Communities Committee, 01 Oct 2003

Meeting date: Wednesday, October 1, 2003

Official Report 232KB pdf

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Budget Process 2004-05

Agenda item 2 is consideration of the budget process for 2004-05. I welcome Shirley-Anne Somerville, who is the policy and public affairs officer with the Chartered Institute of Housing in Scotland, and Gavin Corbett, who is head of campaigns at Shelter Scotland. As we have received a written submission from those organisations, we will move straight to questions.

I am glad to be able to ask the first question, because it means that I can ask a fairly general one. We are told that the present proposals will provide 3 per cent real-terms growth in the communities budget over two years. I was going to ask whether the figure of 3 per cent is sufficient, but I am struggling with the budget documents and I cannot find that increase. For level 3 spending, the 2003-04 draft budget mentioned a total spend of £241 million for 2004-05, but the figure is £196 million in this year's draft budget. For 2005-06, the figure in last year's draft budget was £265 million, whereas in this year's draft budget it is £208 million. Where is the 3 per cent increase in funding?

The figure of 3 per cent is taken from the introductory chapter to the overall budget, which lists level 1 expenditure. I looked at the communities budget in the real-terms table for the overall budget. I agree that the conclusion that the budget will increase by 3 per cent is pretty general and does not tell us much, but that is where the figure is taken from.

I still have not found the increase. Five of the 10 headings under level 3 spending in last year's budget are not in this year's budget. Is there enough spending? Given that last year's budget headings do not exist in this year's budget, are you clear about where the money is going? I am certainly not clear about that.

Shirley-Anne Somerville might say whether there is enough money.

Problems that we have mentioned consistently are transparency and the fact that budget heads change each year. That should not affect the overall totals and I am reasonably comfortable to come to a conclusion about the communities budget as a whole, but it is hard to say whether, in comparing level 3 expenditure in different years, one is comparing like with like. This is not the worst year, but comparisons have been difficult every year because of changes in the categories. This year, some categories have been collapsed together, while others have been disentangled more fully, which means that the details are hard to compare.

The question is whether the budgets have enough money in them, rather than whether they are going up or down. I think that we all agree with the Executive's targets. However, we question whether enough money is being allocated to achieve those targets. For example, under objective 1 on affordable housing, target 1 is to provide 18,000 new and improved homes. That target is welcome, but there is no information in the budget, or in anything else that the Executive has put out, to demonstrate that 18,000 new and improved homes will tackle the problem of affordable housing.

The same holds true for the objectives for regenerating our communities and tackling antisocial behaviour. We welcome the money that is going towards those proposals, but we lack evidence about how much is going in, how many problems will be tackled and how people will benefit. Therefore, I agree that there is a gap between the money that is being allocated and the Executive's demonstrating that that money is sufficient.

Last year's budget allocated £15 million for 2003-04 and 2004-05 for neighbourhood wardens and antisocial behaviour initiatives, and £0.5 million for youth crime. However, I do not know where those figures are in this year's budget. Therefore, how can you say that you feel that those issues are being tackled?

Those figures have now moved to level 2 and are called something else.

The money is impossible to track.

The money has been shifted. I think that the money allocated to tackling antisocial behaviour is now about £13 million for next year and £17 million for the following year. Therefore, the amount is broadly the same as it was in last year's budget. The other thing that confuses us is that the Executive said that about £30 million of end-year flexibility—which is not included in the budget at this stage—will be allocated to tackling antisocial behaviour. If that were genuinely new money, the antisocial behaviour budget would be doubled. However, that money is not included in the budget as it is presented.

That is confusing. I am not sure that I clearly understand that, but I will keep working on it.

I am not sure where we are, either.

That is good to know. Are you convinced that housing and social inclusion issues have been mainstreamed across all department portfolios?

It is difficult to tell—a problem with the communities budget, which makes it more difficult to follow than the Executive's other spends, is that so many cross-cutting initiatives impact on its objectives. For example, on the regeneration objective, money is being allocated for the physical regeneration of housing and community infrastructures. However, it is obvious that much of the spend in other budgets, such as the transport and health budgets, has an impact on regeneration. On the antisocial behaviour budget, the introduction of the Executive's recent consultation document on antisocial behaviour refers to various programmes and budgets that do not seem to relate to, or tally with, what the draft budget says the antisocial behaviour budget tackles.

It is difficult generally to say how much money is going into antisocial behaviour and regeneration, because they are cross-cutting issues. From our evidence, it is impossible to give a simple yes or no answer to the question of whether enough money is going into those issues.

I think that members learned during the Parliament's first four years that we should measure more than just the money that goes into initiatives. The question is whether the allocated money effectively tackles, for example, antisocial behaviour. Shirley-Anne Somerville referred to 18,000 new and improved houses. Highland Council's homelessness strategy states that giving a house to a vulnerable person—for example, someone who has a mental illness—without providing support systems can exacerbate such a person's problem. Therefore, I do not want to know simply about housing figures or the amount of money that is being allocated. Are you satisfied that allocated money is effectively tackling what it targets?

One of the problems is that such money is hard to track. For example, it is difficult to relate housing finance details to housing policy details. That might seem to be a bit lame, so I will put it as a question: does the housing finance system support the housing policy programme? Our answer is that it does not.

Our housing finance system was inherited from previous systems—some of which are from 30 or 40 years ago—which means that we have an irrational system that increasingly piles up initiatives. As a result, it becomes very hard to track things back to each year's policy aims. For us, the question is unanswerable; perhaps the minister and civil servants might be able to answer it.

The challenge that faces the committee is that we have to measure outcomes, not just inputs.

I have become increasingly aware of the fact that the committee raises similar questions each year and that it is very difficult to conclude things in the 45 minutes or couple of hours that it gets each year to discuss the matter. That is why we have asked separately for scrutiny of the whole housing finance system. I do not think that we can examine the system in the short time that we get each year in which to do it, which is probably why we get asked the same questions each year and why we have to give the same answers.

Any suggestions about how to resolve that matter would be welcome.

We will have to agree to disagree about the budget, because I see a drastic decrease in funding where it has been alleged that there is an increase. However, as far as the overall communities budget is concerned, would you reprioritise any of the spending within the portfolio, assuming that you understand where all the money comes from?

I do not think that it is a matter of reprioritisation. Instead, it goes back to an earlier question about the needs that exist and whether spending is addressing them. Because we do not know the answer to those questions, it is difficult for us to say that spending should be reprioritised. One could argue a case for more money; indeed, I am sure that all the organisations that will come before the committee will make that argument. That is a particular difficulty. We have to analyse need, which is something that the budget does not do.

How would you measure that need?

It would require far more scrutiny than a simple budget analysis. As I said earlier, the CIHS asked the committee during the summer to undertake an inquiry into affordable housing. However, such an inquiry would tackle only target 1 of objective 1 in the communities part of the budget. We need that sort of scrutiny for each of the targets that are listed in the budget. As Gavin Corbett pointed out, given the time that we have and the evidence that is contained in the budget, we simply cannot answer questions about the need for affordable housing and how the money is being targeted.

Given that the Executive's policy programme is the best one that we have had for a generation, it surprises me that we are talking about having to make big reprioritisations. The problem is that, globally, the amount of money that we need to support the policy programme is not sufficient. I am not giving a caveat; that is a fundamental fault.

I thought that the objectives and targets set out on page 123 of the draft budget document were a bit bland and vague. Do you think that they provide measurable targets that the Executive can work towards?

I would not say that the targets were bland; indeed, in some ways, they are very good and should be commended. We are definitely on the right track.

However, target 1 simply mentions approving

"18,000 new and improved homes"

without specifying how much money will go towards doing that. Moreover, it does not mention how much public money will be used or how much will be levered in from the private sector. Obviously, increasing the amount of private money that is used will mean an increase in rents and a challenge to affordability. Although target 1 will be met, it is impossible to use it to measure whether it will provide affordable housing because it does not give us any information about the amount of grant money or private sector money that will be used. Although there are very good headline targets, we need much more detailed analysis.

Target 1 on page 123 is the only one that provides any figures. What about target 4, which says:

"We will demonstrate that we are closing the opportunity gap"?

Can you measure that?

I suspect that Mary Scanlon has answered her own question; the targets are very broad. For example, although the target that Shirley-Anne Somerville highlighted is very specific, it does not help us much. That suggests that if the programme is to be delivered we need to go into much more detail on targets. I suppose that if things are set out broadly we will get some general statements. What matters is what lies underneath those targets, but we simply do not have that information.

