matters. I have some concern about that.

The third aspect that I have raised for the committee is Scottish Water's budget, given our continuing interest in that. Members will recall that when the EYF statement came out, £205 million was reallocated from Scottish Water to other programmes via the Finance and Central Services Department. The committee argued that money that is earmarked for capital should be used for capital. Clearly, some of that money was not used for capital because it was used for pay costs in health and it will be used this year again. My suspicion is that although the £205 million is guaranteed to Scottish Water, it has probably gone and will not be required because the large sum of money that is available for future years suggests that Scottish Water will not need to go back to it—for it to be required, Scottish Water would have to spend and deliver the capital programme at a much faster rate than it has been doing up until now.

Although I am not suggesting that the Executive has done anything wrong, under the system that it operates the departments are controlled on a capital and revenue basis. When Scottish Water agrees to release money to the Executive for the Executive to use in the current year and the Executive reallocates it to departments, technically the Executive is operating within its rights, but the effect of that in practice is that money that was earmarked for capital will not be spent on capital.

That is probably enough from me just now, except to say in conclusion that, despite those criticisms, given the committee's report last year, it should be broadly pleased, as almost all its key financial and target-based recommendations have been accepted. The increases in spending for enterprise and lifelong learning, housing, and capital investment and the reduction in the number of targets and the removal of the process-based targets are all in line with the committee's recommendations. I very much welcome the Executive's positive response to the committee's work on those matters.

That is a useful point. I would like to add the appreciation of the committee for the work that you have done—informally as well as in formal committee meetings—to influence the format of the budget, which is now much clearer and much more capable of being relatively easily understood than what we inherited three or four years ago. Certainly, that work has assisted our scrutiny process and, arguably, has assisted the process within the Executive itself of being clear about how budgetary processes influence decisions.

On the efficient government issues, I emphasise again that there is information to come from the Executive—particularly from the Executive announcement—so it might be inappropriate to pursue some of those issues too far at this stage. Arthur Midwinter is flagging up a number of questions that the committee may well want to pursue on the basis of information that will be forthcoming. I am happy for members to ask Arthur Midwinter questions.

The information in the flurry of papers that we received over the weekend illuminated things rather well. In paragraph 11 of the substantive paper that Arthur Midwinter produced, I take it that we are talking about £21.5 billion and £12.9 billion rather than £21.5 million and £12.9 million.

Yes.

Okay. If the clerks could provide the information in a tabular form, that would be more readily assimilated and more easily comparable than it is in the narrative format.

I see that Ross Burnside is nodding.

Arthur Midwinter made a point about the timing of the outcomes. My analysis suggests that only 10 per cent of the targets in BABS are either specific or due to be measured by a completion date before May 2007, which invalidates the exercise to a large extent.

There are still two sets of targets. We are considering the revised set of targets, but we will receive a report on the most recent BABS, which I think covered the period up to 2007-08—I cannot remember the detail. I will discuss the matter with Executive officials later, but it is pretty clear that we had an agreement that they would report on the targets in the previous BABS even though we have moved on to a new set of targets in the most recent BABS. If such reports were not provided, performance would never be reported. It is important that we keep up to date.

I seek clarification on paragraph 11 of Professor Midwinter's paper, which says:

"The cash-releasing target for devolved functions is 50%".

Is that the Treasury's expectation?

Yes. In the UK spending review—

Is it the Treasury's expectation that the Scottish Executive would spend—

The Treasury, quite properly, set no expectations and gave no direction to the Executive. The UK spending review notes that the devolved Administrations have set themselves targets "as ambitious as" those of Whitehall. The 50 per cent element refers to the comparable programmes that are provided from Whitehall. For example, the health savings target in England is 50 per cent, rather than the 60 per cent average that was being sought. The same applies to the education savings target. Higher cash savings are being looked for from, for example, the Department for Work and Pensions, where greater job savings are expected.

In paragraph 15 of your paper, you say:

"most of the £247m savings will fall on local government".

I am not sure where the figure of £247 million comes from.

The figure is in the Executive's spending review. It is certainly not my figure.

