Item 3 is consideration of an approach paper for phase 2 of our cross-cutting expenditure review on economic development. Committee members have a paper that has been prepared by the clerk and Peter Wood, who has been appointed as our adviser. As we agreed previously, Peter Wood has fleshed out the remit of our inquiry and has suggested specific points that we may want to cover. He has also suggested a list of organisations that we could ask to provide written evidence. The paper also includes a potential timetable for the inquiry. As the committee can see, the intention is that a general call for evidence be issued on our website and that letters be issued prior to the summer recess. When we come back in September, we can consider the written evidence that we have received and decide whom we want to invite to give oral evidence.
If you are asking whether we are broadly content, I would have to say that I am not. I reiterate that the inquiry will not be fruitful use of the committee's time. We should consider instead, for example, an inquiry into the long-term implications of public-private partnership financing and the burden that it is likely to place on future Governments, as exemplified by the analysis that was fairly widely reported in the Sunday papers. That would be a much more practical topic for an inquiry. You ask whether we are all content, so it would be remiss of me not to point out that we are going down the wrong road with the inquiry. I have made one suggestion, but there could be many other stronger candidates for the committee's valuable time.
We have already agreed that we will undertake the second phase of the inquiry, so we do not need to revisit that issue. I also point out that the previous Finance Committee conducted an extensive survey of PPPs during a major inquiry.
I am content with the timetable and with the proposal as to how we proceed. However, we suggested at a previous meeting that having the budget adviser—by whom I mean Peter Wood—deeply involved in every stage of the process would be the only way we would be able, in three oral evidence-taking sessions, to get a grip on an area that covers a budget of more than £4 billion. I am anxious to know whether we have agreed terms with the budget adviser that would let him attend all the meetings at which the committee deals with the inquiry, so that he and we are singing from the same hymn sheet. Moreover, when we consider written evidence on 14 September and decide on witnesses to give oral evidence, I would want to start with a summary of what issues the budget adviser thinks are emerging, and his first take on the written evidence. It is anticipated that there will be 15 or more written submissions; it would be valuable to have the adviser's summary of what they say.
Peter Wood will be our committee adviser on the inquiry, but that role is separate from Arthur Midwinter's role as our budget adviser.
I agree with the proposal that the various groups to be invited should provide written evidence. I note that the Scottish Urban Regeneration Forum is included, but should not we also make room for written evidence from one or both of the fisheries organisations? Fishing is a key part of the economy of the north of Scotland, so it would be useful to have input from those organisations.
That is a fair point. It is also probably fair to add agriculture to the list, because one of the issues that Peter Wood identified was operation of the common agricultural policy. It would be appropriate to include the National Farmers Union Scotland.
I am not opposed to those ideas at all, but they illustrate the difficulty of the task and the confusion of the remit. If we accept that we need to take evidence from the fishing and agriculture industries, what about the whisky industry, the engineering industry, the biomedical sector, the construction industry or the food industry? Each of those would justify a sectoral analysis, for which the Scottish National Party has been calling for a long time. If, in a cross-cutting expenditure inquiry, we consider particular sectors, we will be accused immediately of neglecting other sectors if we fail to respect their interests. That illustrates the point that those who believe that we should have such an inquiry have not really thought through the inquiry's purpose and its possible outcome.
We will receive evidence from Scottish Enterprise, and even the most cursory look at Scottish Enterprise reveals that there are sectoral clusters and that the work in those areas—construction, forestry, food and drink and others—come under its remit. We need to investigate that. Scottish Enterprise also has a relationship with its sector-representative bodies. The general call for evidence would take all that into consideration.
To back up what Jeremy Purvis says, we have organisations that cover many of the sectoral interests, such as Scottish Enterprise, Highlands and Islands Enterprise and the Confederation of British Industry. I am arguing that major social problems, as well as economic and industrial problems, are attached to the fishing industry and that it can therefore be regarded as a special case. I am perfectly happy for the NFUS to represent the rural side, but fishing is vital at the moment and it would be considered remiss of us not to take evidence from the fishing industry if we take evidence from other sectors.