You said that, if private money is levered in, rents will inevitably rise. Is that right?

Yes. There is a debate, especially within the housing association sector, that rents depend on how much housing association grant is obtained. If a scheme was built with 80 per cent housing association grant and 20 per cent private finance, that would obviously lead to lower rents than if the scheme was built with 20 per cent HAG and 80 per cent private finance. The more private finance that comes in, the greater the impact on affordability.

It can also be cheaper to rent a house from a housing association than to rent one from the council. That is the case in my constituency.

There are considerable variations within Scotland between the cost of renting from a housing association and the cost of renting from a council. Council rents are based on historical figures. I presume that you were referring to Glasgow. Glasgow City Council had specific debt problems, which meant that council rents were very high in comparison with housing association rents. However, it is still the case that, if one compared two housing association schemes that were built with different grant and private sector levels—which would be a fairer comparison—one would see a difference in rents and affordability.

It is clear that other factors operate—I suppose that the impact on rents is simply a question of how the finance package comes through.

I have a question about the confusion in the way in which the budget is presented. Although I have seen great advances in the way in which it is presented, I think that there is more to do.

It seems to me—I invite you to agree or disagree—that we have to present the information twice, which we are not doing. The budget gives us a clear numerical understanding of who is going to be spending money on what, but there are projects, such as the building of 18,000 houses, that involve spending of money by many different civil servants across the Executive. We are never going to understand the relationship between time-limited objectives—in relation to which one knows when the expenditure stream has finished, because one knows when one has achieved them—and responsibilities for things on which money will continue to be spent more or less indefinitely. Do you agree that it would be helpful to the Executive, to those of us who are trying to understand the Executive and to the wider community if things were to be presented in two different ways simultaneously?

Yes, but that would obviously increase complexity. We have wrestled with that issue in the past few years. The attempt to have more headings has been an attempt to make the financial objectives more sharply focused, but it has increased complexity. Stewart Stevenson gave quite a good example—affordable housing is an issue that will involve housing associations, low-cost ownership programmes, rented programmes and perhaps councils as well, although that is unlikely in practice.

Another issue that we have tried to draw attention to is the fact that significant flows of money do not appear in the budget at all, although they sometimes appear in footnotes—Her Majesty's Treasury's commitment to write off debts being an obvious example of that. Capital money that councils are spending directly from rents is now almost as significant as borrowing consent. I do not think that there is a right way to present the budget, but it would be useful to have a more expansive discussion with the minister and officials about the different conclusions that one might draw from different ways of presenting the budget. There is no single answer and presenting information in two different ways would increase complexity.

I accept your point that we need a much more radical and in-depth examination of the adequacy and clarity of the housing budget—the committee might be able to address that at some time. Your useful submission contains many detailed figures. Would you like to focus on any aspects that require clarification in relation to the housing budget? If you put them on the record, we might be able to run with them.

In view of the fact that the committee will be speaking to the minister in the future, it would be useful to explore more fully the flows of money in and out of what used to be called the new housing partnerships, which are now the community ownership budget.

In spite of there having been further discussion, it is still unclear how much money is coming from the Treasury, and the impact that it has on money in the community ownership budget and on money that would have been assigned to the housing revenue that councils were permitted to spend. That is a crucial area for scrutiny, partly because it is such a large budget and partly because it is at the cutting edge of the Executive's housing policy programme. It is an area of obscurity and is, therefore, probably the priority area for further analysis.

If I understand you both correctly, you think that although the Government has a lot of admirable objectives and targets, there is not necessarily a relationship between those and the funding. Will you elaborate on that and give examples of where you think the budget falls shorts of the intentions?

It is difficult to tell. The communities section in the budget contains tables with footnotes that explain them. There are a few paragraphs explaining the Executive's laudable aims, but the text does not relate to the tables. In many cases, the text mentions different spending commitments or priorities that are not mentioned in the tables—the two do not seem to relate. We have to try to understand the budget through the footnotes only. Sometimes the text does not explain the level 3 headings or what policy programmes come under them. There is general confusion about our ability to read through the budget. The text sets out broad policy commitments, but it does not demonstrate where the money is going and how it will be spent.

Would it be possible to set out in the budget what expenditure had achieved in the past? In housing, the budget could say, "Last year they built X houses and repaired Y houses and that cost so many pounds." That would let us see that we are getting value for money and it would measure outcomes, as Mary Scanlon said.

I hope so, but I do not have an easy blueprint for that. We need more than just the annual couple of hours on the budget; we need to scrutinise the housing finance system as a whole, which we have had for almost a century. We need to consider what kind of housing system would support the policy objectives. Currently we have an inherited housing finance system and the Executive describes its policy objectives in a way that fits the system. That is the wrong way around. I am not suggesting that the task is easy or that I have an easy answer, but that creating space to have that discussion should be a priority. I fear that each year we will have similar, and increasingly frustrating, discussions about the budget because we never have the time to address the issues more fully.

What I will say is on outcomes and it ties in with Donald Gorrie's question. We are always looking ahead to the next year, to how many homes are being built and to how many homes have been taken out of fuel poverty. To analyse what happened the previous year, organisations such as ours, or MSPs, have to trail through various annual reports, for example on the central heating programme or the Communities Scotland investment programme, to find out about every target. It is difficult to bring all that together in time for scrutiny of the budget. Although figures are brought together for annual reports, the process does not tie in in such a way as to allow us to say that the targets were not achieved in affordable housing last year and what our concerns are for this year. There is a time lag in getting all the information together so that we can raise our concerns for the next year.

Thank you. That was helpful.

I have a point about presentational issues. The first year that the budgets were presented as they are now, we thought that it was a step in the right direction because it allowed Parliament and organisations such as yours to have a say. We have been looking for improvements year on year and committees, lobby groups and organisations have made suggestions to the Executive about how it could improve presentation of the budget. We do not have an opportunity to compare like with like this year because committees have suggested changes, the Executive has come up with its own changes and groups have suggested changes. Is it time to state that the budget figures will be presented in the same way over a period of time so that it is easier to make comparisons?

That would be useful, but it would depend on our achieving consensus about how the figures should be presented in the long term and I am not sure that we would currently achieve that easily. The Executive might agree to describe the budget in exactly the same way for the next three years, but other organisations might say that the way in which the Executive wants to present the figures would not be useful; they might want the figures to be presented differently. MSPs might want to know more about other aspects of the figures. We must first get consensus before we decide upon a long-term description of the budget, but ultimately such a description is what we need to achieve.

Given that there have been so many changes to the presentation of the budget, is it a worthwhile exercise? You make the point about the time that it takes your organisations to trail through all the different reports and statements that have been made. Is that a worthwhile exercise or is it a waste of your time because you cannot make true comparisons?

I think that the communities budget is a shambles—we need to say that forcefully. I do not know how it compares to other portfolios—I suspect that communities is one of the worst. We will continue to have this problem each year unless that is said forcefully, and unless there is an opportunity this year, or soon, to have a discussion outwith the budget scrutiny process about how we should describe the budget in a way that is useful to different parties. I suspect that the situation would be even worse if we did not have the budget scrutiny process; I would not like to say that we should not scrutinise the budget. However, it is frustrating to find that we are comparing apples with skyscrapers each year—it is not even as good as comparing apples and oranges. The issue must be addressed soon.

I think that parts of the budget are quite frustrating. I read through some of the stage 1 and stage 2 reports from the predecessor committee from last year. Various recommendations were made; for example, the committee wanted a breakdown of the budget for the 18,000 new and improved homes and it wanted to know how the figures would break down each year. We still want that this year.

The predecessor committee also asked for a comprehensive view of housing investment so that effective year-on-year comparisons could be made. We still do not have that, which is frustrating.

There have certainly been improvements since the first budget analysis, but we still have to make changes. It is not just about tinkering around with level 2 or level 3 headings; it is about the details that we are given to explain the level 2 and level 3 headings. That would not make comparisons more difficult; it would make them easier because we would know what was included in the budget headings.

I will make a brief point, on the back of Cathie Craigie's question, about looking ahead and planning ahead.

I am comparing the plans for last year's draft budget to the plans for this year's draft budget; that is the overall draft budget, never mind what is inside it. My concern is that the plans show cuts of £41 million next year from £921 million to £880 million and cuts of £41 million in 2005-06, irrespective of where the budget headings are. I am trying to grapple with cuts of £41 million when we are being told that there is a 3 per cent increase. Is that a problem?

