Good afternoon and welcome to the 18th meeting of the Finance Committee in 2010, in the third session of the Scottish Parliament. I ask everyone to turn off any mobile phones and pagers, please, as they interfere with the broadcasting system.
Thank you for inviting us to come and talk to you. Our other colleague, Robert Wilson, cannot be with us today. He is in Australia and sends his apologies. We will do our best to get by without him. We do not want to say very much to start with. We delivered the report to you all on 29 July and, with that, our task came to an end. We handed over to ministers and the Government the job of trying to figure out what to do with it all. If you will allow us to do so, we will get right into answering whatever questions the committee might have.
I will start with two general questions. By way of introduction, and before members get into the detail of your recommendations, I will ask about the proposed Scottish Parliament cross-party working group, which you recommend in paragraph 7.11. Can you explain a bit more about how you see that working and how it would generally interact with the Finance Committee and Parliament?
I will let Neil McIntosh answer that question, too. This is a very difficult time, and we think that people will need to come together in a reasonable way to try at least to agree on the size of the problem that they are trying to resolve.
Thank you. I notice that, in paragraph 7.20, you mention the need to move to “a more outcomes-based approach” in the public sector. Will you expand on that and explain how you see it working in practice?
Many of the witnesses we talked to and the proposals that came to us from organisations throughout Scotland suggested that there is frequently a tendency for people to be given input-based goals such as more police on the streets, class size reductions and so on, and that they are much more comfortable just being asked to meet certain outcomes and being given the freedom to decide what they ought to be doing with the moneys that they are given to meet those outcomes. Many of the people we talked to made a strong plea for us to ensure that we get as many of their goals as possible in output form rather than as inputs.
Does Sir Neil McIntosh wish to add to that?
If I may. In many ways, the Parliament has a range of outcome approaches as part of a national framework. However, I think our feeling was that, in relation to budgeting and finance, the forecasts had tended or appeared to be on inputs on the sort of issues that Crawford Beveridge mentioned. There is a need to try to broaden that and to engage with identifying where the Parliament wishes to go in terms of the quality of the expected product of services, and then to work back and put in place the mechanisms that will ensure that we know whether the outcome is being achieved. In that way, we will be able to judge whether the investment that has been put into services is being realised in terms of delivery. That is the general approach that we touch on in the report.
I invite questions from members.
I suppose that I should start by thanking you for the work of the review panel, which has been helpful in terms of shifting the debates further along, even if we have not yet got to firm conclusions. I want to ask two questions. The second, which I will come on to, is on a specific area.
A recruitment freeze is a relatively easy thing to do in industry, where a chief executive can say, “Let’s stop hiring right now. Any exceptions, come to me and I’ll decide whether they’re essential.” Given the breadth and complexity of government, our conclusion was that we could not get that simple an answer. It was impossible for us to define what is essential on everything from the people who pick up our rubbish on the streets to the doctors who do specialist operations, so our conclusion was that we probably have to entrust self-regulation, to some degree, to the people at a fairly senior level who do the hiring in organisations.
Looking at the issue from the perspective of a former chief executive in local government, I tried to think what I would be doing or recommending in the current setting. The first thing that I would want to do is to put on the brakes to keep as much flexibility as possible in the current year until we know exactly what is coming. Part of the reason for that is to protect those who are in employment and to try to ensure that, as far as possible, we create the opportunity to address the issue much more effectively. In that setting, people have to prove that a post is essential and not just say that it is so. For example, teachers are essential, but a teacher in a single-teacher school is critical. If we take that teacher away we take the whole service away. In a different setting the situation might be quite different.
There are a lot of variables in the area. The number of posts at various levels that we conclude are essential will have an impact on how much is saved, as will staff turnover rates. Having said that, were you able even to get to an indicative percentage range for what a recruitment freeze might save, or was that too difficult to do across the sector?
We could not do that in the time that we had; the issue is too complicated. At one point we tried to find out about attrition rates, to ascertain what difference they would make. The data that we could find on attrition were very spotty. Some organisations kept the data well and some did not. We ended up with a range of 2 to 10 per cent, depending on the organisation, and we could not fine-tune it further. It was hard for us to get to a determination.
Does attrition include retirals?
Yes.
