Budget Process 2005-06
Welcome to the formal part of this meeting of the Finance Committee. I thank all the representatives who came to our workshop sessions this morning; the one that Jim Mather and I were in was certainly interesting and, having spoken to colleagues, I gather that they too had interesting sessions.
One of the most valuable things about today is that it gives us an opportunity to find out how the budgetary decisions that have been made, or are about to be made, by the Scottish Executive impact locally. There are opportunities for us to influence those decisions through the Finance Committee's stage 2 report on next year's budget. We will try to learn from what has been said and will ensure that it forms part of our consideration when we draft our report. The exercise was useful from our point of view; I hope that it turns out to have been useful from the point of view of the others who participated in it.
Another valuable aspect of today's meeting is that it is important that the Parliament reach all parts of Scotland. I think that this is the first time that a Scottish Parliament committee has met in Fife. Given that Parliament was established five years ago, we are glad finally to have rectified that situation.
We have received apologies from Frank McAveety, Wendy Alexander, Jeremy Purvis and John Swinburne. However, we have five members present.
The budget process has three stages. We are currently in stage 2, in which we scrutinise the Executive's draft budget. I suggest that one member of the committee from each of the sessions that took place this morning report back to the committee on what happened. If another member who was at the session, or anyone who took part, wants to add to that report in any way, they will have an opportunity to do so.
With us at the table we have Joe Noble, from Scottish Enterprise Fife, who was involved with workshop 1, and Stephen Moore, the head of social work in Fife Council, who was involved with workshop 2. I do not think that we have anyone at the table from workshop 3. Anyone who was involved in the workshops and who wants to say something has the opportunity to do so. Please raise your hand and I will bring you to the table so that you can make your contribution. We will start with Jim Mather's summary of workshop 1.
As the committee would expect, given the enterprise and business people who were sitting around the table, our discussion focused on the overall state of the Fife economy and on the inhibitors to businesses' ability to press forward. We focused on areas such as business rates, water rates and water disposal costs—the cost pressures on business.
We also looked forward to things that would—if and when they are fixed—see the local economy push forward; for example, improvement of commercialisation of technologies and intellectual property in the university sector and overcoming of the lack of basic skills. We also discussed how to handle some of the key infrastructure issues such as transport and water, which act to constrain development in Fife, including the constraints that are affecting plans for 30,000 houses which will, if and when they are built, represent something like £60 million in additional council tax revenues.
There was also focus on what might be done to underpin the long-term competitiveness of the Fife economy, particularly given concerns that current levels of spending might not be sustained. A good bit of focus was also given to the opportunities that exist to boost the local economy and to sell it positively based on the quality of life that people who live in Fife can achieve, which could be used to attract more talented people and more investment to the area. The attendees gave the ring of heavy endorsement for skewing the budget more towards capital. They did so because more capital spend would lead to moneys being more heavily routed in the area. By its very definition, fixed investment is not mobile and funding is more liable to stay in the area.
The conversation took an interesting turn towards the end, when we discussed the intangibility of the Executive's recent emphasis on economic growth and the requirement for it to walk the walk and to underpin that in a way that would make the idea altogether more believable for existing local businesses, individuals and potential inward investors.
Towards the end of the session, we focused on attendees' different perspectives on competitiveness. The Federation of Small Businesses expressed its deep concern about the lack of a level playing field. When we look at business rates, water rates and transport costs it is easy to understand why that view was forthcoming.
Academia expressed concerns about the challenge of competing with other universities for staff. They acknowledged the predominance of the American model and the ability of American universities to headhunt the crème de la crème. The issue of transport was raised once more in respect of the perception that St Andrews is not a city and is "too far away." It was felt that that issue could and should be addressed in the 21st century.
Scottish Enterprise Fife's representatives demonstrated a prosaic and down-to-earth understanding of where the competitors were and where the pressures were coming from, which is from China, Eastern Europe and so on. They also gave the positive view that Fife—sitting as it does cheek by jowl with Edinburgh and having a much lower cost base than London does—could offer considerable cost advantages to the financial services sector, which could be accelerated and developed in the area.
