Budget Process
I formally open the 24th meeting of the Finance Committee in 2005. I gave an introduction at the beginning of our informal session at 20 past 9 this morning, but now that we have moved into our formal meeting, I thank all those who took part in our informal workshops. We will shortly discuss what has come out of those workshops.
The committee is very pleased to be here in Elgin to hear local views on how the Scottish Executive's budget is working or, perhaps, is not working as well as it should in this area.
I thank all the people who have been involved in setting up the meeting. In particular, I thank Sheila Biggs, who is the personal assistant to the principal of Moray College, for all her hard work in organising the meeting on our behalf.
I will outline the procedure for today's meeting. We have already had an informal session at which we split into three workshops; we will now hear feedback from those workshops so that committee members can record their impressions and share the information that they have gained.
The purpose of the committee's visit is to continue its examination of the Executive's expenditure proposals for next year. We are now at what we call stage 2 of the process, which is the committee's scrutiny of the Executive's draft budget. As in the past, the committee has felt it to be useful, as part of its scrutiny, to gauge the impact of spending plans on specific areas and to find out how engaged different parts of the country are in the national process.
At the end of our meeting this afternoon, we will quiz the Minister for Finance and Public Service Reform on general budget issues. I hope that our discussion with the minister will be informed by some of the issues that we have learned about today.
I will now invite people from each of the three workshops to report back. Frank McAveety is our reporter from workshop 1.
Thank you, convener. I echo the convener's welcome for our opportunity to be here this morning. The participants in our workshop have contributed a great deal to the report that I hope to produce—although I say that with the caveat that a politician will be summarising participants' opinions. If anyone feels uncomfortable about that, they should speak to me later.
Three or four themes dominated our discussion, the first of which came over strongly. Participants feel that the budget document's national priorities do not accurately reflect the critical priorities for the regional economies of the Highlands and Islands, Morayshire and the rest of the north of Scotland. That view came over strongly, although the level of information that is available in an overall budget might be a factor. An example is investment in trunk roads. In the past, local authorities had a say in the level of capital investment and, although that investment was never as high as people wished, it was certainly much higher than investment is now, under national priorities. We discussed the fact that such investment is seen as a high priority locally but is given low priority as a national commitment. To have the issue of trunk roads addressed would be regarded as helpful.
We then had a substantial discussion on arterial routes. We discussed the time that it takes to travel across the Highlands and Islands and to connect to the rest of Scotland, and to the central belt in particular. We discussed how that affects economic and company development. We also discussed the quality of arterial routes and their maintenance. Criticisms were expressed about the way in which the budget reflects the importance of such routes.
The second theme was integration of different modes of transport and people's willingness and ability to operate outside their traditional locus of operations, whether in ferry, bus, rail or air services. We discussed ways of bringing the services together more cohesively. An opportunity for that might arise from the new developments in regional transport. It is felt that a more effective integration could be achieved.
There was also discussion of the flexibility of budget options. Criticisms were made about the Executive's focus seeming to be only on efficiency gains rather than on the role of economic growth in allowing services to meet the public's needs. It is felt that local economic growth would assist the economic growth of Scotland as a whole. Parliamentarians in the workshop expressed concerns about having to budget half way through the year in order to determine what was available for one of the public agencies. We do not think that that is good practice in terms of accountability or scrutiny—neither for the agency nor for the wider public.
The third big issue was the price and location of services that are available to the public. It is felt that we should be considering more flexible and imaginative ways of providing bus, ferry, air or train services. We had a substantial discussion about single-track provision of rail in the north of Scotland and we wondered about a five, 10 or 15-year programme of investment to deal with the suitability of the tracks for passengers and freight.
A consistent theme was the need for awareness and knowledge of the various needs of various parts of Scotland. That theme has come up consistently in submissions that the committee has received in recent months. It is felt that we must move beyond the one-size-fits-all approach and instead recognise that there are various stresses and strains in different parts of Scotland.
Two other matters popped up latterly in the debate, but are probably quite important. It was mentioned that there is no budget area that could allocate research funding to consider how new transport modes could be provided and best practice be identified to the benefit of the whole of Scotland and the rest of the United Kingdom. There is a feeling that we need more research.