I move on from a big issue to a small one, although it is important in the context of public opinion. The concessionary fares issue is highly charged politically, as you acknowledged in the report. You highlighted a number of approaches that could be taken to reduce the cost. There is also a do-nothing option, which seems to be predicated on costs rising by 8 per cent per year. What is the basis for that increase? If we allow something to increase by 8 per cent per year, it seems that we are losing control from the start. The increase seemed rather frightening.
That was partly about the demographics of how many more people will come into the affected group and partly about the likely inflationary rates for travel.
When you wrapped the issue up with your consideration of other support that goes to the travel industry, through the bus service operators grant and support from local authorities, did you consider the extent to which costs could be managed down through negotiation?
As you know, the costs of the scheme were negotiated downwards for this year and next year. However, there is no guarantee of what will happen after that. There is always an opportunity to negotiate costs down, but the demographics are constantly against us in Scotland—indeed, in most of the western world. That is a problem, because the affected group goes up at a greater rate than the rate at which costs can be negotiated down.
It is fair to say that we thought that there were issues about the group itself and whether the scheme was wholly appropriate given need in that setting. Members will know that from the report.
The report, which we have had for more than a month, contains some unpalatable options. It is certainly not something that I would want to read before going to bed, because the implications of some of the proposals for parts of our communities are pretty severe.
That is correct. If we did everything that we suggested in the report we would end up saving in the region of £4.3 billion to £4.5 billion. We were trying to aim at savings of £3.7 billion. Our approach was to come up with a range of options; it is for politicians to pick and choose from the least unpalatable ones to try to get to that number.
Did you have a target figure, or was your approach to try to ascertain what savings would be relatively easy to make?
Obviously, we did not consider every possible area. We were just trying to get enough of the easily recognisable things in there so that people could see how to do this with various options and get past the £3.7 billion.
So there is potentially some scope for us to come forward with other suggestions.
Absolutely.
It is not the definitive shopping list.
We were asked to put forward suggestions so that you could make the choices.
It is helpful to know that, just because something is in the report, that does not mean that it has to happen.
That was why we talked in the report about a range of 2 to 3 per cent, which is where the Government targets have been. As I am sure the committee knows, the reason for that is that efficiency savings get harder every year because you always pick the easy ones first and get them out of the way, so the next year you are on to the harder ones. You could have easily reached the savings number by saying, “We’re going to get 6 per cent a year”, but I do not think that anyone we talked to believed that that was in any way feasible. They might be able to do better than 2 per cent, as they have done in the past, but it seemed inappropriate to assume that they could do a lot better and that therefore we could take risks with the amount of budget that was in there.
It is perhaps also worth mentioning that the option of recycling is comfortable and attractive when resources are not under the pressure that they will be under. However, our feeling was that we are now in a situation in which efficiencies that could be achieved should be seen as contributing towards the overall scale, given our view that efficiencies in themselves cannot meet the range of cuts that will have to be applied.
You rightly spoke a great deal in your report about the need for strong leadership. Clearly, we expect strong leadership from the people in government. However, we have to acknowledge that we have a minority Government in Scotland, so strong leadership has to be tinged with a desire to speak to other people. You have strongly recommended that that should happen—that the Parliament and Government should come together. How do you interpret “strong leadership”? Do you expect the Government of the day, which is elected to lead, after all, to approach other parties with a blank sheet of paper, or do you expect it to put forward some proposals?
It is not for me to try to tell the Government of the day how it should be doing things.
But you could give us a view on what you regard as strong leadership from the Government.
It is not just from the Government. We would say that leadership is required in the national health service, among teachers and in the unions; everyone will have to get their head around the problem in front of them and try to make a go of it. Whether the Government comes along with proposals or a blank sheet, the issue is that there is a nut in front of you next year that says that we have got to take £1.7 billion out of the budget. Whatever we start with, we will have to modify along the way because getting to that number will not be easy. Everyone will need to figure out how to contribute, to help us to get to that number.
That is a strange interpretation of strong leadership, but—
Let me try it a different way. What I am trying to say is that looking for Robert the Bruce is not going to happen. Rather, what we are looking for here is to get the clans to come together and try to figure out how to take things forward. Leadership, to me, is being able to get the clans together in a way that takes things forward. I do not know what the right way to go about that is; I do not know whether you should go to the clans and say, “Okay, here’s an idea. What do you think of it?”, or whether you should say, “I’m out of ideas. What do you think about it?” Somehow or other, we have to get people together to get the thing to happen.
