Finance Committee, 08 Oct 2002

Meeting date: Tuesday, October 8, 2002

Official Report 239KB pdf

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Financial Scrutiny Review

The fifth item relates to the financial scrutiny review. Professor Arthur Midwinter has provided a paper on block allocations, which are clearly an important issue for health boards and local authorities. Subject committees have expressed concern that they do not have adequate scrutiny of such matters.

I ask Professor Midwinter to speak briefly to his paper.

After the meeting with Mr Peacock, who said that we needed to discuss the matter further, the committee decided that it would be helpful if I produced a short summary of the issues. The convener is correct: every year that I have been involved in the process, the Health and Community Care Committee and the Local Government Committee have complained about the lack of information on the uses of money and, in particular, the absence of any serious consideration of outputs. Ironically, the tension is more marked in the Health and Community Care Committee, which is deeply concerned that it is unable to make an informed judgment about the adequacy of allocations to particular types of care or disease.

The Local Government Committee is torn between its desire to support local autonomy and argue against ring fencing and its desire to see what the money is being spent on. We ought to clear up the issue once and for all, because between them health and local government account for nearly 60 per cent of the budget. The Parliament must consciously decide whether that part of the budget is not to be scrutinised in the way that other budget elements are.

I see parallels between the issues that we face and the Convention of Scottish Local Authorities' reply to the committee's consultation on the outcome budgeting research. My concern about the COSLA reply is that we must ensure that we avoid ending up with an outcome agreement framework that is agreed between the Executive and COSLA, which deals with the high-level aspirations that appeared in "Building a Better Scotland". COSLA is looking for well-being and quality of life indicators, for example a 50 per cent reduction in cancer in 10 years.

We need to be clear about the role of the committee and the Parliament. At the moment, it is fairly clear that measuring performance in health is done by the Executive and the health boards, and that committees are not seriously involved. I want to find a role for Parliament, so I suggest that we examine the possibility of setting up a joint working group to take the matter forward. Twice we have asked the minister to deal with that and he has taken the issue away and has not dealt with it. Either the committee should decide to drop the matter or it should be serious about it and get on with it.

Peter Peacock has asked us to consider the matter once again. I suggest that the finance people who deal with the local government budget, the Minister for Health and Community Care, and the conveners of the Health and Community Care Committee, the Local Government Committee and the Finance Committee could thrash out what information is acceptable and what is attainable. For example, in this year's health budget we have information on what the Executive spent on various programmes in 1998, but we have no information on what it plans to spend in the next three years.

Are members happy with the idea that we need to have a mechanism to take the matter forward? We can then discuss what the mechanism should be.

Members indicated agreement.

My feeling is that Peter Peacock is probably the minister whom we would want to be involved, for a variety of reasons, such as his grasp of the issues. I suspect that if the Minister for Health and Community Care were on the group, it would not get much attention, because although the matter is crucial, it will not be what he is most concerned with. I was wondering whether we could get Peter Peacock in combination with senior officials from the health department and local government division. That might be the best combination of parties to bring to the table. I suppose that that is a hybrid of suggestions (a) and (b) in the paper. Arthur Midwinter would have to be involved so that we have expertise available.

A number of issues are buzzing round in my mind following Arthur Midwinter's comments. The Parliament has never got to the point of saying what local government should be responsible for. That is the headline issue when leaving people to get on with it. COSLA's problem in identifying which strand it wants to go down is that we have not made the decision in the Parliament.

We recognise that the Executive deals with health boards fairly directly through the health department, but outcomes are rolled out between the boards and the trusts. No parliamentary committee seems to be involved in the linkage between the boards, which set and agree targets, and those who deliver the targets. They are not in the same loop. There is an issue about the legal relationship between trusts and boards. Nobody has done anything to change the legal position of combined boards—currently there are three such legal entities. We are at an early stage and it would perhaps be useful to consider the structural issues as part of the review.

I think that that can be picked up.

Those two questions are critical, particularly if we consider that there is a desire to allow local government the freedom to take the decisions that it thinks would best benefit communities. However, local authorities also sign up to national achievement targets with the Executive. There must be a way of monitoring whether those targets are met.

In some areas, we do not need to reinvent the wheel. We know that the bulk of authorities underspend on transport grant-aided expenditure, for example, then continually moan that they require billions and billions of pounds to be invested in their road infrastructure. What was the fantastic figure that came out last year? We already have evidence that the rhetoric does not match reality and that people are not living up to their commitments.

