Budget Process 2005-06
Item 2 is evidence on the Scottish Executive's budget process 2005-06. The details of the budget were published on 15 October and the Finance Committee is due to report to Parliament on the Executive's proposals later in the year. As part of the process, subject committees are asked to consider the Executive's plans for their area of responsibility and to report to the Finance Committee.
I welcome Peter Peacock, the Minister for Education and Young People, and from the Scottish Executive Education Department I welcome Philip Rycroft, the head of the schools group, Colin MacLean, the head of the children and young people social care group, and Gill Robinson and Colin Brown of the qualifications assessment and curriculum group. If they are not enough, we have added somebody else at the end of the panel. Could you introduce yourself, please?
Joe Brown (Scottish Executive Education Department):
My name is Joe Brown and I work in the Scottish Executive Education Department in the policy support unit.
You must be fearful of a grilling by the committee to bring such a heavy list of officials with you today, minister. I invite you to make a few fairly brief comments to introduce the budget process.
I apologise for holding the committee back slightly at the beginning of the meeting—we got caught up in traffic in the city.
There are a few key points that I would like to make to give some context for the budget. Education clearly remains a key priority for the Executive, and that is reflected in the substantial growth in our budgets for the coming period, in the spending review period that the Minister for Finance and Public Services recently dealt with in Parliament, in the central Government line and in the local government line as well. In fact, central Government growth on spending will increase by 42 per cent over the period that the committee is examining. The local government line will also grow significantly over that period.
I would like to make one comment on the targets that were set for the spending review period. Because of the growth in teacher numbers that we seek and the impact of that growth, we were exempted from the normal efficiency targets that have been set across the system as a whole so that we can make those teacher numbers grow as we want them to. That will allow us to meet a number of our key priorities, as will the additional resource that we have. The extra teachers we are looking to recruit to bring numbers up to 53,000 by 2008 will allow us to have lower class sizes, which is another major commitment.
The budget will allow us to meet all of our commitments to the school building programme, which is massive in its extent. It will allow us to make some important developments in child protection inspection and in child protection services and children's services. It will also allow us to get ahead with initiatives such as the schools of ambition programme, and with initiatives relating to the developments that we want to take place in relation to leadership and many other matters.
The committee's principal scrutiny today relates to the central Government line. As I did last year, I want to make it clear that, although that is a significant sum, it is dwarfed by the money that goes directly to local authorities through grant-aided expenditure. Central Government expenditure is about £600 million and will rise to £866 million over the spending review period, but a further £3.9 billion, rising to about £4.1 billion, goes directly to local authorities.
I will be happy to respond to any questions. I have a phalanx of officials with me because they understand the fine detail of the points that will arise. I will ask them to pick up any technical points of detail.
As you were speaking, it struck me that the question of efficiency savings is not necessarily contradictory to extra spending and extra recruitment. I might come back to that later.
I want to talk about the question of transparency that arises from the local government settlement. You might recall that we went into this matter at an earlier stage in our budget discussions and I gather that there has been some contact between our officials and your officials since then. However, I believe that the contact did not achieve as much as everyone would have liked it to.
The committee was clear that the ability to monitor output from Scottish Executive spend had a lot to do with the ability to read through what was happening at local government level, where most policy delivery takes place. The national priorities action fund, which is a subset of that issue, seems to have grown at the expense of some of the other items without being specified in the budget papers that we have seen. Is there anything that you can usefully say to the committee about increased transparency in terms of the availability of information, an analysis of what happens at local government level and, in particular, the relationship between the Executive's targets and what happens on the ground?
I am more than happy for your officials and our officials to maintain a close dialogue about the issues in which you are interested. Please take that as an open invitation for your officials and advisers to ask any questions that you want answers to. That is in everybody's interest.
Because I have not been involved in the local government finance side of the Executive's work for a year or so, I am not entirely sure whether we still publish the individual grant-aided expenditure calculations, which we used to do. I will look into that. Again, I have no problem with sharing that information with the committee because it is part of understanding what lies behind the calculations that relate to the large sums of money that local authorities receive. If that information is still produced as it used to be, I will see what I can do to make it available to you.
The difficulty that exists in relation to all public expenditure that involves local authorities is that, although we have ways of calculating the relative share of the fixed cake of money that goes to local authorities—that is where all the grant-aided expenditure calculations come into play—local authorities decide how to spend the money and are accountable locally for how they exercise their discretion. There will always be a tension between our ability to explain what our assumptions are about the funding that goes to local authorities and Parliament's ability to scrutinise in a detailed way what happens on the ground.