When I talked about the budget increasing I was looking at the plans for this year, next year and the following year. Spending is rising over that period.

But spending intentions have changed from last year to this year. There has been a cut in the Executive's budget plans.

I agree. We tried to draw that out in our submission. A comparison of last year's plans for next year with this year's plans for next year shows that the money has been cut. That is an issue for ministers as well. My understanding is that it is due to a number of things. One is that money for the rough sleepers initiative that was previously accounted for in the communities budget now goes through revenue support to local authorities, so it no longer appears in the budget, although it appears in a footnote. It seems that other sums of money do not appear in the budget as they are now going through revenue support to local authorities. The committee will have to ask the minister about that.

The big change is in the community ownership budget, which is shown in the level 3 figures. The biggest single factor in the explanation for that is the Treasury's additional commitment to cover breakage costs. I would have liked 100 per cent of the additional money from the Treasury to be available in the housing and communities budget, but that did not happen. Some of the money was taken away for other Executive priorities, which is disappointing for us as housing sector commentators.

I clarify that although funding for the rough sleepers initiative is going to another budget, the initiative is still being supported. That is not a cut. The provision still exists.

Exactly. It is a presentational question.

It is a significant presentational question if it prompts the suggestion that the budget has had a big cut. That is different from saying that the initiative is being supported but funded differently.

However, the amount of money to which Mary Scanlon referred for the RSI is just over £9 million, which does not account fully for the matter. The question is partly presentational, but most of the change is to do with community ownership. I agree that the money is still there.

In addition, we welcome the change in the community ownership budget. I am not sure whether I should use the word largesse, but the Treasury has recognised that funding the matter would be useful. Nobody talks about Treasury largesse as a problem, but it is being presented as a problem, when it is positive for support for the communities budget.

I agree. I am not objecting to the money, which is a welcome addition. Our understanding has always been that the Treasury money was entirely additional to the money that the Executive had to spend on housing. Some of the moneys that the Treasury made available for breakage costs have been used to free up money in the communities budget. That is welcome, but not all the moneys have been used for that purpose. Other Executive programmes—I am not clear about which—have benefited from the Treasury's commitment. As we are housing people, members would expect us to want all that money to be retained in the housing budget, because the need is obvious.

I will return to housing investment and probe you on that. We have heard about the targets for 2004-05 of 5,350 new and improved affordable homes and of including properties for low-cost home ownership in the 18,000 new and improved homes that are to be provided over three years. Your submission says:

"While this commitment is welcome, there is a concern that this will not be sufficient to deal with the current demand for such stock."

Do I presume from that that you do not think that the target of 18,000 homes over three years is sufficient to meet the requirement for affordable housing? If so, have you identified targets and their associated costs to meet the need? Do you know what the need is?

The simple answer is no. We do not know the need, but we suggest that 18,000 new and improved homes will not be enough for various reasons. We wrote to the committee during the year to point out matters such as the fact that 200,000 people are on local authority waiting lists and that the number of homes in the social rented sector has reduced by about 250,000 in the past decade because of the right to buy and the lack of new build. That raises concerns.

I ask members to consider their constituency experience and to decide whether that shows that a need exists. Various anecdotal examples are relevant. Only last week, people queued for five nights to try to buy affordable houses in Craigmillar in Edinburgh. It does not take a three-month inquiry into affordable housing to suggest that a problem exists when people reach that stage of desperation to buy homes.

We do not have all the answers about the number of people who require homes. All that we can examine is statistics that we can gather from various Executive sources to prove that a problem exists. That is why we asked for an inquiry into the subject.

The 18,000 new and improved homes are welcome but, as our submission says, they include improved homes, which make a dent in the figure. They also include particular needs housing. Although that is welcome, it makes a dent in the level of general needs affordable housing for rent that is available in Scotland. We do not know how many homes are needed, but we strongly suggest that 18,000 will not be enough.

I note that not all those 18,000 homes will be new homes. Earlier, you said that there was no information to demonstrate that 18,000 homes would be sufficient to tackle the problem. In other words, we do not know where that figure appeared from. Other than having members going round their constituencies and estimating what the need is, how could that assessment be made more effectively in a way that would allow resources to be better targeted?

About five years ago, the Scottish Office commissioned a national housing needs assessment. It was never published, which was a great pity, as it presented a good opportunity to use the figures to consider the forward projection of housing needs as well as the improvement of existing stock.

There are quite rich sources of information. Local authorities have been conducting detailed analyses of need in their areas in relation to the new housing partnership funding. They have been considering stock options and house conditions and so on. From next year, local housing strategies should come up with quite detailed information at a local level. That should fill in some of the gaps. It would be useful if that information could be brought together at a national level. That would allow us to determine whether the figure of 18,000 homes—or whatever figure was being used at the time—was adequate.

There are sources of information; it is not a matter of plunging into a void and trying to gather evidence from nowhere. However, I am not convinced that there is any commitment to drawing that information together.

You are suggesting that the information exists but that research needs to be done to find it and that it would then need to be brought together nationally.

Yes.

The evidence exists at a local level through the new local housing strategies but, as Gavin Corbett said, there is no commitment to tie that information together at a national level and to use it to analyse the targets.

You suggested that the committee could conduct an inquiry in this area, but a different approach would be to ask Communities Scotland to tie that information together and present it to us. If the information is already available, is there a need for a committee inquiry?

A committee inquiry would be able to take a step back from the issue and consider the local housing strategies in a fresh and perhaps more independent manner. We are keen for the Parliament to take a view. The Executive's commitment to 18,000 homes is also a Communities Scotland commitment.

The Executive is committed to gender proofing in relation to the budget. In your submission, you mention that particular needs housing accounts for 29 per cent of the amount identified for this year. Obviously, that addresses some equality issues, but what impact does it have on women? I ask about women in particular as we know that they are likely to be in the position of renting their home, because of issues such as the pay gap and the fact that women heading single-parent households are less likely to be able to afford mortgages. All those issues have to be considered in relation to the housing investment. Do you think that they have been?

The Executive could present examples that would illustrate a commitment to, at least, gender awareness in the budget, for example in the increased amount of money in the area of domestic abuse.

Given that we cannot even agree on what the basic figures are, I think that any gender proofing would be a cosmetic exercise. I do not want to reduce the importance of gender proofing, but I do not think that we are even remotely near a point at which we would be able to determine the impact on women, ethnic minorities or whoever.

The budget contains various detailed examples of equalities projects, such as those relating to domestic abuse. One of our concerns is the need to determine the level of need for such projects. There are various examples of domestic abuse refuges or new accommodation being set up in small schemes throughout the country. There is no doubt that that is welcome, but the explanatory text does not say how many people asked for but did not get the money, what need still exists or how many people still lack a place in a refuge. That information is available from other parts of the Executive; it is just not available in the budget. The equalities section of the communities budget is rather meaningless, because it is a list of separate, individual projects which, although commendable, does not lead to a grand picture of how the budget deals with the needs that exist, such as gender issues.

It also compartmentalises the issue. This afternoon, the Parliament will debate an Equal Opportunities Committee motion on mainstreaming equalities throughout the budget. Everything should be looked at with equality eyes.

In your submission, you say that the communities budget will grow by only 3.3 per cent, whereas the overall Executive budget will grow by 7.3 per cent. You go on to say:

"This is of particular concern following the Finance Committee's recent report into Children in Poverty which shows that the total planned increased for core services which impact on children in poverty, including housing, is well below the Scottish average increase in programme expenditure for the next three years."

I find that rather interesting—if that is the right word. One of the big issues of the parliamentary session will be antisocial behaviour. I want that to include a focus on providing services for children and young people. Your comment is therefore something of a worry. What are you trying to say with it?

We are merely raising the issue and asking further questions of the Executive. That is one of the areas for which we do not have all the answers, because it is difficult to measure whether the budgets are going up or down. In its response to the Finance Committee's report on cross-cutting expenditure in relation to children in poverty, the Executive disputes some of the figures in the report. At this point, we urge the committee to consider the matter further and question the Executive about whether it agrees with the Finance Committee's report and the impact that the Executive envisages on services that impact on children in poverty. We do not have all the answers on that area, but we are concerned about it.

Presumably there is also some kind of gender impact.

Yes.