The final comment, which was made by the largest company in the workshop, was pretty uplifting. It was a categorical recognition that, given that the pressure and competition on commodity products that have limited added value was fierce and getting fiercer, there is a need to highlight the positive aspects of moving up the value-added chain. It was heartwarming to see the emphasis that that company has in recent years put on making the mouth music of innovation real by boosting spend on research and development, by undertaking many more joint ventures with other companies than was previously the case and by creating within the company business development and research departments that have budgets that allow them to do things that move matters forward. I will stop on that positive note.
Does Joe Noble want to supplement what Jim Mather said or perhaps offer a counterpoint to it?
Joe Noble (Scottish Enterprise Fife):
I will not offer a counterpoint—what Jim Mather said was a good reflection of the debate that took place—but I will reinforce one key point, which is the need for a national strategic overview. The refresh of the smart, successful Scotland initiative that was announced last week is a major step forward in that the strategy is no longer only an ambition for the enterprise networks—as per the subtitle of the original document—but is now a Cabinet-level strategy. Therefore, all aspects of Parliament's work and the Executive's resource distribution will reflect the objective of economic growth.
Our discussion focused on some key areas, such as transport and water infrastructure for growth. Scottish Enterprise Fife would like a clearer link between assessment of economic benefits that result from key investment decisions and the decisions. That has not been articulated as well as it should have been, and we hope that the new strategy document will provide a framework that enables that to be taken into account more effectively.
I will add a couple of points of my own, as I was involved in the group. One thing that came across clearly was the need for transport links, particularly into the city economy of Edinburgh. That perhaps underpins the focus on building up regional economies as conurbations, which is one of the new strands in the smart, successful Scotland initiative, and illustrates Fife's strong wish to be seen as being attached to and part of that process. Transport connectivity was considered to be the key issue for the future of Fife's economy.
The other issue that was presented, particularly by Fred Bowden from the Tullis Russell Group, was the need to look critically not only at allocations of money, but at how money is used to ensure that it is driven towards improved productivity and greater effectiveness. The committee intends to consider that in the near future, but it is a good warning to us that the issue is not just about amounts of money, but the effectiveness with which that money is used. It is also a warning that the committee and Parliament should be interested in examining critically how money is currently being used so that we can find out whether there are better ways to get outcomes and outputs for the resources that are being put in.
We move on to the report from the second workshop group from Alasdair Morgan.
Our group was concerned with the health and communities budgets and included representatives from Fife NHS Board, Fife Special Housing Association Ltd, Fife constabulary and social work in Fife. It was a wide-ranging and interesting discussion and I tried to get a basic message out of it at the end, although I am not quite sure that I succeeded in that. However, I think that the participants could all discern a connection between the Executive's aims, the aims of the partnership agreement and the contents of the budget—I am sure that the Executive is glad about that.
There was a feeling that tensions between the Executive and organisations were often caused by the quickly changing nature of our society. I will deal with specific points that were made, some of which referred to that matter.
Fife NHS Board is concerned that there has been no indication about allocation of funds to it, and said that it is difficult to make judgments or to plan ahead in the same timescale as the Executive because the board does not have the same amount of forward certainty. There was no mention of when full Arbuthnott implementation will take place, which is an issue that applies particularly to Fife, which is helped by the Arbuthnott formula.
It was felt that there is a similar issue with regard to local authority allocations, particularly with the recent change in the formula for the supporting people initiative, about which we may hear more later. The same message came through from Fife Special Housing Association, which had equipped itself and made plans on the basis of assumptions about how the supporting people initiative would develop. Of course, it suddenly found that the whole basis of its assumptions had changed underneath its feet.
There is a problem in that budgets do not always necessarily change to reflect changes in cross-cutting priorities; for example, there are special police units that deal with child protection, sex offenders and so on, which are cross-cutting priorities, but the police budget does not recognise that.
It was felt that, although there is a general undersupply of housing, the vast majority of money in the budget goes on new supply and there is no commitment to improving the stock, for example. Fife Special Housing Association Ltd's 30-year business plan is based on 1997 standards, which is when the business plan was drawn up. There is no allowance in that plan for the increase in standards that will obviously take place over the next 30 years, if the past 30 years are anything to judge by.