The subject of leadership is critically important, not just for Government but for Parliament. In many ways, in a situation such as this, there is a point at which you look for leadership from Parliament as a whole and to Government to engage with Parliament to try to ensure that there is as much of a consensus as possible about some of the big issues that are coming along the track.
I do not disagree with one word that you have said, but people seek to govern for a purpose—they seek to govern to achieve certain aims. If we find ourselves in a very serious position, I would have thought that strong leadership should emanate from a Government that gives some indications of areas that it is prepared to consider.
Our timing was somewhat unfortunate. We managed to give all of you the report just as large numbers of people were about to go off on holiday. Everybody is back now, and we need to wait and see how quickly things can be mobilised and discussions can be got going. From discussions that I have seen in the press and from work that I know about, there seems to be a lot of stuff going on. I know that people in the Convention of Scottish Local Authorities, for example, have been trying to think their way through the various contingency plans that they must put in place for dealing with matters. The work may not all have happened in the Parliament, but members are back now, and I hope that the Government will give leadership to get them all into the discussions soon.
I have been in government, and I assure you that summers then seldom meant much of a holiday. However, things might be different these days.
I am not disappointed. As I said to Mr FitzPatrick, we deliberately tried to give more options than were required to get to the right number. We said in the report that we could see no overwhelming or compelling evidence for ring fencing in any particular area, but it is entirely within the gift of the Government to decide to do that, as long as it understands that that does not take away from the other numbers but simply means that resources must be found in another place. Each time flexibility is narrowed, it makes it tougher to be able to do the job in other places. We understood that it was not for us to make the decisions on whether there should or should not be ring fencing, although it was for us at least to point out that we could not see any compelling evidence that showed that that needed to be done and, therefore, if it was done, it would cause pain in all sorts of other ways.
I do not mean to personalise the matter, but I am interested in what you have said about the totality of what you identified, as opposed to the figure of £3.7 billion that has been mentioned. You have a lot of experience in business and job creation, and it is clear that you have had important remits in and outwith Scotland. What would happen if your business needed to save £3.5 million and someone came along at the end of an exercise and said, “Actually, we can really sharpen things up here. I’ve identified savings of £4 million”? Would you take that?
Probably.
You call for strong leadership from Government, but strong leadership implies that there are people who are willing to be led. It has clearly been enunciated that the situation is serious, and we require clear thinking and guiding principles to see us through. Are you disappointed or reassured by the general reaction so far to your findings and the warnings that you have given, and to the whole situation?
I will let Neil McIntosh answer the question as well but, from my perspective, I have been quite heartened by the reactions. The overwhelming tenor of the press was that at least it was good to get the issues on the table so that people could discuss them in reasonable ways. If we manage to achieve that, we will have achieved quite a lot. Of course it would be nice to get everything wrapped up fairly quickly, but we are realistic enough to know that the process will take some time. In general, with the odd exception, the press has been pretty favourable towards what we have done.
Some of the reaction is not surprising because it is what people said to us. People said that they were anxious to have the issues aired and expressed so that things could move forward. My impression, from the contacts that I make and the people whom I meet, is that many people out there in the public services are up for dealing with some of the difficult issues that they will need to face. There is a lot of contingency planning and thought going into how the issues will be addressed, particularly in relation to how organisations might start to work together more closely. People are looking at how they operate and how they can achieve not just greater efficiency but greater effectiveness.
I, too, thank you for what is a useful report. The whole thing makes scary reading, I suppose, but the scariest thing for me is the extent to which, if we believe table 2.1 on page 27, the cuts are front-loaded. I found that table particularly striking because it says that the departmental expenditure limit cash cut for next year will be £1.2 billion, which is greater than the DEL cash cut over the four-year period. Realistically, therefore, we need to focus on next year’s budget while, hopefully, taking the longer-term view.
As you acknowledge, we have done our best on the issues of pay, universality and efficiency to include some costed options for various changes to policy. In the four and a half months or so that we had to put the report together, reaching the level of granularity of the likes of the Howat report a few years ago was just impossible, given the time and resource that were available to us. We tried to focus on those few big areas and cost out as best we could what changes to policy options would do.
Let me just focus on those universal benefits, which much of the public debate and many commentators have focused on. Without stating a view on the matter, I observe that there appears to be not much scope to save money in that area next year, which is our primary focus, particularly given all the zeros that appear against free personal care for next year in table 5.5. Presumably, that is because primary legislation would be required.
