Agenda item 5 concerns the infrastructure investment plan. Last week, we took evidence on the plan from the Minister for Finance and Public Service Reform; this week, I am pleased to welcome the Minister for Transport, Nicol Stephen, to the committee. With the minister are: John Ewing, head of the transport group; John Howison, head of the trunk roads design and construction division; Damian Sharp, head of the public transport major infrastructure team; and Claire Dunbar-Jubb, head of the finance and business planning team. Officials have very long titles in the transport division.
I thank the committee for the opportunity to discuss the Executive's infrastructure investment plan. In 2005-06 we will, for the first time, spend more than £1 billion of our departmental budget on transport. That funding will increase to almost £1.4 billion by 2007-08 and will be used in part to fulfil the commitments in the transport capital programme. Of the total budget, 70 per cent will be directed at improving public transport over the period of the transport long-term investment plan, at tackling congestion and at promoting more sustainable transport.
You will have received our report on economic growth. We are waiting for an official reply to that from—I presume—your colleague Tom McCabe, but we hope that it will be a co-ordinated reply from all the ministerial departments to what we had to say in the report. We were particularly concerned about co-ordination of investment at spatial level, particularly regional and conurbation levels. To what extent are the transport projects that are listed in the IIP integrated with strategies for housing, renewal and business growth? What evidence is there to support the argument that they are?
Better integrated planning and transport is important for Scotland and we have not yet achieved the required level of integration and co-ordinated partnership working. Transport is vital in terms of planning for future housing and business or industrial developments, so the review of planning will, I hope, lead to improvements from a planning perspective. However, from a transport perspective, the lack of a national transport strategy or co-ordinated regional transport strategies has been a weakness, so it is good that we are making progress in those areas.
We are looking to move beyond the aspirational; we want to move from "This is what we ought to do" to "This is what we plan to do." That has been done in the context of the central Scotland corridor study, which was a multi-modal approach that examined options and provided at least a basis for making decisions. Why has that not been done elsewhere?
There has been an element of catch-up in some of the current programme. The central Scotland corridor study is a good example of a study in which we were able to draw on local planning data and to work closely with local authorities to identify strategic needs along that particular section of road. Particular projects flowed from that, so it is the kind of model that we want to develop and grow.
How do you, for example, assess competing road and rail projects? I know that there is a formal mechanism, but I would like the panel to explain how a decision is made, such as, for example, that project X is in but project Y is out.
The Scottish transport appraisal guidance approach—the STAG approach—is relatively new but is widely accepted as being a major step forward in that we examine the key factors that are associated with a particular project. In that process, consideration is not specific to any single mode of transport; we consider a variety of options for tackling a particular problem and we try to find which option will deliver the best results. As the convener noted, that approach was taken in the central Scotland corridor study, and it will be taken in considering the possibility of dualling a section of road from Inverness to Inverness airport. For that project, I have made it clear that the appraisal should focus not only on the road, but on public transport and a range of associated issues. In the past we would not have done that; we would simply have looked at a single issue or approach.
Our roads programme consists of various elements. One of the more visible elements is completion of the Scottish motorway network. On that, the planning parameters are built in through the traffic models that are used to help us to understand changes in traffic patterns. We are also considering measures such as route action plans, whereby we propose to improve some of our long-distance single carriageway routes. That will involve upgrading the parts of the network that do not have very high traffic levels but which are the communication points that connect remote parts of Scotland to the central area. Again, it is a matter of examining current traffic requirements and assessing how those will develop in line with authorities' aspirations for the future.
I have a difficulty with that. The Treasury's "Green Book: Appraisal and Evaluation in Central Government" guidance, which is based on 60 years of use, is used to decide whether a project is in or out. Some of the projects on the list of priorities seem to barely stagger through even that assessment. How is it that systematic decisions based on priorities in, say, Edinburgh or Glasgow can be made in a realistic timeframe? How does that work through into policy? It is not clear to anybody how the process works—certainly not to members of the committee who have considered it.
