Consultative Steering Group Report
Good morning everybody. We are now quorate so I propose to make a start. At approximately 9.30 am, we will break from our continuing work on the consultative steering group report to take an item from the Audit Committee. We have advised members of the Audit Committee that 9.30 am would be an appropriate time and I think that it would be efficient to take them when they appear.
Before we do that, I want to resume discussion of the paper that we considered last week, which is the draft text of the accountability section of the CSG report. We should consider the text in tandem with the paper that I have circulated, which contains proposed amendments.
Last week, we reached paragraph 113 of the accountability section of the report. We were about to discuss a section from paragraph 114 onwards on the Sewel convention and Sewel motions. Members are aware that we have agreed to examine that issue. We are in the process of gathering information from the United Kingdom Government and the Scottish Executive about the Sewel convention and the motions that derive from it.
The text that appears in the report is an outline of the issues and an examination of related aspects. The text contains no recommendation as such, and I propose to replace paragraph 130 by inserting a comment and a recommendation, which reads:
"We will investigate these, and any other pertinent points in a separate inquiry."
I say that because I do not want to close down any discussion because something has not been mentioned. The paragraph continues:
"We have sought the views of the Scottish Executive and the UK Government on the use of Sewel Motions, and we hope to report to the Parliament on their use before the dissolution. If we are unable to do so in the remaining available time, we recommend that our successors in the next parliament should complete the inquiry and report with appropriate recommendations."
Sewel motions came up a lot in the course of our evidence taking. The comment that we are making says that we are not in a position to address the issues in the report, as work continues on them, but we intend to report on them if we can. The paragraph to be inserted acts as a marker on the issue of Sewel motions.
As members are happy with that addition we will move on to the section on financial accountability, which begins at paragraph 131. The section sets out an analysis that we received and an outline of some of the concerns that have been raised about budgeting. The first change that I propose is to paragraph 134, which states that we will consider the procedural issues that the Finance Committee raised following its scrutiny of the budget process. I suggest that the paragraph is highlighted in bold—it is a statement of intent and not a recommendation.
I propose to highlight in bold the quotation that forms part of paragraph 146. The quotation forms part of a Finance Committee memorandum to this committee. It makes an important statement of that committee's intent on the accessibility and intelligibility of budget documents, the allocation of time for the budget process, the importance of engaging the people of Scotland in the process and progress on the equality proofing of budgets. As that is a significant statement, it would seem to merit being highlighted in bold.
I move on to paragraph 152. I suggest that we remove the last sentence, which opens with the words,
"He pointed to a lack of understanding".
The reference is to Mike Watson, the former convener of the Finance Committee. I suggest that we insert:
"Mike Watson also pointed to a lack of understanding about resource accounting and budgeting, ‘year-by-year comparison and "basic accounting principles"',"—
we may have to tidy up the quotation marks at that point, although they may make sense in the context of the original document—
"and stressed the desirability of making the budget, in an appropriate form, something that was not confined to ‘academics, local authorities and other groups with a direct interest'"—
that is the Finance Committee's comment—
"but was widely disseminated and understood (although he was realistic about what was possible in this area)."
The wording is similar to the sentence that we are removing, but it makes a fairly bold statement about the direction in which the former convener of the committee believes that the Finance Committee needs to go. I suggest that we add it to the document in bold text as a separate paragraph, after paragraph 152.
The report must state that the budgetary process, although well intentioned and the subject of acute effort, is a complete fiasco, on which Parliament has virtually no effect.
We have additional text from Murray McVicar, which will show some of the progress that has been made since the evidence was taken and which outlines some of the directions in which the Finance Committee is working.
I suggest that paragraph 155 be placed in bold, because the finding is significant. It reflects Donald Gorrie's point that MSPs have found the budget difficult to grapple with. The MORI survey demonstrated that point.
On that point, I have read the literature several times but I may have forgotten some of the content. There are significant failings on the Executive side, as well as on the Parliament side. Much of the report concentrates on the fact that committees are not doing their stuff, which is correct, but the budget is framed in an obfuscatory fashion.
That is a fair point. I am happy to reconsider the wording of the report and to determine whether the committee might suggest changes in that direction. The flow of information and the time scale are critical to the process. The Parliament does not control the process.
I suggest that paragraph 158 is changed to strengthen the wording. It is the same point that was made about the Finance Committee and the subject committees. The paragraph should read:
"We consider that the Finance Committee and the subject committees should keep their relationships, and their division of responsibilities, under routine consideration, in order to ensure that the best possible use is made of subject committee expertise."
As members will see, that is simply a rewording of the original text.
I suggest that paragraphs 159 and 160 be removed and replaced with stronger text with some recommendations. Paragraph 159 should read:
"We concur with the recommendations by Mike Watson, outlined in paragraphs x and y above. In particular we recommend the retention of a standing budget adviser, to provide both the subject committees and the Finance Committee with the expert advice which they require."
