Finance Committee,

Meeting date: Tuesday, May 8, 2001

Official Report 155KB pdf

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External Research

The final item is on proposals for external research that we will forward to the conveners group. I have put in a number of suggestions, but I am not aware whether any other member has done so. Members have received a slightly more worked-up version of two of the proposals that I had provisionally suggested. I put in three proposals originally. One was to do with green economics and budgeting. One was on how we move towards outcome-based budgeting. Although we have spend a lot of time talking about that, a considerable amount of practical work must be done on how the Scottish Executive finance department deals with outcome-based budgeting.

My final suggestion concerned gender-based budgeting, and a worked-up proposal as to how that might be developed is included in the paper that members have in front of them. That would complement some work that is being done on that subject, partly by the Executive's equalities unit and partly through external research.

Those are the three suggested topics for research. I am not clear, however, about whether we must make a final decision today, or whether we must simply think about the proposals and make a final decision at our next meeting.

The committee could agree at the next meeting whether to go ahead with a proposal; we do not have to do so today.

You have given us three substantial suggestions for research, deputy convener. The equality and green economics issues are both valuable, and they would best be taken forward by the Equal Opportunities Committee and the Transport and the Environment Committee, respectively. Substantial research has already been produced in those areas, and my plea would be that we should repeat the exercise next year, with some research that would be useful for the whole budget and across the Parliament. We can then show that the Finance Committee is relevant to the entire process.

I have not been as diligent as you, deputy convener, in producing a suggestion in writing, but I have one here that I want to put orally. We need something that we can use as a marker, across the budget. The suggestions that have been made are very substantial, but I think that they are best dealt with by other committees.

My suggestion anticipates our inquiry following the inquiry on private finance initiatives—it is on our friend, the Barnett formula. Given the controversies about that formula, which will clearly be on-going, work could be done in trying to get a reasonably impartial take on how the formula operates and on what it does to the budget, both historically and from now on. Such work would help inform the Parliament's ruminations and the committee's inquiry after the one on PFI. That is my suggestion; it is for colleagues to say what they feel about it.

When Andrew Wilson first brought up the question of an inquiry on the Barnett formula last year, I supported him, because it is important for us to have a working knowledge of its intricacies, and for us to transmit that knowledge to the Parliament. I do not think that a lot of people who stand up and come out with comments on Barnett actually understand its fine print or its basis. It will almost certainly become a subject for discussion, as I said when I was talking to Andrew Wilson about it at a seminar some months ago, at which the former Minister for Finance was present. Having spent part of my working life in the north of England, I know very well the tensions that exist down there. People there are going through similar angst. It is important that the Scottish Parliament gets a handle on the process.

To return to the comments on Callum Thomson's paper on suggestions for external research, I agree with Andrew Wilson that the gender-based issue and that of green economics are subject-committee specific at this stage. However, we need somehow to develop an outcome-based budgeting model. That will provide a way for the other committees to do their work in budget terms. They do not always focus on outcome-based budgeting as a front-line issue, but they are very much involved with the practical issues that come under their briefs.

Following our earlier discussion, I felt that there might be some merit in somebody researching the state of play with regard to statistics. I think that it would be reasonable to get the Executive to do that, however, and for the committee not to spend our limited cash on that. I recommend that we press hard to get an accurate snapshot of the current position on statistics. That would be very helpful.

I suggest a strictly factual exploration of the Barnett issue after the UK general election to inform not only our colleagues, but the press, Westminster MPs and everybody else. In the public ignorance stakes, the Barnett formula must be pretty high up: it is the Celtic of public ignorance; it is easily the leader in its field. It would be helpful if a dispassionate view could be reached on Barnett, after which we could all get worked up about it politically. I think that the argument about inviting other committees to consider greenness and equal opportunities in budgeting is reasonable. If they do not want to do that, we could perhaps return to those matters, because they are budgetary issues as well as being subject-committee issues. Either we or the relevant subject committee could pursue them.

I will put in my tuppence worth. The suggestion of research into outcome-based budgeting is the most important one. If we are going to progress the budget process, we must begin to understand what we want from the Executive with regard to outcomes, which is what it is now discussing. We need research and international comparisons. We have had some presentations on places where outcome budgeting already operates. We should get into that in more detail. That is the topic that I would like to support. The reason for my supporting an inquiry into outcome-based budgeting, rather than the Barnett formula, is not political. It is rather to do with the fact that, if we allow the budget process to go on without a further push next year, we will develop a set form for doing things, and I do not think that we have anything like the set form that I would like to see.