The selection of any set of projects is a complex process. An economic appraisal is made and the "Green Book" is looked at, which provides one set of parameters and gives one set of decision points or factors to take into account. However, one must also take into account factors such as the contribution to accessibility, to safety, to the environment and generally to better integration of the Scottish transport network. One has also to look at the cost of a particular project; a project or idea might score very highly, but would not be affordable in a realistic timeframe. Other issues might also affect the deliverability of a project. A number of factors must be weighed up in addition to the "Green Book" conclusion. At the end of the day, it is a political decision about priorities and which projects should proceed.
From the point of view of a scrutinising committee such as this one, that explanation could justify any decision, however irrational. Although I am sure that no irrational decisions have been made, unless there is a net present value figure or something of that nature that suggests, for example, that project A clearly passes the test in purely economic terms and there is little scope for political deliberation around that, but project B does not or is marginal, then it becomes very difficult for us to accept that politicians' decisions are justifiable.
There are two points to be made in that regard. First, the STAG appraisal provides for net present value figures and a cost-benefit analysis. If we were to base our investment decisions purely on net present value figures, we would probably undertake very few public transport schemes but very many road schemes—my officials can correct me if that is inaccurate.
Some public transport schemes have strongly positive net present value—if that is the criterion that we are considering—such as the Edinburgh Waverley scheme, in which the net present value is more than £2 billion. That is a very strong scheme in anyone's book. Few schemes are in that category, although some produce good numbers, including the Edinburgh airport rail link and the tram schemes. Many schemes perform a bit better than just being marginal; even if they are not as strong as the Edinburgh airport rail link they bring significant inclusion and environmental benefits.
Can you give us examples of schemes that have been shelved as a result of a STAG evaluation? You have told us about projects that are going ahead, but what about the other list of projects that, by definition, were not political priorities?
There are relatively few in that category because the STAG process is relatively new. When did we do our first STAG appraisals?
STAG came out in draft in 2001.
The process is significantly onerous, so we tend to do STAG appraisals on the major projects on our current list that are proceeding.
I just wonder what the point is. It seems to me that there are only two categories—projects that get a good score in the STAG appraisal and go ahead, and those that do not get a good score but go ahead because of political priorities. That is it.
I can think of some schemes that, because of the STAG process, have not come to us for a decision. The minister is right to say that very few have come to us—
To whom did they go?
In the corridor study, the STAG process considered options including, for example, joining Glasgow Queen Street and Glasgow Central stations by means of an underground tunnel. The STAG appraisal assessed that project as not meeting the objectives of the study. That is not to say that such a tunnel will never happen, but the scheme was not suitable when it was measured against the objectives of the STAG appraisal. The same thing happened to the scheme for electrification of the Shotts railway line. There were options for meeting the objectives of the STAG appraisal, but those schemes were not the best way of doing that. Those were not decisions for the Executive, but were part of the process that led to the advice that came to ministers. Projects tend to fall away quite early in the process.
Similarly, different schemes were proposed for the Glasgow airport rail link and the Edinburgh airport rail link. Indeed, a cheaper scheme was proposed for the Edinburgh link, but we went for a more expensive scheme because it had the best cost benefit. The project's net present value seemed to be so much better when compared to the other schemes, so we decided to go for the more ambitious and expensive scheme.
We seem to be in difficulty. At one level, you have set several goals that you want to reach through allocation of transport spend. All of that is in the context of the Government's overall top priority of economic growth. However, you seem to be saying that you consider the projects and come up with a number and then, in some cases, you ignore the number because you do not like it or, in other cases, it knocks out a scheme such as the Glasgow tunnel, which Damian Sharp mentioned.
If we were to build the line to Gorebridge only, the net present value would be more significantly positive. You should remember that the appraisal for the full line that is now being considered is also positive. If the line went to only Gorebridge, it would give a higher net present value, but it would not then be a Borders railway.
So it is a political totem rather than an economic growth-based calculation.
You are implying a lot.
I am not. I am simply asking what the objective justification is for making that decision and not any of the other decisions that could conceivably have been taken.