There was a general feeling that there have in many areas been innovative pilot projects that are funded under special initiatives, but the ability to roll out those projects more generally if they are seen as successful has often been hampered by the fact that the funding system has been far too complicated. It was suggested that there must be some general way of consolidating special initiatives into mainstream budgets. There is also a general feeling that we must think more about the longer-term needs of the country, rather than try to micromanage. I presume that that was a criticism of all of us as politicians.
I return to the health board. Concern was expressed that the implications for salary costs of the agenda for change are as yet far from clear, which raises a question about how robust the budget figures are for health boards. We do not even necessarily know their costs this year, far less the costs in three years' time. A similar point was made about the implementation of single-status agreements for the staff of local authorities.
The health priorities refer to building seven new hospitals, so it was asked where those hospitals would be. The health boards wonder which health authorities' capital plans reflect the presence of those seven hospitals, especially in the light of the review of health infrastructure, which will not report until next year.
Finally, we reached a conclusion that ties in with that of the first workshop. Everything is predicated on the fact that we must get the economy right because if the economy is not right, we will not find the money for all the objectives. I am sure that Stephen Moore will add much more to what I have said.
Stephen Moore has the opportunity to supplement what Alasdair Morgan has said.
Stephen Moore (Fife Council):
We were delighted to be given the opportunity to discuss how we in Fife together meet the challenges that we all share. We are fortunate with our coterminous boundaries for health, housing, the police and the council, because we can quickly recognise the challenges that we all face, and we can work together to address them.
I want to add a number of points to those that Alasdair Morgan has made in order to amplify what he said.
We recognise that Fife and Scotland are changing societies. We are making arrangements for the next generation and not just for the next year's budget. The three-year budget settlement is an attempt to address longer-term strategic objectives for all of us, but we must in the meantime deal with current needs and pressures. By that, I mean that we must recognise that although we can come together to meet many of the challenges, we must work in partnership with the Executive. We need to be clear that we share priorities.
I said that Fife is changing. It is clear to us and to Fife that more of the same will not be good enough in future. I will give three quick examples. First, in the next five years, the over-85 population will increase by 20 per cent; we need to respond to that. If our services stay the same, they will not meet needs. Secondly, at the same time, the number of schoolchildren in Fife will drop by 16 per cent, so we need to be careful about investing in a huge range of new infrastructure for education and other children's services. We need to think through the implications for the situation in five years, especially if we take on a burden of debt that extends beyond five years.
Thirdly, it is right that, as a result of tremendous investment over decades, people who have learning disabilities live much longer and have much better quality of life. We have a clear commitment to end institutional care of people who have learning disabilities by Christmas 2005, which is right, but the result is that the number of such people who now live in our society and in our communities has never been recognised before. The care costs and the requirement to care for those people are an immense responsibility and burden for us all to share, but our infrastructure and costings will not allow us to meet those aspirations. We urge people to think beyond three years towards the implications five and 10 years ahead. We share a common agenda and to do more of the same will not be good enough in the future.
The committee is interested in obtaining better data about what money has been spent on, especially since devolution. We have lobbied hard for that information to be made available to us. You go one step beyond that by saying that one should have anticipatory information about where demographic problems are likely to lead and that the Executive, councils and agencies should plan on the basis of demographic projections rather than narrowly on the basis of budgetary projections. Is that the burden of what you said?
That is a fair summary. Although we are very good at administering what we do now, I am concerned about whether we are proactive enough about getting ready for change in our society, which means new commitments and investment and letting go of some matters. The challenge for all of us together may be to work out our core priorities and how we will address them. We should use the spending review as an opportunity to address those long-term objectives, which must be managed now.
Around us, our society is changing dramatically and will change even before the spending review is exhausted. We should use the opportunity to consider the longer term at the same time as we think about day-by-day administration.