I make a process point. I appreciate that poor Tom McCabe has known about his new post for less than 24 hours, so it would be wholly inappropriate to ask him about the spending review today. However, given the ministerial changes, we should bear it in mind that there are two distinct scrutiny exercises to undertake: the scrutiny of the budget; and the scrutiny of other documents or matters, such as the efficiency review. As we consider what will be a crowded agenda for the committee after the October recess, it would be a mistake to confuse an exercise that is in essence about the budget and spending proposals with the separate issue of efficient government. We will need to keep the two aspects separate as we consider our timetable at the end of the month and the beginning of next month, for the minister's sake and for the sake of the officials from whom it would be appropriate to hear. The people who decide how much we spend across departments are perhaps not the same people who drive some of the specific agendas.

Our intention is certainly to try to separate the two aspects of our work. Today, obviously, we are driven by events beyond our control, but we have perhaps identified some of the questions that we need to ask and we can organise the process whereby we pursue issues around the budget and efficient government.

Dr Murray asked where the figure of £247 million came from. The figure is on page 55 of BABS.

Thank you. I have found it.

I thank Arthur Midwinter for his paper. The committee will organise how we progress that work.

We move to agenda item 3 and I welcome Tom McCabe who, subject to parliamentary approval, will be the Minister for Finance and Public Service Reform. With him are colleagues from the Scottish Executive Finance and Central Services Department: Colin McKay, who is head of the efficient government team; Richard Dennis, who is co-ordination team leader; and Fiona Montgomery, who is policy analysis team leader. Given that Tom McCabe knew that he was to become the minister only yesterday, it would be appropriate to invite him to give evidence on the spending review and the draft budget after the recess and perhaps, as Wendy Alexander suggested, to give evidence separately on the review of efficient government. There is much scrutiny to come.

On behalf of the committee, I welcome Tom McCabe to the beginning of what will be our regular interaction. We can take the opportunity today to invite him to introduce himself to the committee—of course, he is no stranger to the Finance Committee, as he was a member of the committee in the previous session of the Parliament—and to outline how he envisages the scrutiny process.

Thank you and good morning. The First Minister invited me yesterday to take on the position of Minister for Finance and Public Service Reform and I accepted the post, as members know. The convener rightly pointed out that important processes have to be completed before my appointment is confirmed, not least of which are the approval of the Parliament and Her Majesty the Queen and a swearing-in ceremony at the Court of Session. It is important that I make it abundantly clear that I am here as a deputy minister in the Scottish Executive and will be no more than finance minister-designate until those important processes have been carried out. It is important that I avoid showing any discourtesy to the Parliament and its processes.

In a short space of time, I have managed to have some discussion with my predecessor—we shared a car this morning on the way to Edinburgh, as is the way of such things. He tells me that he has had a good relationship with the committee. In my new role, as in other roles that I have held, I regard it as being in all our interests to have a productive and constructive relationship, which is strengthened rather than weakened by robust exchange. I hope that our exchanges will shed light on where the Executive wants to go and, which is important, how it seeks to get there.

After such a short time, it would be facile of me to suggest that I am anywhere near conversant with the detail of many of the issues that the committee had intended to discuss this morning, as the convener rightly said. I think that it would be unrealistic of the committee to expect otherwise. However, I strongly felt that there would have been a missed opportunity if this part of the meeting had been cancelled or if I had passed up the chance to open up what I sincerely hope will be the kind of relationship to which I alluded. I was a convener of the Finance Committee in the previous session of the Parliament, so I am aware of the importance of the committee's work and its overall contribution to parliamentary scrutiny. On behalf of the Executive, I want to assist the committee as much as I can in its important scrutiny role in future. Most of the faces have changed since I was a member of the committee, but I have no doubt that the committee's work will be enhanced by the fact that Des McNulty is convener and a rejuvenated Alasdair Morgan is deputy convener.

I will do my best to answer members' questions, but I hope that you appreciate that I will rely heavily on the officials who are with me. The convener rightly identified Colin McKay from the efficient government team and Fiona Montgomery from the spending review team and I understand that the committee sees Richard Dennis more regularly and knows that his team deals with end-year flexibility.

Undoubtedly, the spending review is the most important process in our budget system. I acknowledge that the committee must have the answers that it needs to understand the process and to hold the Executive to account about meeting its commitments and responsibilities. The efficient government review is central to how we intend to drive up value for the money that we deliver. I underestimate neither the challenge that that presents nor the contribution that the committee can make to successful progress.

As a result, it is important that we have a proper opportunity to discuss these issues, and I have made it clear to the convener that I would be happy to come back to the committee in the near future when I have had more of a chance to get up to speed on some issues.

