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Chamber and committees

Rural Development Committee, 24 Apr 2001

Meeting date: Tuesday, April 24, 2001


Contents


Budget Process 2002-03

The Convener:

I remind members that we still have a full agenda in front of us.

Item 3 allows us to address the budget process 2002-03. The committee agreed to consult selected organisations on the first stage of the next year's budget process. Members have copies of the responses that have been received and an explanatory note from the Executive. The item has been put on the agenda today to enable the committee to identify matters that are to be examined on 8 May when the Minister for Finance and Local Government is due to appear before us.

Do we need further information and, if so, who do we need it from? While we are all thinking about what we want to do, I welcome Adam Ingram who is here as a reporter from the Finance Committee.

Do members want me to say something?

Feel free.

Mr Ingram:

I am here to try to improve the Finance Committee's understanding of the issues of concern in its subject area that the Rural Development Committee might have with the Executive's spending strategy for the 2002-03 year and beyond.

As members know, the Finance Committee, in conjunction with the subject committees, can propose changes to the budget within the constraint that the overall resources available cannot be expanded. It has not been able to go through the whole process as originally envisaged, given that we have been going up a steep learning curve in the first two years of the Parliament. This year, the Finance Committee is determined to go through the process properly, consult the subject committees and get itself into a position where it can influence the Executive's budget.

I dare say that the Rural Development Committee has a continuing interest in several issues about funding and the like. There was a discussion at the Finance Committee this morning about who will pay for the compensation packages for the foot-and-mouth outbreak. Will it come out of the UK reserve or will some of it come out of the reserves that the Scottish Executive is putting together? The Finance Committee convener, Mike Watson, is writing to Angus MacKay about the matter, because we do not have a clear understanding of the rules on the reserves. It is a grey area, which is of concern to the Finance Committee and no doubt to this committee as well.

Those are the kinds of issues that we will be examining in the next month or two. The Rural Development Committee is expected to produce a written report by the end of June. The Finance Committee will study it and try to take it forward.

I have been told that it is the end of May.

Right.

We will have all the committee reports by the beginning of June. I am here so that I can inform the Finance Committee of this committee's main concerns prior to that.

The Convener:

We should be concerned about the likely impact of the foot-and-mouth outbreak on the broader budget. There were several estimates in the papers over the weekend of the total cost. The figures indicated that the cost would be significant if it had to be dealt with entirely through the Executive's budget.

Cathy Jamieson:

When we knew that we would be reviewing the budgets, nobody could have anticipated the foot-and-mouth problems. Having to look across a whole range of budget lines gives me cause for concern. More questions could be asked at the moment than there are answers.

The Scottish Parliament information centre briefing note indicated that provision for the organic aid scheme is scheduled to fall from £5 million to £3 million. Those amounts of money are probably relatively small in comparison to the amount that is being paid out in compensation but, as I have an interest in the future of agricultural practices, I certainly question the rationale behind reducing that provision in the coming years.

Dr Murray:

I agree that we must include the financial effects of the foot-and-mouth outbreak.

The explanatory note from the Executive seems to be written in a different language—I do not feel that it explained anything. I do not understand it and I am not sure what its purpose is. It would be helpful to know how it related to any other matter.

We must consider several issues. Following on from what Cathy Jamieson said about the organic aid scheme, I would be interested to examine the way in which rural development issues are to be financed and progressed. That relates to what might need to be done in response to the outbreak of foot-and-mouth disease and to how rural economies are to be regenerated. I would like more information on whether the rural development regulations might be revisited in the light of the outbreak and whether there might be further funding for the diversification of rural economies.

Cathy Jamieson:

An important issue that does not fall within the rural development budget heading is the funding that was potentially available to local authorities. In the broader context, we should consider taking a cross-cutting approach, particularly in relation to authorities, such as Dumfries and Galloway Council and those in Ayrshire and the south-west of Scotland, that have borne the brunt of the measures that have been taken in response to foot-and-mouth disease.

When we examine budgets, we should bear in mind the fact that we should consider them from the equalities point of view and how they impact on certain groups in communities.

Richard Lochhead:

I agree with Elaine Murray's point about trying to work through the Executive's guidance, which is a complete nightmare. I make a serious point: I do not understand why MSPs have never been sent on a crash course on the budget—that is one of the first things that should happen to MSPs after they are elected to the Parliament.

The rural budget is complicated for two reasons. First, in relation to the cross-cutting aspects of the budget, the rural affairs department is given a minuscule budget, although the Executive will argue that so much of other budgets is spent in rural Scotland. Therefore, it is difficult for us to ascertain how much Government money goes into rural Scotland. Secondly, the irony is that the rural affairs department does not really have a budget, because the vast bulk of its money is tied to European funding. Only a tiny fraction of the headline figure is subject to the discretion of the Minister for Environment and Rural Development. We have never fully addressed that important matter, which the Finance Committee might take on board. I cannot recall the figures off the top of my head, but the minister has discretion for only a few per cent of the overall rural development budget. The minister acts as a postman for the £500 million a year that comes from Europe.

Do all members have in front of them the private briefing paper on the budget, which is headed private: members only? [Members: "Yes."] I am wondering how I managed to lose it.

Richard Lochhead:

My final point is that, when the Executive publishes the budget, perhaps it could also issue notes to explain why budgets have changed drastically. For example, if there is a reason for those changes, it could simply issue an explanatory note.

Mr Ingram:

To be fair, the "Annual Expenditure Report" is a significant improvement on last year's budget documents. I do not know whether members have managed to work their way through the document yet, but the Executive took on board many of the recommendations that the Finance Committee made. However, it is not an easy read, to say the least.