The position is that the Executive cannot promote major public transport infrastructure projects itself. We have to rely on others to promote proposals through the private bills process—that said, I believe that the position needs to change. In this instance, a partnership has made a proposal, which is for the reinstatement of the full Borders railway and not for a scheme to Gorebridge. We evaluated the proposal in the same way that we evaluated proposals from Transport Initiatives Edinburgh and the City of Edinburgh Council for the Edinburgh airport rail link or from Strathclyde Passenger Transport for the Glasgow airport rail link.
In the case of the Borders railway, it is perhaps worth remembering that the Waverley railway partnership consists of the City of Edinburgh Council as well as Midlothian Council and Scottish Borders Council. All three councils signed up to the concept of building the railway out to Galashiels. I understand that the City of Edinburgh Council sees the railway as part of a longer-term process of gaining access to labour and housing markets that will encourage growth in and around Edinburgh. The City of Edinburgh Council views the decision to build the railway to Galashiels as a key strategic decision. The initial benefits would be higher if the railway were to be built only to Gorebridge.
I am sure that the City of Edinburgh Council would be in favour of lots or transport projects in Edinburgh, particularly if Scottish Executive money is involved. I assume that other local authorities with proposals for their areas think likewise.
We are not saying that we ignore what is said in the STAG appraisals. The process means that we have to have clear reasons why we favour one scheme over another. Given the choice between two schemes with slightly different NPVs, it may well be that we would favour one because of its more strongly positive environmental impact or because it will achieve greater benefits in terms of integration. The critical thing is to have a clear rationale for the decision to back any given scheme.
If I understood him correctly, I think that Damian Sharp said that the Waverley scheme met the criteria absolutely and delivered a high rate of return in terms of net present value. I assume that the part of the Borders rail line to Gorebridge meets a higher threshold. I do not want to pick on Borders rail; I am simply trying to understand the issues.
There is a fundamental difference between what a railway to Gorebridge and a railway to Galashiels will deliver. That is reflected in the STAG appraisal, which shows the different outcomes.
Will you tell us what those different outcomes are?
The appraisal of the line to Gorebridge shows that, in transport economic terms—I am referring to the TE efficiency tables—a better return will result on the investment. However, the economic and locational impact assessment of going only to Gorebridge shows that that would have little, if any, economic impact on the Borders. The work that DTZ Pieda Consulting undertook, which was updated by Tribal HCH Ltd, shows that that is the case.
But surely the point of reference is not the Borders but Scotland. Surely the Executive makes an assessment of projects based on the contribution that they would make to Scotland.
Yes. STAG also requires an assessment of how the impact is distributed within Scotland; it shows what the different emphasis and impact of a project will be. It is then clear to ministers what they will get for a given investment.
I think that we should move on from this line of questioning. Before I proceed to a question about the management of costs, I think that Andrew Arbuckle wants to come in.
My question is in a similar vein to those of the convener. In his introductory remarks, the minister referred to the £35 million that is to be given over the next three years to the regional transport partnerships. Have schemes been identified for the partnerships or will the RTPs be given the money and asked to decide on their own priorities, with no STAG appraisal process and therefore no commonality between them? The question that I should have asked first is why the figure is £35 million and not £45 million or whatever?
It is £35 million because that is a significant new amount of funding for transport and specifically for the new regional transport partnerships. The simple answer to your other question is that the approach to allocating the funding has not yet been agreed. We want to ensure that there is a proper appraisal of projects and that we invest in the best-value projects.
To clarify, my argument is slightly different. It is possible to suggest that some projects have had to be worked hard in order for them to pass the STAG appraisal test and get a positive indication. You say that the test is whether ministerial direction is required, but I think that we are looking for a higher test involving a balance between different projects, each of which can show real benefits in global terms.
We are considering a number of route options. John Howison can provide more details, but we have not yet reached a decision on the preferred corridor for the road. The consultation ends on 29 April, so we are near to the end. We will take decisions on the preferred route in the late summer or early autumn once we have had a full opportunity to consider the comments that have been received—there are a significant number.
The present cost forecasts are in the range £210 million to £280 million as outturn prices.
How does that relate to the indicative allocations that have been made for the project?