We will of course have an opportunity to debate the efficient government review in the chamber just after the recess. In any case, there are some advantages to postponing the debate until the committee has had an opportunity to study our efficient government plan, which will be published shortly. Although I hope that the plan will answer many of the committee's questions, I have no doubt that members will have many more questions that they will want a direct exchange about. I am happy to do that at the earliest opportunity.

We will also have an opportunity to discuss EYF in the context of the autumn budget revision. Although Andy Kerr announced portfolio entitlements back in June, they still require to come before Parliament for approval.

As I have said, we will have further opportunities to discuss these issues. As far as today is concerned, I will do what I can, and will bring in officials to clarify technical details. I hope that the committee will bear with me if we need to reply in writing to some of your questions. If that is the case, I assure members that they will receive our responses in the shortest possible time. I am also perfectly happy for Professor Midwinter and the clerks to pursue individual matters with officials where members think that that would be helpful.

For now, I simply draw the committee's attention to "Building a Better Scotland", which sets out the spending review outcome. I am sure that the committee already knows that the draft budget will contain more detailed information.

I look forward to the challenges and opportunities that my new portfolio holds. Equally, I look forward to having the kind of relationship with the committee that serves not only the interests of better government but the overall interests of the exciting new Scotland that we are all helping to build. As I have said, I hope that members will appreciate that only a short time has elapsed since the First Minister invited me to take on the post. We will do our best in the circumstances and I will rely heavily on officials. I repeat that I am quite happy to have a dialogue with Professor Midwinter and the clerks and that if we need to reply in writing to any of the committee's questions, we will do so without wasting any time unduly.

Thank you, minister. I am sure that the committee welcomes your comments about the constructive dialogue that you wish to engage in with the committee. We have had that dialogue for a period of years now and look forward to its continuation. After all, such a situation is to everyone's benefit.

Given the difficult circumstances, it might be inappropriate to pursue our usual line of questioning, which is based on a dialogue about political issues. That said, this is probably a good opportunity for members to ask any technical questions that they might have.

It might be appropriate to have a written response to this question if the minister or his officials are not aware of the answer. Following on from the briefing that we have just received from our adviser, I wonder whether you have made any assumptions about council tax levels over the next three years.

In reaching the settlement for local government, the Cabinet was very clear that it wanted to allocate full funding to tackle any new pressures on local government or any new commitments that it was asked to take on. The settlement also includes an allowance for pay and prices. Against that, the Executive is fully funding the new pay deal for teachers, the police and the fire service.

An efficiency assumption that was also built into the settlement was described by the minister as challenging but deliverable. If local government works with us and meets that efficiency assumption, there will be no need for council tax rises specifically as a result of the spending review commitments. That will be a matter for local government. I think that, in his speech on the budget settlement, the minister said that he saw no reason why council tax rises should depart from the trend in recent years.

So the assumption is that any rises will be inflationary.

The assumption is that there is no reason why the Executive's burdens on local government should require council tax rises. As a result, it becomes a matter for individual local authorities to deal with.

Our adviser has already highlighted a few of the pressures or responsibilities that you mentioned. Does the Executive have a list of new responsibilities that local government is taking on? If so, are you able to provide them in writing to the committee?

Yes.

That would be extremely useful.

When might local authorities expect to receive information about their individual settlements?

As that will form part of the usual local government settlement process, we think that it will happen at the end of November.

In response to Jeremy Purvis, you mentioned that some provision for funding extra teachers has been included in the calculations for the settlement. Are you able to let us know what the extra funding is?

In addition to funding for the new pay increases for teachers, some extra money has been made available in the education settlement for extra teacher numbers.

But you cannot put a figure on that at this point.

We do not have the final figure just yet, because negotiations are still continuing.

The minister mentioned the publication of the efficient government plan. When do you expect that to happen?

I do not have an exact date for that at the moment, but it will happen in the near future. Indeed, we expect to be in a position to debate the issue in Parliament very soon after the recess.

Is it likely that the plan will quantify the expected savings for individual departments?

Yes. It will give details of each department's plans.

Does that mean that it will provide not just the amount that will be saved but details of the processes that each department will go through to make those savings?

Yes. The plan will identify the areas in which departments will make savings.