The final point that was raised was the question how we can ensure that customers' needs are reflected in how we provide and price routes and how we can make them more flexible in the interests of the differing needs of the wider community.
Those were the dominant themes that emerged in the group. I pay tribute to the contributions that were made by people from the area. I am sure that they identified two or three areas that we need to reflect more on. If other members of the group—people from the area or parliamentarians—want to add to what I have said, I am happy for them to do so.
We could give John Swinney or Mark Ballard a chance to highlight any of those points or to raise additional ones.
I associate myself with what Frank McAveety has said and will emphasise two points.
In the strategic priorities that are set out in the Government's programme for transport, particularly with regard to growing the economy, there is an emphasis on strategic improvements that relate fundamentally to the central belt of Scotland, but there is virtually nothing that deals with anything north of the Tay; in fact, I am not sure that it even gets as far as the Tay—[Interruption.] The convener is drawing the Aberdeen peripheral route to my attention; I accept his point. However, in this neck of the woods—the Highlands—there has been little in the way of strategic programmes. A powerful example of that is the fact that, once the two major trunk road improvements that are being undertaken in the Highlands are completed, there is nothing else in the programme that relates to this area. There is a big question about trunk roads.
There are also problems to do with attempts to achieve some of the targets that the Government has set. For example, one target is to
"Transfer a further 2 million lorry miles per year from road to rail or water",
but there is little evidence of practical steps' being taken to make that come about. Where, for example, are the improvements in the rail network that would make that physically possible? There seems to be a lack of strategic nationwide thinking in the programme and a lack of linkage to the major objectives.
The second point relates to the locality here in Moray. Our contributors talked a lot about the A95, which links Elgin to Aviemore, and the A9. They said that the A95 is used heavily for freight—if my memory serves me right, I think it was said that it is the trunk road in the Highlands that carries the highest proportion of freight. About six or seven years ago, the local authority dealt with the route by trunking it, so it has as a result effectively gone from being at the top of Moray Council's list of priorities to being at the bottom of the Scottish Executive's list of priorities, because it is a trunk route on the far periphery. That has had a negative effect on the infrastructure and condition of the road. It is interesting, from a process point of view, that what looks like an administrative decision to take the responsibility for a road from one agency to another has had negative consequences for the quality of the road.
I agree with Frank McAveety and John Swinney. However, I want to add a couple of things. One of the things that impressed me in the contributions was the range of small projects that would do a great deal to improve transport links in the area. There is a contrast between a budget that focuses on very large infrastructure projects, and there being a range of relatively low-cost improvements that would have a dramatic effect on the region. That is something that I will take from the session.
Frank McAveety mentioned the lack of a regional focus. The three Executive priorities of growing the economy, closing the opportunity gap, and sustainable development play out differently in the regions. There is concern about a one-size-fits-all approach being taken to tackling all those problems. It was strongly emphasised that, given the different regional circumstances, sustainable development and economic growth in the region need specific measures rather than the assumption that what works for other parts of Scotland in improving sustainable development will necessarily work here.
Does any member of the workshop group, who is not a member of the Scottish Parliament, have additional points to make? None does. In that case, I assume that we have provided a reasonable record of what came out of that session.
I move on to workshop 2, which dealt with economic regeneration. Our reporter is Jim Mather.
The inputs and the participants are proof that we can confront the reality of what inhibits progress and come up with a much better and more resurgent solution.
We started off by being given a clear idea of the components and nature of the local economy, which were wonderfully enunciated by Jim Johnston, who talked about farming, fishing, food, fermentation and flying. He went on to augment that by killing one of the myths and showing what else is going on. He challenged the low-wage economy label by pointing out that many oil workers who are resident in Moray earn their money elsewhere. Equally, people commute to Aberdeen and Inverness. Senior Royal Air Force personnel can be taken out of the wage equation.
He also told us what is happening in manufacturing and about the arrival of new workers from the accession states, from Spain and from Portugal whose arrival is allowing manufacturing to continue competitively. However, he also voiced concerns about the long-term viability of manufacturing, which led us into conversations about the area's potential. There was emphasis on the positive and on the area's potential to be a city region between Aberdeen and Inverness—"filling the doughnut", as it was so eloquently expressed. However, that would require the growth of more family businesses and more diversification. There would have to be more emphasis on added-value industries and on businesses that depend on the area. By that I mean businesses that are not replicated elsewhere. I found that very interesting. It was the main point that was made by Professor John Kay when he spoke last week to the Parliament's cross-party group on the economy. He suggested that that is the way forward for Scotland, and that Scotland should emulate what has happened in successful parts of Switzerland, northern Italy, and Germany.
