Finance Committee, 07 Dec 1999

Meeting date: Tuesday, December 7, 1999

Official Report 216KB pdf

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Expenditure Plans (2000-01)

You have had a briefing paper on the 2000-01 expenditure plans. We want to try to pull something from the briefing with Brian Ashcroft and Stephen Boyle that we had three weeks ago and prepare ourselves for next week's meeting with the Minister for Finance.

I have been asked to point out that because the cabinet meets on a Tuesday morning, the minister cannot be here before 11.30. If we complete the other business before 11.30, we may take a short adjournment during the meeting.

If there are other points on which you require details from the minister to ensure that he is able to comment on them when he comes before us next week, let Sarah know within a reasonable time scale. Sarah, what would be a reasonable time scale for you to transmit those requests to the minister?

By the end of Friday of this week.

So, by Friday at the latest. That will give the minister, or his staff, three days to prepare responses.

Given the time scales and the process that we are engaged in here, and the fact that the report has to be written very quickly after the next meeting, this is a helpful kick-off. At this stage in the process, given that we have not had any consultation or real digestion of the figures, the aim of our report should be, perhaps, to set out our concerns or suggestions for improvement in the manner in which we receive information.

That issue dominated much of the discussion with Professor Ashcroft and Mr Boyle. That could be where we add value at this stage, rather than in commenting specifically on the budget itself. This note is very helpful—almost everything is captured in it. There are one or two exceptions, which we can cover in discussion, but this is a helpful beginning to the debate.

One problem is that Stephen Boyle had been away on holiday, which meant that he and Professor Ashcroft had not been able to co-ordinate as much as they would have liked. They were covering different time scales, which made it difficult to compare what each was saying. For future reference, it is important that we encourage them to co-ordinate, particularly when they are making such a presentation, so that we can get more direct comparisons.

A number of points in the report are not covered here. For example, Stephen Boyle talked about

"the figures that we received being set out in cash terms. The simplifying assumption that I made was that inflation would be identical across all budget headings for the next three years. That is a hugely simplistic assumption. In some components of the budget, such as pharmaceuticals"—

we were discussing pharmaceuticals, so that is my specific point—

"inflation may be much higher and in others it will be less."—[Official Report, Finance Committee, 16 November 1999; c 164.]

That is a crucial point.

This is a serious issue for us. The report should scream, in size 17 font, "Never ever give us cash-terms figures unless you give us real ones", because such figures are entirely useless. I have to spend half an hour deflating the figures, which is something I have not done for three years—it is very painful. Everyone else has to do it too, so it is useless getting cash-terms figures. The document that we received in the consultation process is an insult. The Conservatives ceased doing it at one point because it was so preposterous. The report should scream loudly, "Deflate."

The next issue that was raised by Keith is how to deflate, because there is no Scottish inflation figure. Is it accurate to use UK-wide ones? Take the health programme, where inflation is running at 12 per cent in some areas. How valuable is that? We can now play a role and say to the Executive that it should consider making some suggestions. If health spending increases by 5 per cent but prices increase by 10 per cent, the volume of purchases has gone down. That is disguised within cash-terms figures and, indeed, real-terms figures, which I guess was Stephen's point. These are serious issues, on which we should make our view known. This report gives us the chance to do that.

I am afraid that I will be unable to attend next week's meeting, regrettably, as I have an appointment with Scottish question time in the Palace of Westminster.

The first bullet point on the expenditure proposals report is one that I feel very strongly about, and I questioned Brian Ashcroft and Stephen Boyle about it. The way in which information was presented in the budget statement, particularly the helpful way in which Brian Ashcroft presented the inflated figure for one particular year with his slide, was useful for clarifying exactly what the Government is saying in its programme.

We need clear financial information about which there is no dubiety, and attempts to make something look larger than it really is—which is all that we are getting in the comparison between outturn and new expenditure figures—is something which we should state loudly and clearly that we do not find acceptable as a way to present information. I hope that we can make some strong remarks about that in our preparations for the debate.

Andrew raised the third bullet point. John has now raised the first one. I think that we accept that those should be the subject of a question to the minister. Does anyone want to comment on any other points in the expenditure proposals report or to raise any other issues?

How long will we have with the minister next week? Just an hour and a half, presumably?

Just an hour, I think.

I take it that we will be in committee room 1.

The final decisions on the allocation of committee rooms for next week have not been taken yet.

So it is not the case that whenever a minister comes before a committee, the meeting will always be in the room where meetings can be televised.

It is indeed not necessarily the case: a balance of judgments has to be made.

Will it be in committee room 1 next week?

We do not know yet, but Jack McConnell will attend from 11.30 am, and we are entitled to expect him to be here until 1 o'clock if we need him to stay until that time. There has been no indication that he is time-limited. I therefore advise members to set aside their time until 1 o'clock on Tuesday.

One thing that arose from the discussion with Brian Ashcroft—and I met him in another place later and the discussion continued—was how we handle contingency spending. At the moment, the Government will go off, with permission, and spend up to a certain sum, which will come from all over the place and will be difficult to trail. Professor Ashcroft did not fully explore the point at the committee meeting, but later elsewhere he discussed in more detail how to approach setting up a contingency fund whereby we know in advance what is going on, what top-ups are required and so on. I do not know whether we should perhaps ask the minister about how he views what could be called the flagging procedures for contingency spending.

That is something that we can raise.

It is certainly something that Brian Ashcroft would like to hear more about.

I should stress that there is no obligation to give the minister advance notice of what we are going to ask him. Members are at liberty to raise any question that comes to mind on the day.

Fine.

Or there may be points that members may wish to hold back.

Not yet, anyway. [Laughter.]

I wish to ask for clarification from Sarah on the drafting of the report. Do you plan to take the points that we have been talking about into consideration, Sarah, and how do you plan to expand the report?

I propose to do a draft for members, for consideration at the beginning of next week's meeting, which expands on the points made and reflects on comments made today and in discussion with the witnesses at the previous meeting. I hope that members will be able to comment on the terms of that draft in advance of seeing the minister, and that, after we have heard from the minister, a further draft will be made, reflecting both his response and points made by committee members in discussion.

Time has been very tight for members to comment on the draft. We hope to have a draft ready by 3 o'clock or 4 o'clock in the afternoon. That would have to go for publication by about 7 pm. I hope that, next week, we can discuss practical ways in which any members who want to look at the further draft can make an input to it that afternoon.

It therefore occurs to me that we should not plan to get away by 1 o'clock. Even if the minister leaves at 1 pm, the committee will be required to stay a bit longer to continue discussing how we want to supplement the draft report. If members have lunch commitments on Tuesday, please try to get out of them.

Will we be able to keep the room beyond 1 o'clock?

If not, we can make alternative arrangements.

Are we aiming to finish at about 1.30 pm?

That is quite a likely time, yes, Andrew.

Is that acceptable? We can use the earlier part of our meeting to consider the draft report. Will you circulate it before the meeting, Sarah?

I will do. My hope is that, to facilitate the first and second stages of drafting the report, the meeting with the minister will, apart from any specific points that anyone wants to raise with the minister that we had not covered with Professor Ashcroft and Stephen Boyle, follow the individual points that have already been highlighted. The minister's response to those points could then be worked into a draft fairly easily thereafter.

Are there any other comments on that? Thanks, Sarah.

I think that we should note the work done by the clerks on this. It was very difficult to fit this report in, given the time constraints. We are on course to do it, albeit rather frenetically, but it will be achieved, for which I would like to convey the committee's thanks.