Finance Committee, 09 Sep 2004

Meeting date: Thursday, September 9, 2004

Official Report 297KB pdf

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Budget Process 2005-06

The fourth item on our agenda is consideration of a paper from our adviser on trend series data that we received from the Executive. Members have a copy of the data together with an analysis produced by "Professor Arthur" and by SPICe. We cannot see the rest of your name, Arthur, so you have just become Professor Arthur. We also have copies of correspondence between me and the minister and a brief note from Arthur Midwinter offering advice on the minister's letter. I will give our adviser an opportunity to speak briefly to his paper and will then invite contributions from members.

I will be brief. Members have had most of the papers for some time; they were sent out to give the committee information during the summer. All I would say about the data that we have received is that the results of the analysis that we carried out are broadly consistent with the trends that we identified—even with the problematic data in the post-devolution period. I am pleased to say that Jim Mather has provided me with his own calculations, which are consistent with our findings. He has health and education as the big winners and local government and environment and rural affairs as the big losers.

The main reason for bringing this agenda item before the committee today is to get a decision from committee members on how they would like to have the information published. There is no dispute that Andy Kerr, the Minister for Finance and Public Services, is happy to publish the information for us. In our correspondence, the Executive's preference—which I would agree with—was to publish the five-year run, which it now has, using the current resource accounting and budgeting system, in the draft budget.

The Executive's preference was also to publish separately the 10-year trend data, which is on a different price basis, excludes significant one-off increases and takes account of shifts in responsibility. However, the minister is prepared to publish that information in the draft budget if members think that that is where it should be. My view is that, as the draft budget is the beginning of the document for parliamentary control of expenditure, it is more appropriate to have the 10-year data published separately, because otherwise the data will not be consistent and might cause confusion among members and among the public. I am therefore suggesting that we agree with the minister's initial recommendation on where to publish.

I will give Wendy Alexander the first opportunity to ask questions on this, because she has been the most relentless pursuer of trend series data.

The paper is helpful and I agree with the recommendations that Arthur Midwinter has made—that five-year data, in resource terms, and 10-year data should be published under separate covers. The conclusion is relatively successful, although it leaves unresolved an issue that I have raised offline, perhaps for discussion over the next year—the need for a distinction between what is important for control purposes, which is appropriate for budget documentation, and what other additional information may be appropriate for policy purposes. However, let us agree this paper today and leave that issue on the table for discussion over the coming year.

I agree with Wendy Alexander that this is a useful paper. As those of us who represent rural areas have long argued, we are, as ever, the big losers. I am delighted that Professor Midwinter has highlighted that point.

But you are not delighted that you are losing.

No—I am delighted that you have highlighted the fact.

Of course, that is diametrically opposed to Peter Wood's assessment of the rural-urban split. These joys await us this year.

I am sure that we will have plenty of discussions on these issues, but I think that we have a consensus that we should agree with Arthur Midwinter's advice. We will pursue that.

Members indicated agreement.