Is an organisation such as Fife Council, let alone a partnership between a council and a health board, as equipped as it needs to be not only to make planning decisions, but to give advice on key strategic choices? You say that more needs to be spent in relation to learning disability. Are you in a position to identify matters on which less need be spent, or to identify previously recognised need that no longer has the same priority? Those are the hard decisions of politics.
There are challenges for us. People who have learning disabilities are in many ways an easy and obvious group to identify, but they have been largely hidden from society's eyes because for many years they were cared for in long-stay hospitals. Their number is not reducing but increasing because of advances in medical science; they are living much longer lives. The request and plea from their families is that the state should ensure that their needs are met when their families can no longer care for them. That is an enormous obligation for all of us to own and to take seriously.
We need to change our services, because the current services are designed on the basis of long-stay hospitals and need radical change. That draws us into the big moral argument about who deserves less. We are investing more than we have ever invested on all sorts of groups, such as drug users, sex offenders and other offenders, and local politicians are often faced with the challenge of determining which group is in the greatest need and should have priority.
We need to think about the fact that we spend more money on the last two years of people's lives than we spend on all the preceding years—most of our costs for older people go on residential or hospital care in the last two years of their lives. However, a huge amount of money now goes to sustain people in their own homes. I will give a small example. Of the 63,000 people aged over 65 in Fife, only 2,000 live in residential care homes, which means that 61,000 people live in their own homes and depend on us to care for and support them in their communities. That is right, so maybe we need to think about using investment to keep people alive, well and safe in their own homes, rather than spending it on a lot of expensive infrastructure costs. Frankly, we could do much better—and cheaper—if we changed the balance. Those are big challenges that face all of us, particularly as society is used to having the services that we currently deliver.
Is it the case that the compartmentalisation of budgets into agencies to some extent inhibits that process? I cite an example that I think was raised in workshop 1: there is arguably a significant cost to maintaining in economic activity people who are a long way from the labour market and were not previously involved in productive economic activity. Perhaps we need to be better at weighing the costs of putting in place services to bring people back into economic activity against the costs of not doing so. We could then identify the best package of measures. A difficulty arises because the costs of different approaches lie with different agencies—and might require agencies that have not yet been invented—so budgetary conservatism means that nothing happens. Perhaps Joe Noble wants to comment on that.
There is a hierarchy of budgets and relationships. That is recognised at local level, through the Fife partnership, which directs the community plan. For example, the drug action team ensures that local health care co-operatives work with social work and that specialist training programmes are in place. In Fife, the fact that the boundaries of the local enterprise company and the tourist board, in addition to those of the organisations that Stephen Moore described, are coterminous helps. We work together quite effectively, but I take the point that as we gravitate away from where activity takes place, the joined-up strategic approach becomes less visible.
The fact that 20,000 people in Fife are economically inactive pulls down the region's productivity levels, even though the productivity levels of people who are in employment are higher than the Scottish average. Scottish Enterprise will play the appropriate role in trying to encourage people to be economically active through employment or self-employment.
Some of those aspirations will have to be taken forward by people such as Stephen Moore and other colleagues, so you might need to work together on the matter. There might need to be some porosity in your budgetary approach. Is it fair to say that?
Absolutely. I stress that the community partnership in Fife works particularly well because we have a single purpose. There is no fragmentation or geographical friction; if it is right for Fife that we do something, we do it. As the committee knows, in other parts of the country community plans might be structured round three different council areas so it is perhaps less easy to have a focus of attention and agreed priorities.
We move on to the report from workshop 3, which will be given by Ted Brocklebank.
Ours was an interesting and wide-ranging session. Our witnesses did not want it to be thought that it was a girning session, but there were some specific criticisms of various aspects of the Executive's operation and that of Fife Council.
Transport difficulties within Fife dominated most of what we discussed. It was made clear that, although the promotion of social inclusion is an objective in the draft budget, there was a real difficulty in travelling within the kingdom of Fife—which we did not consider to be particularly remote—because the links had not been worked out correctly. I do not think that that was a criticism of the Executive, but the feeling was that the Executive had not given attention in the budget to the fact that the transport problems in an area such as Fife were more serious than in an urban area such as Easterhouse. A built-up area such as Easterhouse could be covered fairly simply, whereas, for example, it is not physically possible to get by public transport from Newport to Tayport, which are three miles apart, without first crossing the River Tay, going to Dundee and coming back again. Transport in general in Fife seems to need some joined-up thinking.