We are stark about the trend in the budget. In 1997, the Scottish Office inherited the lowest homeless housing budget since the war in real terms. It could be argued that the only way was up, but the budget is still growing slowly. The Executive's response to the Finance Committee's report raises as many questions as it answers. The fact that the budget is growing slowly from a record low means that a real problem still exists. The evidence that Shelter Scotland has from its members and clients is that a real problem still exists. If the communities budget is not keeping pace with the overall budget, that is a major problem for us.

I will return to the targets and the level of need. None of us knows how to put a figure on the need and the targets. The research that you mentioned from, I think, 1995 would be useless now, because it is so much out of date.

Absolutely.

When the Social Justice Committee dealt with the Housing (Scotland) Act 2001, we spoke about local housing strategies, which provide a way to ensure that local authorities measure the wide need for housing. That need would be measured in a local area and then the information would be collated nationally. Are you confident that, when the information comes in—some local authorities are further ahead than others, but by next year, the figures should come together—it will give us a good enough picture to find out whether the target of 18,000 new and improved homes is realistic or does not meet the need at all?

I would be surprised if, at April next year, we have sufficiently well-developed strategies in all areas to make the comparison meaningful. That is the direction in which we should be heading.

Strategy should be a process. I would like to ensure that, over the next couple of years, Government has the clear goal of developing each strategy in such a way as to help to form a national picture. That means that we have to set national targets and a national context. If it is right for national Government to give local authorities a statutory duty to make local strategies, it is reasonable for local authorities and other partners to expect national Government to come up with a national strategy.

Are CIHS members able to meet the challenge of developing such local strategies?

The strategies will become a new source of information. It is too early for us to say that we will have 32 strategies that will answer all the questions. That is more a task for Communities Scotland and the Executive, which, when developing the strategies, must ensure that they meet all the necessary requirements.

The first wave of strategies might not be perfect and we might have to do some tinkering with them, but I reiterate that they will be a brand new source of information. As Gavin Corbett says, the important thing is what we do with that information. I think that we are on safe ground, in that we will get new targets and will be able to question the Executive about why it is not committing more resources to housing. I think that we will do better next year, with the strategies in place, than we have done previously.

Much legislation and many regulations from the first session affect housing. Does central Government provide sufficient support to allow local authorities to meet the new requirements that have been placed on them? Will the funding available allow local authorities to implement the provisions of the 2001 act?

At the level of initiatives, I would say that the answer to that is yes, and I presume that the Convention of Scottish Local Authorities would be of the same view. The new homelessness duties, for example, are subject to two new pieces of legislation. Things are approaching okay with regard to ensuring that there is enough temporary accommodation over the next few years. However, some of the big-picture stuff is still unclear. The extension of homelessness duties and the general duty to provide affordable housing will have longer-term implications. As Shirley-Anne Somerville said, the right to buy means that every year we are making a net loss of affordable housing.

You asked whether enough support is available. We know that new projects are being backed by the supporting people fund from this year, but we do not know how much is involved in that, nor which needs those projects will meet. The jury is therefore still out on those big-picture matters, particularly the overall number of houses for people on low incomes and the level of support required. Once we get a handle on those things, that will help, and we will be able to establish whether the current levels of provision are adequate.

I was going to ask a question about the community ownership budget, but I think that it was answered earlier.

I wish to ask about the measurement of need. Would you agree that the number of people sitting on housing lists is a rather crude measure? In my constituency, people might be on half a dozen different lists. They might be on a list because they do not like their neighbours or because their community is fragmenting. That will not necessarily be sorted out by addressing only housing issues. People's housing needs can be addressed in other ways.

Absolutely. We are not saying that if there are 200,000 people on waiting lists, we need to build 200,000 new homes. We recognise that there are various reasons why people are on waiting lists. That figure is just for local authorities, so it does not include people who are on housing association waiting lists. It is a crude measure but, in the letter that we sent to the committee, we used it with six examples to illustrate the need that exists. Although we are not saying that we need that number of new homes, it demonstrates, together with other statistics, that there is a problem out there.

Do you think that there is an underlying change in attitude towards the kind of housing that people want? This is entirely anecdotal, but my impression is that younger people have more of an expectation of owning their homes than had people of my mother's generation, who assumed that they would rent their homes. Is that still a recognised trend? Do people buy their homes simply because they cannot get high-quality houses for rent, or is there something different happening in connection with what people now consider as their housing needs?

The majority of the population certainly aspire to owning their own home. That has changed over time, particularly through the 1980s. With the right to buy, people see owning their own home as a possibility for them in a way that was not the case in the past. In the hot spots, various people go into the private rented sector or into owner-occupation because there is simply no other option for them. It is right that people aspire to own their own homes—that is why the institute supports low-cost home ownership—but there are sections of society that simply do not have any option other than home ownership, even though that might not be the best option for them.

As an overarching principle, we should perhaps be doing something about the social rented sector. Perhaps the sector should no longer be seen as the tenure of last resort for people who have no other options and who are stuck in housing that they desperately do not want to live in. Generally, we need to ensure the principle behind the social rented sector by increasing the number of people who want to stay in affordable rented housing.

There is evidence of that in my constituency, where housing has been changed round by stock transfer. There are different ways in which property can be managed and people can also aspire to that kind of housing.

The written submission from Robert Rogerson, who will give evidence later, emphasises that the budget tends to focus funds for regeneration on housing at the expense of community regeneration. Is there a danger that regeneration funding within the communities budget is overly skewed towards physical investment, such as housing, at the expense of wider forms of community regeneration?

It would be surprising if, as housing organisations, we were to say yes to that. While we see so much outstanding housing need, it is difficult for us to say that money should be spent on other things. We need to get some of the basics right. We are still living with very poor-quality housing and housing shortages in some areas.

It is also true that some aspects of community regeneration may not appear in the communities budget. I imagine that aspects such as improvements in health outcomes and in educational outcomes might well contribute to the regeneration of an area, by making it a better place in which to live, but they will appear in other budgets. That is hard to trace, so I am not surprised that that point has been made.

As a campaigning organisation, we would never say that housing expenditure should be reduced to increase other aspects of community regeneration. If those are to be increased, you should increase them all. That is why campaigning organisations exist.

You made a distinction between new housing and improved housing. In some of our communities, the housing will be lost to the stock unless it is improved, so improving the housing is almost like providing new build. Equally, the situation must be different across Scotland. I would be interested in your comments on the way in which that is expressed geographically. For example, one of Glasgow's difficulties is that it has housing that people do not want. If a community has housing that people do not want, that has an impact on the community's capacity to regenerate itself. However, it is not simple to sort that out. There is evidence that houses that have been physically improved have then been abandoned because other factors have begun to crowd in.

There are various examples of housing-led regeneration that was in no way as successful as it should have been. After the houses have been regenerated, people may still be terrified to leave their homes because of the antisocial behaviour in the neighbourhood, such as drug taking in the closes. Regenerating the physical infrastructure of the houses is needed because much of it is in poor condition, but that will not solve the community's problems.

As Gavin Corbett said, not all regeneration funding is contained under the level 2 heading for regeneration given in the budget. There are a lot of things in health, transport and other areas. So, yes, you are right that we should not invest only in housing. However, we should not stop investing in housing when we start investing in other areas. If people do not want to live in the houses, the regeneration will still fail. There needs to be a balance.

My understanding is that there is a shortage of housing in rural areas, where it is difficult to replenish the housing stock, but that the problem is different in Glasgow. A sufficient number of houses exist in Glasgow, but they are hard to let. Should there be different strategies for different parts of Scotland?

Absolutely. We must recognise that people do not want to live in some areas, perhaps because of the type of housing there. In other areas, particularly former mining communities, not all the housing that exists is needed, perhaps because an industry has gone. There are bound to be areas in which thousands of houses exist but in which people no longer want to live because there are no jobs or infrastructure. However, that does not mean that houses are not needed elsewhere.

Homelessness might be seen as a different measure of need. I commend the Executive for the Homelessness etc (Scotland) Act 2003, which will give everyone in Scotland a right to a home. However, that act will put pressure on the system and the housing stock. The budget figures for homelessness seem to be fairly static for the three years involved. Is the budget sufficient to ensure that the recommendations of the homelessness task force are implemented fully?

I would not exactly say that the money is enough. The amounts that have been committed for the coming couple of years are reasonable, given the other priorities in the budget, which are needed. The big hit will come outside this budget period, when the priority need system is fully extended. That issue is probably one to be discussed during future spending reviews. At that point, the supply implications of there being many more people who are entitled to housing association or council houses will be much greater than the amount for which this budget allows. That might become a crunch issue in the period beyond 2006.