The comprehensive array of inhibitors that were enunciated was also very useful. That matter interests me more than a little, because unless we confront those inhibitors, our ability to move forward is limited. I hope that, even at this late stage, the list of economic inhibitors, bottlenecks and problems is fed into the task force, which is circulating its first draft report. I make a plea for that task force document to be passed to MSPs in the Highlands and Islands, because we would be keen to engage with that process.
I shall read out the list of inhibitions that I have before me. I list them for no other purpose than to ensure that we have missed nothing and to encourage the people who sat in on the session to come back to us with anything that we miss. We mentioned manufacturing vulnerability and we also discussed population decline; concern was expressed that migrants who are coming just now may not continue to come in the longer term if the economies of Portugal, Spain, Estonia and the Czech Republic take off and develop. Housing availability is also an issue, although it is clear that some manufacturers are solving that problem by buying housing and hotels to provide accommodation.
There are financial constraints on local government, particularly on the local authority's flood fund. There are unintended consequences of the efficient government initiative, with the Government leaning on the Scottish Environment Protection Agency to do what it has to do, and there are also things that Scottish Water has to do. The financial implications of transport links are also an issue, whether they are to do with increased fuel costs or extended travel time, and there is the "doughnut" concern that troubles some businesses, about people being not quite able to get here and energise the economy to the extent that could be possible. Exporting of people is also of concern because we are bringing in people at the lower end of the income scale and exporting many of the skills that could provide the potential to start new local businesses.
There is also an overall issue of competitiveness and financial pressure on colleges. The economic budget is under constraint and there is uncertainty about RAF jobs. Concern about flooding is more than just a short-term concern about negative things that could happen; it can also create an inhibition for future investment if money and land are not available. Those are the points that emerged from a rich workshop session. I have no doubt that we shall dive into them again. However, I make a plea to James Gibb to involve us in lengthier workshop sessions in future so that we can drill down and help to come up with a solution.
Thank you. I should say that the economic regeneration workshop was enhanced because we had Margaret Ewing MSP, the local representative, present during that session. Unfortunately, Margaret has had to leave, but she made a strong contribution to the discussion, having been an elected representative for the area for the best part of 20 years.
Derek—is there anything you want to add to what Jim Mather has said?
No. As always, Jim has captured the issues pretty comprehensively and has given a fair representation of what we discussed.
I offer non-MSP participants in that workshop the opportunity to put any points that were not captured in what Jim Mather said. There are, perhaps, one or two comments about skills and education that have not been mentioned but which were raised by Wendy Haston in the workshop. Would you like to reiterate those points?
My specific concern, which was also expressed by fellow workshop members, is that, although we thoroughly applaud the funding for education and the emphasis that is placed on education, a lot of that money drifts into the administration costs of delivering new schemes. One example that was selected—this is by no means an indication that we view it in any way other than favourably—was learndirect Scotland and learndirect down south. The aims of those initiatives are laudable, but the money drifts off into marketing and disbursement of funds while we still have volunteers delivering learning in rural learning centres, particularly in the Highlands and Islands, so the money is not going where it needs to go.
I have a question for Jim Mather. He said that the efficient government programme was leaning on organisations such as SEPA. Can he tell us more about what was said in the group about the consequences of that?
One direct effect was highlighted. Pressure on SEPA's budget may be making SEPA marginally more rapacious in imposing charges, which chimes with work that I have done recently on a guy called W Edwards Deming, who turned around the Japanese economy back in the 1950s. He was able to make the argument in corporations and in Government that the key to efficiency is to have all the silos lined up with the same objective and the people working to deliver a worthy aim. In some circumstances, that may mean that organisations such as SEPA must take the pain to allow other elements, perhaps in the private sector, to do better and to generate economic growth.
There is a hidden clamour that I hear repeatedly. People say, "Wouldn't it be nice if Highlands and Islands Airports, Scottish Water and SEPA had exactly the same objectives as businesses and Government?" Economic growth is the objective of Government and of every business and self-employed person I have ever come across. Would not it be nice if the quangos in the middle had the same objective?
