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Chamber and committees

Finance Committee, 07 Mar 2000

Meeting date: Tuesday, March 7, 2000


Contents


Bills (Financial Provisions)

The Convener:

Members will be aware that item 7 relates to the Standards in Scotland's Schools etc Bill and the Census (Amendment) (Scotland) Bill. My note questions the value of the role that we are playing and asks whether that role might more usefully be passed on to the subject committees. I would like to hear comments on whether the sort of activity that we are undertaking today would most usefully be done by this committee. There might be some feeling that we should hold on to that power.

Rhoda Grant:

I agree with what the note is saying. However, if the subject committee, in considering the financial memorandum, felt that it was not properly covered in the budget, or had not been budgeted for, it might want to refer it to us for comment. I can see that it would be able to scrutinise the matter better than us, but if an issue came up, it could refer it back to us to consider.

The Convener:

We seem to have assumed that role—it is not set down anywhere. The question is whether we should have that role in future. For another committee to refer the matter to us would be perfectly acceptable, if it considered that to be appropriate.

Mr Macintosh:

I agree with the gist of what you are saying. We have a thoroughly unsatisfactory process at the moment, in that we are trying to make decisions without enough information and we are doing little more than rubber-stamping what the Presiding Officer has already done.

I agree that the subject committees are the appropriate bodies to explore further the financial implications of policies, but I would hesitate before giving up our role altogether. Further to the suggestion in your note, I would ask the subject committees to provide a more detailed explanation or endorsement of the financial implications of the two bills. It is up to the Finance Committee to endorse those budgets.

The reason I say that is that any individual committee—for example, the Education, Culture and Sport Committee, of which I am a member—will be considering and approving the policy, then approving a reasonable cost for that policy. We can all operate outwith our own committees, and we will be endorsing the cost of that policy within the framework of considering the objectives that we are trying to achieve in education. The Finance Committee has a more strategic position and will endorse the cost in the framework of the overall budget. We should not give up that remit.

I agree that at the moment there is not enough information in the two bills. The subject committees should be asked to analyse the financial provisions of a bill and comment on it. Those comments should come before us.

I take your point, but we do not officially have that remit to endorse. That is for the Parliament.

Why are we doing it at the moment?

We just drifted into it. It would seem to be the most obvious place for that to be referred to. It is not provided for in the standing orders.

Dr Richard Simpson (Ochil) (Lab):

I agree with Kenneth Macintosh. The same process that we operate for the budget as a whole should be used in this instance. Subject committees should be asked to comment on the decisions about where money will be found. If additional money is required, the matter should come back to this committee, which would decide where the money should be found.

If ministers have said that money will come from the reserve fund, it is reasonable that subject committees should comment on that. I am concerned that we might end up in a situation in which something that requires additional expenditure is landed on an outside agency without additional funding being available.

We should try to establish working relationships that are similar to those that we have for the budget as a whole.

Do you mean relationships with the subject committees?

Yes.

Mr Raffan:

The memorandum is useful. The current situation is unsatisfactory, but I am loth to give up the power that the committee has. Kenneth Macintosh made a good point about working through the subject committees. I find some of the financial memorandums distinctly unhelpful. The memorandum attached to the Census (Amendment) (Scotland) Bill says that it has not been possible to estimate the costs that would be incurred by the Administration in relation to the inclusion of the additional question. That is not helpful.

The memorandum that comes with the Standards in Scotland's Schools etc Bill says:

"In general, apart from the projected refinancing arrangements . . . there will be few additional costs that arise as a direct result of the Bill."

To be fair, the document goes on to give more detail. We should be working in a devolved way through the subject committees. We should, perhaps, guide them regarding the questions that they should ask about financial memorandums. Reponses could be sent back to the clerk of the committee in a uniform format. In most cases, it is likely that the committee will do nothing, but it would be useful to have feedback.

The Convener:

We do not have the power to ask committees to do that. This committee has assumed that role. A glitch might result from the fact that the subject committees have already expressed concern about how they will fit the budget process into their programmes of work. They must do that, however, but they might not welcome the fact that they might also have to consider financial memorandums. I have not spoken to any members of other committees about that, but some concern was expressed at the conveners group, in particular regarding this year's budget.

Mr Davidson:

I, too, found your note helpful.