When we inherited the scheme from the councils, the budget was about £120 million, I think.
So you are saying that the costs have more than doubled.
The costs will be what the costs will be. The other way to look at the matter is that the estimates that were given previously do not match our present expectations of cost.
It is important to reflect on the process from which the cost of any capital project emerges. An estimate will be made, but it will probably be a largely desk-based estimate; there will be some understanding of the route conditions, but in general it is a paper exercise that produces an indicative set of numbers. That is why we talk about the concept of optimism bias, which involves adding a big percentage chunk on top because we know that the first guess will be wrong. It will be a stab and it will give an indication of the broad scale of the project, but it will be wrong.
How does that process become transparent and subject to parliamentary scrutiny? The initial announcement that is made is based on a cost figure and a STAG appraisal, but if the costs change significantly—as in the case of the Aberdeen western peripheral route, although my point could apply to any major capital project—at what point does your internal review process become something that we as parliamentarians can scrutinise in a sensible way? We might say, "Perhaps project X is no longer sensible, given the new cost factors."
I suppose that that would come at the next stage of the project, when the minister makes another announcement. In the case of the Aberdeen western peripheral route, that will be when the consultation process has been completed and ministers take a view on the preferred route. We can then give a clearer view on what its costs will be.
The ministerial announcement might be about the preferred route and not about whether the project has satisfied a second test, which is what you were talking about.
We need to find a better way of achieving that, particularly in relation to private bills. You have concerns about the way in which the financial resolutions on private bills come before the Parliament, and we are talking about big sums of money for some projects. I am happy to provide information and appear before the committee whenever you think it appropriate. We are developing an approach; part of the reason why that is happening only now is that although capital spend was quite restricted in the early days of the Scottish Parliament, it is now expanding significantly. We now have some major projects costing £500 million or more and a number of projects on which expenditure is more than £100 million, and it is important that the Parliament and the Finance Committee are involved in a better way than at present. It is for all of us collectively to put in place mechanisms that will allow proper scrutiny. If we put such mechanisms in place, they will enable us to deliver on projects more effectively and will benefit schemes. It is important that we are tested on projects regularly and that we consider costs and timetables. Appropriate accountability for all that must be in place.
That would be welcome. The ministerial announcements process raises an issue, because ministers tend to announce projects that will proceed. We are interested in the process by which such decisions are made. Perhaps we need to examine the timing of dialogue between the committee and the Executive to ensure that the announcements that are ultimately made fit in with the transparent process that we would all like to have. We could discuss that with your officials later.
That would be helpful.
I realise that I am hogging the questions a wee bit, so I will ask just one final question. If a large rail or road scheme were delayed by unforeseen circumstances or for legal reasons, we could have a significant underspend, because resources could not be committed. What mechanisms are in place to ensure that money that is allocated to transport continues to be spent on transport in the given timescales—to ensure that problems with one project do not lead to major delivery issues in the transport budget? Is there a mechanism to put other schemes through the process faster? The question is for John Ewing and the minister.
I emphasise that such a problem has no perfect solution. It is vital to manage the capital programme actively and to ensure that we are still working on several smaller and medium-sized projects that can be brought forward and delivered in a relatively short time. It would be wrong to end up with a capital programme that squeezed out important smaller projects.
As the convener recognises, the situation is difficult when we deal with very large projects. When we have a programme of smaller projects to work on, including projects with local authorities, the potential exists to combine a judicious bit of over-allocation with bringing forward projects. That can be managed. However, the situation is extraordinarily difficult with the big and chunky major projects that we are discussing. In that situation, we must rely on the end-year flexibility rules on 100 per cent carry-forward of capital slippage.
It would be useful to have in writing a description of how such brought-forward arrangements might work. We all understand how the CUP operates. That is an important aspect of the financial management of underspends. However, the minister and his officials must also undertake strategic anticipation to ensure that we do not lose momentum throughout the transport portfolio because of the delays that can occur.
Minister, I am trying hard to resist your bringing out the Alan Sugar or Donald Trump in me, but I am disappointed by the lack of passion and positivity about the projects that are at your disposal. Will we see some passion in the strategic projects review, which was announced in June 2004? What impact will that have on the flagship projects that are identified in the infrastructure investment plan?