However, we have been doing a number of important things recently to try to make the situation better not only for reasons of transparency but for reasons of performance improvement. Last year, we published the "National Priorities in Education: Performance Report 2003" and we will publish one again in 2006. That is a very comprehensive and detailed document about all the national priorities and how each local authority is performing relative to the frameworks within the national priorities. That is one mechanism, which I commend to the committee and invite it to examine in detail. We would be happy to come back and give evidence on that in due course if the committee desires. It plots carefully what is happening, which is the first time that that has been done, and it is opening up new ground internationally in terms of what people are reporting about educational performance. It is a rich source of data. In addition, data on financial performance are available from the Accounts Commission for Scotland and Audit Scotland, which examine local authorities' expenditure.
The reason why we have the national priorities performance report is not only to give local authorities feedback about how they are performing, but to ensure that there is much wider public scrutiny of how they are performing, so that we see progress year on year on the targets around the national priorities, which they set with our help. That is an important part of the future. The improvement framework that was set up by the Standards in Scotland's Schools etc Act 2000, of which the national priorities—and therefore their reporting—are a part, is an important driver of performance improvement and an important vehicle for releasing information.
I will ask Philip Rycroft to talk about the detail of the national priorities action fund, but you have to keep it in context. I recollect that we are talking about less than £200 million in the fund, against total spending on schools education approaching £4.8 billion. It is a small part of the total.
It is quite a big part of the Executive's spending, however.
Indeed, that is the point that I was going to make. It represents a significant proportion of our spending, but it is designed to drive and to incentivise some of the changes that we want in the system. It is entirely legitimate that central Government has a source of cash that it can use to facilitate, drive and make changes in the system as a whole. Given the amount's scale relative to total spending, it does not seem to be out of proportion to what we need.
There is no dispute about that, but the issue is that it is a substantial part of the Executive's budget and there is no breakdown. The fund seems to be absorbing things from other areas. The committee would like to have a breakdown of what it boils down to in practical terms, because we cannot relate anything to targets or priorities without that information.
I am more than happy to help the committee with that. The fund is broken down into several parts: part of it is for continuing professional development; part of it is about investing in improved behaviour in our schools, following the "Better Behaviour—Better Learning" report; part of it is in relation to free fruit and meals in our schools; and part of it is for information and communications technology. We are more than happy to give the committee the information that members want. Perhaps Philip Rycroft can say more about the fund, and also how within the fund we are planning to remove some of the restrictions on local authorities to vire between parts of the fund to ensure that they meet their local priorities.
Philip Rycroft (Scottish Executive Education Department):
As the minister said, the fund is divided into a number of strands: school in the community; integrated community schools; social justice, which covers inclusion and so on, the line for which has increased significantly, partly because of the addition of funds for the Education (Additional Support for Learning) (Scotland) Act 2004; discipline and ethos; school infrastructure; and nutrition in schools. We can give the committee details of all those.
The committee expressed concerns last year about initiative funding. Local authorities have frequently spoken to us about that. In response, we have tried to make management of the national priorities action fund more flexible so that it can respond to local need. For example, if a local authority has good policies in place in respect of school discipline and has done the job on that that is required of it, it should have flexibility to vire money into other areas—perhaps into the school meals side or whatever. Authorities have asked for more local discretion and the committee implied that it supported that when it spoke about the excess of initiative funding. We are working with local authorities to see how we can increase the fund's flexibility over time. However, the purpose of the fund is to enable local authorities to respond to national priorities. That is why the fund remains within the central Government "Specific grants" line instead of transiting through into grant-aided expenditure.
The committee would be grateful to receive that breakdown as soon as possible.
Before finishing on that matter, I want to return to the local government issue. The committee has no desire to interfere with the discretion of local authorities, but we still want to know what is happening at local authority level. According to the information that we have, there is some sort of perceived blockage in the ability of Executive officials to give us more information or to work with us to develop mechanisms for providing that. From the discussions of our predecessor committee, we understood that ministers quite favoured being as open as possible. We would like to see progress on that, which might lead to measurable results at the end of the day.