Through you and the conveners group, should not we recommend some form of standardised template via which the subject committees could report to us? That would provide guidance for those committees and would be useful to the Finance Committee.

That is what was done in regard to the budget, and the reaction to it was as I said. If the subject committees are to be involved, it would make sense to do as you suggest.

Andrew Wilson:

This harks back to a discussion that we had at one of the committee's earliest meetings. When I seek to promote the Scottish Parliament to people outside the Parliament, I mention the fact that bills have attached to them detailed assessments of costs to the private sector, to local government, to the voluntary sector and so on. Such attachments are very good, but that practice has not always been used. Is that due to the fact that the financial issues advisory group's recommendations are being met only in spirit? As Keith Raffan pointed out, there is no assessment of financial implications in the two accompanying documents to which we have referred. We can make representations to try to ensure that the documents that accompany any bill include a proper stab at such an assessment.

None of the parties that are represented on the committee would get away with publishing manifestos that did not include such information, as is done routinely with bills. The attempts at assessment might subsequently be argued over, but it is not good enough to see a bill that has a range of financial implications being presented without such assessments.

The committee's role is to ensure that the details that we get and the format in which we receive them are adequate. If that was the case, half the arguments that the committee has would not occur. I would not object to rubber-stamping a bill if it contained information that allowed me to make a judgment about it. At the moment, the committee is rubber-stamping bills the financial implications of which we know nothing about.

We need not make a decision today—there is no urgency.

Rhoda Grant:

Subject committees have more relevant information that would allow them to rubber-stamp bills. They will know about financial implications of bills through their processes of scrutiny.

We must provide the subject committees with a form that will allow them to provide information for the Finance Committee. We do not want to make them jump through another hoop if they are satisfied with their scrutiny of a bill. Most of the time we will only examine and note such information. We should allow the subject committees to scrutinise the financial memorandums and then refer any financial problems to us, rather than merely leaving us to rubber-stamp bills.

Mr Raffan:

I disagree. It is important that we establish a process and a routine. It is not a huge burden on a committee to indicate to us that there is a problem. The form could be kept simple so that it does not involve a lot of extra paperwork.

Regarding the Standards in Scotland's Schools etc Bill, the financial memorandum says that costs

"that do arise will tend to fall on local authorities."

That is all very nice. Local authorities complain that they have to absorb the cost of the introduction of bills and of consultations with no help from Government. That is crucial and it is an issue in which the committee should be involved.

Dr Simpson:

That is exactly the point that I was trying to make. The decisions should relate to the people who have to meet that expenditure. If it is a local government issue, the Local Government Committee should ask whether local government will have to meet the cost from within its funds or from other funds that will be made available. If it is felt to be appropriate, the committee should have a debate with the people who will have to meet the expenditure. The same applies to health: if a matter is being passed to a health board to absorb, the Health and Community Care Committee should say that there will be no additional money.

That clarity is essential to the democratic process. For too long, authorities have been asked to absorb great and beautiful new ideas that do not look expensive but which turn out to cost a lot of money. That must stop.

There seems to be general agreement that the subject committees should play a greater role in the process.

Andrew Wilson:

If the subject committees play a greater role, we should ensure that they have the tools with which to work. Nothing in this or in any other bill gives us that ability. I believe that we have discussed this before. If Sarah Davidson advises us who drafts the policy memorandums, we could ask that the format and the detail be more robust. At the moment, no one can make decisions on the basis of those documents.

The Convener:

We can do that. I assume that we would talk to the appropriate officials in whichever department the bill comes from.

Perhaps Sarah Davidson could have a word with some of the clerks on the subject committees, to see how they think their committee might react to the suggestion.

I am reluctant to take up David Davidson's suggestion that I put the matter on the agenda of the conveners liaison group. However, I might do that at some stage.

Mr Davidson:

The clerk could investigate the extent of the responsibility of someone who produces a bill to include a clear financial statement in the policy memorandum. I thought that the standing orders hinted that an indication of the cost of a bill was obligatory.

From my personal experience of organising a member's bill, I can say that there is a requirement to include an indication of the cost. If there are financial implications, the bill is put on an entirely different footing.

If that is the case, why is the Executive exempt from that requirement?

It is not exempt from the requirement.

We have had a useful discussion; we will take the matter forward after we have heard the views of other committees informally, through the clerks.