Budget (Scotland) Bill: Stage 2
Good afternoon and welcome to the Finance Committee's third meeting in 2008.
I ask everyone to turn off mobile phones or pagers. Even if they are on silent, they can still affect the broadcasting system, so please turn them all off now.
We have apologies from Liam McArthur. I welcome Ross Finnie to the meeting as the committee substitute for the Liberal Democrats and ask him to declare any relevant interests.
I have no interests to declare.
The first item on today's agenda is stage 2 consideration of the Budget (Scotland) Bill. As well as having copies of the bill, committee members will have a note from the clerk. I draw the committee's attention to two points in the paper: first, only a member of the Scottish Government can lodge an amendment to the bill; and, secondly, as stated in paragraph 5 of the note, it is not possible to leave out a section of or schedule to the bill by disagreeing to it because, in order to do so, an amendment would have had to be lodged.
I thought that it would be useful to allow the Cabinet Secretary for Finance and Sustainable Growth to make some explanatory remarks about the bill and to give members the opportunity to ask questions before we start the formal procedure.
Thank you, convener. I welcome this opportunity to continue the scrutiny and discussion of the budget proposals for 2008-09 at stage 2.
First, I thank the committee for its work on the budget process. I acknowledge that that work has been undertaken in a slightly compressed timescale, although we were anxious to ensure that committees had the traditional two-month period in which to undertake scrutiny. The committee's report on the 2008-09 draft budget was substantial, and the Government has given careful consideration to the points and recommendations that have been made. I sent the committee my formal response earlier today, and a number of the issues raised by the committee were also discussed in the stage 1 debate last Wednesday in Parliament.
This afternoon's meeting of the Finance Committee focuses on the detail of the Budget (Scotland) Bill itself, as approved in principle last Wednesday by Parliament. The key point to make clear is that the figures in the bill do not reflect any changes from those already scrutinised as part of the budget process to date, apart from the separate identification of a small budget of £3 million for English for speakers of other languages as a level 3 in its own right.
However, as committee members may be aware, there are differences in the presentation of budget information between the draft budget and the budget bill. In order to assist the committee, I will explain the main differences with reference to table 1.2 on page 3 of the supporting document. Column A sets out by portfolio the 2008-09 budget as shown in table 1 of the spending review document, which was published last November. Column J sets out the budgets as reflected in the Budget (Scotland) Bill, and columns B to I provide details of the adjustments that are necessary to meet the statutory requirements of the parliamentary process.
The major adjustments set out are as follows. First, there is the exclusion of £83 million of non-departmental public body non-cash costs, which do not require parliamentary approval. Those are mainly in relation to capital charges and cover bodies such as the national institutions, Scottish Enterprise and Scottish Natural Heritage. Another element that varies between the spending review document and the bill comes from taking into account income of just over £1.7 billion from national insurance contributions, which is used to fund approximately 15 per cent of health and well-being portfolio expenditure.
There is also the exclusion of local authority supported borrowing and judicial salaries, amounting to a little over £330 million. Adjustments have been made to portfolio budgets to reflect the requirement that separate parliamentary approval is required 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 difference is the restatement of the specific grants included in the overall 2008-09 local authority settlement that remain ring fenced under the appropriate cabinet secretary responsibility. For example, police grant remains the responsibility of the Cabinet Secretary for Justice. Full details of all grants treated in that way are included in the summary table on page 77 of the supporting document.
I again make it clear that those are essentially technical adjustments and do not change in any way the budget that has so far been scrutinised by this and other committees and approved in principle by Parliament. However, they raise a number of what could be charitably described as interesting, and perhaps confusing, issues in relation to the clarity and transparency of the budget process. They could usefully be addressed as part of the review of that process—a review that I welcome.
There is a strong case for looking again at the difference between how the budget information is presented in the budget bill and the announcement of budget information in the spending review, which is driven by the statutory requirements of the Parliament. I would certainly support any attempts to address those anomalies with a view to simplifying the presentation of budget information and making it more readily understandable both to members of Parliament and to the wider public.
The final question that I want to address is on where we are in the budget process. Parliament approved an amendment to the Government's motion, requiring the Government to reconsider the support available for the recruitment of police officers and for accelerating the timescale for the introduction of a reduction in business rates for smaller companies. The Government is giving active consideration to those proposals as part of the budget review process, and I will report back to Parliament accordingly on the Government's response.
I am delighted to answer the committee's questions.
I thank the minister for those clarifications and explanations, which are now on the record. Do members have any questions?
Minister, you have not lodged any stage 2 amendments. However, the Finance Committee has made two suggestions, and a number of issues arose during the stage 1 debate. Since that debate, a number of announcements have been made—for example, on additional funding for universities, and possibly some additional funding for vocational training. Are you considering lodging amendments at stage 3 to take account of the recent announcements?
I am reflecting on last Wednesday's stage 1 debate in Parliament. The debate was comprehensive and many different propositions were made by MSPs. I am considering all the points that were raised. In particular, I am considering the committee's amendment, which was successful. After considering all the points, I will report back to Parliament with any proposed amendments in advance of stage 3.
You have announced an extra £10 million for higher education. Will that lead to a budgetary change?
That money is covered in the settlement for the financial year 2007-08, so it has no consequences for the Budget (Scotland) Bill for the next financial year.
As there are no further questions, I thank the minister for what he has said.
We turn now to the formal proceedings on the bill. We have no amendments to deal with, but under standing orders we are obliged to consider, and agree formally, each section of and schedule to the bill, as well as its long title. We shall take the sections in order, with schedules being taken immediately after the section that introduces them. We shall 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. Do members agree with my proposal?
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 our stage 2 consideration of the bill. I thank members for their input and for their consideration of these matters.
Meeting suspended.
On resuming—