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The third item on our agenda is our continued consideration of the budget process 2009-10. I am pleased that the Minister for Europe, External Affairs and Culture, Linda Fabiani, is with us today. She is accompanied by Wendy Wilkinson, the deputy director of the Europe, external affairs and culture directorate, and David Seers, the head of the cultural excellence team in that directorate.
I am happy to be here to talk about the culture aspects of my draft portfolio budget for 2009-10. Obviously, as I have been granted only four minutes in which to make my introductory remarks, my initial contribution will be somewhat limited. However, I am sure that we can explore any aspect that members wish.
Thank you for your opening statement, which gave us a helpful overview of your budget commitments.
Your opening statement gave us some clarification on some of the key areas. Obviously, there is a big and challenging world out there and I think that some of the things that are happening are very exciting. I want to talk about the difficulties that we faced in June around the transition costs, when you revised your estimates of £700,000 to £1 million. Could you explain the reason behind that revision?
I am happy to talk about that, but we should bear in mind that the Creative Scotland Bill has fallen. The Finance Committee clearly expressed concerns about the bill's financial memorandum, and we agreed to take those concerns on board. We did more detailed revisions and presented the costs, as we saw them at that point, to the Finance Committee.
I asked the question because of media speculation that the transition costs will be more substantial than expected. Could you comment on that? If those reports are in any way correct, we are talking about a considerable increase on the initial estimate.
First of all, I must say that those media reports are spurious and have no basis.
Are you confident that there will be no major inflation of the figure that you gave the last time you revised the costs? Some people are talking about an increase of five to seven times the figure.
The Creative Scotland Bill fell in June and is no more. There is a new process, which involves the forthcoming public services reform bill. The transition costs will be included in the financial memorandum to that bill.
You are right to say that the Creative Scotland Bill fell, but there are still concerns about the transition period, and there is comment in the media that there is going to be a considerable increase in the cost. However, I see that you are confident that that is not correct and that you believe that the reports are spurious. If you were prepared to put that view on the record, that would be an important guarantee to the committee.
As I explained prior to coming to the committee, I cannot discuss details of the transition costs of creative Scotland. That would be disrespectful to Parliament, as due process requires that the matter be dealt with in the financial memorandum to the public services reform bill, which will be produced at the appropriate time.
When is that likely to be?
I believe that the public services reform bill will be introduced at the beginning of next year.
You said that you are allocating £5 million to the innovation fund over a two-year period. Is that money in the £55 million for 2009-10?
Yes, it is.
If it is included in that money, it is not new money. It is part of the budget that was already allocated. It is core funding.
No. It was not part of the spending review for the three years. I announced the creative industries innovation fund to Parliament in June. That is the fund you are talking about.
If the innovation fund is additional money, should the budget for 2009-10 not be £60.1 million, rather than £55.1 million?
David Seers will explain it. It is obviously part of the revisions of budgets that go on all the time. That is normal practice, particularly in the culture budget, because of issues that arise and the nature of the culture portfolio.
I draw a distinction between core funding for the Scottish Arts Council and Scottish Screen—the component parts of creative Scotland—and the overall figure. The innovation fund is not part of the core funding, but it is part of the overall figure. As we explained in a letter to the convener in December, the fund is part of an overall line that is labelled for creative Scotland and includes not only core funding but a number of other elements, including the expo fund, to which the minister referred in her opening remarks.
That does not seem to mean that the £5 million is new money.
The 2 per cent efficiency savings are based on the core grant, so the fund is not part of that.
So there is no need to find 2 per cent efficiency savings on that money. That is helpful.
In the debate in which I announced the innovation fund, I announced that £100,000 from the cultural enterprise office will be transferred from Scottish Enterprise to creative Scotland. That will show up in the budgets that the committee receives after the revisions that take place as normal practice throughout the year.
A press release accompanying the First Minister's legislative statement to the Parliament on 3 September stated:
We are working on that as part of the work on the proposed public services reform bill. I can say that if there is a requirement to alter the budgets that have been presented to the committee, as is normal practice, we would inform you of that as appropriate. I hope that that answers your question.
I have a question about moneys for the traditional arts and the Scots language. I am sure that the minister is well aware that that is a difficult issue at present and that the Scottish Arts Council recently offered a very welcome lifeline for the Scots language, for six months only, while the audit of the Scots language is completed. Can you confirm that the audit will look not only at the Scots language, but at financing of support for the Scots language? If that is the case, are you confident that your budget has the flexibility to allow you to follow through on any funding implications that might arise as a result of the audit?
That is a welcome question. The Government puts a high premium on indigenous Scots language and arts, so that is a welcome lifeline that the Scottish Arts Council has offered to both the Scottish Language Dictionaries and the Scots Language Resource Centre Association. It has also encouraged the three traditional arts groups to apply for funding.