Paragraph 160 should read:
"We commend the efforts of our own information centre, SPICe, in publishing documents which explain the budget using plain and accessible language. We consider that the importance of having budget documentation in plain English is greater than in any other area of government. Such transparency is not an end in itself: it encourages people to engage with the budget process, whereas the persistent use of ‘jargon' discourages such engagement."
By "jargon" I mean almost everything that appears in the budget papers, from the use of acronyms to the use of financial conventions, which are not immediately transparent to people who do not have accountancy skills.
I suggest that paragraphs 162 to 166 be put in bold. They contain strong observations about holding meetings away from these buildings; the importance of scrutinising the substantial sums of money that are available to the Executive; the role of committee members; the advisability of training members in some of the budget's terminology and concepts; the public's participation in the budget process; and the use of our website to allow people to track the budget process.
I then propose to take out paragraph 167 because the point has already been substantially covered. Murray McVicar has suggested additional text at that point, which members ought to have in front of them. It is a single sheet with four paragraphs, numbered 167, 168, 169 and 170. We will consider those for a moment.
Paragraph 167 reads:
"Since the Committee took evidence on this in 2001, some progress has been made in the scrutiny of the budget. The Finance Committee has appointed a Standing Adviser on the budget"—
I am not sure whether we should name the adviser; we will take a view on that later—
"who has liaised closely with a number of committees and with SPICe. In addition, some committees also appointed advisers specifically to assist them in their scrutiny of the budget. Each committee received a pre-AER scoping paper and a post-AER analysis."
I suggest that we accept that paragraph, subject to the last sentence being written in jargon-free English, so that the report is consistent with what we have decided. The sentence is accurate, but it is not very transparent.
I then propose an additional paragraph:
"Whereas, Stage 1 of the process in 2001 produced no recommendations for changes to the Executive's spending plans, this year, there was a total of 12 recommendations, which were endorsed by the Finance Committee."
That picks up Donald Gorrie's point that committees were not grappling with the budget before, and the fact that there is some evidence that committees are getting a better grip of it this year.
We should also have a figure for the number of recommendations that the Executive took any notice of whatever.
That would be pertinent. I am quite happy to have Murray McVicar find that out for us and add it to the text.
The budget is not all plain sailing. The proposed additional paragraph 169 states:
"Problems of timing are still an issue, as is the fact that every second year is a spending review year, releasing more money into the system between Stages 1 and 2 and, in the view of some members, making Stage 1 redundant in these years."
There are continuing difficulties for the committee.
The final additional paragraph notes:
"The Finance Committee convener, adviser, clerks and spice have had a number of meetings with Executive officials and ministers to try to develop ways forward in terms of presentation, and this work is on-going as part of the Financial Scrutiny Review."
At our next meeting, having reflected on those changes, I might well suggest adding a recommendation about the way forward. The text is very much an outline of the progress made, but it is value-free and recommendation-free. It would be appropriate to add something further, but I have had no time to prepare text for that, so I may start the next meeting with that point and any other points that we need to pick up. I thought that it was very helpful to have that additional perspective on the fact that committees are making progress.
The next section is on the Auditor General for Scotland, starting at paragraph 168. As is normal, the early paragraphs outline evidence taken and perspectives given. In paragraph 177, I suggest replacing the existing text with a stronger statement, which would read:
"We consider that the Parliament should foster and encourage the work of Audit Scotland, although the suggestions made by Mr. Black in paragraphs x-y are matters in the first instance for the Audit Committee, whose work with Audit Scotland we acknowledge."
We will work out the paragraph numbers later. That beefs up our recognition of the role of the Audit Committee and endorses what it is doing.
I suggest that the following paragraphs be printed in bold text. I propose to change paragraph 178 so that the text is in bold. Paragraph 179 should also be in bold, and I have added a recommendation. I do not think that I have changed the words, but it is so long since I did it—about a week and a half. One change is that, instead of "consider", we should say that we
"recommend an element of work co-ordination, possibly overseen by the Audit Committee".
We should add that all committees should develop a capacity for audit. I was switching back and forth between a Word document of the report and an e-mail that contained the changed text. Sometimes the Word document collapsed and changes were not saved. I am sure that a line of text has been lost, but the sense is clear enough.
Paragraph 180 is changed. It should read:
"Value for money and performance issues both lie at the heart of government and scrutiny, and we agree that there could be scope for plenary debate of salient points arising from audit ‘overview'. While we would defer on the precise nature of any such process to the Audit Committee, we do agree that it would be appropriate for the Parliament to raise the profile of this fundamental area of scrutiny once or twice yearly."
The committee must judge whether we should call that a recommendation. As it is, it is a reasonably strong opinion. Are members happy with that?
Members indicated agreement.
It would be appropriate to break now to consider the Audit Committee issues, as colleagues from the Audit Committee have now joined the meeting.