The strategic projects review concerns the next phase. In the current phase, the projects are identified and we are determined to proceed with them and to deliver them on time and on budget. They are as set out. If we are to deliver them, our capital spend will have to increase significantly.
I will scratch at the review's purpose. What evaluation criteria will be used? How open and objective will the review be? Will it fuel parliamentary scrutiny by allowing us to evaluate the likely impact on the economy?
The process will be major and open. The regional transport partnerships will have a key role to play in proposing projects, but they will also have a duty to work together. For example, the west of Scotland partnership will work with the east of Scotland partnership on issues that relate to the linkages between Edinburgh and Glasgow. Other parts of Scotland have similar important cross-boundary issues. MSPs, local authorities, businesses and business groups will have the opportunity to contribute. As I said, we are only as good as the projects that we come up with. I hope that some projects will be exciting and major and will set the tone for transport infrastructure investment in Scotland for the first half of the 21st century.
The feedback from the committee will have shown you that we have an appetite for openness and objectivity to fuel the debate and to generate excitement and pace. Is that envisaged as part of the design criteria in the review?
I am interested that you talk about excitement, pace and dynamism. Much of what I have heard has been about cost-benefit analysis, net present values and ministers not using their political powers to approve projects unless they have the right economic appraisal context. If you suggest that the dynamism and the pace come from members' side of the table, I have not sensed that today—perhaps I should leave it at that.
A review of the tapes might be quite illuminating for all of us.
Yes. Provided that the cost benefits and the net present values are in our favour, we would like to buy out the contract at the Inverness airport terminal. We have been in discussions and negotiations with the current owner of the contract. The ownership of the contract changed last year, which meant that there was a delay as we had had discussions with the previous owner. However, I am still optimistic that we can get a positive outcome. Clearly, however, the negotiations are commercially confidential. I think that our proposal to remove the burden of that contract would make a significant difference to the development not only of Inverness airport, but of the Inverness area and much of the Highlands.
Is removing that burden likely to have an impact on the finances that are available to Highlands and Islands Airports Ltd, especially with regard to other airport developments that might otherwise be happening in the Highlands?
It could have, depending on how we structure the funding that we would give to HIAL to enable it to carry out the buy-out. That is the way in which we would do it: rather than having a direct deal between the Executive and the current owners, the buy-out would be executed through HIAL. I do not want to do it in a way that will burden HIAL. If we did so, we would be replacing one millstone with another. The important thing to achieve is the development of the economy in Inverness and the Highlands, and the removal of something that is a significant burden on that economy and will continue to be so unless something is done about the structure of the contract.
I take comfort from that answer, which saves me from having to ask the supplementary question that I was going to ask.
There are plans for the funding of new vessels and for improvements to the ports and harbour facilities. The proposal is that, if the tendering were to proceed—of course, it is on hold at the moment and we do not know what the outcome of our discussions with the EU will be—those assets would go into a separate vessel-owning company that would also have responsibility for the port infrastructure, which is currently the responsibility of Caledonian MacBrayne. If we can avoid the requirement to introduce tendering, we would have to either maintain the current position or come up with further arrangements that would comply with the EU laws and regulations in this area.
That is another useful answer. Given what you have said in that answer and in answer to my question about the Inverness airport PPP contract, is there a case for coming up with a set of criteria and targets for growing the economy of areas such as the west coast or the area around the airport? A broad aspiration regarding population figures, for example, or on the number of economically active people in the area could be taken on board by the transport division in moving in the right direction to energise those economies.
There is a case for that approach, but I would not put the responsibility purely on the transport division, which will have a major task simply to deliver those projects on time and on budget. I would rather see the transport division working closely not only with the new regional transport partnerships and the local authorities, but with the local enterprise companies and Highlands and Islands Enterprise, which would have a crucial role in that area. A better-integrated approach between transport and the enterprise agencies, involving planning—getting back to the convener's first point—in a much more substantial and co-ordinated way, could be exciting for the future of infrastructure investment in Scotland.