Richard Lochhead:

I agree with Adam Ingram. An improvement that has been made is that the EU and non-EU moneys that come to the department have been divided. Last year, we were given extremely complex information about that, but the division is clearer this year, because the Rural Affairs Committee drew the Government's attention to that matter.

The paper that is in front of members is based on our previous discussions and decisions, although certain areas might require clarification. Are members content with the way in which the paper is set out and with what it leads us to discuss?

Are you talking about the paper that makes a suggestion about something called CHABOS, of which I have never heard.

A note has just been passed to me about that. CHABOS stands for the committee of the heads of agricultural and biological organisations of Scotland—I have written it out carefully.

How long has CHABOS existed?

The Convener:

I do not know. The best answer that I can get is that it has existed for a few years.

Meeting CHABOS might provide us with the opportunity to find our way into the issue of scientific support. Elaine Murray raised that issue before the foot-and-mouth outbreak sneaked up on us. If we consider the likely financial impact on the organisations that are involved in CHABOS of the broader budget, which funds those organisations, it becomes all the more relevant for us to meet representatives of CHABOS. That would be a valuable process for us to enter into, because we would be able to inform ourselves about the likely impact of foot-and-mouth disease.

We will find out what CHABOS is when its representatives tell us. Are we content to invite it to send a representative to the committee on 8 May?

Members indicated agreement.

The minister is coming to address budget issues on that day. Is there anybody else from whom the committee wants to take evidence?

Dr Murray:

Members who represent the south of Scotland are conferring. Alex Fergusson and I met Tony Fitzpatrick of Dumfries and Galloway Council last week. He has interesting views about the need for rural diversification following the foot-and-mouth disease epidemic, in terms of rural communities' becoming involved in different types of developments. He has suggestions concerning the way in which article 33 of the European rural development regulations might be used to achieve that. I wonder whether it might be worth hearing more from Tony Fitzpatrick.

Alex Fergusson:

I support that. I was at that meeting. Tony Fitzpatrick has some innovative ideas, which we would benefit from hearing about, especially concerning the interpretation of the European rural development regulations. He is also worth listening to on the issue of recovery from the foot-and-mouth disease epidemic, which I hope we shall soon be doing.

Does that meet with the approval of other members?

As several councils are involved, perhaps the Convention of Scottish Local Authorities might be asked whether it wants to send a representative of councils in rural areas.

The Convener:

We have received a written response from COSLA. Did members find that response unsatisfactory? We could ask those who submitted written responses to come and discuss their evidence further. However, we also have the option to invite individuals who have ideas of their own, and who are able to contribute to the discussion in which we are involved. Elaine Murray's and Alex Fergusson's suggestion is the kind of action that we need to take, to provide some new thinking in the process.

Dr Murray:

Alex Fergusson and I just remarked that we might want to invite COSLA, but it would probably send the convener of Dumfries and Galloway Council, who is its rural matters spokesperson. That would take us round in a circle. There are issues for other councils, but some of Tony Fitzpatrick's views on rural development are not related purely to the council that he represents, and they have interesting implications for rural communities throughout Scotland.

Cathy Jamieson:

One of the difficulties that we face might be in distinguishing between considering rural development in its broader context—a good thing that we should be doing—and focusing on some of the budgetary questions that we need to answer now. We must be clear about our purpose in inviting more witnesses.

Yes. The reason must be related to the budget.

Cathy Jamieson:

So many issues relate to the impact on local authorities of the recent foot-and-mouth outbreak that it might be worth giving members the opportunity to ask further questions. If that means inviting the convener of Dumfries and Galloway Council, so be it.

So—to whom should we talk?

Tony Fitzpatrick.

Rhoda Grant:

I suggest that we invite COSLA to send a representative. We could cover the issues that we have been discussing and those that have been raised by other rural councils. That one person could cover all the issues. Even if that person came from Dumfries and Galloway Council, as a representative of COSLA, they could put forward points of view from other councils as well.

We have a combination of ideas. If we put them together and express them to COSLA, we might be able to please everybody.

Alex Fergusson:

I am quite happy with that. Tony Fitzpatrick heads up a group that has representatives of all the councils that are affected by objective 5b funding, and he is a multi-council representative on issues of European funding. However, I am perfectly happy for the committee to approach COSLA.

Do we need any information further to that which we have received? If so, from whom? Is there anyone from whom members would like to request additional information?

Members indicated disagreement.

The Convener:

As there are no suggestions, we have probably approached all those with whom we want to deal.

We have already begun to deal with the next question, which is whether we want to invite anybody else to give evidence in a fortnight. We have dealt with the suggestion that we should ask CHABOS and we have worked out what it does. COSLA has also been suggested. Does the committee want to hear from anybody else, apart from those two groups and the minister?

There has been murmuring about the Scottish Agricultural College.

The Convener:

The SAC is part of the organisation that we have already agreed to invite. Previously, we discussed the possibility that, given that there have been changes in the finance arrangements for the SAC, there might be a conflict of interests if we invited representatives from SAC to speak to the committee on that matter.

Are there any bodies working with communities, other than local government bodies? I am thinking of charitable or voluntary organisations.

It is difficult to see how such bodies tie in with the budget of the rural affairs department.

The Government has just given money out of the rural affairs budget to rural stress organisations, for example.

The Convener:

We must ensure that we deal specifically with issues that are raised by the budget. The Finance Committee will expect a report based on that. If members have other suggestions, they should contact the clerks within the next 24 hours.

Does the committee wish to have a private briefing on the lines of questioning that we are likely to want to put to the minister before the 8 May meeting?

No.

No.

The Convener:

Okay. We will take the opportunity to ensure that a paper that contains possible questions is circulated so that, if members' infinite imaginations run dry, they will be able to keep the process going. I doubt that that will be necessary.

Do we agree to proceed on that basis?

Members indicated agreement.