I accept that you do not want to pre-empt the findings of the audit—that is the right approach for you to take. However, people who work in the sector are anxious about their funding. You will know that only too well, as I am absolutely positive that they are making representations to you just as they are making representations to members of the committee. Although they welcome the six-month extension, it offers them only a bit of a lifeline. The difficulty is that they may still have to make people redundant, and people who once worked with those organisations are taking other jobs because they need some certainty—they are concerned that their posts will no longer exist.
I will lay out the background to the current position. Last year, when I became Minister for Europe, External Affairs and Culture, I inherited the existing funding regime for all the organisations that you are talking about. Prior to that, there had been some ring fencing in relation to the traditional arts, which a review of the Scottish Arts Council back in 2006 had removed, putting those bodies on the flexible and foundation funding regime that was introduced at that time.
The audit is focusing exclusively on the Scots language. You could do something for the arts right now. Is there a reason why you have chosen not to do something for our traditional arts at this time?
I refute the suggestion that we do not do anything for our traditional arts. The situation that I inherited was that there was no guaranteed funding for the sector. I work with what I am given—there is recognition across the sector that I cannot change things overnight. I am not suggesting that you are saying this, convener, but there is a view that the Scottish Arts Council does not fund traditional arts, which is not the case. It is unfair to accuse the council of that, if we consider how the fèis movement has been funded and the relationship that has been built up over the years between Gaelic arts and the council.
Do you have a rough timetable—I will not hold you to it—for when you anticipate being in a position to give funding certainty to the organisations that are experiencing pressures at the moment?
I am working on that. The importance of our indigenous arts and languages has been at the forefront of our minds since we came into government. We have already taken many steps to improve the situation and will carry on doing that.
My question is about the future of creative Scotland under the new bill that the First Minister has announced. Can you reassure us about how the detail of the financial memorandum to the proposed public services reform bill will affect the budget for creative Scotland this time next year?
As I said to Mr Gibson, if there are substantial changes to the culture budget—generally, such changes are considered twice a year, at the October and spring reviews—I will feel obliged to report to the committee in the normal way.
Do you anticipate that the proposed bill will affect creative Scotland's budget?
The culture budget is always flexible. It is due process for the proposed bill to come before Parliament at the appropriate time. At that point, I will be more than happy to inform the committee of any changes to the culture budget. I have said previously that I am more than happy to appear before the committee at the appropriate time to talk about such changes. I stand by that. It is inappropriate for me to comment at the moment.
Do you agree that there are still interesting debates to be had about the lead role in creative Scotland and that those may impact on some of the budgetary commitments that must be made in the future?
The transition team is continuing its discussions. My in-house team meets the transition team regularly, and I have regular meetings with Richard Holloway, the chair of the joint board. Discussions are on-going in preparation for the creative Scotland element of the public services reform bill.
Do you think that some of the difficulties with the bill that fell in June can be overcome through the discussions that are taking place at the moment?
I do not think it is helpful to look back to a bill that no longer applies because it fell. Parliament voted down the financial memorandum and caused the bill to fall, despite Parliament agreeing unanimously to the bill's general principles. The way forward is to look at how we can best develop creative Scotland as an agency for future arts development.
People are, however, looking for reassurance so that we can move forward. You are entirely right about the cross-party support and that many good things are happening, but we have to ensure that the financial backing exists to allow that development. As you well know, in June there were difficulties around some of the slight contradictions in the bill, so Parliament decided that that had to be reviewed. Are you confident that, since then, the discussions have been helpful in allaying some of Parliament's concerns?
I say again that the due process of Parliament is such that the issues will come to Parliament at the appropriate time as part of the Scottish public services reform bill.
Do you accept that that is a bit frustrating, particularly for the members of this committee, which is responsible for cultural matters and for scrutinising what the Government does in that regard? The Scottish public services reform bill might well not come to the Education, Lifelong Learning and Culture Committee, although it might be a secondary committee, if the lead committee thinks it appropriate. We might not be able to give the bill appropriate scrutiny, and we might not be able to use the expertise that all members of this committee developed through our scrutiny of the Creative Scotland Bill to make sure that the Scottish public services reform bill gets creative Scotland right.
As I said clearly in the run-up to this meeting, I am unable to talk about the detail of the Scottish public services reform bill. However, I have said that I will be happy to come back to the committee at the appropriate time for specific discussions about creative Scotland, if the committee feels that that will be useful.
I do not think that I asked a specific question about the detail of creative Scotland but about the rightness of the policy that creative Scotland should be formed under the Scottish public services reform bill and whether creative Scotland should have a bill in its own right.