I was the other participant in the workshop. It is worth reiterating the point that was made about the scale of the flooding problems that exist in Morayshire and the fact that there are different problems in different localities. Far fewer resources are available from the Executive than are required to sort out the problems even in this area. We know that there are flooding problems in other parts of Scotland, as was recently most graphically illustrated in Hawick. There are a number of such problems. Flooding represents a fetter on economic development, both because of the insurance problems that existing companies face and because there is a lack of land that is not threatened by flooding for expansion or development-based activity. That is a particular local problem here in Moray, which is different from problems in other parts of Scotland. That is not to say that other parts of Scotland do not face similar issues.
We have not previously held a workshop on the subject of our final session. However, Susan Duffy, who was involved in it, tells me that it was an interesting and useful session. Our reporter is Andrew Arbuckle.
In agriculture, it is always said that the best farmers are those who walk their fields most often. The visit of the Finance Committee to Elgin today is the political equivalent of us walking our fields. It is good for us to hear about grass-roots issues, problems and concerns.
Our group discussed the budget process. We were fortunate to have with us the budget adviser to the committee, Professor Arthur Midwinter, who gave a five-minute introduction. If anyone here wants a five-minute view of how the system of spending £29 billion annually operates, they should catch Arthur at lunch time. He laid out the parameters within which the Scottish Executive operates and the timetables of the budget process, and made a comparison with the previous regime, when the money that came to Scotland was dealt with by the then Scottish Office. Two former Westminster MPs have been present today; they would contrast the transparency in the current Scottish Executive budgetary process with the darkness of the previous regime. We were not looking for it, but one member of the working group offered us a compliment, which got us off to a good start.
Arthur Midwinter pointed out that, in Scotland, we have come through a period of unparalleled growth in the past six or seven years. In real terms, we have had more money to spend than ever; nevertheless, there is a fear coming from Westminster that we are now entering a tighter economic situation. That is reflected in the fact that we are now seeing programmes for efficient government. Indeed, the Scottish Executive has set up an independent baseline budget review that will focus on efficient delivery of government.
Our working group included representatives of education and the voluntary sector, and we spent most of our time discussing efficient delivery of services at local level. There is obviously a conflict between funding of the voluntary sector and funding of local authorities and health boards. It was also made obvious that, in some cases, there is distance between decision making and delivery. Concerns were also expressed about unannounced disappearances of support funds. In one case in the Scottish Executive, the rural partnership fund has just disappeared from the budget, which has caused problems. In another case, funding for adult literacy projects has disappeared, although that may be a local authority issue. There is concern about a lack of connection and a feeling that the situation should be improved.
We also considered education. Lossiemouth High School is trying to get into the schools of ambition initiative, but it is having difficulties. The benefits that arise from such an operation were explored. For me, the most heartening contributions came from two final-year Lossiemouth High School pupils, who said that they had seen a change during the time that they had been at secondary school. That shows that some of the benefits are coming through in schooling.
Overall, the view was expressed that more devolved budgets and not ring fencing would lead to better or more efficient delivery of services locally. I do not know whether Elaine Murray or any other member of the working group would like to raise any other issues that we touched on.
It was interesting to hear that the schools of ambition bid involved the entire school community. Although the bid was not successful, the process of applying has been beneficial to Lossiemouth High School. Evidence that we have heard about the bidding process suggests that it is time consuming and that if the right result is not achieved at the end of it, it is hardly worth the amount of time that people put into it. It was interesting to hear about that from a slightly different perspective.
The funding of information and communications technology is an important issue. In particular, the deputy head teacher of Lossiemouth High School had been involved in a delegation to China and came back with a strong sense that investment in ICT in schools in our competitor countries is much greater than investment in ICT in schools in Scotland. That might be an issue for us. That is also true at a wider level for adult learners and others. We will, I hope, have got all communities linked up to broadband by the end of the year, and additional investment may have to be made in ICT to make Scotland competitive with other countries.
It was mentioned that rural disadvantage is not recognised in the Scottish index of multiple deprivation. That issue has just been raised with the committee in our inquiry into spending on deprivation. There are also the connection issues that Andrew Arbuckle referred to; for example, the lack of available social rented housing in the area, perhaps because Communities Scotland does not have the local knowledge that the councils had.
