Subordinate Legislation
Budget (Scotland) Act 2011 Amendment Order 2011 [Draft]
Item 3 is to consider the Scottish statutory instrument that provides for the 2011-12 autumn budget revision. The draft amendment order is subject to the affirmative procedure, which means that the Parliament must approve it before it can be made and come into force. We have a motion in the name of John Swinney before us, inviting the committee to recommend to Parliament that the draft order be approved. I again welcome John Swinney, Cabinet Secretary for Finance, Employment and Sustainable Growth, who is accompanied by Terry Holmes, principal accountancy adviser to the Scottish Government. I invite the cabinet secretary to make an opening statement explaining the order. I remind him not to move the motion at this point.
This is the first of two planned routine revisions to the budget. The second and final revision will be the spring budget revision, which will be laid in late January. As in previous years, a pattern of authorising revisions to the budget in the autumn and spring is required as the detail of our spending plans inevitably changes from when the budget bill is approved.
This revision takes account of the restructuring of Scottish Government portfolios following the election in May, a decrease in the national health service and teachers pensions budget, a technical adjustment to align the Scottish budget with the accounting required under the international financial reporting standards in respect of the M80 improvement project and the allocation of additional funding that I previously announced at stage 3 of the Budget (Scotland) (No 5) Bill in February. The changes that are proposed in the autumn budget revision result in an increase in the approved budget of £85.7 million, from £33,872.4 million to £33,958.1 million.
Following the election in May, the First Minister made changes to the structure of the cabinet. The resulting impact on portfolio budgets is detailed in table 1.8 on page 9 of the supporting document to the autumn budget revision. There was no effect on the total budget from those changes.
The two material revisions to budgeted expenditure in the Budget (Scotland) Act 2011 are largely technical. A decrease in funding that is required for NHS and teachers pensions of £247.8 million in annually managed expenditure is the result of a change in actuarial factors, in particular the discount rate that is applied to future pension scheme liabilities. Her Majesty’s Treasury reviews the rate annually, and the resulting changes to the AME budgets are therefore required to be made at the autumn budget revision each year.
An adjustment to reflect an increase in budgets outside the departmental expenditure limit of £276.7 million is required for the completion of the M80 roads project. That technical adjustment is non-cash in nature and spending-power neutral. It simply aligns our Scottish budget with the accounting that is required under the international financial reporting standards and the Government’s financial reporting manual to present a read-across from the approved budget to our annual accounts.
If we set aside the technical changes, which net to £29.4 million, the budget has increased by approximately £56 million, mainly as a result of the allocation of funding from an additional carry-forward of £30 million from 2010-11 under the budget exchange scheme; an increased estimate of non-domestic rates income of £11.5 million, which I announced back in February; and around £16.7 million from the Department for Environment, Food and Rural Affairs for a transfer of responsibility for animal health and welfare. The other significant transfers in the Scottish block are mostly due to the realignment of budgets within and between portfolios, including a net transfer of £55 million to further education for nursery and midwifery training, and just under £29 million to health for drug treatment and prevention.
There are no further new announcements or new initiatives in the figures that the committee is scrutinising. The revisions reflect decisions or announcements that have already been made.
The brief guide to the autumn budget revision that has been prepared by my officials sets out the background to, and details of, the main changes that are proposed. I hope that committee members have found that guide to be of assistance.
Thank you, cabinet secretary.
The Scottish Government’s website says that the Scottish Government has announced that it does not intend to publish an efficiency outturn report for 2011-12. The website says:
“We will not require each portfolio or each public body to submit separate efficiency plans and we will not undertake quarterly assessments or publish an Outturn Report for 2011-12.”
The reason for the decision not to publish an efficiency outturn report has not been given. Can you give us an explanation for that?
Essentially, the reason is that we are obviously in a very different financial climate, in which very challenging budgets have been set for individual portfolios and portfolio holders. As a consequence, I took the view that it would be most effective to focus scrutiny at portfolio level to ensure that individual portfolio holders were able to construct their plans and progress them as part of the efficiency agenda, and that it was not necessary for us to create the type of infrastructure that surrounded the outturn report in the past. Obviously, that was set in the context of a financial settlement in which budgets were rising by significant amounts.
As members have no questions that they want to ask the cabinet secretary, we will move on to item 4. I invite the cabinet secretary to move motion S4M-01206.
Motion moved,
That the Finance Committee recommends that the Budget (Scotland) Act 2011 Amendment Order 2011 [draft] be approved.—[John Swinney.]
Motion agreed to.
Are members content for the committee to formally communicate its decision to the Parliament by way of a short report that provides a link to the debate on the matter in the Official Report of the meeting?
Members indicated agreement.
That was the final item on our agenda. I thank everyone who came to the meeting, not least the cabinet secretary, who has had a somewhat gruelling session. I hope that he enjoyed it as much as we did.
I thank everyone who participated in this morning’s sessions, including the young folk from Ardrossan academy and Garnock academy who participated on Friday and today, and who will be at the Parliament next week. This has been a very successful first-ever meeting of a parliamentary committee in Largs. The committee has certainly had a very productive day. I thank one and all for that, and close the meeting.
Meeting closed at 15:41.