I share some of the convener's difficulties in getting to grips with how you differentiate between your priorities and the different modes of transport and how you come to your decisions. It is a bit surprising that, although you have your strategy, Scotland does not have a national integrated plan for transport. When you consider the allocation of investment funds between the differing transport modes and investment opportunities, are you satisfied with the information that you have available?
One of the major policy decisions that I took after being appointed in 2003 was to move to a national transport strategy—call it a strategy, call it a plan, but there has never been such a thing in Scotland. I could make a party-political point in relation to that. In the past, the attitude has been to let the market decide, to let ad hoc schemes emerge and to leave matters to the responsibility of individual local authorities and individual developers. In relation to transport, the attitude in the final decades of the previous century was that the main responsibility was for roads. Very few significant public transport projects were being funded in Scotland. We funded CalMac and, to a small extent, Highlands and Islands Airports Ltd; the funding of both has gone up dramatically in recent years. However, what we did was for no better reason than the historic structure of the transport spend.
The response to the party-political point is that you have now had six years. Much of what you say is aspirational, but where is the hard evidence? Apart from the M74 extension, with its claimed cost-benefit ratio of 9—perhaps you can explain what that means—what are the typical cost-benefit ratios of the road and rail schemes that are listed in your plan?
The simple answer is that there is a range. Damian Sharp could best describe the range for the public transport projects and John Howison could best describe the range for the road projects.
The larger schemes—the motorways—typically have a cost-benefit ratio of about 4 up to about 9. That is because the present traffic conditions cause fairly substantial congestion for a large number of people. Things such as route action plans, which provide connection to rural areas, typically have lower cost-benefit ratios of between 1 and 2. They are positive and worth doing, but they do not deliver the same sort of returns on the investment as the bigger schemes do. Nevertheless, they are still worth doing to ensure that Scotland maintains an integrated transport capability.
I do not want to concentrate on the Borders rail link; it is probably not appropriate for me to do so, given that I am on the committee that is dealing with it. Nevertheless, I will make one brief point. You mentioned cuts in journey times. Is it not a fact that the journey along the proposed Borders railway will take longer, because of the number of stations, than the journey along the railway that it will succeed, which closed 30 or 40 years ago? Is not that one of the problems?
The journey will take approximately the same length of time.
I have heard that it will be 15 minutes longer.
That is not correct. It would be true if the trains had not stopped on the way, but the trains on the previous railway stopped at all the stations that are proposed except Tweedbank. Compared with the current public transport, the Borders railway offers a 30-minute journey time saving.
Okay. I had probably best leave that issue.
The Scottish transport appraisal guidance does not rank schemes. It does not produce a list that starts at the best and proceeds to the bottom, although that can be done with the net present value or the cost-benefit ratio. The Scottish transport appraisal guidance appraises across five criteria that cannot be combined into a single number, therefore it presents the impacts of a scheme to decision makers. It does not produce a list from one to 100.
Should it not?
We are dealing with very complex problems. I am not sure that trying to cram down those problems into such a list would not over-simplify the world that we are trying to deal with.
One of the advantages of STAG—one of the reasons for its introduction—was the fact that it introduced a capacity to assess and evaluate benefits and costs that could not be translated into monetary terms, which is what assessment by NPV and economic assessment does. STAG builds on the economic assessment. Some pretty heroic assumptions would then have to be made in any attempt to quantify those figures. A ranking of projects could be produced, by NPV and the other factors that need to be taken into account in making a decision on them. However, STAG produces a more comprehensive report on any individual project; it does not just look at the cost-benefit ratio or the NPV.
As you say, there are some heroic documents to wade through. The one that I am holding is for the Borders railway; the one for the M74 is twice the thickness. Perhaps it is necessary to separate out rail and road projects, for the reasons that you mentioned, because of the difference in the criteria. However, is it not possible to do what a project assessment might normally be expected to do, which is to produce a grid in which a range of criteria is given 10 points or five points—or whatever the appropriate number might be—to find out how the more objective indicators compare from one project to another?