I have absolutely no problem with that—we all share the same issues. A huge proportion of the day-to-day targets that I am committed to delivering are not in my hands but in the hands of local authorities so I, too, need to have clear handles on the performance of local authorities. There is a constant tension between central Government and local government on the extent of the information that we seek.
I stress that the national priorities system and the performance reporting on those priorities is very new. We have had only the first report, but we have learned a lot from it. Officials are currently working with local authorities on how we might refine the data and use them in the next round of reporting. The clear intention is that the system will be a centrepiece for seeing what is happening with the resources that we provide so that we can monitor performance on the ground. If the committee's officials can give us clear ideas about the kind of data the committee seeks, I give my commitment that our officials will work with them to see what we can do about that.
I know that a wider dialogue is taking place between Tom McCabe, who now has responsibility for local government, and the local government community to try to get a clearer handle on the kind of data that we all desire so that we can monitor performance and make policy decisions on the basis of the changing trends in the challenges that local authorities face. Quite a lot of thinking is going on about how we might focus much more precisely on what we need to know. That information can then become publicly available.
Clarity of information is a crucial issue, which Wendy Alexander will pursue.
I apologise for not giving prior notice of this question, but it came up only after discussion with our budget advisers.
I seek direction from the minister—I want to ask the first-principles question about what we are trying to achieve with the education budget. As a committee, we thought that the statement of priorities that appears both in "Building a Better Scotland: Spending Proposals 2005-2008" and in the "Draft Budget 2005-06" was incredibly helpful. The statement of priorities lists 11 key commitments, which we had hoped would be reflected in the targets. I think that that is happening, but it is happening slowly.
Let me run quickly through those 11 priorities. The first priority is first-class schools, for which there is a target. The second is that there should be more flexible learning, but we could find no target for that. The third target is on improvements in outcomes, but the target relates only to the bottom 20 per cent of pupils. The fourth priority is children with additional support needs, but we could find no target for that. The fifth priority is to deliver more teachers, for which there is a target, and more support staff, for which there is no target. The sixth priority is the development of social care, for which there is a target. The seventh is the protection of children, for which there is a target. The eighth is the expansion of early-years provision, for which there is no target. The ninth is to increase the availability of child care, but that priority has no target. The 10th priority is for more active involvement of young people, but there is no target for that, and the 11th is the review of the children's hearings system, for which there is no target.
However, some issues—such as Gaelic—that appear in the targets do not appear in the statement of priorities. Over time, can we expect to see alignment of the 11 priorities with the 10 targets? We felt that having different priorities and different targets might allow some people out there to pick and choose the things that they respond to; they might not respond on some priorities that are key for the Executive. Directionally, over time are we likely to see targets that reflect the 11 priorities? Obviously, it is helpful that some targets have been made redundant in the recent past.
My hope is that the answer is yes. I am as keen as Wendy Alexander to get real clarity on what we are seeking to achieve. We have much more clarity today than we had two years ago and we will have even greater clarity in two year's time than we have today. We want to keep moving forward in that way.
In setting our targets, we have tried to respond to what this committee has been telling us—indeed, to what the Finance Committee has been telling Parliament that all Executive departments should do—which is to have fewer targets. The immediate difficulty is that if we are to try to have fewer targets we must work out what they are. We are also being implored not to shift our targets radically but to maintain some continuity year on year. We are trying to do that and, at the same time, slim the targets down.
I am sure that Wendy Alexander could ask me all sorts of questions about why we decided to drop one target and not another. At the end of the day, however, we had to come to a decision. The Finance Committee wants each department to have 10 targets, so that is what we have sought to do. Over time, I hope that there will be more alignment—we are trying to work towards that.
The other factor in all of this is that we are dealing with a set of moving targets. In the past, we tried to have some sort of continuity by updating targets where we could and dropping others that seemed not to be as important as the 10 we must now pick. Policy developments happen all the time; things are moving and changing. In a sense, our statement of priorities reflects our more current agenda and not the one that we have in our targets. For example, some of the areas that Wendy Alexander highlighted are picked up in "ambitious, excellent schools: our agenda for action". The funding that I have got is very much aligned to meeting what is in that document. That is reflected in some of the targets.
Wendy Alexander will find in "ambitious, excellent schools" not only a series of policy announcements but a series of timelines against achieving all of them. In part, the timelines allow me to ensure that I can drive forward the process of change and development internally. Technically, they are not targets, but measurable outcomes that are available in the system. If Wendy Alexander also examines other documents, she will find many more areas that have timelines against them.