My next question might be somewhat premature, but how will you be able to monitor whether departments are making those savings? For example, as far as local government and health boards are concerned, the potential to make savings is not in the particular department's control but in someone else's hands.

It is important that we set up proper monitoring processes and that we ask people to commit themselves to making a contribution to them. I hope that, over time, we will be able to demonstrate clearly where savings have been made and applied. After all, we must ensure that there are identifiable benefits at the front line.

Given that the prospective minister has known about his position for less than 24 hours, I will try not to make a political point. Jack McConnell recently said that he expected the Executive's efficiency targets to be tougher than those set by Whitehall. Does the panel believe that that will be the case?

I am interested in finding the most appropriate solution for the situation in Scotland. We have set ambitious targets. I do not think that there is necessarily a limit to our ambition; indeed, I want people to judge us on our achievements. If people want to compare what we achieve up here with what happens down south, that is their business. This Parliament was established to address the issues that we face in Scotland, and that is what we intend to do.

But the budget adviser's analysis does not suggest that the targets will be tougher. Are you able to comment on that at the moment?

We have set targets that are appropriate to Scotland. I am sure that people will appreciate that their aim is to pursue efficiency, which will lead to reinvestment in front-line services.

Will the approach require job losses?

To be fair, Ted, I think that you are being a bit premature. After all, an announcement is to be made on these matters soon. I am sure that we will return to these issues.

I have a philosophical question, minister. When your predecessor gave evidence to us six months ago, I asked him about the absence of top-level targets for growth, life expectancy and population numbers. Famously, he responded by saying that he could not have such targets because he did not have the levers to control those outcomes. Do you share that philosophy?

We have the levers to control outcomes such as life expectancy. We are making substantial investments in our health service, but we will struggle to achieve the success that we desire unless we can engage people in a discussion about the lifestyle choices that they make and unless we can turn the tide of ill health that is racing towards our health service. If we can manage to do that, we can expect to see improvements in outcomes such as life expectancy. For instance, in my previous portfolio I often quoted the outrageous situation of Shettleston's male life expectancy, which is 63. Why would we be in politics if we did not have an ambition to ensure that that situation was radically overhauled?

The virtuous circle that I tried to persuade Mr Kerr to break into involved setting targets for such things to set him on the right track. However, his response was that he could not set such targets because he did not have the levers to produce those outcomes.

I am firmly of the view that we should set targets in individual portfolios. For example, we set targets for the number of children whom we lift out of absolute and relative poverty and for improvements in survival rates from major diseases. On a range of indicators, we make it clear that we expect improvements to result from the changes and investments that are being made. We have our hands on those levers, but we need an engagement with people in Scotland. We could spend all the money that we like on health, but we will not succeed unless we engage people to think differently about their lifestyle choices. We need to accept that Government has a vital role in making it possible for people to adjust those choices.

Mr Dennis said that council tax would not need to rise over the period by any more than inflation. He said that councils were expected to be able to deliver in all the areas that Arthur Midwinter highlighted if they could meet their efficiency targets, which were "challenging but deliverable". That might be okay for councils as a whole, but some councils are much more efficient than others. How will the minister ensure that councils that have already tried to squeeze out all their inefficiencies are not penalised in comparison with those councils that have taken a more lackadaisical approach?

We do not believe that there are councils that have squeezed out all inefficiencies.

I assume that you do not claim that each council is as efficient as the next one. Are councils equally efficient?

I am not suggesting that; I am saying that there is room for efficiency savings in each council in Scotland. We need to be careful that we do not single out local government. There is substantial room for efficiencies right across government in Scotland, including health boards, local government and a whole series of other agencies.

However, there are issues around council tax and the objectives that local councils must meet in delivering services on behalf of central Government. Will the local government settlements recognise that some councils, although not perfect, might be already more efficient than other councils? How will the Executive work out which councils have already reached a higher degree of efficiency so that they are not penalised in the settlements over the next few years?

We have no intention of penalising councils. We engage in an on-going dialogue with local government representatives. Clearly, individual councils might wish to express a particular point of view, but local councils are democratically elected bodies that may have different aspirations for their local communities. They may set different targets and take on expenditure commitments that they will have to justify to their local communities.

Have any assumptions on local government pay settlements been built in? What percentage increase has been assumed?

There is an assumption for pay settlements, but I do not know the exact figure.