My recollection is that there is a time lag in contracts and that the savings in the first year are extremely difficult to achieve because of the difficulty of suddenly drawing matters to a close. You make a relevant point. We are starting to see costed options from those who will have to make the cuts and say where they have to go. To be candid, within the timescale that we are talking about, the need to take out large sums of money in next year’s budget creates one of those rather untidy situations in which we have to look for savings where we can find them, on the basis that they just have to be achieved. That is why I talk about a freeze on recruitment and other matters. Pay is another issue that is simple and straightforward. The options are there and pay represents a significant part of the costs.
The second area that I want to ask about is equalities issues. The general point is that we all accept that the budget has to be cut and I am sure that many of us would say that we have to follow the principle of fairness. Without getting too party political, some might criticise the Westminster budget on those grounds, but we will set that to one side. I am interested in the extent to which you were asked to look at the budget from an equalities point of view. One critique of the Westminster budget is that it affects women disproportionately. There could be a gender dimension to cuts but, equally, there could be an age dimension. We tend to think of age discrimination as being against older people—and we have talked about services for older people—but, equally, other people have expressed the view that the cuts could have a disproportionate effect on younger people. The process could work in different ways.
That aspect is very important. It was not mentioned specifically in our remit, although we were asked to be mindful of those issues. However, in the implementation phase, it will be critical for whoever has to implement the changes to consider exactly those issues. This morning, we talked a little about the fact that, with the private sector not exactly booming right now and with the freezes and potential cuts in the public sector it will be particularly difficult to figure out how we bring young people into work as they come out of schools and colleges. That is at the other end of the age discrimination spectrum. For example, we need to think carefully about whether our capital spend can be used in ways that require apprenticeships to be set up as part of the bidding process, rather than simply saying that we will go to the lowest bidder. That might not be the right policy option, but we must give some thought in the implementation to ensuring that the process does not discriminate against groups that have suffered from discrimination in the past.
The report talks about the numbers and says that we are looking to save £4.3 billion or £3.7 billion. The issue is how to get to some of those numbers. To reach the big-ticket numbers, pay and pensions will probably be critical, because they are the biggest part of the budget. The report states that there are “only two broad options” on that. The first is
We tried to see whether any mix of changing the amount of efficiency savings that we get and changing any of the policy positions on universality would allow us to make up the £1.7 billion that we must reach in the first year. The answer is no, we cannot get that.
As you would expect, the Scottish Trades Union Congress and Unison flagged up an alternative option in their submissions to us, which is to pursue a policy of higher taxation in order to sustain employment. That is a perfectly legitimate proposition, but the issue was not within our scope, other than in relation to the 3p tax variation that is available to the Parliament. That is a matter of political choice. When we consider the issue realistically, it is impossible to see that the public sector wage bill and manpower resources will be the same after the process as they are now. It is just not sustainable to achieve that.
The STUC said:
I do not accept that. The highest quality of analysis was undertaken. Our only interest has been to try to ensure that we provide you with information that has been researched and sourced in every way. Every item of information that is presented in the report has been sourced. I am happy to see debate among people, but the information is solid as far as we are concerned.
You commented in the report on the UK Government’s plans to cut spending and the deficit more quickly. There is a clear political divide on that. Do you think that cutting deeper and faster, which is the UK Government’s objective, is a necessity in the circumstances?
So now I get to comment on the UK Government.
You mentioned it in your report.
The issue is another judgment call. I assume that the UK Government’s thinking is that it wants to ensure that it is able to keep its credit standing with the world’s banks and bankers and therefore it wants to get rid of its debt at a much faster rate. That is a perfectly reasonable argument; others would argue that that is probably not as important as trying to ensure that we do not drag ourselves back into a recession by cutting too quickly. I am sure that much wiser minds than mine made the decision, but I think that it carries a degree of risk.
I did not expect you to pass comment on the issue. How would you and Sir Neil prioritise spending, if not by ring fencing specific budgets?
It seems to me that there is a decision tree that must be gone through. The first question is whether there are areas in Scotland where politicians collectively feel that the budget must be ring fenced for some reason. We could not find good reasons, but that is not our job; there might be something out there that you think absolutely has to be protected.