There was criticism of the concessionary fares scheme, which Fife Council went into before the Executive did. The workshop participants wanted more information on the scheme, such as who is using it and whether it is really meeting the needs of the people. There was even a suggestion that we might have to consider some kind of means testing on concessionary fares to discover whether the money is being spent correctly. Is it going to the right places, or should there be spending on areas where the need is greater?
The feeling was that, although the budget is about closing the opportunity gap, people are being denied transport and work opportunities in Fife. We heard that in north-east Fife—in Cupar and St Andrews—which has a relatively booming economy, employers simply could not get the workers that they need. There are not enough people to fill the jobs in north-east Fife, but there are people out of work in mid Fife, round about Levenmouth and other such places, and the transport links to get people to where the work is do not exist. We considered different ideas for transport, such as getting away from buses and towards minibuses or taxis so that people who wanted to work could travel into the areas where there was work with more ease than at present. It was drawn to our attention that one employer in Cupar lays on transport to bring people in from other parts of Fife. Fife NHS Board has to do the same to bring nursing staff and carers from central Fife into Stratheden hospital simply because there is such a shortage.
Our colleague from the National Farmers Union took the matter a little further by pointing out certain anomalies in transport even within the farming industry. He made the point that there is no point in producing our goods if we cannot market and transport them. He drew our attention to the fact that we export potatoes from Fife to Holland, but Portuguese potatoes are being imported into Scotland to make potato crisps. There seems to be a lack of joined-up thinking in such matters.
We heard about other aspects of transport, such as air links. There was a little debate about improving the air links, which are basically non-existent at the moment unless one considers the possibility of some kind of passenger transport from the Royal Air Force base at Leuchars or the possible development of Glenrothes airfield. However, the representatives from the tourism industry expressed doubts about whether that was really the way we should be going. Given that something like 80 per cent of people come to Fife by car and that we are talking about a United Kingdom market, why should we consider air links?
The group considered environmental issues as well as transport, so we considered whether the draft budget contained a strategic plan for renewables. The general feeling was that there does not seem to be a coherent strategy on renewables. We talked about the opportunities for biomass energy in the former opencast mining areas in Fife, where trees could be planted for coppicing. We already have Tentsmuir forest here. All kinds of ways were suggested in which renewable energy could be produced, rather than simply from wind farms, which appear to be the main thought at the moment. We also considered the targets on recycling and biodegradable material. It was felt that no particular investment is suggested in the budget overall and that we must invest in ways of making the environment good and clean and of producing renewable energy without damaging it.
Tourism is a major part of the economy in this area of Fife, certainly in the coastal villages and Dunfermline. We recognised that the tourism industry is good for the area and that it could be a green, sustainable industry. However, we felt that not enough joined-up thinking has gone into the issue. To sustain tourism, we need good transport links and the right kind of motorways. It was mentioned that motorways in Fife are a bit haphazard because they come so far and then stop dead—they do not really interlink to the east neuk area. It was suggested that the budget should be less concerned with investing heavily in matters such as two remote national parks in the Highlands and more with areas such as Fife and Grampian, which could expand their existing tourist base.
Another point was about the lack of local partnerships in Scotland. We need more good-quality pilots. We heard that there are excellent food products in this part of Fife, such as tremendous seafood, meat and game, as well as excellent, award-winning restaurants, but that the logistics of getting the foodstuff to the restaurants are not really tied up. The point was that the two should be linked. For not a lot of money, we could run pilot projects to identify how to get products to the markets and to develop more interlinked markets, which would be of value not only to Fife, but to other parts of Scotland.
I hope that I have covered most of the matters, but Elaine Murray will pick up anything that I have forgotten.
Ted Brocklebank has covered much of what was said. The issue was raised that there is not enough cross-referencing in the budget, which ties to the comments that were made in other workshops that the budget is too compartmentalised and that there is not enough understanding of how certain parts of the budget could assist other parts. Such issues are not really flagged up in the budget.
