Scottish Government Consolidated Accounts
The next item is the Scottish Government consolidated accounts for the year ending 31 March 2009. It involves an unusual issue, which we have not considered before. The item does not—at least this year—involve the committee commenting in any detail on the consolidated accounts that are before us. At this stage, we are exploring how we can use the accounts in future years to help to inform the Parliament’s budget process and the committee’s contribution to that process. I ask the Auditor General to introduce the item.
As the committee knows, we currently report to you on public spending in a variety of ways. You get the reports on the accounts of individual bodies when a matter of public interest arises—you have recently had some work that looked at the Mental Health Tribunal for Scotland administration in that way. You get studies on particular services or policy areas, such as the efficient government programme, which you have been looking at today. You also get overview reports on areas such as the national health service, which pull together the £11 billion that is spent there and aim to give you a sense of what is being achieved with that money and of where the risks are.
However, what we have not done so far is report on the overall Scottish Government consolidated accounts and the total £30 billion or so that is spent. That is partly because of the challenge for you and us of getting a grip on that wide range of expenditure, the range of bodies that it includes and the programmes that it covers.
The focus on how the committee might be able to help to inform the Parliament’s budget scrutiny, which came through in the discussion on the November report, led us to think about how we might be able to take that a bit further with you at this stage.
We have taken the opportunity to let you see what is in the consolidated accounts, which is the very thick document that you have in front of you. The covering papers show some of the sorts of analysis that are quite straightforward to do to focus questions to the Government about what is going on there.
The consolidated accounts bring together the expenditure and income in one place for the core of the Scottish Government, the Crown Office and Procurator Fiscal Service, NHS boards and the Government’s executive agencies. As Bob Black said, the audited accounts are published in October every year and laid in the Parliament at that point. On timing, in theory it would be possible for us to do some analysis of those audited accounts, which would feed into the Parliament’s budget scrutiny.
In the briefing paper that you have, we have done a high-level analysis of the Scottish Government’s outturn for the financial year that ended in March 2009 and identified significant areas where the outturn varies from the budget provision. We have not attempted to explain why those variations occurred, but we have looked to identify the sort of analysis that we could provide for you if it would be helpful to probe the accounts a bit further, with the aim of thinking about questions for budget scrutiny for the Parliament as a whole.
We think that there are a couple of areas that you might want to consider. First, we could take the analysis of the variations further, go into more detail, provide you with more of our understanding of what lies behind them and use that to focus questions for the Government, which would play into the budget scrutiny process. Secondly, we think that, in the longer term, there is scope to look at more of the whole system cost of portfolio areas such as justice, and education and children’s services. We do that currently for the health service, because it is a pretty well-defined area of service. It might be possible to develop that further in the medium to longer term. Taken together, those sorts of analyses would let the Parliament ask questions, through its various committees, about progress in delivering policies and outcomes and how that is reflected in future budget proposals. We think that that is worth a bit of consideration at this stage.
The Government continues to improve the financial information that it is making available to Parliament, including the earlier publication of its accounts and greater detail to assist with the scrutiny of detailed budget proposals. However, at the moment, there is not much detail that links the expenditure with performance or the outcomes that are achieved with the money that is spent. The committee might have an opportunity to think about helping the Parliament to close that gap.
As the convener has said, the accounts that you have in front of you relate to the financial year that finished in March 2009. We are now heading very quickly towards the end of the current financial year. We will soon be starting the audit of that set of financial statements. It is important that we keep our focus ahead on what might be possible in future. There are some headline messages in the briefing paper that you have, which draws on the last set of consolidated accounts, which might help you to focus your thinking a bit more.
There are three things to pull out. First, there was limited overall change between the original and the final budget at the high level, but there were significant movements in individual portfolio budgets beneath that level. Almost a third of level 3 budget lines showed significant variation between the original and the final budgets, which is important. Equally, the outturn of all portfolio budgets was within the statutory limits, but in two cases there were revenue overspends that were offset by capital underspends. There is nothing wrong with that, but it is another example of how detail that is evident at the lower level does not come out at the top level of analysis.