I agree that fishing is a special case—the SNP has always argued that—but we are not conducting an inquiry into the fishing industry's problems, which we have discussed in Parliament and its committees a great deal. The remit of our inquiry is rather different.
I repeat: we have already decided to go down that route, so I see no point in labouring the point further.
Local authorities are among the biggest spenders in the country, yet there is no mention of them in the paper. There are 32 councils that have tremendous budgets; they impact on the economic development of the country more than we can imagine, but we are not even asking them to give us a report, which I find rather strange.
That is a fair point. Perhaps we should add the Convention of Scottish Local Authorities to the list.
I cannot remember its name, but there is an association of the economic directors of the local authorities. It might be worth inviting evidence from that organisation.
We would need to go through COSLA, which could refer the matter to its specialists.
For our inquiry into Scottish Water, which touched on all aspects of Scottish life, including the voluntary sector, the old, the young and the business community, we had a fairly limited list of agencies and other parties to whom we wrote specifically to ask for evidence. However, many other people volunteered evidence when they knew that we were carrying out the inquiry, so I do not think that, for this inquiry, we should write an exhaustive list of the 755 organisations that have an interest in economic development in Scotland.
The discussion has triggered in my mind the thought that it might be sensible to widen the scope of the inquiry to include engineering employers, freight associations and everyone whom we possibly can, but to do so in a way that constrains their responses to an extent. We might ask them to reply in a tight format to part of the call for evidence, and to specify what inhibitors and constraints they face in being as competitive as they might be and in achieving the growth that they might achieve.
I understand the intention behind that suggestion. Perhaps we ought to ask one or two umbrella organisations, such as the Confederation of British Industry, about the best way to co-ordinate the responses of different organisations, including those which Jim Mather mentioned, so that we can get some kind of sectoral analysis, although it may be that the CBI is not the best organisation to co-ordinate responses. I am conscious that we will get a surfeit of information if we try to put too much into the process.
That is why I am keen on having the advisers close to the inquiry. We have the first piece of work from Peter Wood, which gives us a frame of reference. We are not trying to do the Enterprise and Culture Committee's work, which is to decide how much goes to individual sectors. Our work concerns a much higher-order issue, because we are the only committee in Parliament that is empowered to look across departments to examine how aggregate spend is spread among primary industries, rural development, enterprise agencies, education, higher education and transport. Those are the categories that Peter Wood uses. We are supposed to drill down against his report and ask whether, at the very highest level, the balance between the six primary support categories and the three secondary support categories that he identified is broadly right and commands the assent of the organisations that we are trying to support. If we go 10 levels deeper than Peter Wood, we will not answer the first-order question, which is whether the broad balance is correct at the top level.
There is some support for that view. However, if we try to do what is suggested, the danger is that we might move beyond what is manageable from Peter Wood's point of view. It has been suggested that we incorporate the fishing and agricultural sectors, as well as local government, because there are issues in respect of those sectors that we want to examine. I suggest that the clerks have a chat with Peter Wood, based on what we have heard this morning, to try to identify a request for specific evidence that can be sent out. I presume that we will get the report back on that, and the evidence itself, on 14 September. At that point, we will have the opportunity to discuss with Peter Wood where we should go for oral evidence. That, of course, is where the committee can really drill down into the process.
I am not trying to turn the inquiry into a plebiscite in which we will get 5 million responses, but I have one further suggestion to make. The Institute of Chartered Accountants of Scotland and the Association of Chartered Certified Accountants represent practitioners who deal with people every day and who see the constraints that they face. It would be good sense to involve those organisations and to drill down at that level to get some feedback. Rather than go to the Institute of Chartered Accountants of Scotland at Haymarket, we could do it by tackling five or six accountants from round the country to get a view from all airts and pairts.
That is a suggestion that we can consider on 14 September.
One of the main reasons for suggesting that councils be involved is that doing so might allow us to highlight the crass inefficiency that leads to 7 per cent of council tax not being collected. That is an enormous amount of money. If we can highlight the total inadequacy of council tax collection in bringing in those funds, we might be another step down the road to getting rid of the council tax.
I am not sure that that is an issue for this inquiry.
Meeting continued in private until 12.51.
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Budget Process 2005-06