As I said, the transformation of the homelessness situation depends crucially on the availability of support to keep people in houses. We know how much money has been made available through the supporting people fund this year, but we do not yet know what that money will be used to fund and whether it will address the need. Until that becomes clearer, I will be unclear whether the extra money for homelessness is adequate.

Obviously, Shelter deals with particular people and cases. Is the organisation aware of any unexpected demands that housing and other providers face in addressing homelessness that might require the Executive to consider additional funding support for homelessness issues in the next couple of years? I accept your points about the long term, but have any unexpected circumstances arisen recently?

Many people tell me various things, but I cannot say that a pattern or a big picture has emerged. Practitioners tell me that the many changes in housing and homelessness policy have limited their capacity to drive forward change, such as the development of new temporary accommodation that is needed in the short term and the recruitment of support staff to work with people who have previously been left out. Perhaps that is simply a transitional issue, although it might be a longer-term problem. I suspect that the staffing issue in some housing fields is similar to the crisis with social work staff and is probably a serious long-term problem.

Are the additional houses to tackle homelessness in the short term and the refuges that Shirley-Anne Somerville mentioned earlier included in the figure of 18,000 houses or under housing for particular needs?

That is not clear. I hope that there is a distinction between providing specialist accommodation such as a low number of hostels for supported accommodation and providing X number of new housing association houses. It would be unfortunate if there were a crossover between those budgets.

Your submission states:

"29% of the total … was for particular needs."

Does particular needs mean things such as sheltered housing and not short-term refuges for women who face domestic abuse or short-term accommodation for homeless people?

The figure was taken from Communities Scotland's investment programme for last year. I think that it refers to sheltered accommodation and similar needs, but I will investigate the issue further and get back to the committee. I am not comfortable about giving a concrete answer on the issue today.

That is perhaps something that we could ask the minister as well.

I have a brief question on regeneration. Do you think that the Executive's target of supporting local authorities in developing or implementing proposals for transferring 70,000 houses to community ownership is realistic? Is the budget provision at the right level, given past experience with stock transfer?

It is difficult to say whether that is realistic, as there is no information on what local authorities are included and what discussions have been going on between the Executive and various local authorities. I cannot say whether the target is realistic, as I am not aware of how the Executive came up with that figure.

Maybe I am wrong, but I do not think that Shelter or the institute have got very much out of the budget process. In the conclusion to your submission, you say:

"As in previous years, the budget is as conspicuous for what it does not say as for what it does say."

Here is your opportunity. The budget identifies £24.8 million of end-year flexibility money in the communities portfolio. How do you think that that money should be spent?

I would like to take that question back to practitioners and people who are affected by such things and ask them what their priorities would be. In the absence of information about the amount of support and specialist accommodation for implementation of the homelessness strategy, I would identify that as a priority. As I said earlier, the amount of money that is being made available to tackle homelessness is broadly okay, although I am not saying that another £25 million would not be useful. We are as much in the dark as the committee about whether the provision for homelessness meets need.

That is an impossible question. We could spend that amount of money on each area and still not meet the need. Three of the institute's priorities for the coming years are affordable housing, housing conditions and the private sector. Not enough money is going into any of those budgets. We would want any increase in expenditure to be shared among those.

Thanks very much for coming along. Our session has run over slightly, in recognition of the importance of the issues that have been highlighted.

The matter has not been raised today, but there has been a suggestion in the public domain that the committee is reluctant to carry out an inquiry on housing, despite the compelling arguments for one. We considered the issue of committee inquiries generally in assessing our work load, and we are mindful of the time that we have already spent on housing and our responsibilities in relation to our broader communities remit. It was in that context that we agreed to conduct our inquiry into the social economy—which I am sure that you recognise will have an important part to play in the regeneration that we all seek.

You will appreciate the fact that, although it is the role of housing groups to campaign as hard as possible for what they want the committee to do, it is reasonable for the committee to make a decision about what kind of inquiry it wants to start off with. I am sure that our dialogue will continue whether we are conducting an inquiry into the social economy or a more specific inquiry into the pressing issues that you want to highlight to the committee.

Meeting suspended.

On resuming—

I welcome our second panel of witnesses, who are Dr Robert Rogerson, the head of the department of geography and sociology at the University of Strathclyde, and Stephen Maxwell, the associate director of the Scottish Council for Voluntary Organisations. Members should note that COSLA was invited to give evidence but declined the invitation to attend today's meeting. The witnesses have provided us with written submissions, so we will move straight to questions.

You will have heard the questions that we asked the first panel of witnesses. I am struggling with the change in overall headings between last year's spending plans and this year's spending plans. Fifty per cent of last year's headings have disappeared, and I do not know whether the projects are continuing this year under different headings. I also note that the spending plans for the next two years have been reduced by £41 million, and I am not sure whether that money is being spent elsewhere.

Given your academic background, Dr Rogerson, I thought that you or your PhD students might have been trawling through the figures. Can you tell me whether there is real growth in the overall communities budget and whether that £41 million of cuts is being spent elsewhere?

I wish that I could give you a simple answer.

I wish that you could, too. That would help enormously.

As you heard from the previous witnesses, there are difficulties in tracking money between last year's budget and this year's budget. Some of the sub-headings and caveats in the budget allocate spending elsewhere. For example, £9.27 million a year has gone from the budget for the rough sleepers initiative to another budget that is not in the communities budget. However, I have concerns that there are some gaps that I cannot explain. I, too, cannot track all the money from last year's budget to this year's budget. There are gaps, but there are genuine attempts to reallocate money between headings—which I will address later—that might be positive dimensions to the budget.

Specifically, have you found the £15 million for antisocial behaviour initiatives anywhere in this year's budget? That was a plan for last year that does not exist this year. Is the money under another heading, perhaps?

Perhaps the terminology is the problem, as it suggests a transfer from a budget rather than new resources. It is not clear to me whether the money has been transferred from a previous budget where it was intended to be spent or whether it is new resources. It may be a question of tightening up the terminology.

Okay. Do you think that the levels of expenditure reflect the emphasis that the Executive has placed on the communities portfolio? Do you think that the expenditure is set out to achieve the targets and objectives?

No. As I said in my written submission, I have a concern about the communities portfolio that is partly presentational and partly substantial. The communities portfolio in the budget appears to place a heavy emphasis on housing and physical infrastructure. I have a problem with that. That is one dimension of community regeneration. However, much of the research that I am involved in—and which, as we have just heard, the voluntary sector is involved in—looks towards a much broader definition of community regeneration that is people focused and considers the social economy, skills and lifelong learning as part of community regeneration. That is the cross-cutting dimension of community regeneration.

The budget is dominated by housing, and perhaps that is the substantial issue. However, the challenge to the minister is that if the Executive's rhetoric centres on an approach to community regeneration that includes people-focused regeneration—which it does—the presentation of the budget should reflect that. I am concerned that elements of regeneration in other parts of the total budget, such as health, education of young people and justice, are not linked clearly to the communities portfolio and budget. As a result, although the budget seems to be dominated by housing, it might well not be. The presentation is perhaps imperfect.

I am delighted to hear that you have had the same problems. I do not feel quite so daft now.

Your submission suggests that there is a lack of clarity in funding for cross-cutting priorities. I know that you have almost answered the question about people-focused regeneration, but are you convinced that housing and social inclusion have been mainstreamed not just in the communities portfolio but across all departmental portfolios?

Yes, I am. Over the past year, the Finance Committee has been examining the issue of cross-cutting funding with a particular focus on the voluntary sector's role and its report suggests that there is clear evidence that, as far as practice and allocating funding are concerned, such mainstreaming has been carried out in a proper cross-cutting manner. The difficulty is that the draft budget does not indicate that strongly. One finds snippets of it. For example, an element of the young people budget—I think that the figure is £2.2 million—links up with communities. Moreover, the mention of responses to antisocial behaviour in the justice section links to the communities portfolio, although no figure has been indicated in that respect.

I think that the draft budget demonstrates more the Executive's intention instead of clarity about the actual levels of cross-cutting funding. As I have said, research elsewhere suggests that cross-cutting is taking place; however, it has not been presented in the budget as accurately or as fully as it could have been.