In a way, ring fencing is giving absolute priority. As you go through everything, you identify where the priorities are. However, ring fencing an entire block of expenditure is a problem, because there will be varying priorities and areas where savings can reasonably and feasibly be made. It is always dangerous to close off options in that sense.
I suppose that another thorny issue is council tax. Do you think that the current policy of a council tax freeze is sustainable?
We said that we did not believe that the council tax freeze was sustainable now. Our proposal would have been to crystallise the moneys that the councils have had in lieu of that tax until now but set them free to go ahead and set some reasonable level of tax increase for next year, which would save that £70 million that the Government has been giving them for the more general funds that we will need to find.
You have identified the £3.7 billion that we need to save—that is the figure that has been bandied about. We have had Andrew Goudie’s report, the report from the Centre for Public Policy for Regions and your report. I would argue that Mr Swinney has more than enough information to tell us what is in his mind budgetwise now. However, I read in the papers at the weekend that he is now going to set off on a tour, which includes Kirkintilloch in my constituency, to ask people for their views. It is commendable in itself that he is going out to ask the people. However, we have not seen a budget and we will not see one until after the comprehensive spending review report comes out on 20 October, which, incidentally, is mid-way through the next recess. It will be November before we see a budget number. As Tom McCabe said, you said in the report that you were looking for some urgency in decision making. It seems to me that we are not getting that. What is your view on that?
Again, it is not for me to second-guess the minister on this. It is true that he will not have his final numbers until late on. From what I have seen in many areas, particularly in local authorities but in other areas too, people are not sitting around waiting; they have gone ahead and decided that there is enough information out there now. COSLA in particular has done very sophisticated modelling, pushing demography out into the future to figure out what its current policy choices will cost over the next three or four years and trying to figure out what it might do to close the gap if the cuts are 10 per cent or 15 per cent, for example. Although it would certainly be nice for everybody to have the detail of the budget at this stage of the game, I do not think that there is anything preventing people from making reasonable assumptions based on the numbers that we all have and starting some contingency planning.
To its credit, of course, COSLA has decided to move and take contingency action on its pay policy. In the same way, you could argue that it would be perfectly feasible to apply a recruitment freeze as a contingency to ensure that, when you know the exact budget, you know where you are. There is a whole series of options in that respect. There are some that, managerially, you might wish to act on; politically, however, it is a different world, and I recognise that certain judgments and decisions have to be made at the right time.
That is exactly my point and what we in the Labour Party have been asking for. We do not expect Mr Swinney to give us exact numbers; we are simply asking him to bring us the options that he is thinking about. Your report highlights things that he could be doing, but we have heard little about them.
In that case, I advise you to go to his town hall meeting in Kirkintilloch and tell him that.
Don’t you worry—I will be there.
Is there not a sense that local government has already been here and has experience of dealing with this kind of situation, whereas central Government does not have the same experience and therefore faces a learning curve? Might the local government experience of undergoing cuts and having to make greater efficiencies provide indicators from which central Government could learn and benefit?
There is a wealth of experience and expertise out there—and not just in local government. I was certainly impressed by the quality, attitude and approach of the civil servants who supported us and believe that, among civil servants and many other managers across the public sector, there is a genuine readiness to engage with this challenge, if they have the leadership that they are looking for as they move along.
I, too, am grateful for the report and the work contained in it.
We looked at growth forecasts from the Office for Budget Responsibility and other sources, but could not find any current forecast that substantially helped the numbers that we will have to deal with over the next few years. As a result, we tried our best to figure out ways of not acting against growth and, indeed, of adding to it. That is why we were very interested in maintaining capital spend, because we saw that as a means of stimulating growth in Scotland, particularly in the private sector, as we went along.
Was it a deliberate decision not to consider macroeconomic impacts? After all, it might or might not be the case that other UK policies will have either a negative or indeed considerable positive impact on the Scottish economy and might well offset a DEL budget reduction.
That is correct.
The reason why I am asking about the UK is that it is in the remit. Perhaps Sir Neil might be able to respond.
That comes back to the analysis that Dr Goudie produced. He looked at the picture across the UK and at the factors for Scotland. My impression is that his was a high-quality analysis, which I would be happy to depend on.