Professor Arthur Midwinter (Adviser):
I have only one comment to add. The most relevant point for me to take away and think about related to the process. Members of my group were happy about the arrival of three-year budgets, but it was confirmed to me that the tracking of block grants and where the money goes, which has concerned the committee in the past two to three years, is an issue. There is a clear gap between the grand strategy and the hoops that people who are involved in delivery must go through. Completing application forms often takes a long time, and sometimes they are so complex that an accountant or consultant is needed to fill them in. I will take that away, think about it and see what we can come up with in discussion with the Executive to smooth the process. It is clear that we cannot track the money to the local level. We might have the best strategy in the world, but if targets are not hit locally, it needs to be rethought. It was useful to hear that.
Do any of the non-MSP participants feel that members have not covered points that arose in the workshops that need to be reinforced? They all appear to be happy that we have captured all the points.
I offer committee members an opportunity to reflect on the information that we have received. Bearing it in mind that we will question the minister this afternoon, are there any points that members would like to flag up?
I will chip in. My colleague Derek Brownlee sold himself a little short: in our workshop, he asked the pertinent question whether the issues that we now confront have changed much in the past 10 years. The answer was an adamant no—the issues had not changed. That feeds in nicely to asking the minister this afternoon what he will do that is different and more likely to trigger regeneration throughout the country.
One aspect that I looked for but which we did not go into relates to the Moray task force that is under way. There are three key issues: pushing foreign direct inward investment more out of the central belt to areas such as Moray; civil service relocation to areas such as Moray; and the impact of and value that could be captured from broadband. We have massive evidence that retired people want to live in areas such as Argyll and Bute and Kintyre and all the way up to Moray. If we can use broadband, civil service relocation and foreign direct inward investment so that young people can have a decent income, they will live here and plug their families and children into this great area in which to bring up children.
In whichever part of the country to which we went to discuss the budget provisions, it would not be surprising to hear that sufficient resources were not spent in that area. I say that as a caveat to what I am about to say and with no disrespect to the individuals who make such comments.
What struck me from our discussion with people at a local level was the lack of strategic cohesion to what is in the draft budget. In the discussion group on transport issues of which I was part, the impression was almost that although we might talk the language of integrated transport solutions, we have one bit over here, one bit over there and another bit somewhere else. Elements are not brought together cohesively.
When the new transport bodies are established, more cohesion may be achieved, but I was not given an awful lot of confidence that the current process for spending public money makes communities feel that different policy programmes and how money is spent on them are cohesive and complementary. That is a significant challenge for the Government and the committee needs to examine that carefully.
One of the issues that John Swinney brought up from his workshop's discussion was the view that those who live outwith the central belt are disadvantaged. I do not know whether that is further refined by the idea that people living in rural areas are disadvantaged compared with those who live in urban areas—or is it vice versa? When we consider our budget, we might wish to consider whether those allegations can be refuted. It is a difficult and controversial notion, but there is no doubt that that perception exists.
A number of issues were raised in our workshop that are matters for ministers other than the Minister for Finance and Public Service Reform. Queries were raised about the enterprise, communities and environment and rural development budgets by a number of participants. I propose to produce a note on that and to obtain written replies, as we did when the committee visited Orkney, and to send information back to the participants so that they know that we are dealing with the issues. If you are happy with that, convener, I will do something along those lines.
I wish to pick up on John Swinney's point about nobody feeling that enough money is spent in their area of Scotland and on Andrew Arbuckle's point on specifically rural issues. As far as the area of the west of Scotland that I represent is concerned, the calculations on transport spending show that very little is spent to the west of Glasgow. I am sure that people in my constituency would say similar things to what has just been said.
The concentration of transport spending is, in the first instance, around Edinburgh. To a secondary extent, that applies to the proposed M74 extension in the east of Glasgow. There might be an argument about the balance between very big projects, such as the Borders railway and the Edinburgh tramlines, and the maintenance and upgrading of existing infrastructure. I was not part of the transport workshop but, as I understand it, the main issue discussed was not about the need for brand-new roads to serve Elgin and the Moray area, but about the condition and limitations of the existing roads.
