Budget (Scotland) (No 2) Bill: Stage 2
Good afternoon and welcome to the Finance Committee's second meeting in 2009, in the third session of the Scottish Parliament. I ask all members and members of the public to turn off their mobile phones and pagers.
The first agenda item is stage 2 consideration of the Budget (Scotland) (No 2) Bill. As well as having a copy of the bill, members also have a note from the clerk. I draw attention to two procedural points: first, only a member of the Scottish Government can lodge amendments to the bill; and, secondly, as paragraph 5 of the clerk's note makes clear, it is not possible to leave out a section or schedule by disagreeing to it, because an amendment to do so would first have to be lodged.
I thought that it might be useful if, before starting our formal proceedings, I allowed the Cabinet Secretary for Finance and Sustainable Growth to make some explanatory remarks about the bill and gave members an opportunity to ask questions.
Thank you, convener. It is a pleasure to come before the committee once again for stage 2 consideration of the budget bill.
As I did in the parliamentary debate just before Christmas, I put on record my thanks to the committee for its published assessment of the Government's budget bill. I issued the Government's formal response to the committee's findings to the convener on 7 January. To assist members, I will explain certain details in the bill.
I point out certain differences between the draft budget and the bill, with reference to tables 1.2 and 1.3 in the bill's supporting document. Column A of table 1.2 sets out by portfolio the 2009-10 budget as shown in the draft budget document, which was published last September. Column F sets out the draft budget, as it needs to be restated for the budget bill, and columns B to E provide details of the adjustments that are necessary to meet the statutory requirements of the parliamentary process.
I will outline the major adjustments. First, there is the exclusion of £83.5 million of non-departmental public body non-cash costs, which do not require parliamentary approval and relate mainly to capital charges and to bodies such as the national institutions, Scottish Enterprise and Scottish Natural Heritage.
Secondly, we have taken into account income of just over £1.7 billion from national insurance contributions, which is being used to fund approximately 14 per cent of health and wellbeing portfolio expenditure.
The third major adjustment is the exclusion of local authority supported borrowing and judicial salaries, which amount to a little over £330 million and again do not require parliamentary approval.
Fourthly, portfolio budgets have been adjusted to reflect the requirement for separate parliamentary approval for a number of directly funded and external bodies, including the National Archives of Scotland, the Forestry Commission and the Food Standards Agency.
The final adjustment is the restatement of specific grants that are included in the overall 2009-10 local authority settlement and which remain under the control of the cabinet secretary with responsibility for those policies. For example, the Cabinet Secretary for Justice remains responsible for the police grant. Full details of all grants treated in that way are set out in the summary table on page 75 of the supporting document.
Those adjustments are essentially technical and do not change in any way the budget that has been scrutinised by this committee and others and approved in principle by Parliament. They are simply an explanation of the reconciliation that has taken place and form part of the process of parliamentary approval.
Table 1.3 sets out changes to the original draft budget that are now included in the 2009-10 budget bill. The changes fall into three main categories. First, there are updated estimates of annually managed expenditure, which have been provided to Her Majesty's Treasury as part of the normal process of monitoring such items. The largest increase is in teachers' and national health service pensions, reflecting the most recent actuarial valuation.
The second change is in additional net spending, mainly to reflect commitments in relation to police, fire and teachers' pensions. That has been funded largely from non-domestic rates income based on local authorities' most recent forecasts.
Thirdly, there are changes as a result of accelerated capital expenditure of approximately £230 million, on which I have already made a number of detailed announcements. Those changes, of course, follow as a result of the Chancellor of the Exchequer's announcement in the pre-budget report of his willingness to accelerate capital expenditure for 2010-11 into 2008-09 and 2009-10 and are detailed in column I in table 1.3.
As I made clear last week to Parliament, I remain committed to an open and constructive approach to the 2009-10 budget process and continue to seek consensus and agreement on a budget that will meet the needs of Scotland's people during these difficult economic times. Although I appreciate that this part of the process is largely technical and procedural, I welcome any comments and suggestions that will help to build such a consensus as we move towards next week's stage 3 budget debate.
I hope that my explanation has been helpful. I am very happy to answer questions.
I thank the cabinet secretary for his explanatory remarks. If members have no questions, we will move to the formal proceedings.
There are no amendments to deal with but, under standing orders, we are obliged to consider and agree to formally each section of and schedule to the bill and its long title. We shall take the sections in order, with each schedule being taken immediately after the section that introduces it. We will take the long title last.
Fortunately, standing orders allow us to put a single question when groups of sections or schedules fall to be considered consecutively. Unless members disagree, that is what I propose to do. Are we agreed?
Members indicated agreement.
Section 1 agreed to.
Schedules 1 and 2 agreed to.
Section 2 agreed to.
Schedules 3 and 4 agreed to.
Sections 3 to 5 agreed to.
Schedule 5 agreed to,
Sections 6 to 10 agreed to.
Long title agreed to.
That ends stage 2 consideration of the bill. The Parliament has already agreed that stage 3 proceedings will take place on Wednesday, 28 January, and members might wish to note that the deadline for Scottish ministers to lodge stage 3 amendments is 4.30 pm on Thursday, 22 January.
I thank the cabinet secretary and his officials for appearing this afternoon. We will have a short suspension.
Meeting suspended.
On resuming—