I take your point about the breadth of your remit. I will not go as far as to ask you about the cure for cancer; I will just go to the first part of your remit. Point (i) of it was:
We had to try to figure out how to be mindful of as many of the things that we were asked to be mindful of in the remit as we could be. At one point, we considered whether we could map directly back to the national outcomes, but that was just way too complicated to do, so we decided that it was best to take a more generic look at the national outcomes and to be mindful of what the Government was trying to do without saying that a particular proposal would cause performance on a particular national outcome to improve or decline in a particular way. That would have been too complex.
Okay. I appreciate that.
If I may, I will add a couple of points on that.
The reason why I asked that question is that it is the Government’s stated strategy—for which there is a degree of cross-party support—to align budget choices with strategic outcome directions. I do not mean to be critical, but your report did not help much in that regard. I take Sir Neil’s point, but it did not help to step back and take a more overall approach when it is even more pressing when budgets are being reduced that priorities are determined.
As I said before, we have seen that many of the organisations that we are working with are well down the line in putting their plans in place. COSLA is probably the leading example, but there are others. Although four months from the publication of the budget is a tight timescale, in many cases organisations will be ready to pull the trigger very quickly. In fact, they are doing so already in some instances and pre-announcing what they are doing about pay for next year, for example.
From your perspective, there is no reason why there cannot be a policy response from the Government to the conclusions and each of the recommendations that you make.
Do you mean that there is no reason why there cannot be a response right now?
Yes.
That is not for me to decide. All that I am saying is that I think that there is enough knowledge about the size of the cuts for people already to be taking action in many, many places. I agree with the convener that there is perhaps not enough knowledge at the level of national Government, because this is a new thing for Government to have to deal with, but in places such as the police, education, local authorities and so on, people are already doing a lot of advanced work on what they need to do to be able to meet the number when they get it. As Sir Neil rightly said, COSLA is already making some of the pay and hiring decisions that need to be made to get there. I am not quite as worried about that, although I understand why you would be.
The only point that I would add is that of course there is an area of uncertainty, which is what the actual scale of the cuts will be if there is to be ring fencing of a major block—the health block—and what that will mean in practice, because it will change the level of cuts that will be required elsewhere. The sooner people are aware of exactly what is going to happen, the better it will be for everyone, because they will be able to plan more effectively, just as, in relation to the council tax freeze, if the authorities know where they stand earlier, they will be able to factor that resource into their plans and projections and carry it through.
I do not want to put words in your mouth, but in effect the only things that are left now are the policy choices. You said that work has already started and that the trigger just needs to be pulled, to some extent.
Yes.
So what are left are the policy choices.
That is correct.
We are now in a period of waiting two months before the Government, which will have had your report for four months, says what those policy choices are.
Yes. I think that you are asking us to go into an area of political judgment. It would not be appropriate—
I suggest that the question would be better posed to Government ministers.
I am keen to know whether the practical information that the Government has to provide to the public sector already exists. I am picking up that there is now enough information for policy decisions to be made, whether they are then implemented through legislation in the Parliament or by the Government.
I can answer that only by saying that there is information that is available at present and information that is not. The information that is not available is the October statement and its implications and the outcome of the public consultation exercise that is taking place to gather public views and thoughts. That is beyond our remit.
I appreciate that, but Mr Beveridge made the important point that there is a lot more in the report than an estimate of the reductions, so in effect we do not have to wait until the spending review for some policy directions and choices to be made. That is my point.
Yes.
Finally, if I can, convener, I have a question on capital—
Your comments have disturbed Joe FitzPatrick.
They always do.
They have done so again. I will let him put a quick question.
Jeremy Purvis is talking about the policy choices that have to be made. Clearly, we are coming to that time, but in a Parliament of minorities, it is for all of us—Opposition as well as Government—to come to conclusions on the policy choices.
Yes.
Jeremy Purvis has a final question.
Is it the view of the panel that there is insufficient strategic direction with regard to the capital budget at the moment?
That is correct. Our view is that it appears that projects come up and get approved and that capital for spending in the health service or local authorities is given out to them to spend in the way that they think fit. We are facing some big shortages of capital. Our notion is that a parliamentary body should take a strategic look at that and decide where trams come versus what happens to the Southern general hospital, or a new Forth bridge versus a ring road for Aberdeen. Those are big projects, we will not have the money to do all of them and there is a desperate need for strategic guidance.