You mentioned the emphasis on funding. Indeed, we keep talking about the amount of money that is going into things. Are we able to set targets to measure how we are closing the opportunity gap or enhancing social inclusion and to check whether the substantial money in the budget is being used effectively to meet those targets? None of us would disagree with the targets, but our consideration is not helped by talk of a lot of money going into housing while the headings are being juggled. Is it possible to set targets in this respect? Are the priorities that you can make sense of the right ones? Will you give us more advice on how we can set spending against the targets?

If you do not mind me taking a more academic perspective on this question, I think that we should be aware that there are two types of targets. First, there are the indicative headline targets that are presented in the budget. Such broad goals are perhaps more difficult to put into more quantifiable and measurable terms. Indeed, it might be undesirable to do so, because it would narrow the focus to such a point that we would miss out on all the cross-cutting benefits that might accrue in aiming towards those targets.

A second set of targets is much more measurable. In community regeneration, we could set time-limited targets that can be linked to particular practice and potential types of funding. For example, we could ask about involvement in certain tasks and about the composition of budget components of different portfolios for specific targets to be met on the way towards meeting the overall headline target. Such targets are being played out on aspects of equality where the budget has already been set. I would like more explanation of how the Executive will achieve those targets and how they are linked to the headline target; that information is absent. However, it would be unwise to argue that everything that is set out in the broad targets should be measurable.

I do not want to stray into other portfolios, because other committees will deal with them, but one Executive target is:

"We will demonstrate that we are closing the opportunity gap for disadvantaged communities in respect of key outcomes for education, health, justice, transport, housing and jobs."

Let us look at the first of those—education. How would you measure closing the opportunity gap in education?

I think that the Executive does that elsewhere, not in the budget summary but under the closing the opportunity gap benchmarks and indicators that it indicated elsewhere, and which were in the budget last year in relation to those goals. It was specified precisely what would be under each of those headings as part of the overall headline. There is a division between the broad headline goal and the specific elements. Another issue is how those link together. That is absent from the draft budget and the documents that have been produced by the Executive.

I understand health and education, but can you measure social inclusion?

You can measure dimensions of it imperfectly. Some aspects of social inclusion are related to how people are involved in communities and to their feelings, goals and aspirations, but those are not helpful in setting budgets. We need to take a view of communities as a whole, rather than the individuals within them. That is the tension between the social inclusion measures that the Executive has pointed to and the way in which it can fund projects to achieve social inclusion, given that projects are focused not on individuals, but on groups of individuals.

So do you have a little sympathy with this committee, which is trying to make sense of a social inclusion budget in which funding is being taken elsewhere and subject headings are changing? Could the budget be presented in a different and more meaningful manner?

If the Minister for Communities is asked to oversee the cross-cutting dimensions of the Executive—and the minister is charged with that—this committee should be able to scrutinise those dimensions. It is incumbent on the Executive to release that information in the budget, since that is the way in which the Executive wants to represent the cross-cutting dimension.

Would you reprioritise any spending within the communities portfolio?

I would give the same answer that you heard earlier. The difficulty lies in identifying priorities when we cannot see them. For example, expenditure on community regeneration is not explicit in the draft budget. Until we know such information, it is difficult to suggest specific reprioritisation.

Almost every budget line in the Executive's regenerating our communities budget goes down in real terms over the next two years. In that context, is the quote from Mary Scanlon that the Executive

"will demonstrate that we are closing the opportunity gap for disadvantaged communities in respect of key outcomes for education, health, justice, transport, housing and jobs"

supported?

If we look at the regenerating our communities element at level 2, and below that at level 3, we see that most of the significant reduction is in the community ownership dimension. The rest of the expenditure is level. We could argue whether level is sufficient, because in real terms that means a reduction. Again, clarity would be helpful. For example, has expenditure on the social economy and community learning been targeted elsewhere in other portfolios? I know that that is not your concern, but that would be the question for the Executive and for the Minister for Communities specifically. The Executive is putting only £1.6 million into that area, despite the emphasis on the social economy over the next two years. However, the social economy includes more than just what comes under the heading of the communities portfolio. The challenge might be to ask where the additional funding, if any, will be spent in other budgets, or to ask what other budgets are providing to assist, for example, the development of the social economy.

If I may, I will add to Dr Rogerson's comments on the social economy and the way in which it is represented in the figures. We estimate that over the next three to five years a budget of about £50 million has been allocated from various expenditure streams to support social economy developments, yet on reading through these figures it is quite impossible to identify where those resources are.

That is one illustration of the difficulties that are faced by those of us on the outside who are trying to make sense of the figures. I am sure that members of the committee face that difficulty as well. When we try to reach conclusions or engage with the budget, we simply do not recognise many of the figures in the budget. We are in discussion with Executive officials about other streams of funding. We are told that they are committed, but we cannot identify them in the document at all. They may or may not be included in the overall figures—it is simply impossible for us to know.

I note that, under the enterprise budget, the number of jobs to be created in the social economy is to be 90 a year—the word timid comes to mind. Perhaps the social economy is not recognised as part of the enterprise budget. Should it not be mainstreamed so that it is not just looked at in the communities budget?

Bits of that expenditure may well be located under other departmental budgets. The problem with the communities budget is the presence of the voluntary issues unit. The budget is meant to take an overview of the voluntary sector strategy and expenditure. In fact, the only figure that pretends to have any overall summary value is the figure for voluntary issues. In one of the tables, the figure is shown to increase over the two later years from £13.9 million to £19.2 million.

We have to set those figures against the level of expenditure on the voluntary sector throughout the Executive and its public bodies, which we know is about £400 million a year. At the very least, the budget would be improved if one or other Executive department were to accept responsibility for trying to gather together the other expenditure streams to provide an overall view of what is happening to voluntary sector expenditure throughout the Executive. The voluntary issues unit is part of the Development Department, so it is the most obvious department to do that.

I am interested in your general point that community regeneration comes not through a focus on the physical, but as a result of people and their experiences. My experience is that, if you talk to people about what is happening in their communities, they say that physical things happen because other things happen, such as their housing deteriorating or whatever.

You heard the response from the previous panel of housing witnesses who said that we should spend money on those other things but only if the money is over and above the spend on housing. Let us say that we were told that the budget has to remain the same, but that the emphasis on where the money is to be spent has to change. How would you make those hard decisions? Do we have to question whether the proportion of the overall budget that is going to physical regeneration is inappropriate or whether it could be better spent elsewhere?

Politically, that is a difficult judgment to make. The SCVO's role is to act as an umbrella body for the voluntary sector, which includes housing associations. We would find it difficult to come to a judgment of that sort. The view of many voluntary organisations over a long period of time, since the days of the urban programme, has been that there is an imbalance in the expenditure on disadvantaged communities and on the regeneration of those communities. For political reasons, it is easier to show results from an investment that is made in the physical structure of communities. It is more difficult to demonstrate hard results from an investment of money in their social improvement.

Many of our members are pretty convinced that an imbalance exists. They worry about the reduction—indeed, the clear cap—in the social inclusion partnership budget, which is shown in the figures. There is also a fear that the development of social capital around the SIPs, which has built up as a result of past investment, might get lost as a result of the absorption of the social inclusion partnerships into the community planning structures. That may well lead to less scope for the continued growth of community engagement and social capital that the social inclusion partnerships have produced.

I am ducking the question to some extent. I am reflecting the views of some of our members, rather than giving a confident judgment of my own.

Do you accept that when we are reflecting on the budget, the easy thing is to say that all the groups should get more money? Is there a consequence to not addressing the imbalance with regard to the effectiveness of the money that you are spending?

Yes, but I do not feel qualified to make that judgment in the name of the SCVO.

Given that I am not involved in an organisation, I can say things that other witnesses cannot, because they are reflecting their members' views. As we said before, the critical point is the need for more local responses. We have to recognise that in some locations, emphasis on the physical environment and the infrastructure of housing might be crucial in community regeneration. I am thinking of some of the more remote rural areas where the lack of affordable housing or housing of the right quality or dimensions is crucial in community regeneration. In other locations that is not the case. We need to have a flexible response to that in the budget. The difficulty is whether, given the headline budgets—we have an example of that here—the budgeting structure and agency structure allow local responses. That is perhaps where the scrutiny can take place. Are we putting the funding in SIPs or Communities Scotland? Does the ratio of funding to each offer the right sort of response and does it enable flexible local responses? We should be asking that, rather than trying to dictate. I hesitate to say that we need to shift to a ratio of 70 per cent to 30 per cent, rather than 80 per cent to 20 per cent. That is not really the issue; the issue is whether we are offering the right sort of budgeting structure to enable local responses.

