Finance Committee, 07 Sep 1999

Meeting date: Tuesday, September 7, 1999

Official Report 111KB pdf

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Mental Health (Public Safety and Appeals) (Scotland) Bill

There is just one item on the agenda. The clerk has circulated a briefing note outlining the pertinent issues. I hope that everyone has seen that note and had a chance to go through it. It occurs to me, Elaine, that you have travelled here from Aberdeen only this morning. Have you received a copy of the brief?

Yes, I received a copy by e-mail.

Good. What we have to do today is fairly clear and is set out in that brief. The Mental Health (Public Safety and Appeals) (Scotland) Bill having been referred to us, we have to decide as a committee whether a financial resolution is required under the bill, and whether the estimated costs and savings detailed in the memorandum—which appears on pages 20 to 22 of the paper that was circulated last week—appear to be reasonable. We also have the opportunity to consider the terms of the Executive's finance motion. Has everyone seen that motion?

I need a copy.

The clerk has another copy. It is fairly straightforward and we will want to discuss it in general terms rather than as it relates specifically to this case.

Everybody now has the paperwork. This is the first time that we have had the opportunity to consider a financial resolution. Does everyone have the information at hand to refer to?

It is clear that a financial resolution is required. There can be no debate about that. Does anyone want to comment on that general principle? It is also clear that costs will be associated with the bill. As members will have seen from the briefing, the figures are necessarily speculative. It is difficult to make any precise estimate of such costs. The question is whether the figures in the financial memorandum are reasonable. I invite comments on that question.

I want to make two points. I wonder about the estimates given in paragraph 36 of the financial memorandum. They are mathematically correct, but the additional costs of detaining four patients in a setting that contains as many patients as does the state hospital at Carstairs is hardly the same as the cost per patient. That cannot be a correct basis for such a calculation. That is a semantic argument but, mathematically, paragraph 36 is correct.

My greater concern, however, is not about the consequences of detaining the small number of patients that we are discussing, which the memorandum covers satisfactorily. I am concerned about the consequences of the operation of the act within the criminal justice system. As Gordon Jackson and I both pointed out in the chamber, as one door closes another door opens.

The fact that the legislation incorporates personality disorder into mental illness may result in individuals with a personality disorder who have committed a serious or violent criminal offence seeking detention in Carstairs, whereas they may hitherto have been detained in the prison system. Nobody can predict that that will happen, but the Executive is beginning to become aware of the fact that the change in the law may affect the court system.

The Executive may be becoming aware of that, you say?

I think that the Executive is aware of it now. Nobody knows what will happen. The Executive has tried to make the change in the law apply only to the small number of prisoners who need to be retained and to the so-called loophole in the existing legislation, but the law has to apply to everybody.

We accept that. Are you arguing that, while they are still speculative, the figures underestimate the likely costs?

That is what I wonder about. There may be savings in the prison service, but the costs per prisoner in the state hospital are substantially more than the cost per prisoner in the prison system.

I think that Andrew Wilson wanted to make a comment.

My comment was on a separate topic, so we can come to it later.

Richard makes a fair point, which has more to do with the legislation than with the financial consequences. It raises questions about how far we are to judge the financial implications of a piece of legislation. I am of the same opinion as Richard; paragraph 36 seems to be a fair assessment of the likely direct costs. The briefing paper may raise issues about how far the Executive expects us to extend our scope in judging the financial implications of legislation.

Because we are dealing with an unknown quantity, the best thing to do is to flag up to the Executive the fact that, until the matter settles down, we would like to see an annual statement about the outcome of this resolution. That way, an annual investigation could be conducted, either by us or by the Audit Committee. I assume that the costs are an item in the Executive's budget and can therefore be questioned annually by the Finance Committee. That is the best offer that we can make in order to retain scrutiny as the situation develops.

That is a good point. Richard pointed out that the bill could have unintended consequences. It could result in many more people being locked up in Carstairs at goodness knows how much increased cost.

This is emergency legislation, and will be superseded in due course by other legislation. We do not want costs to spiral out of control. We need a method for coming back to this bill and checking that that is not happening.

We must therefore draw to the Executive's attention the fact that we intend to monitor the situation, to ensure that costs are not significantly in excess of the estimates. I am sure that members of the Executive will want to do so too.

It would be useful to monitor costs. The briefing note also suggests that there may be some savings for the police, for local authorities and for the health service. If costs are to be monitored, we should widen our scrutiny to include possible savings. The document states, quite reasonably, that it is not feasible at the moment to come up with any figures.