Although the STAG summary table, which is typically two or three pages long, does not assign numeric values in that way, it sets out whether various factors have a strong, moderate or weak impact.
But that is for each individual project. Is it possible to use the same criteria to find out how all the projects score against each other? For example, five of the major projects that are proposed are for Edinburgh, and I presume that you have to take some decision about timescale or funding priorities with regard to Waverley station, the Edinburgh airport rail link, the Borders railway and the tram proposals. After all, in order for any judgment to be made, one of those projects must emerge as a more urgent priority or as something that will provide a better return. However, the problem is that we have no evidence that you make such comparisons or judgments. Our report suggests that that is a defect in the way in which such matters are handled. Am I right to say that you do not make such comparisons?
We make those comparisons explicitly with regard to proposals that are alternatives to each other. As far as your example is concerned, we will very soon strengthen my team in order to manage the many projects in the greater Edinburgh area that interact with each other and the fact that they will have to be done in a certain order. Indeed, I was interviewing yesterday for that role.
At this point, Jim Mather would usually make a comparison with business. However, I would have thought that a business organisation that had to spend much smaller sums of money than those that you are talking about would still identify a critical path of investment decisions and make judgments about different investment options based precisely on the issues such as deliverability, value and rate of return that you have identified. You do not seem to be making such judgments or to be able to communicate clearly to us how comparative assessments could be made.
A major projects review reported when—as I recall—Sarah Boyack was still the minister, and judgments were made then. I was not involved in them. However, I must emphasise that this is not about the lack or availability of a plan or strategy; we must also take into account the availability of funding. In 1999, the total funding for all roads and public transport projects was between £350 million and £400 million. We are now moving up to a budget of £1.4 billion a year, which is transforming the level of investment in our roads and public transport infrastructure.
I agree that we need to do things better. Substantial amounts of money are involved and, as we have seen, there are shifting costs. We cannot say that certain decisions have been made and that we will not look at them any more. The Finance Committee is required to look at the management of such projects systematically.
Other European nations are making significantly greater levels of capital investment. I ask members to look at some of their decision-making processes. I question whether any European nation has in place the sort of robust, economic, almost academic approach that the committee seems to suggest would be a good approach for Scotland.
I do not disagree with that point, but the substantive points that came from our report are that we are concerned that each project seems to have been considered in a silo context rather than on a regional or conurbation basis. The primary criteria seem to be confined to each project and not transferable across projects; nor do they look at broader ends such as economic growth. The critical path that we talked about earlier is not clear to us. We are not absolutely clear why certain projects are in or out, the grounds on which a project is rejected or could be changed, or how you respond to changes in the parameters. Perhaps it is our fault that we have not read the documents carefully enough.
As the minister said, a number of the projects flowed from previous strategic reviews of what was required, such as completing the central Scotland network. The Executive has been clear in the partnership agreement that it wants to deliver those projects and that is what we are committed to doing; in a way, that offers value for money and ensures that there is proper protection for the investment that is being made. Each of the projects is being evaluated in a way that tries to ensure that when ministers have to take key decisions on the funding of projects, they have the information that enables them to say whether they will go with a project or not, or whether something needs to be changed or adjusted.
The contribution of the minister and his team has been refreshingly honest, transparent and non-evasive. I am an outsider looking in and am not on the same high financial level as some of my compatriots on the committee.
It would be for the committee to consider, but I suggest ensuring that the information is the best that is available at the time, and recognising that the quality of the information will improve as a project is worked up and developed. It should be acknowledged that no one is trying to pretend that the original estimate is wildly wrong; it was made on the basis of a set of assumptions that underpinned the project and, as the project plan is developed and the process is gone through, those assumptions are refined and risks are analysed and quantified. We begin to identify the measures that are needed to manage those risks, and that refines the cost. It is about making sure that there is a robust process and that the cost is always being challenged as the project is being progressed.
We have probably finished our questions. Given John Swinburne's point, it might be helpful if you and I and the clerks could have a further discussion about identifying the correct point in the process at which we can exercise such scrutiny.
Yes.
That would then feed into our work plan for the period.
Meeting continued in private until 12:58.
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