I do not want to give the wrong figures, but we have made assumptions for pay. In our efficiency assumptions, we assumed the existing pay deals for teachers, police and fire services. I think that the other pay settlements were assumed to be in line with the teachers' settlement, which is, I think, about 2 per cent or 2.5 per cent.

It would be useful to have that information in writing. Arthur Midwinter has a question.

Further to the two previous questions, I would like clarification on the efficiency assumptions in local government. Am I right in understanding from our previous discussions that it is envisaged that the efficiency gains within the Executive will operate within fixed budget totals, whereby departments that meet their targets will be able to release those resources to develop front-line services, but departments that fail to do so will have to live within their totals? The local government settlement seems to be qualitatively different. When you said that an efficiency assumption was built in, did you mean that a sum of money was taken off the top? Will local authorities that do not meet their efficiency targets somehow have to meet the costs of that from somewhere else?

It is not the case that we took a sum of money off the top. In considering how much additional provision to make for local government, one might say that, for example, as average pay and price inflation is running at 2.5 per cent or 3 per cent—that figure applies to companies rather than to local government—and the expected productivity gain is 1.5 per cent or 2 per cent, an average increase in funding of 1 per cent is required. That is the sort of calculation that was undertaken in local government. However, I have not cited the local government numbers because I do not have them to hand. I do not want to mislead the committee.

Richard Dennis seems to be confirming what I think has happened. An allowance has been made for savings within local government that is not reflected in the settlement. That sum has been taken off the bottom rather than off the top. The settlement includes an assumption about the sum of money that local government will save, so the total is less than it would have been.

I think that that is true.

Will you clarify what the local government efficiency savings assumption is? The United Kingdom spending review mentions a figure of £6.45 billion. Have we yet put a figure publicly on what the saving will be? I could not find such a figure in the document. Did the minister say that in his statement to the Parliament?

The efficient government plan will set out the assumptions for local government. I do not want to pre-empt what the plan will say, but it is likely to include two elements. In addition to the assumptions that we made on the settlement, there will be opportunities for local government to make further efficiencies that will benefit their front-line services. Therefore, it is not entirely a case of just taking money off at source, as happened in the UK settlement. The plan will set out some of those figures.

In that sense, our spending review is not analogous to the one in England because ours does not specify the savings assumption, which will be given in the efficient government review.

Do you envisage doing something about the inefficient collection of council tax? Allegedly, some 7 per cent of the tax is not paid by those who should pay it. Given that only 40 per cent of each council's electorate pays the tax, is there not a big argument that the tax would be spread much more evenly and collected more efficiently through pay as you earn, whereby it would be collected at source? For God's sake, we are still collecting the poll tax in some regions.

We should not stray into the second of the two arguments that John Swinburne advanced in his question, as it is the subject of a review. However, what about collection rates?

Although there is—and there has been for some time—considerable interest in our ability to collect local taxes, there is scope for improving rates of collection. We may need to engage in some lateral thinking about exactly what we are prepared to do. My experience as a council leader leads me to question the view—or misinterpretation—that the people who do not pay are the ones who cannot afford to pay. Often, when the figures were analysed, they showed that the people who did not pay were those who were more than able to pay; they were often the people who had access to what I will describe as professional advice and who were therefore able to evade their commitments. A strong case can be made for looking at what we can do to improve rates of collection.

I have a question on the savings that councils and health boards are expected to make. Again, I do not want to pre-empt the statement but, in relation to the focus of the savings—better procurement and shared support, for example—is there an expectation that authorities and bodies will work co-operatively in order to make mutual savings? Is that the way in which we are moving?

Undoubtedly, that is the general direction of travel. Initiatives such as the joint future agenda are undoubtedly generating savings. Another example is the e-care project, which aims not only to assist the more efficient delivery of services to the consumer, but to lead to a greater synergy between local government and the health service. Because of the reasonably high degree of unnecessary duplication in the public sector in Scotland, there is scope for examining how best to harness technology and other methods of removing that duplication. Local government reorganisation in Scotland created a fairly significant number of what might be called back-office functions, as anyone with experience of the situation can see. There is scope for re-examining that.

I think that we have exhausted the questions that we can put in this first session. I thank the minister-in-waiting for coming to the committee today in advance of his appointment. We look forward to a robust exchange of views after the recess. I also thank the officials for their responses to our questions.

Thank you, convener. I thank committee members for the way in which they offered their questions.