It is not unreasonable to expect that there will be a report on the costs, savings and additional expenditure across the board.

That is what I am suggesting.

We note that. We are not suggesting that the costs are unreasonable, but we want to keep an eye on them.

My concerns are about the format of the financial memorandum, given that it is a first-off and we are all feeling our way. Rule 9.3 on page 35 of the standing orders sets out what a financial memorandum is supposed to do. I fear, however, that this document does not do quite what it should in terms of setting out costs, time scales and other information as required by the standing orders. The structure of the memorandum does not help us to assess or to judge it. I cannot tell from this document what the maximum possible cost of this measure will be to the budget. We do not know what the minimum cost will be, so that is a concern—

Sorry to interrupt, Andrew, but we have already covered that point. We have said that the cost given in the memorandum cannot be anything other than an estimate. We cannot put parameters on it.

Absolutely. Most public sector appraisals, however, provide upper and lower estimates. My concern is not so much to do with the bill as with finding a formula to which we can return in future. We need to set that out now so that it is established.

We have a fixed budget. This sort of measure will not appear in the Executive's budget, because it is too far down the list of spending. If spending takes place, it will come from somewhere else. We need to understand where it will come from, and that information is not set out in the documents that we have here.

I would like us to give some thought to our requirements for dealing with financial memorandums in the future. Today's business concerns a small item, the costs of which are impossible to judge and must be left to the Administration, but the structure of such things should be set out more clearly.

Can you clarify what you mean by structure, Andrew? Are you saying that the way in which the memorandum is set out is all right, but that it is not specific enough on costs, parameters and, if there is any budget revision, on where additional costs will be met.

Most appraisals in the public sector follow Treasury guidelines by setting out a cost-benefit analysis. We should mirror that in our work so that there is a clear structure. In this case the example of four patients has just been plucked out of the air—understandably—but what if there are more? We need to understand that, potentially, this could cost the public sector much more and therefore that the budget must be able to accommodate it. There must be a slush fund, or reserve, to accommodate the worst-case scenario that Richard outlined.

The bill is a bad example, because it is so specific, but if we are to work with financial memorandums often, we have to be clearer about what we can take from the advice given by the Executive.

That is what I was trying to flag up, although in a slightly different way. I understand Andrew's point about having a banding within which spend should occur, but we are talking about an evolving situation. This is also the first financial memorandum that the committee has received. When we decide that matters should come through the committee, it will be incumbent on us to follow them up annually until we are content that the system has settled down. That is a chore that we are going to have to perform.

Annual review would cover Andrew's point in the short term. We need to see a few other matters before we can reach the very tight, formulaic approach that Andrew wants. Is that what you are suggesting, Andrew?

It seems to me that what Andrew is saying—of course, you can speak for yourself, Andrew—is that bands would have been better than the specific figures that are given in the memorandum. Richard is suggesting something similar because he suspects that the figures are likely to be underestimates.

I can see the benefits of creating parameters, but what happens if the costs begin to exceed them? Do we say that no one else is allowed into Carstairs because that will put the budget over a certain limit? There will be difficulties if we try to be as prescriptive as that.

Quite. My point is that we have a fixed budget; the memorandum implies that extra expenditure will take place and I have no idea where the money will come from. Will it come out of the reserve, if one exists? Will it come from the Carstairs budget or from within the health budget? Those are the issues that should be set out in financial memorandums in the future.

I am not bothered about the specific points here, but—

I would have thought that the budget revision would cover that, when we get that information. I do not know about a separate reserve.

That is why we need a cost-benefit analysis that sets out the potential savings and costs in different bands according to the best judgment of the Executive.

As we scrutinise the whole budget process, we should be able to call for that level of detail on what has happened in a particular area and where the money has been spent in terms of what the committee agreed to be acceptable. We would then know whether the amount was growing or whether it was as had been predicted.

The committee will not, however, get into that level of detail with such small sums, unless it is examining issues of specific concern. We will consider large amounts of money when we go through the budget process. If there are particular concerns about a budget going out of control, we will want to know the details and where the funding transfers are taking place to deal with the matter. However, I do not think that we will normally need to get down to this level of detail.

The committee will have a huge work load scrutinising the budget at a higher level. Andrew's point is that the memorandum must contain some variations so that, at a later date, we can check against those predictions to see what is happening.

I agree with Andrew that the figures in the memorandum are too vague to be much use, but we are trying to be reasonable—to say whether this is a reasonable estimate. It would be good to define which budget the money will come from, although the memorandum seems to state that it will come from various different budgets: social services, health and the legal system. The estimates are very vague, but the point is that they are reasonable, and that is the key.