I am sorry. I do not understand what you mean by that.
I suggested that my question did not ask for any detail about creative Scotland. I was asking about the Government's policy approach, which is that the establishment of creative Scotland will be contained in a bill whose scope will be much wider than just creative Scotland and will cover public services, of which creative Scotland is one small part. As the minister who is responsible for culture, are you content that legislation for which you have direct responsibility will be contained in a bill for which another minister will have responsibility?
I would have preferred that Parliament had not voted down a bill that all members agreed with—and which I inherited from the previous Administration. It was right for the Government to act quickly to give some comfort to the sector, which has spent many years being told that reforms were going to happen, and being subject to all sorts of reviews and consultations but seeing no action.
Convener, I apologise to you and the minister for being late; I was held up in traffic.
It is hugely significant and it has been welcomed by all 12 of the Edinburgh festivals. In the first year, we funded 10 of the festivals. An example of the use of the money was for Smetana's opera, "The Two Widows", which was performed by Scottish Opera at the Edinburgh festival. There was also the publishing of a book by four renowned Scottish authors, which is being sent out internationally. It is all about showcasing the wonderful talents that we have in Scotland.
Thank you. That was helpful.
I have a general question about the overview of your budget. Your budget for 2009-10 is £55.1 million. I meant to say creative Scotland's budget—
Right—I thought you had cut my whole budget for a moment.
Sorry. Could you give us a breakdown of how you anticipate that £55.1 million being spent?
Yes. There are the core grants, which are equivalent to the Scottish Arts Council and Scottish Screen grants. We then have—
Could you tell us how much that constitutes, please? That would be helpful in allowing us to track the budget.
Of course. The core grant for what is currently the Scottish Arts Council is £32.296 million for 2009-10. There is the youth music initiative, which is a restricted set of funds for the Arts Council. That is carried on from the previous Administration, and amounts to £10 million. For 2009-10, there is also the cultural co-ordinator budget. That is its last financial year, and the budget for that comes to £2.15 million. Arts and business, which I think is an extremely important component of what we do, is £400,000. That is separate from the Proceeds of Crime Act 2002 money that arts and business is helping us to expend in special projects. Depreciation always exists: under the Scottish Arts Council line, it comes to about £70,000. There is a transfer from the health budget of £180,000.
Claire Baker has a question.
I should have said that if you want further detail on the figures, we are more than happy to give the committee a written breakdown.
That would be helpful.
I can also give you that for 2010-11, which will mean that you have a picture of the year before and the year after. If anything arises from that on which you wish further information, do not hesitate to ask, and we will supply you with it.
Thank you. That would be helpful.
Once we have that breakdown, it might answer this question. I understand that, according to the 2007-08 budget, the Scottish Arts Council and Scottish Screen budgets were due to total £59.4 million. In the figures that the minister has outlined, the Scottish Arts Council and Scottish Screen combined have been allocated £32.296 million in core grant plus another £3.24 million exclusively for Scottish Screen. Can we be given more detail on those figures?
Are you talking about what we inherited from the previous Administration?
In the 2007-08 budget, £59.4 million was to be allocated next year for Scottish Arts Council and Scottish Screen combined. I am asking for a breakdown of the £55.1 million. The amount seems to have dropped. Is my understanding correct, or have I missed something?
Thinking back, I remember that the top-line allocation for creative Scotland was about £59 million when we came into office. However, that included moneys for the national performing companies. Our reallocation of those budgets accounts for some of that difference. The top-line budget included more than £20 million for the national performing companies. Putting those into a separate budget brought down the total.
So the money for the national performing companies has been transferred.
Yes. We should remember, too, that the issue is made all the more complicated by the fact that we changed the headings. For example, the overall budget for the portfolio in the previous Administration included culture and sport, so it included many other things. However, I can make that detail available, if you bear with me.
That is helpful. If we can have that breakdown, that will be fine.
When the national performing companies were transferred from the Scottish Arts Council budget, we added the extra on to our budget. Once you work it all out, you will see quite clearly how those differences have arisen. We also increased the budget for the performing companies during the first year when it was decided that they should be taken in-house. That decision was made by the previous Administration, but we agreed with it and were happy to continue with it. Those perceived anomalies can clearly be explained. We will do that in the detail that we send to the committee.
That detail would be appreciated.
I might ask Wendy Wilkinson to respond, given her experience generally.
I should add that the £4.016 million includes the first year of the innovation fund, which accounts for £2.5 million.
That has pre-empted my next question. I was slightly confused about where that would appear.
Thank you. If any further points arise in the committee's discussions, I will be more than happy to furnish further details.
Thank you. We now move into private session.
Meeting continued in private until 10:25.