That is the argument that we must have in order to respond to the points that Mary Scanlon made about outcomes. Putting money in without understanding what happens in communities will not necessarily achieve what we want.

That is true, but we can turn the question on its head and ask first whether we understand what communities need. That goes back to the question of whether we know what housing need is. Equally, we have to ask whether we know what the need is in communities with regard to the social economy and development. How best do we find that out? One of the arguments is that that is where the voluntary sector has a significant role. It has local knowledge and capacity, not only to find that out but to ensure that local voices are heard. That is our remit here.

Mr Maxwell raised an important point. I looked up the enterprise heading in the draft budget. There is money for social economy organisations undertaking a business development review; there is money for training; the third heading is on the number of jobs supported in the social economy. We are trying to measure something that is in another budget. Perhaps some of the £41 million has gone into that. The money for the social economy comes under the enterprise budget and that is what makes it difficult for us to measure it.

If our enterprise organisations recognise the importance of the social economy I will be delighted. Sometimes they do, in a marginal way, so being part of the mainstream budget sends out a message.

We need to know that the money is being measured and spent effectively under another budget heading.

The figure of around £50 million over a three-to-five-year period, which we reckon is available for support of the social economy in one form or another, does not include commitments under the enterprise budget. Those commitments are being made within Scottish Enterprise's budget. I am pretty confident—and I can check this—that the estimates that we have made do not include those commitments. Other figures that would be considered to fall under the communities responsibility are not brought together and identified in the communities budget as being expenditure on and support of the social economy and the voluntary sector.

That is confusing.

I can check that.

Yes.

Dr Rogerson's submission mentions closing the opportunity gap and equality issues. The Scottish budget equality statement says:

"'Equality proofing the Scottish budget is the mechanism for linking the mainstreaming of equality in the policy process with the appropriate distribution of resources.'"

It goes on to state that the Executive seeks

"to ensure steady progress year on year"

with regard to producing a gender-proofed budget. Is there any sign of that happening in the draft budget?

I am probably not the best-qualified person to comment on that, so I will give an ill-informed outsider's view. Gender proofing is not something that instantly springs to mind when I read through the budget.

The convener mentioned the point in your submission about putting people rather than fabric at the centre of regeneration. Your submission mentions

"the proposed childcare and employment initiative … which is to ‘complement' new funding under the SureStart scheme"

Is that a practical example of an issue being targeted by the Executive to get an outcome that may have a gender impact?

There are such examples in the draft budget, but you have to hunt for them. I picked up that example because it pointed to a budget funding a particular purpose, which includes a gender dimension. That is important when we are considering community regeneration. That is one positive example in the whole budget. Other dimensions of the issue are not explicit in the draft budget. In the time that I have had to read the draft budget, I could not track through them and say that I am confident that they have been included elsewhere in all portfolios.

The Scottish women's budget group might want to carry out such an analysis.

I will now ask you a question about homelessness similar to that which I asked the previous witnesses. The Executive's intention to take away priority need over the next 10 years is quite a radical step. I think that we would want to commend the Executive on that, as it will give everyone in Scotland a right to a home, which up until now has not been the case. However, the budget in that area seems to be fairly static over the three-year period. Do you think that the budget is sufficient to ensure that the homelessness task force's recommendations will be implemented fully?

I am afraid that I will give the same answer as the one that we heard earlier.

One of the points that comes out of the task force's recommendations is that homelessness is not a short-term problem and there is not an easy solution within the short term. The challenge will be whether, towards the end of this budget period and the beginning of the next one, the Executive will be able to continue to commit funds, at the existing level or at an increased level, to enable the targets to be met at the end of that time. A start has been made in this budget; I am not qualified to say whether it is large enough in the short term. It is more a question of how the medium to long-term funding is continued. The Executive's statements suggest that it will continue the funding and we must scrutinise the budget carefully to ensure that it does so. The challenge will be whether the Executive will continue to provide funding at this level, or a higher level in 2006-07 and 2007-08, when some of the initiatives will kick in and require the continued funding that the task force points to, but which the Executive's response suggests it has not quite taken on board.

It is encouraging that the commitment has been made for this year's and next year's budgets. The targets that have been set are people focused. It is another example of focusing on people first rather than fabric.

Indeed. All the sub-headings below level 2 have people and fabric dimensions and I was trying to draw that out: homelessness is part of the people dimension. How we fund that dimension, and continue to fund it is important, and it is necessary to make it a priority, with funding going towards specific initiatives and targets, particularly in areas such as homelessness—which the Executive has identified as a necessary dimension of community regeneration—and backed up by significant research.

My question might build on what has already been said. Given that social inclusion budgets are delivered through a number of different departmental portfolios, do you consider that there are sufficient funds in the communities budget to meet the social inclusion policy objectives contained in that section of the budget?

Robert Rogerson may want a little time to think about that. I was surprised and slightly puzzled by some of the figures given for social inclusion. On page 130, in the table entitled, "Tackling Poverty and Helping Vulnerable People", there is a figure of £12 million, rising to £14 million in 2005-06 under the heading of "Promoting social inclusion". I was a member of the Scottish social inclusion network when it existed, I follow the social justice annual report fairly closely when it comes out and I am involved with the voluntary sector's interest across the wide range of social inclusion, but I have no idea what that £12 million for promoting social inclusion actually includes, and nor does the text help me to understand that.

When social inclusion covers such a wide range of actions and policies, it seems slightly absurd to identify a single budgetary heading, "Promoting social inclusion", as has been done here. All sorts of programmes should be contributing to that, but that is just another illustration of the difficulties with the format that the budget follows. I do not know about the other departmental budgets, but some of the figures in the communities budget are difficult to relate to what one understands about what is happening in social inclusion or under some of the other headings. A sum of £12 million for promoting social inclusion seems absurd, but social inclusion partnerships are another part of the social inclusion expenditure. How many of those items does one have to add up before one can make a judgment about whether enough is being spent on social inclusion? I cannot answer that question.

Is that because of the difficulties that we were talking about earlier, with the budget changing from year to year so that it is difficult to track where the money goes?

That is another illustration of the problems with the format, and those issues are being pursued. It may be the case that Robert Rogerson has a clear idea of what the £12 million under "Promoting social inclusion" is for, but I was certainly not able to identify it clearly.

I am afraid that I do not have an answer to that question. Like Stephen Maxwell, I think that the £12 million figure seems ludicrously small in relation to what we are trying to achieve, but that illustrates one of the dimensions of the budget. There are two or three mainstream, cross-cutting priorities for the Executive and it seems appropriate that, if the Executive sees social inclusion as a challenge that it wants as one of those priorities, it should be indicating to each committee and department how different components come together to meet that priority. I cannot answer that question because I cannot accumulate the different dimensions of social inclusion that come under a variety of headings and say, "There's the budget for social inclusion and the things that promote aspects of social inclusion."

We know intuitively that there are some elements, such as the social inclusion partnerships, that should be included in the £12 million for promoting social inclusion. However, I hope, although it is not explicit in the document, that there will be other elements in other portfolios that will support social inclusion, given that it is a mainstream, cross-cutting priority for the Executive. One of the challenges might be to ask the Executive why it cannot just say that social inclusion, like sustainability and equality, is one of the priorities. If it is going to be split up into a variety of areas, the budget should include, even if it is not comprehensive, some of the elements that are scattered throughout the budget statement.

That would be the logical perspective from which I, as an academic, would look at this, given the priority of social inclusion. That perspective does not apply to all areas, but social inclusion is one particular example of an Executive mainstream, cross-cutting priority.

Funding to support regenerating our communities declines over the three-year period. Do you have any views on the allocation of funds in that budget?

The main reason for the reduction is the reduction in the funding of community ownership. The funding is static in almost all other areas, with the exception of derelict and vacant land—an area that is not funded at all this year, according to the draft budget, but will be funded in the next two years. Given the pressures on the budget—and given that this is not the only way of providing funding for the regeneration of our communities, because such funding is implicit elsewhere—the funding is at least static. However, as we heard earlier, the total budget is rising by 3 per cent.

The funding for social inclusion partnerships remains fixed over the three-year period. Is the funding sufficient to meet policy aims?