There was a question about the sustainability of developing more air routes. It was suggested that we should consider another overseas ferry development, given that the present one from Fife has been successful at bringing people into the country, whereas air routes tend to take people out. On public transport, it was argued that the best solutions can be found by allowing local flexibility within the regional transport funds to identify the best ways of providing appropriate public transport for the needs of communities. It was mentioned that, although we want to promote environmentally friendly tourism, the green tourism business scheme is underfunded.
Ted Brocklebank referred to the national parks. The question was not whether the parks are worth the money, but why their budget has increased so much. People are obviously concerned that that money might have to come from other areas where investment is needed.
Do people wish to make any other contributions?
Fred Bowden (Tullis Russell Group Ltd):
I will speak from my seat over here.
You will need to come to the table to be recorded.
I have a point of information. A fairly major biomass project is being considered for Fife, which would address some of the points that Ted Brocklebank's group raised. It is at an early stage of development, but the council and other partners are very much involved. I hope that we can see progress, because it is a real opportunity.
Will it be in an old mining area?
It will use willow, which would be grown in substantial quantities around Fife, but I am not an agriculturist, so I am not sure where it will be. It will also use coppiced wood. It may be that the areas that Ted Brocklebank highlights will be used.
On another point that Ted raised, when the committee was up in Orkney a couple of years ago, I was impressed by how the Orkney food producers, tourist board and restaurateurs had all got together to strongly promote Orkney food. I wonder whether we could examine some sort of regional food development and marketing in Fife and other areas of Scotland, to implement the lessons that have been learned.
That has been tried in Fife, but we were told that all sorts of obstacles to producing food locally and selling it in local restaurants were found, which seems extraordinary. It would be interesting to know more about that experience. I was also in Orkney a couple of years ago, and was impressed by how food was central to its tourism strategy. I would like to know more about the problems in Fife.
Islands always have the advantage that, to some extent, they control what comes in and what goes out. Where areas of Scotland have high quality produce, we ought to be able to identify within the overall marketing framework the particular regional sources in a way that adds value. That is probably not just an issue for food chains within local areas. It is also an issue about marketing foodstuffs outside their areas, so that people know where things have come from, because they may be prepared to pay marginally more on the basis of that provenance.
It could also be part of green tourism, because locally produced produce is more environmentally friendly.
In part, the solution is transportation. We had one particular business, which unfortunately is no longer with us, called Scotland's Larder, which was designed to achieve what the convener suggested, but it failed because of insufficient demand for the restaurant. It was just outside Leven, in the east neuk. Perhaps it was not as accessible as it could have been, which further reinforces the point about transportation.
I want to link that to the first workshop, at which we talked extensively about transportation. The Executive's approach to the national planning framework, in terms of building city regions, is strongly supported by everyone in Fife because, as we said in the workshop, we recognise that a strong Edinburgh is good not just for Edinburgh, it is good for Scotland, for the financial services sector, for Fife, the Borders, East Lothian and West Lothian. Connectivity to Fife is important in terms of releasing the potential of some of the key sectors that are important to Scotland.
In our workshop we discussed Transport Initiatives Edinburgh and the fact that, due to the congestion charging debate, it has not focused enough on areas outwith the city boundary. Although the city region is a sound concept that has support from virtually all parties, that support is not being translated into activity on the ground. No attention is being focused on that. The convener talked about the fragmentation of the budget and perhaps this is an example of a situation in which budgets should be considered on a strategic, national basis. An extension of light rapid transit or trams into Fife would help to release the potential of Edinburgh, although that fact might not have been recognised by those within the Edinburgh boundary.
I would like to reinforce the point about transportation, although Ted Brocklebank articulated it well. Transport links within Fife that lead to Edinburgh are extremely important for the region.