We need to monitor the budgets to ensure that they do not go out of control, but will that be our responsibility or will it fall to the Audit Committee? I suspect that it will fall to the Audit Committee to consider budgets that accelerate out of control.

Given that the Audit Committee looks back on spending, I think that that is the case. The clerk has just reminded me that there will be an opportunity at stage 2 for members to lodge amendments to probe the figures. The Executive might be able to give more precise estimates then.

Instead of giving fairly precise figures—relatively modest ones—would it have been better for the Executive to double them on the ground that that would ensure that expenditure did not exceed the prediction? I am not sure that that would be particularly helpful. At this stage the figures are not just speculative—they are shots in the dark.

We need to separate the two issues. First, there is this particular memorandum. It is fair to say that it contains reasonable assumptions, although it might have been helpful to consider a best-case and a worst-case scenario, bearing in mind that either end of that spectrum would have been just as speculative as the figures that we have in front of us.

Secondly, there is a separate, more general point—raised by Andrew—about what we would expect to see in a financial memorandum. When we discuss a sum of £276,000, for example, in a budget of £15 billion, we all accept that it will be relatively easy to identify. However, when we consider bills that have financial implications of millions of pounds, or whatever threshold the committee happens to establish, we must have a more definitive indication from the Executive about where that money is coming from. If a bill has financial implications of £5 million, £10 million, £15 million or £20 million, when do we say that we want to see a very prescriptive statement about what budget that money is coming from?

That relates to the more general point raised by George about our awareness of the way in which the whole budget hangs together. I take a slightly different view about the degree of detail that one might wish to go into in that budget and I have harped on about that before in the committee. If some of us want to drill down into the details of that budget to understand how the whole £15 billion fits together, we should be equipped with the information to do so.

When the Executive tells us that the consequences of such and such a piece of legislation are an annual recurring cost of £25 million, from one budget or another, the committee must be in a well-informed position to say that that is a reliable assumption, rather than simply believing what the Executive says. We have to apply a certain amount of independent jurisdiction to ensure that we are comfortable with those assumptions.

This is not a normal situation: we are considering emergency legislation that incurs additional expenditure. Normally, we will study legislation that forms part of the Executive programme and it will be clear where the money will come from and it will be budgeted in the annual figures.

We need to put on record what we expect to see in future legislation.

Okay.

We are really talking about best practice. There will be other bills that are vague. We must ask for as much information as possible. If a bill forms part of the legislative programme, we will get a lot of information. However, we should ask for as much as possible, taking into account the fact that in some cases we will have only best guesses. That is a matter for future bills, rather than for the bill we are considering today.

We want to tell the Executive that we would rather be given parameters than the specific figures that have been supplied in this case. At the same time, in this particular case—which we cannot avoid coming back to—we want to monitor the situation to see how it pans out in subsequent years.

To return to the particular case, I have been told that the approximate cost of an appeal to the House of Lords of £100,000 is a conservative estimate. The cost is based on taking the case to the Lords. Can we ask for advice on whether it would be cheaper to bring the law lords to Scotland? We are talking only about five people in a room.

I do not think that it is the travelling that incurs the cost, it is the solicitors. The daily fees will be the same wherever they are.

It is more than that because, in certain cases, the cost would include the transport of individuals who have to appear as witnesses, custody costs and all the rest of it. In the last two days, people with legal knowledge have told me that £100,000 is a conservative estimate and have suggested that we find a way of checking whether it would be cheaper to bring the court up occasionally. Apparently, the law lords can do other jobs at the same time.

Well, it is worth investigating, although the savings would tend to be marginal. If there are savings to be had, we would welcome that, but I am not sure that it would make a huge difference to the overall budget.

I do not know, but surely it is a valid question.

It is a question to be asked.

If we get to the situation that they have in America of no win, no fee, a lot of cases might be driven by the egos and career prospects of individuals who are prepared to risk it just to increase their profile. We have seen that happen already.

Let us not get dragged onto the subject of egos and career prospects.

If that is the case, this is a fair target. Five such cases a year would take the sum to more than half a million pounds.

Yes, that is a legitimate question to which we can draw attention.

Paragraph 40 of the financial memorandum says that there are likely to be fewer appeals under this legislation. In that case, appeals to the House of Lords are not likely to happen very often and there will be savings of about £40,000.

Yes, and the point was made that, in the House of Commons bill, the cost of legislation was disregarded, although we must take account of that cost in this Parliament.