Social inclusion partnerships have their own targets as part of the funding agreement. The budgets have been drawn up based on estimates of what was needed to achieve those targets. In theory, the moneys available to the SIPs should be sufficient to meet the specific target outputs that the partnerships are committed to. The monitoring and evaluation system will tell us whether those target outputs are achieved from within their budgets.

A wider anxiety—which has existed since the beginning of SIPs—is that the dedicated budgets for social inclusion have always been a very small fraction of total public expenditure within disadvantaged communities. A great aim of SIPs has been to stimulate the co-ordination of public spending within those target communities. How far we have gone towards achieving that increased co-ordination and targeting is an open question.

Another worry for the future is whether the integration of SIPs in the community planning structures will damage the effectiveness of social inclusion spending. Although Executive policy is that money will still be available for specific social inclusion targets within communities, there is a real fear among community activists and voluntary organisations that they will lose some of the leverage that they have achieved through the partnership structures when they are integrated into community planning. That brings us back to consideration of the people dimension of spending in the community. The budgets may still be there in the Executive's plans, but if, as a result of the integration of SIPs into community planning, communities lose part of their engagement and part of their leverage in those budgets, the money may be spent less effectively on the priorities that those communities have identified. That is an anxiety that is hidden by the figures, which show a standstill.

I will be blunt: I am concerned about the level of funding. In the transfer to the community planning process, there will be hidden costs that will have to be absorbed within the static budget. To have to find funding from outside the Executive funding in order to compensate for those costs will endanger what social inclusion partnerships are able to do.

I am not yet clear about the speed of that transfer process or about where it will come in the budget stream. The intention is that we will have community planning by 2006. There will be costs that will have to be absorbed by the budget at some point in the three-year period and there is a danger that they will be absorbed within the grant element of the SIP, rather than their being found through other sources of funding beyond the SIP funding.

I want to pursue two points on the voluntary sector and partnerships that Dr Rogerson made in his submission and which Stephen Maxwell dealt with in his last answer. Dr Rogerson's first point is that someone's power depends on the money that they bring to the table. That is true: the position in which many voluntary sector people feel they are can be compared to the position of the British in Iraq in relation to the Americans.

Would it help if any available additional money was given to voluntary organisations or the local social economy projects by some other route, without removing existing money from the local authority? In other words, would it be better if new money went directly towards strengthening the hand and the independence of the local voluntary organisations? Would that help or do you have any other suggestion about how to remedy the problem?

The problem is less than Donald Gorrie suggests but there is, in my view, greater need for clarity. The funds do not bring absolute power; what is important is to know what one brings in terms of funds and other attributes. The lack of clarity in the budget is important, both at the level that we are scrutinising today and below that level.

It is clear that the voluntary sector wants access to funds that have as few strings attached to them as possible, and which are not filtered through other agencies. If voluntary sector organisations could get their hands on the money that is available for the priorities that are set by the Executive, that would be one route to achieving what they are looking for. It is more important to have clarity than to dress up the issue as a problem, which I tried not to do.

I take a slightly different view to Robert Rogerson on that. In the community context, community activists who represent their communities in the SIPs, for example, feel that the fact that they alone of all the partners do not bring a budget to the table is a source of imbalance in power within what is meant to be a partnership structure. The fact that they cannot put any money on the table means that they are not so well placed to influence spending decisions within the partnership.

I have always believed that devolving to community representatives some of the spending power over the public budget in target communities would be a way in which to strengthen people's contribution to community regeneration, although that is perhaps a policy matter rather than a budget matter. That process would have to be subject to all the necessary safeguards about accountability, representativeness and so on. If community reps had some spending power of their own—even if the sums involved were relatively modest—that would begin to influence the balance of power and the dynamics of the partnership decision-making process, which could make a difference to the process of regeneration.

The second point was about people spending all their time on committees and therefore being unable to do anything useful. I am sure that all of us believe in partnership, consultation and so on in the voluntary sector, but you point out that there is a serious problem. If everyone spends all their time discussing with everyone else what they are doing, we will not increase the product of the additional money that we put in. Do you have a solution to that problem?

That sounds as if you are asking how we would get rid of committees. It is a question of streamlining and mainstreaming certain dimensions. I say that tentatively because I am not arguing for top-down initiatives to get rid of layers of accountability, auditing and practice. As budgets are shifted between initiatives, the tendency is to create committees afresh rather than to use and redeploy existing structures.

My argument is more general. We heard earlier about the way in which levels of spending have been adjusted. The more we shift those around on a year-by-year basis, the more danger there is that when we bring in other bodies, including voluntary organisations, we will end up with new committees, mechanisms and structures without redeploying what we already have in place. That is the point that I was trying to make in my submission and it harks back to the bigger issue of how the budget is being shaped. Regular changes to the budget have implications on the ground.

A new budgeting line of expenditure in this year's budget is for community engagement, which is identified at £5.6 million for the next three years. From April next year, that is going to be spent on something called the community empowerment fund to make sums of money available directly to the priority disadvantaged areas in order to fund communities' engagement with community planning structures. The Executive is committed to making that money available directly to community bodies and organisations. That money is not for public spending purposes of the sort that it was suggested might help to alter the dynamics of the decision-taking process; it is intended to support communities to create structure, develop expertise and develop the necessary skills to represent communities' interests in the community planning partnerships.

The involvement of communities and the voluntary sector in community planning or other partnerships must be properly financed, and I hope that the £5.6 million is the beginning of a line of expenditure that will grow over the years in the name of local participation, engagement and empowerment. If that money is spent correctly, it will help to overcome some of the problems and difficulties, such as exhaustion, that communities and voluntary organisations experience when representing themselves in complex bureaucratic structures such as the SIPs. We welcome the emergence of that distinct line of expenditure in this year's budget.

Does the futurebuilders fund have enough money in it to achieve the objectives of capacity building?

I notice that there is no indication of how much the futurebuilders fund will be in Scotland. I do not think that that figure is separately identified anywhere, although it is mentioned in the text. It is the Scottish equivalent of a sum of money that the Treasury has identified for the UK to use to build the voluntary sector's capacity to contribute to public service delivery.

It is very encouraging that the fund is mentioned as a definite commitment of the Scottish Executive because there was until quite recently some doubt about whether the Executive would use its powers of virement to spend that money elsewhere in the budget, rather than build voluntary sector capacity. We believe that the amount is between £12 million and £14 million over three years. It is a significant addition to the money that is available to build voluntary sector capacity.

I am sticking my neck out, but I do not think that the immediate problem for the voluntary sector in building capacity is lack of money. The immediate problem for the voluntary sector is to get the balance right between building infrastructure and using available resources to open up access to new public services markets. That will depend on how strong the initiative is and on whether the Executive's leadership is strong enough to help open up the health and social care markets, environmental services and so on. The futurebuilders fund of £12 million or £14 million ought to make a significant contribution to that; the voluntary sector welcomes it. It is the first time in public—or in the draft budget—that that money has been dedicated to building capacity in the sector.

Has the Executive set out the right objectives and targets in the social inclusion budget?

I would not look to the budget for the best statement of the Executive's social inclusion targets; I would look to "Better communities in Scotland: Closing the gap", its social justice policy document. The targets that the Executive set in that were produced as a result of a stream of policy development. The Executive now has statistics to back up those targets, so, over the past three years, we have been able to get a much better handle on what is happening to poverty, deprivation and social exclusion. That is an enormous breakthrough for an informed Scottish policy debate and an informed debate about how effective expenditure will be.

In a way, as Robert Rogerson said, there is a bit of a gap between the social justice statement and annual reports on the one hand, and the budget on the other. If there was a way of using some of the information that is available in the social justice annual reports in the budget documents to illustrate how expenditure impacts on some of the problems, that would be an advance that would help our understanding. There might be all sorts of practical problems in the way of that, but the gap is an obstacle to a clear view of how the money is being spent.

I agree with Stephen Maxwell's first point especially. The budget is not the place in which we would expect to, nor should we, see all the specific targets that have been set. That takes us back to the point about the two levels: there are headline targets and there are specific targets. It is difficult for anyone who works in the sector to work between those two levels. After all, those who work in the sector need to be a large part of the audience for the budget. In many cases, they are volunteers or organisations that represent volunteers and they want to know more about the matter. If they do not have knowledge of, and access to, the specific targets and the thinking about the funding that goes towards meeting those targets, they will not work as effectively as they could. For their work to be efficient and effective, the gap between those two levels of targets needs to be filled.

I thank the witnesses for coming and for contributing to our consideration of the draft budget.