The essential dilemma is that, although I have only 10 targets—so that the Parliament can focus clearly on them—I also have many other areas of activity and I need to have in place the internal processes that will help to drive them forward. There will always be a degree of mismatch—that is inevitable. We have to keep our thinking fresh—we have to move forward on new initiatives, ideas and developments and we have to respond to change in the environment in which we work. There will always have to be some kind of overlap between those kinds of statements. That said, I intend to try to move in that direction; the points that Wendy Alexander made will help us to focus on that more effectively.
If I may, I will make one final point. Target 10 of the list of targets is a process target and not an outcome target on achievement or attainment. Within target 10 are a set of processes that will ensure that our priorities work from local level right through to national level. Every local authority will have realistic targets that it must meet. The targets will move performance on from where local authorities and their schools are at the moment.
Target 10 is the driver for a series of other things that happen at local level in respect of performance. I am talking not just about the bottom 20 per cent, but much more widely about the system as a whole. Again, that will come out in the national priorities performance report in 2006—as, indeed, it did in our report of last year.
I have a few specific questions on targets. I will try to put them as succinctly as possible. Target 1 is to ensure
"By March 2008 … that children and young people who need it have an integrated package of appropriate health, care and education support."
The target sounds laudable, but how will you know whether it is achieved? Given that the previous target was set for March 2006, will we get a milestone report in 2006 that will show us the progress towards achieving target 1?
You might not have seen these, as they might not yet be published, but a series of technical notes backs up the budget documents. The notes set interim milestones and provide much more detail about how we will know whether we are moving towards a target. The meeting of target 1 will be assisted by, among other things, the work that we are doing on single assessment and support for young people. The target reflects the need for young people to have integrated packages of care, appropriate health care, educational support and so on. The technical notes will give much more detail of the interim milestones on the way to meeting the targets.
Given that the Scottish Executive Education Department does not bear all the responsibility for social work, target 3 seems to relate to other departments. The justice and communities portfolios will have a role in ensuring that the target is met. Are such targets joint targets that apply to other departments?
Yes. Target 3 deals with inspection and quality assurance. Across the Executive, a huge amount of work is going on collectively in relation to the inspectorates. For example, on integrated children's services inspection, Her Majesty's Inspectorate of Education is leading a team that involves HM inspectorate of constabulary, the quality assurance people in the health service, the social work services inspectorate and others. The Executive places a great deal of emphasis on trying to ensure that we consider inspection in a much more joined-up way than we perhaps have done in the past, to try to ensure that there is no overlap of inspection of individual establishments and organisations and to ensure that the principles and strengths of our inspection systems are shared more widely across the Executive. We are trying to join up the approach as effectively as possible. Colin MacLean might add some detail on that.
Colin MacLean (Scottish Executive Education Department):
Graham Donaldson will host a conference tomorrow at which he will lay out how he proposes to take forward the inspection of child protection. As the minister said, a number of organisations will be involved, including the Scottish Commission for the Regulation of Care. When the detail has been thought through, the next step will be to consider how the process might be applied to other aspects of children's services. Target 3 is about quality assurance for social work and the thinking across the different Executive departments and various inspectorates about how best to ensure that we consider social work coherently across the system.
In response to Elaine Murray, I mention that I had discussions with officials yesterday about the work that is going on in the social work review group, which is considering a performance improvement system for social work as part of its work on social work as a whole. The social work services inspectorate has already become a shadow agency and is working on plans to integrate its inspection with other aspects of social work. That work is in hand and we fully expect the deadline of March 2008 to be met.
Target 5 is to increase teacher numbers to 53,000. I understand that there has been some loosening of that target in relation to requirements in specialities. We will consider this issue again during tonight's members' business debate in the Parliament, but there are significant shortages in mathematics and science. A third of science teachers are more than 50 years old and half are over 45. Target 5 could be met by recruiting a lot of teachers in areas that are already quite well equipped, which would not address the problems in mathematics and science. How can we address the need to monitor the recruitment of science and mathematics teachers?
The target reflects the top-level political commitment that the Executive made in the partnership agreement to increase teacher numbers to 53,000. That priority is focused on reducing class sizes to 20 in mathematics and English for secondary 1 and secondary 2 pupils and on reducing primary 1 class sizes to 25. Target 5 reflects that clear political commitment.