Although there may be a reduction in appeals to the House of Lords, there is still the question of European legislation. We have been assured that the bill fits with the European human rights legislation that we have adopted, but I suspect that someone out there will be willing to challenge that. There may be costs in establishing the law by judgment.

Yes, that is a point to consider, although, as Kenneth reminded us, we are dealing with interim legislation. It was made clear in last week's debate that the matter will be subject to further legislation following the Millan report. Bearing in mind how long a case takes to get to the European court, by then the bill may well have been superseded. Nonetheless, we must add it to the list of points that we want to be drawn to the Executive's attention.

Does anyone have any further comments on that?

Is it the view of the committee that the memorandum, as it appears, contains estimated costs and savings that are reasonable, and that we are writing to the Minister for Finance with the points that have been raised?

Yes.

Because this is emergency legislation, the finance motion has been published in time for us to consider it. That may not always happen. There is no requirement in the standing orders for the motion to be published at a certain time, other than prior to stage 2; it could be published immediately prior to stage 2 or before stage 1. We may or may not have the opportunity to consider the motion in committee. The motion that we are considering today is broad and I do not think that we have any reason to object to it.

The finance motion mentions

"the following expenditure payable out of the Scottish Consolidated Fund".

There is a possibility that that could be restrictive with regard to certain sections of the bill. If, for example, any amendments with financial implications were lodged, they could be ruled out before being discussed because the sections they sought to amend were not specifically referred to in the motion. My view is that the committee would not be comfortable with that.

We want to make the point that, ideally, we would like an opportunity to consider the finance motion. The Executive is not obliged to put the motion before this committee or to lodge it in sufficient time for us to consider it, but we would not want discussion of perfectly legitimate amendments to be prevented at stage 2, simply because their financial implications were not covered by the finance motion.

We need to be aware of that matter. While I am opening it up to discussion now, we want to be able to draw it to the Executive's attention.

I am pleased to hear what you have said, Mike. We have to have an eye on the financial implications of any measures that are introduced, but I would hate to discover that legitimate proposals to develop legislation fell at a hurdle because their consideration was barred as a result of financial implications. I am pleased to support the line of argument that you have set out, Mike.

It is a question of timing. If a motion referred only to certain sections of a bill, that would be a sign that the Executive was trying to restrict spending in other areas. We must have the opportunity to examine that. How soon before stage 2 could a motion that we were prevented from considering be published?

One would normally expect it to come out in a framework whereby it would go into a business motion. It would always be open to the Parliament to amend that business motion.

Would the business motion be passed within such a short time scale that we could not have a scheduled meeting? We might not even be able to hold an emergency meeting—that would give rise to concern.

I have raised this topic of conversation with the Minister for Finance three times: that of his discussing with you or with the rest of us—even informally—how we can best set up clear lines of communication that will deal with these odd situations, which will undoubtedly arise. We do not pretend that the Executive, when considering its policy, will worry about a committee. When it has considered its policy, it must then consider the role of the committees and how they will be used.

I get the impression that the Minister of Finance is open to offers, at least to have a general discussion about how matters with a financial implication can be seen to be coming to the committee in a reasonable form, so that the committee is perceived as able to do its job efficiently while not unnecessarily holding up the flow of work in the Parliament. You raised this, convener, last week, and we discussed it again at our informal meeting: I think that it is you who has to organise a meeting with the minister and his advisers to get his thinking about how best to approach the matter. We could then consider the matter again at a committee meeting.

I can see no reason why we should not have a standardised or new procedure whereby the motion is published at the same time as stage 1. There may be special circumstances on some occasions when the Executive will not wish to do that, but if the committee could express the expectation that that will be done, that would give us the opportunity to discuss the motion if we felt we had to. If the Executive felt that it would be impossible to do that because of special circumstances, we should be told and receive an explanation.

Would that be an acceptable line to put forward when I write to the Minister of Finance?

Would it be reasonable to put in place, for example, a cross-party sub-committee, including you, convener, which could examine—

We are not allowed to form sub-committees, David—we are not permitted to form them without referring to the Parliamentary Bureau.

For the purposes of discussion, would there be any merit in having a small group dealing with things on an emergency basis?

Not formally, because we are restricted in doing so. However, this committee will, no doubt, meet informally in various places in and around the Parliament from time to time—often purely by chance.

As happens already.

As members are aware, having been in the chamber last week for the debate on the business motion, and as we can see from our briefing papers, the finance motion will be taken without debate. That may or may not be because we are dealing with emergency legislation. For what it is worth, finance motions are dealt with in the same way at the House of Commons.