You were talking about the environment and biomass energy. Another environmentally sound scheme that Fife Special Housing Association raised concerned a block of flats in Lumphinnans, which is between Cowdenbeath and Lochgelly. The obvious option was to knock down the block of flats because they were substandard and the heating costs were extremely high—I think that a figure of £600 a year was mentioned. Instead, however, a geothermal heating system was installed. That reduced the cost of heating to around £250 a year. However, it seems that there was no money available in any sensible fashion to enable the scheme to be rolled out to similar blocks of flats, which I think will have to be demolished. In terms of the Executive's objectives, it would seem that an extension of the scheme would be a win–win situation. If bureaucracy is impeding that, that needs to be examined further.
Something that was raised in our workshop and, I understand, the second workshop, was the extent to which the coterminosity of boundaries and the close links that exist between the various organisations in Fife allow some local flexibility in terms of deciding what solutions are best for Fife. Do you think that how the Executive organises itself—on departmental lines—assists you in working together as local agencies or do you do that despite how the Executive works?
There is no doubt that Fife makes a success of what can be a poor deal in terms of joined-up thinking. It does that because it focuses on the needs of its citizens. That means that there is less competition between the big organisations and fewer disagreements about where their responsibilities begin and end. That is reflected in the health service and particularly in the police service, in relation to drug treatment, sex offenders, caring for elderly people and people with mental illness and so on. Resource transfer is important. Because there is a long tradition of working together, even people who come into the area from elsewhere quickly pick up the commitment to work together. That is not the case elsewhere; in other areas four or five local authorities will compete against one health board, for example. That does not happen in Fife.
However, there is no doubt that the Executive could think through some of its strategies a bit better. It tends to focus on one-year or two-year pilot schemes or initiatives that have clear outcomes that are set by the centre, which might not entirely meet the needs of communities. Sometimes, we have to spend some time analysing those initiatives in order to make them fit for Fife. Generally, the Executive is supportive of that but, sometimes, if something that we do at a local level is not reflected in the centre, that can frustrate joined-up thinking.
Generalisations are always difficult. Things are never at one end of the spectrum or the other; they are usually somewhere in the shades of grey in between. However, in relation to economic development, which is the number 1 objective in the partnership agreement, there is no joined-up thinking on investment decisions. Transportation decisions do not adequately reflect the economic case that is being made. Equally, the economic arguments for some of the key water investment decisions, particularly those relating to growth, do not appear to have been properly articulated. It is understandable that, because of how the Executive is structured, its style of thinking does not add to a cross-cutting theme of economic growth. That style works well at local level, but perhaps improvements could be made in the resource allocation to work on a firmer strategic overview in the Executive.
If one were making water decisions for example, and one adopted the utilitarian principle of the greatest benefit to the greatest number, north Fife might lose out because of the relative sparsity of its population. So that principle is not sustainable. At the same time, the compliance principle against which water decisions have been made in the past five years has been criticised. How does one find some halfway house that takes account of economic considerations but which finds an appropriate mechanism that means that the different parts of Scotland get a reasonable share, depending on the quality and nature of what can be delivered?
It is a transparency issue. Criteria must be developed openly so that people know exactly why one water decision is taken against another competing decision and equally, why a particular transportation decision is taken over another. There is no clarity about that just now. I appreciate the political situation that you described—that decisions will be taken for reasons that are not directly linked to the sole criterion of economic growth—but there must be some degree of transparency in understanding that economic growth is what Scotland wants as a nation, that these are the projects that will deliver that and that they are being approved based on their ability to contribute to the national agenda. That is not as clear as it could be just now.
That is a useful insight for the committee.
It is interesting. Fife Council published the first draft of its structural plan the other week. There is a definite emphasis on development in mid-Fife in that draft. That is eminently sensible given that it is an area of deprivation and one that has seen industrial run-down. Yet it is difficult to see how Fife Council can do an awful lot about that other than to try to make arrangements for affordable housing or to try to ensure that the housing stock is right.
To see what else the council could do about the situation, I went with Joe Noble to look at the proposed renewables park at Methil. It is a wonderful industrial site right next to the Forth that could be used for a variety of different engineering facilities, but offshore turbines have been looked at specifically. That is perhaps the next and most sensible generation of wind power. The problem is, how does the local authority get that site up and running? How does it get the transport links in there? How can the local authority do that unless somebody makes a decision at national level and says, "Okay, we don't want to give them any competitive advantage over Easter Ross or wherever else, but at least let's look at giving them the transportation and the infrastructure." It is difficult to see how Fife Council can do much about that unless somebody has an overall plan. Do you agree?