The Executive might be in danger of indulging too heavily in rhetoric in saying that decisions should be taken at a local level and that it will not influence local democracy. That raises people's expectations, which then either are not met or are met in a haphazard way. Disillusionment among people is a big problem, as is people's confidence in those who are in public life, in what politicians say and in the enormous figures that are announced. People find the figures difficult to comprehend and then they do not see the expected outcomes. That is a big issue in local government.

Equally, it is a big issue in health. At the moment, monitoring is done by the Executive and the national health service boards, which have a vested interest. It seems appropriate for the Finance Committee—or another parliamentary mechanism—to stand between the Executive and the NHS boards to provide proper scrutiny, otherwise the arrangement is too cosy.

That is particularly true in health. Currently, no complications arise from someone having a separate electoral mandate. We need to have an overview of what is being done in the health service and I do not believe that the Health and Community Care Committee or the Parliament has that.

We must be sensitive to local government's separate mandate, but there are major discrepancies. Tom McCabe highlighted the roads issue, but social work is another. There are major discrepancies across the board and there is a role for the Parliament and the committees in scrutinising what is going on and finding out what is being delivered. We need to do that.

I do not know how or when we should go about implementing the recommendations. The effect of suggestion (a) in paragraph 8 of Professor Midwinter's paper would be that only members of the Executive parties would be involved in the process. There might be a question about whether that affords Parliament its proper role. I do not know whether we want to pursue the matter before the election or later.

We could do useful preliminary work on the issue before the election. I do not know how far we should go down the route of preparing a report.

Is that something that might be better done in a non-partisan way, involving officials and our adviser, along with the appropriate minister, rather than elected members? If it were to involve elected members, we might want to consider the appropriate political balance. I can understand the logic of involving the conveners of the committees, but if Executive members are involved, all that will happen is that they will speak to the Executive.

That is not right.

Two members from each committee could be involved. We could get over the problem that way.

Alternatively, the matter could be left with officials. Rather than being involved at this stage, members from all three committees could take part in a joint meeting to consider the report.

That is quite a good idea, up to a certain point, but with the best will in the world, we all run into times when it is difficult to be politically objective. We require a much higher degree of objectivity on both matters. It might be helpful if a piece of work were taken to a certain level before the politicians become involved.

We could say that the Finance Committee wants to proceed in a certain way. Does Arthur Midwinter agree with that suggestion?

My understanding is that you are suggesting that the spadework be done between the Executive officials and ourselves and that we take the matter forward to the stage of agreeing a paper. As long as the convener and Peter Peacock agree that that is what will happen and agree the remit and what is expected of us, we can bring a paper to a joint meeting thereafter.

At that stage, because the report will cover health, local government and finance, it may be necessary to have a joint meeting or to arrange to deal with the matter jointly. We may say one thing, the Local Government Committee might want to deal with the situation in a different way and the Health and Community Care Committee might want to deal with it in yet another way. We should take parliamentary scrutiny forward; that is what this is all about.

It might be useful to have an interim position in place for the start of the next budget round, because it would need to inform that process.

I suggest that we agree to authorise the convener to write to the minister to indicate what we would like to see done and to ask him for his views by return. The convener would kick off an interface between himself, on behalf of the committee, and the minister. Until we go through that process, Arthur Midwinter will not be in the loop to do anything other than work that is directly for the committee.

That is fine. I can easily do that. The burden will fall on the clerks and Arthur Midwinter to take the matter forward.

It will make a difference once the officials know that the process has political backing. Currently, we have discussions with the finance officials, who are our appropriate point of contact. When we get into health matters, they immediately say that they will have to discuss the problems with their colleagues in the health department. On two occasions they have not come back with a response.

That is why you wanted to have the convener's authority.

At the previous meeting, Mr Peacock stated clearly that we should examine the matter and get a clearer picture of what is possible.

In the first instance, we should give authority to the convener and Professor Midwinter to engage in the process. We should also refer the matter and the paper to each of the other committees to seek their support in principle for the approach, with a view to the process being dealt with in such a way that politicians are not initially involved. Thereafter, we will take a joint approach.

I do not think that we will say that politicians will not be involved, because ministers will want to see what happens. We are saying that a technical exercise will be carried out and that the matter will come back to us in due course.

Are members happy with that?

Members indicated agreement.