Perhaps the issue is essentially one of balance between large, strategic projects based on new bits of infrastructure and the maintenance, upgrading and bringing to fitness of purpose of existing bits of infrastructure. One of the questions that we could ask ministers is whether we have got that balance right. We can appreciate that, from the Executive's point of view, it is quite nice for a minister to cut a ribbon to open something new, big and significant. However, that work might have been done at the expense of other things that require to be done.
I would have thought that there is no shortage of ribbon-cutting opportunities in Scotland. You make a very good point about the difference between large-scale, strategic projects of the significance of the M74 extension and what seem to be, in the grand scheme of things, projects requiring very small amounts of money, as we discussed in the transport workshop, although such projects could bring big economic gains, particularly when it comes to rail infrastructure.
One project that was mentioned involved the construction of extra loops and sorting out railway bridges that need to be slightly raised and track that needs to be slightly lowered to allow for more freight trains. Such projects would perhaps require £10 million tops. However, the project in question is not happening this year; it might go ahead next year. That is not a confidence builder when people are looking for drive and dynamism in the economy. People know that the infrastructure must be in place before economic activity can be further developed.
You are absolutely right. It is not about the grand, multimillion-pound strategic transport improvements; it is about little pockets of money. The Executive might be too focused on the big projects when it sets the priorities or there might be no mechanism to ensure that small projects are funded more quickly and efficiently. I do not know whether our adviser can throw any light on the associated process point. I am not sure exactly how prioritisation is done in the Executive, but we need to consider the matter further.
The exercise that we propose on the Executive's management of public finances will involve consideration of what the Executive calls pre-expenditure assessments, so that very point will be looked at.
Mr Swinney talked about local projects. I am conscious that, according to the draft budget, there is an extra £50 million to £60 million in the budget for roads maintenance this year, but the overall grant to local authorities is standing still. Despite the theoretical provision of £60 million in the block, the Executive is more or less saying that local authorities will have to find the money from within their existing budgets. We need to keep on top of such issues with the minister.
That is the nub of the debate about process that we need to have with the minister, but for me there are two or three other dominant narratives. There has been fairly substantial growth in public expenditure commitments, but the two questions that keep coming up are whether we are demonstrating value for money and whether we are connecting that expenditure with other investment streams. Are we encouraging the private sector to take the responsibility, as well as the opportunities, for investment?
The question that we need to explore with the minister is whether the efficiency savings process is such that we will be unable to track the outcomes and different sectors will be treated differently, including the quangos sector, organisations such as HIAL and local authorities that had the money already. There is an assumption that there will be savings, which creates space for substantial additional resources, but, depending on our perspective, we can read those situations differently.
As a youngster in the east end of Glasgow, I was too poor to have a train set so I thank Sam MacNaughton for giving me the opportunity to understand rail gauges. I hope that that expertise will be reflected in the committee's recommendations.
As Arthur Midwinter says, it is important to consider pre-project assessments. We can have both economic growth and the priorities of sustainable development and closing the opportunity gap. Regardless of the arguments about those priorities, our task is to ensure that there is a clear link between the priorities and what happens on the ground.
I was struck by Jim Mather's comments about SEPA. We need much more clarity about SEPA's objectives. If there is concern that SEPA is focusing on revenue generation and that that is hindering economic development, we must pay more attention to the reconciliation of sustainable development and economic development. If spending is to meet the targets that we agreed, it is important to consider not only the interaction between the priorities that have been set but the interaction between the priorities and the use of cash on the ground.
The group that I was in was certain that efficiency savings are possible. People did not deny that. However, they felt that some of the structures and the lack of trust among health boards, councils and the voluntary sector about the way in which funds were being held on to were creating a lot of duplication and that some of those barriers could be lifted, which would increase the possibility of doing things more efficiently. It struck me that the community planning partnerships, which we spoke to last week, said exactly the same thing about central Government. They said that there seemed to be a lack of trust among the agencies, central Government and the community planning partnerships and that they have to undergo rigorous and bureaucratic mechanisms to get funds, involving ticking boxes and so on, instead of being assessed on outcomes.
There is probably a question about whether auditing procedures are making it difficult for the various levels of partnership to trust one another to develop outcomes and deliver on them, rather than have to tick boxes and so on. We should probably raise with the minister the question how we engender an efficient way for the partnerships to work with one another that does not revolve around people having to tick boxes because they do not trust one another to do what they say they are going to do.
