Finance Committee, 07 Oct 2003

Meeting date: Tuesday, October 7, 2003

Official Report 261KB pdf

---

Cross-cutting Expenditure Review

The third item on the agenda is consideration of our approach to a cross-cutting review on economic development. In particular, we want to consider, in principle, whether to appoint an adviser. Members have a copy of a briefing that the Scottish Parliament information centre prepared and a note from the clerk. I invite comments from members.

I do not think that we can resolve the issue today, in view of the time. I ask that a paper be prepared for next week that might help in the discussion that we need to have. I will run through table 1 of the Scottish Parliament information centre briefing, which outlines the amount of money that is spent on economic development because, in my view, that is the key to the whole discussion.

The 50 per cent of the budget that is spent on enterprise and lifelong learning should be split up into money that is spent on the enterprise network, money that is spent on further education and higher education and money that is spent on industrial support at the hands of the Executive. That would demonstrate that less than 10 per cent is spent on the enterprise network, 38 per cent is spent on further and higher education, 2 per cent is spent on industrial support by the Executive, 10 per cent is spent on transport and less than 1 per cent is spent on VisitScotland.

It is interesting that more than 5 per cent is spent on rural areas and that 8 per cent is spent on the common agricultural policy and so on. A pie chart that examines the total spend and which breaks down the enterprise and lifelong learning budget heading would let us focus on the big issues, not least the 40-plus per cent that is spent on education. That would facilitate a discussion next week about what we are looking for in an adviser. The fact that we spend as much, if not more, on the CAP as we do on enterprise bodies would make for an interesting discussion, especially as we are the only committee that can reflect on such matters. If the clerks could provide that information for next week, we could revisit the inquiry's scope then; I will not expand on my views on that at the moment.

Our next meeting is on 28 October. Do other members have comments?

I am not sure whether it would be possible, but it would useful to find out how that budget is divided within Scotland. At one of the committee's first meetings, I raised my concerns about the mechanisms for dividing up economic spend throughout Scotland. I think that that is done in a number of ways and I am not certain that the process is coherent. As the Finance Committee, it is part of our role to consider that issue.

Fisheries, VisitScotland, enterprise and transport are all headings in the table to which Wendy Alexander referred. In all those areas, there are different means for dividing up spend throughout Scotland. An indication of the division of spend in different areas of Scotland would be useful because it would make it easy to examine growth and results in those areas.

I agree with Wendy Alexander that we should not move to appoint an adviser at this stage; I hope that that is a correct statement of her view.

On the more important issue of the inquiry's remit, which could be infinitely broad, I agree that we must consider spending geographically and along the current departmental demarcation lines. I would like to us to have an opportunity to consider other matters that impact on the economy. I hope that we can have a more detailed discussion of that—perhaps we could have a lengthier paper. For example, the burden of taxation is obviously key to economic development. The impact of regulation, not least regulations that are passed by the Scottish Parliament on business, is a key indicator that we read about from business commentators week in and week out. I hope that an inquiry will be able to cover regulation and taxation and I hope that members will concur that we want a rounded inquiry if we are to have useful outcomes that we can use to assess our performance.

There is always a danger with inquiries that are as broad as this might be that we set our goals too wide and try to examine too wide an area of interest. I am less interested in what Jeremy Purvis said about the regions than I am in the focus on the key sectors, because they were identified in "A Smart, Successful Scotland". Funding has gone into the different sectors, but we do not have the details. It would be interesting to find out more about the level of funding that has gone into the sectors and about the outcomes. What success has the funding produced? That is crucial to the way in which things might be funded in the future. If we are to take decisions about putting money into key sectors in the future, we should ask how successful it has been. Has it started to succeed?

That is about scrutiny of Scottish Enterprise and how it divides its budget. It would be excellent if we could expand on the work done by the Scottish Parliament information centre to compare the situation with other devolved areas in the world. I do not know if that is stretching it, even if it is just a paper exercise. I am sure that research has been done; I am thinking about Quebec, Catalonia and some of the Länder. That would address some of Fergus Ewing's comments about different systems.

Our difficulty is that the exercise could become almost infinitely large. We need to narrow it down and to identify particular themes. Members want different things, but we have to reconcile those. Members must recognise that we cannot do everything.

The other important point is that the review must be cross-cutting. For us simply to replicate what legitimately should be the work of the Enterprise and Culture Committee would be entirely inappropriate. Our focus has to go well beyond the enterprise budget and look at the ways in which the enterprise budget links in with other budgets, such as the transport budget, in order to make our role appropriate.

On the appointment of an adviser, I do not think that at any stage there was a specific proposal to move forward. The suggestion was that, in principle, we recognise that we will need an adviser so that we can make progress. I was asking for agreement in principle so that we can request that an adviser be financed by the Parliament. The process of deciding who the adviser should be and how we should select them is a separate issue, which we can take on after further discussion. Are members willing to agree in principle that we should have an adviser, so that we can go through the bureaucratic process of placing a request, and that we will return to the specifics of how we appoint the adviser and what their remit should be at the next meeting, when we have a paper? Is that acceptable to committee members?

Much along the same lines, could we also ensure that we get an adviser who can take a much broader outlook and who can, for example, advise us on the impact of fiscal autonomy on everyone's outlook?

The discussion about what the adviser will do will be dealt with when we come to it. We are not at that point yet.

As an adviser, I say that the wider you make the remit the more difficult it will be to find one adviser. People who are experts on fiscal autonomy are not necessarily experts on economic development or some of the other topics that have been suggested.

I presume that we are just agreeing that a paper should go to the Conveners Group to ask for funding for an adviser. We are not even looking at the scope or remit of the inquiry, or at the kind of qualifications or experience that we want the adviser to have. I would have thought that that was straightforward.

Yes. Do we agree with what Kate Maclean suggested?

Members indicated agreement.