I am very conscious that this briefing aims to cover an awful lot of material in a very short time and that some of the material might be of interest only to the anoraks among us. However, given the debate that you had back in December on the report on the future of Scotland’s public finances, we thought that, at this point in the budget cycle, it was worth taking a bit of time with you to look ahead to next year and think about what you might find useful in future years.
12:00
Thank you very much, Caroline. We have not seen you at the committee in a while, but you are certainly making up for lost time today.
Everything was going fine up until that last comment. I hope that members will not use these reports simply to pick on individuals with whom the committee has constantly raised issues. We have to be above this—
It was suggested in the report on “Scotland’s public finances: Preparing for the future”, which the committee considered last November, that the committee might consider scrutinising the audited accounts for the whole of the Scottish Government. We noted that those accounts are usually available in October, which is earlier than the point at which they used to be made available.
We thought that it might be appropriate for the committee to have a look at the accounts and draw out any significant issues that could inform future budget processes. We agreed to come back to the committee with a paper to suggest how Audit Scotland might contribute to that.
As you say, we are not for a moment suggesting that you scrutinise the 2008-09 accounts, because we are almost at the end of 2009-10, but you asked for the consolidated accounts to be circulated so that you could see the shape of the document. Caroline Gardner will indicate our main ideas about how we might contribute.
I am bit like a double-decker bus, convener. You wait for hours and then three come along at once.
I could get used to this, though.
As one of the individuals who were very anxious to receive this information, I think that we can see very quickly how helpful and informative it is. I agree with everything that Caroline Gardner has said. It would have been far more helpful to have gone into the scrutiny that she talked about with supporting information from Audit Scotland, and I believe that the real worth of this work will be established only after a number of years have passed and we have built our knowledge. That said, reading through even these documents, you instantly start asking important questions about the outturn figure and the spring budget revisions, which we have not scrutinised in any great detail. Certainly with regard to these budget documents, some of those revisions were very substantial indeed.
I go to church if I want to hear sermons.
I support Nicol Stephen’s comments. If we are going to look at the issue at a subsequent meeting, it might be useful if the reasons behind certain things that Caroline Gardner highlighted, such as the significant variation in a third of the level 3 budget lines, could be outlined. We should also examine the reasons behind this switching between revenue and capital, which—taking on Audit Scotland’s role for a moment and looking at it from an accountant’s point of view—I would suggest is not usually acceptable.
The covering report is very helpful in that it reminds us that the Scottish Government’s core budget is only 8 per cent of total expenditure. Given that the budgets of NHS bodies, agencies and NDPBs, which we scrutinise, make up 50 per cent of the total whereas the budget of local government, which the Accounts Commission deals with, is 36 per cent, we are between us already dealing with a significant amount of expenditure.
Just to go back to one my bêtes noires, I see that our dear friend Sir John Elvidge gets paid between £180,000 and £185,000 a year—which is twice the salary of the director of education in your local authority area, convener—and that when he retires he will get a lump sum of £230,000 and a pension of £80,000. Nice work if you can get it.
I also suggest that we should not stray into matters that our colleagues on the Finance Committee might be covering. We carry out a different scrutiny role, and I hope that members will be mindful of that as these reports come to us in future months and years.
I understand Willie Coffey’s point but, if a public report that has been laid before a parliamentary committee refers to certain facts and if that committee is attempting to use these reports to inform its future work, members have the right to consider those facts. I assume that, if the information was irrelevant, it would not have been reported. If it has been reported, it is relevant and therefore fair comment can be made.
Obviously this has been only a preliminary discussion about what we will do with these reports, and we will discuss the matter later in the meeting. I thank Caroline Gardner for her introductory remarks and draw the public part of the meeting to a close.
12:05
Meeting continued in private until 12:35.