Two strands in that are particularly interesting. From ministers' point of view, they are interested in being able to show that they have responded to specific problems. Characteristically, they promote initiatives, which must have bits of money attached to them if they are to be seen to be effective. However, if we multiply that process by minister and by department, we end up with all kinds of different pockets of money, which all have their own different rules and administrative arrangements. If someone in a remote place—for example, Elgin—is trying to get something done, they must assemble a package of funding from those different component parts. To an extent, someone in that situation is at a disadvantage not so much because of remoteness but because people with greater expertise in other places will be able to get together better bids or will be able to produce bids more quickly. That applies in urban as well as rural areas.
There is therefore what I suppose we can call an institutional drag from the initiatives and the structures that means that money gets spent in ways that are about the maintenance of those structures rather than about the delivery of a product. I think that the minister is aware of that problem, but the issue is how to resolve it. It seems to me that one of the ways in which we can do that is by cutting out some of the structures and simplifying the whole system in Scotland. Devolution was superimposed on a local government structure, a local enterprise company structure and a health board structure that have not fundamentally changed. Perhaps one of the questions is whether we should strip out some of the organisations and make the whole process simpler.
The other issue might be whether we say to the minister that if the Executive is not going to go for that reorganisation across Scotland, it could at least reorganise the way in which it allocates money so that it does not go into the multiplicity of different pockets. That would create a different kind of partnership relationship between, for example, local and national organisations. That suggestion perhaps does not break any eggs, and I am not sure whether it would resolve the problems because I think that a fundamental reorganisation is required in some areas. I would like to see fewer local government organisations and health boards and simpler structures for local enterprise development. Ultimately, I think that we will be pushed in that direction. However, if the minister is not going to go that way, he needs to lay out how the simplification of the structure and the breaking down of the institutional drag factors will be dealt with.
I very much agree with the comments that you and Elaine Murray have just made. We have a duplication culture in Scotland. If you tried to ask all the organisations in the different areas of government to fund a particular project and were told "No" by every one, by God, you would have gone round the houses. The case for simplifying government in Scotland has never been stronger. As the convener pointed out, the Scottish Parliament has emerged into our governance, but the rest of our governance has not changed dramatically. Indeed, it has probably become more, rather than less, complicated. Although we all have to respond to that challenge, the Government has a particular responsibility in that respect.
No one would disagree with the concept of efficient government—why on earth would they? However, the current programme chases pennies while the pounds leave by the front door. As the convener said, we need to tackle the structural congestion in Scottish Government, and I see no sign that the Executive's programme is doing that. However, the problem must be confronted.
One key question that set my mind working came from Jim Johnston, who asked how we can be fair to everyone in Scotland. That feeds back into the loop. At the moment, people feel a lack of a proper opportunity to evaluate need in an open, objective way that prioritises projects across and within different areas. We had no shortage of constraints today. I have to say that, when we asked Highlands and Islands Enterprise Moray how things were meshing together and how cause and effect issues were being monitored, I did not hear the sort of answers that I wanted to hear.
If we had a proper evaluation of need across the various parts of Scotland and in areas such as Moray in order to prioritise projects and to show which was the sorest thumb, which gave the biggest return and so on, we would genuinely start to make some progress, especially if we could monitor their effects on a common worthy aim that people could get their heads round. For example, we could focus on maximising the number of working-age people in work at a local level and then consolidate that nationally. Such an approach would bring together the efforts of everyone in business, education, the health service, transport, economic development, SEPA, Scottish Water, HIAL and so on. On that basis, you could get on-going returns and build confidence in the claim that fairness is starting to stalk the land.
As members have no other comments, I draw this part of the meeting to a close. I reiterate the committee's thanks to all those who participated in the workshops. Your comments will feed back into our questioning of ministers this afternoon and our budget report, which will be produced in December and will be the subject of a parliamentary debate. You can be assured that you have been listened to and that we have learned a lot from what you have said. I hope that this work will not only feed into that immediate process but shape people's longer-term thinking about the issues that affect the Moray area. Indeed, that happened in previous years when we fed in the input from equivalent sessions in other parts of Scotland.