In paragraph 6.37 you say:
I would say it slightly differently. It is true that there are bodies that look at specific areas such as transport and that the Scottish Futures Trust is trying to work out implementation issues in how to get the best deals for capital expenditure, but we could not find anywhere where the totality of capital in Scotland—be it for maintenance or the new production of bridges, hospitals or whatever—is looked at. No one is making the hard decisions and saying, “This project is much more important than that one. This is where we should spend our capital for this year.”
The only member who has not contributed thus far is Linda Fabiani. I intend to remedy that.
I have waited patiently. Mr Beveridge, in your chairman’s message, you say:
Do I get out alive no matter how I answer the question?
You can try.
I sense an understanding of the need for us to come together around solving the problem. That said, I am not sure that Scotland has enough history of mechanism to help you all to understand how to do it. None of you got into this because you did not want to help Scotland; you are all in the Parliament because you want to make a contribution. You all started with the same basic ideal on this sort of stuff. From what I read from the different parties in the papers, there is an amazing amount of commonality in what you all want to do. There is real disagreement only around the fringes or about the way in which to do things, but it is not huge. It ought not to be that hard, but there has not been the mechanism by which to make it happen. I hope that everybody will figure out a way to do it.
I have read the committee’s reports, and the Official Reports of your meetings—there may be a prize for that; I do not know. I found the debate constructive on a whole range of issues. The Finance Committee has challenged Government, at times quite readily, in terms of the broader interests of the Parliament.
Sir Neil McIntosh said that it was not for him or the co-authors of the report to decide what were essential public services, and I take that on board. However, you are clear in your conclusions on efficiency that the
It is difficult to get solid information on them. As the committee might remember, quinquennial reviews of all public bodies used to be carried out to ensure that they were still valid. Those reviews tended to be somewhat toothless, but there is a strong case for someone to take a good look every couple of years at why a body was set up in the first place, what it was supposed to do, whether it is doing that, whether it is still necessary to do that, and whether that is the best way in which to do it.
You also mentioned scrutiny bodies. Do you think that our public services are overbureaucratised?
That is a tough one. Many of the people whom we spoke to complained that they were being overaudited and scrutinised, and were spending more of their time explaining to all sorts of different bodies that they were working to the rules. We are just saying that we need to ensure that these things are truly appropriate.
So you think that Audit Scotland should stay?
We certainly need a body to ensure that everyone is spending their money wisely, but I will not speculate on what it should be.
To paraphrase part of your remit—on which Jeremy Purvis focused in more detail—you were asked to make recommendations on options for the Scottish Government and the Parliament to consider. The report does what is outlined in the remit, but I was struck by the chairman’s message, which seemed to be much more innovative and future thinking than the general body of the report. It mentioned “strong leadership”, and noted that we had to create
That was the difficult bit. Our remit did not ask us to look at the longer term; it wanted us to deal with the next four years’ spending. However, it soon became obvious that it would be difficult to set people off on a path if we did not know where they were going. Although we will all be running around trying to put the fire out for the next couple of years, at the same time we need to come up with the overall design for the new house that we want, if we can find a way to do that.
In a way, this is one of the tests of the concept of the Scottish Parliament and of where Scotland is going. It is certain that, if you were starting from scratch, you would not build the Scottish public sector as it exists at the moment. There is an opportunity to take the longer view, but we should not take too long to reach the shape that seems right. We know that we have a changing population structure. People talk about advancing age as a problem of care, but there is a tremendous resource within the community of people who, like me, are still of an age to contribute. If we want services that are built on people remaining and being sustained in their homes and communities, with institutionalisation as the last—not the first—option, there is an opportunity for the voluntary sector to act as a mainstream provider. The same applies to the private sector, in areas where it can do so with excellence. I am referring to all of the areas, such as early intervention, where there will be a shift in the way in which services are provided and structured.
Perhaps that is the new kind of politics that we need.
I must draw proceedings to a close. You have just made a plea for national unity of purpose and for us to work together to resolve an unprecedented situation. The point is well put; there is a challenge to all of us to act in the national interest. Do you wish to make any final comments?
You have summed up matters well. In the report, we tried to provide people with enough information to enable them to understand the big decisions that all of us want to be made in the best interests of Scotland. That is our plea. As we have just discussed with Ms Fabiani, it is also important that we do not get so caught up in the firefight of the next few years that we forget that we have an opportunity really to shape what we want the position to be when we come out the other side.
Thank you for your evidence, experience, wisdom and advice. We will take a short break to allow the witnesses to change over.
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