For the next meeting on 22 May, we need to have a worked-up proposal for any external research. Two suggestions other than those on the clerk's paper have now come in, for which we do not have worked-up proposals.

There is apparently already quite a lot of research on the Barnett formula which, we should remember, is a fixed formula. We need to be careful that the things that we do are of value to us; Andrew Wilson made the point that it is not about producing more research, but about producing something that is useful to the Parliament. We need to be clear that we are not repeating things or doing things on Barnett that somebody else has already done better. In any case, decisions on the matter will be made next week.

In defence of my other two suggestions—on inquiries on green economics and gender-based budgeting—I agree that some aspects of the green economics inquiry would probably be better dealt with by the Rural Development Committee or by the Transport and the Environment Committee. However, I do not agree that other aspects should be handled by those committees. I say the same about gender-based budgeting, which is a cross-cutting issue that needs to be dealt with by all sorts of different committees. It affects budgets that cut across the work of a number of different committees.

I do not think that the Equal Opportunities Committee—although its members might be interested in gender-based budgeting—would have quite the right focus, which this committee could give to the subject. The proposal for investigating gender-based budgeting is largely about a matter that we spend a lot of time discussing in this committee: cross-cutting issues. That is the case whether we are discussing rural affairs, drugs or the subject that Donald Gorrie talks about—the voluntary sector. This is the same sort of thing, and the way in which budgeting is developed reflects cross-cutting issues.

We need, based on final, worked-up proposals, to make a final decision on the three suggested inquiry topics at our next meeting.

I point out that our timetable for this is fairly tight. The next meeting is on 22 May, and the closing date for submissions to the senior research assessor is 25 May, in order for the proposal to go to the next conveners group meeting after that for final agreement on which projects will be selected. Ideally, it would be best if the committee could agree today on a final proposal, which we can then work up. The paper that gets signed off on 22 May will have to be the actual, final proposal—subject to comments and tweaking. It should not be a matter of members coming with five or six proposals for 22 May, after which we would be left with only a couple of days for tightening them up. We do not have the time to do that.

We do not have any kind of worked-up proposal on at least two of the suggestions, although we do have some clearly expressed views from committee members.

That leaves us on the horns of a dilemma. I am happy to work towards producing a worked-up proposal reasonably rapidly, but given that it is difficult to make a decision without having a proposal before us now, I am open to the committee's views. I am happy to go ahead and make a decision today, but I am also happy to work on a proposal. I am not sure what are other committee members' views.

On the basis of what we have just heard, the one subject on which there has been a common strand over the past few months has been outcome-based budgeting. That might not involve such a complicated piece of work, because part of it will be technical—on how outcome-based budgeting might be applied. We might be able to focus that work quite sharply. If there is a choice in the matter, I opt—marginally ahead of a Barnett inquiry—for doing that.

It is indeed something that we have talked about a lot.

I, too, would be happy to go with an outcome-based budgeting inquiry. I think that all three ideas have merit, and could be passed round other committees, but outcome-based budgeting is central to our discussions and is worth pursuing.

How does the committee feel? Are we happy to make a decision today? Based on what I have heard round the table, I think—

I think that there is a clear consensus in the committee that research on outcome-based budgeting would be useful. My only plea on that would be for us to consider how practically to draw up a firm proposal that would be meaningful for the Finance Committee, which is why I did not support that proposal so strongly at the start, despite agreeing with it. We need expertise in each area of the budget in order to know the outcomes that we are looking for—with regard, for example, to the national health service or transport. I would like that question to be posed to the subject committees, and I would steer the proposal in that direction. However, we might get Richard Simpson to work up a proposal on the basis of the committee's consensus, if it was Richard who suggested it.

I suggested it.

We are in broad agreement that outcome-based budgeting is what we wish to push, but I am a wee bit leery about the fact that it will be more difficult to deliver than to suggest. That, however, is for the drafters of the inquiry remit to worry about.

I could work with whichever member will work on this in drawing up a draft final proposal, which we could then present at the meeting on 22 May.

Do you want to take over on that, Richard? Although I stuck the proposal in originally, I am happy to let you get on with it.

Yes. I am happy to do that, and to work with Murray McVicar.

It appears that we have agreement: we will go for an inquiry on outcome-based budgeting, and Richard Simpson will work up a proposal in conjunction with Murray McVicar, bearing in mind some of Andrew Wilson's comments. I am sure that we all want to be able to do good work or to commission good research that will be valuable and useful. We need to be clear that that is what we are doing. If, at our next meeting, we are not happy with the proposal as it is drawn up, we can make a final decision, although we could change our minds.

I thank members for their attendance.

Meeting closed at 11:22.