Yes. Resources and delivery in Fife are down to the local enterprise company and the council. We are working closely with our council colleagues to try to get that site up and running.
At Scottish Enterprise, we take a national cluster approach to areas of our remit, including food and drink, which we spoke of earlier. Energy is another such area to which we have made a national commitment. Perhaps what you describe should happen in the Executive, which could consult on the matter. However, we have certainly been developing the Methil project and we are hopeful that it will come to fruition over the next six months or so.
I have two points. First, earlier this year, we carried out a study on the relocation of civil service jobs, which is a subject that has not cropped up today. Has any thought been given to positioning Fife as a suitable location in order to attract civil service jobs? Secondly, following the refreshment of "A Smart, Successful Scotland" over the past week or so, what is going to be operationally different in Scottish Enterprise Fife and what different targets might you put in place to measure those operational changes?
On the first point, we realise that Fife has specific strengths to encourage Executive relocation there. There are areas of multiple deprivation, especially in central Fife, as described a few moments ago, which would benefit from those jobs, and we are promoting Fife whenever a decision to relocate jobs out of Edinburgh is being considered. Tavish Scott recently agreed to visit Fife—I think it was about six weeks ago—and, in a parliamentary debate the following day, he referred to the attributes of Fife, such as the fact that we have a larger labour force available than there is in Edinburgh and the fact that there is not the same wage inflation in Fife as in Edinburgh. The quality-of-life arguments are very strong and should be factored into the decision-making process—we are alive to that. A strategy is being developed with our partners in Fife Council, and we are going through an implementation phase of that just now.
On the refresh of "A Smart, Successful Scotland", it is a wee bit early to decide what will be different operationally. I welcome the fact that there will be some clarity around the areas that have been unclear in the past. Our memorandum of understanding, which is to be developed with Communities Scotland, will help that. A point was made earlier about economic activity and the need to strike a balance between releasing opportunity and improving productivity rates. The memorandum of understanding will help, but it is a wee bit early to say how. I am sure that there will be changes—perhaps changes in targets—but I cannot comment on those at this stage.
Jack Perry will probably comment on them later in the week.
I am sure that he will do so tomorrow.
Does anyone have any further comments to make?
I would like to give one example of where joined-up thinking should be implemented between the Executive level and the local level. At the local government level, it is clear to us that budget management is management of risk. We have absolutely signed up to the Government initiative on local authorities, health and housing with respect to learning disability, and long-term hospitals will close. Throughout Scotland, we are 13 months away from that: we are almost there. However, just when we are on the last lap, with the people with the greatest needs about to be supported in the community, the Government is cutting the supporting people grant—at the very time that we need it most. When hospitals close, we still have to care for the people with learning disability who, traditionally, would have gone to live in those hospitals because their age and their needs have changed. Together, we have signed up to a big partnership to support in the community those who are most vulnerable in our society; however, almost at the last lap, the budget for that seems to have been reduced by quite a significant amount throughout Scotland. That has implications for the way in which we all deliver services—both the Government initiative and the local authority and health initiative.
I think that your concerns are shared. That is an issue that we will pay some attention to.
On behalf of the committee I thank Stephen Moore, Joe Noble and all the people here who have contributed to our discussion this morning. As I said at the start of the meeting, we will try to take your evidence on board in producing our report. Although he is delayed in Shetland, the Deputy Minister for Finance and Public Service Reform will give evidence to us this afternoon. In the past, our morning evidence sessions have given us bullets to fire at ministers in the afternoon, and I am sure that some of this morning's thoughts will be carried over into our cross-examination of the minister this afternoon. This has been an important exercise, as it gives us, on a cross-party basis, an opportunity to identify the realities on the ground that underlie the figures in the book. Thanks for your contribution in helping to clarify some of the issues for us.
I suspend the meeting until 2 o'clock.
Meeting suspended.
On resuming—