The question is whether we want to have the opportunity to debate such motions when we think that that would benefit the Parliament. I am not making an issue of the motion that we are discussing today, which was lodged under special circumstances, but does anyone have a view on whether this committee should express an opinion?

I would say obviously not in this case: we do not have enough information and the motion is straightforward and accommodating.

To return to my earlier points about understanding where money comes from and how measures are paid for, we may wish to comment if money is moved from one part of the budget to another—which is not germane to hearing the case for a bill. There must be a case for debating what is happening with the money, because members of the Parliament or the Finance Committee will want to comment on where money is coming from, where it is going and whether it is adequate.

The procedural difficulty is that once a business motion is passed, as happened last week, it may not be possible to change it. A change would require a vote by the whole Parliament. It would be better if the business motion was not prescriptive when it was lodged. We might not feel that there is anything to discuss, in which case a motion could go through very quickly. If, however, the door is closed when the business motion is moved by the Minister for Parliament, it is thereafter impossible or very difficult to change it.

I believe that our view should be that that door should be left ajar so that we can use it when we need to. I am not sure of the mechanics of that, but I think it means simply that when the business motion is lodged it does not mention that it will be taken without debate. Debate on it may not be scheduled, but there would be an opportunity for debate.

I would be concerned if we slipped into a process in which it was assumed that finance motions were to be taken without debate. Debate should take place only when there is a genuine need for it, but there may be times when this committee or political parties wish to pursue a debate on a finance motion. I do not think that we should close off the option.

I have slight concerns about this matter. I would be uncomfortable if we got into big debates on finance motions in the chamber, but there should be a mechanism whereby the committee can debate such motions—this is supposed to be the committee that will be expert on them or have expert advice on them.

You used the word "ajar", convener. I think that that is the right approach. If this committee, some of its members, or you, saw a motion coming up, and felt that it raised issues or had implications, there should be an opportunity to debate it in committee rather than in the chamber.

It is really a matter for the Parliamentary Bureau. Richard is suggesting that the committee has the opportunity to discuss motions. We do already—the question is, what happens as a result?

I am uncomfortable about indicating to the bureau that we are happy, in the normal course of things, for motions to be taken without debate in the Parliament. We should have the opportunity to raise such matters, but if a motion has been scrutinised in this committee I do not think that there would be much value in its going to a debate in the Parliament. I would not, however, want that opportunity to be closed off, which would give Parliament the wrong signal.

I made my remarks in that context. The question is whether we express a view that affects whether a resolution is discussed in the Parliament. It may be that if the Finance Committee's view is that something is fine and there is no need to debate it, it will be expected to go through on the nod, but, once it is put up for discussion, a member could say, "Just a minute, I am not on the Finance Committee and I am not sure about this." The Executive would not be happy and we would not be happy. The general principle of finance motions has been discussed at every occasion.

How do we ensure that we have the opportunity to express a view and avoid the door being closed on every occasion?

Could you, convener, report to the Parliamentary Bureau, whose members are the arbiters, on our view on whether a motion is a suitable—not necessarily controversial—subject for debate?

It is a question of timing. The bureau prepares the business motion. It depends on how far ahead the business is being prepared, but it is a matter of my expressing the committee's view.

If the bureau is taking a decision on whether a finance motion is open for debate in the Parliament, it would be fine if you, as convener of this committee, had the opportunity to be consulted.

I am comfortable with that. Our point is that it should not be the general practice for a resolution to be taken without debate: that that would be acceptable in certain situations but that we would wish to have a view on whether that was the case.

It is almost a case of the standing orders being amended so that, subject to the approval of the Convener of the Finance Committee, the resolution will be taken without debate—words will have to be formulated. It means that, if this committee decides that it does not want to push a resolution out for debate, it is tough on the other members, but it is up to them to speak to us and up to us to speak to them: we are in the middle of all this.

Members would expect to discuss a motion with a committee, and only in exceptional circumstances would a member not have that opportunity. That, if members are comfortable with it, will be the view that we will express to the Parliamentary Bureau about general practice.

Members will see from their briefing paper for this meeting, under the heading

"General approach to Financial Resolutions",

that the clerks have offered to

"prepare a paper for discussion".

Do members wish to discuss any outstanding issues about that at a future meeting? Unless there are any specific points, I suggest that we accept that proposal. I do not know how soon that may be done, but the paper could be presented at a suitable meeting in the near future.

That completes the formal agenda; we will now move into an informal session.

Meeting closed at 10:29.