Beyond that, we now have in place increasingly sophisticated work force planning for education, which did not exist in any degree of sophistication before the McCrone settlement. One outcome of the settlement was that we realised that we had to understand the work force much more effectively, principally to work out all the costs of the settlement and how it would be phased in and implemented. That has given us the basis of intelligence for monitoring closely in every subject the current vacancy rate, the expected retiral rate and, if they will create a shortage, what increase is required in the supply of teacher training places in our universities. Also taken into account is a range of factors such as the rate at which we can expect to recruit from outside Scotland or to bring other professionals into teaching. We consider science, music, physical education and every other aspect that involves our work force.
Underneath the target, which is for the high-level political objectives that we have set out, is a matrix that is available for us to examine. I am not sure how much of that is broadly in the public domain—perhaps Philip Rycroft can help with that. I have no particular difficulty with sharing the techniques and logic that we apply and how we try to pick up such details to adjust the supply of teacher training places to fill shortages.
The teacher work force planning exercise and all the detail that accompanies it are put into the public domain. I think that the last lot of information was published three or four months ago. It was made available to the Scottish Parliament information centre and others. All the information is in the public domain.
I have a final question on target 10, which says that local authorities set targets—we have discussed that. Are those targets yours or theirs? Target 10 refers to
"the position as published in 2003".
Is that publicly available so that we can examine it, or is that information that only the Executive holds?
The national priorities performance report reflects performance against the targets for that time and is publicly available. You asked whether the targets are centrally imposed and standard throughout the system. They are not. We discuss with each local authority the setting by it of challenging targets for its range of schools, wherever they happen to be.
You will appreciate that schools in local authority areas have different performance levels. We want to ensure that everybody drives up improvement, which is why we have more of a focus locally. The danger of national targets is that they could lack a challenge for local authorities that already exceed them. We want those authorities to be challenged, too, and to raise their performance. Local authorities set a range of targets and we are happy to supply the committee with that information if members have not seen it. Local authorities will be monitored against those targets for the performance report.
Philip Rycroft can keep me right, but it is interesting to note that, when we had national targets, some local authorities set targets that were higher than ours. Evidence suggests that because local authorities consider their circumstances and not average performance in Scotland, some authorities build more challenge into the system. Target 10 allows us to challenge local authorities on whether their targets are stretching enough and ensures that we set achievable targets that push forward performance in a more locally sensitive way. Local authorities should work with schools on how schools' performance can be progressed.
I draw the "National Priorities in Education Performance Report 2003" to the committee's attention. The document contains a national summary and, to save a few trees, a CD-ROM is attached to it to give details authority by authority on local targets that have been set. A wealth of information is provided about what is going on in every local authority in Scotland. We have a commitment to consider performance against those locally set targets and we will publish a follow-up report in 2006.
I do not want to give the impression that we have sat back and left that process to run. The committee is aware that local authorities are subject to HMIE's inspection regime, which involves periodic inspection. The Executive has also vastly improved its dialogue with local authorities. We are in the middle of a round of visits to every local authority in Scotland to talk about how they are getting on against the national priorities, what issues they have and what they think about national policy development. It is our intention to continue that dialogue, which is far richer than it used to be and gives us a far better understanding of some of the pressures under which the local authorities operate, as well as some of their ambitions.
There was an undertaking to monitor the progress on the dropped targets so that there is some consistency. Will you reassure me that that will happen and tell me in what format it will be reported?
Absolutely. In a sense, those targets were not dropped, because we are still operating to them. Indeed, a number of them are in the partnership agreement, so we expect close scrutiny of how we perform against those ambitions. Take, for example, the target on school meals. As the committee is aware, following "Hungry for Success: A Whole School Approach to School Meals in Scotland", we have a huge programme of activity under way to improve the school meals that are offered to kids. That programme will continue. The same applies to integrated community schools and health-promoting schools, for example. All those things remain embedded in our continuing activity.
Peter, you mentioned in your earlier comments that the document that is relatively fresh—"ambitious, excellent schools"—is another template of the Executive's vision for education and you specifically mentioned that resources have been made available to meet the objectives set out in the document. Will you give us a flavour of what you mean by that and how it relates to our earlier discussion about targets and objectives?
Off the top of my head, I can say that "ambitious, excellent schools" contains things about curriculum review, to which costs will be attached, and extra teacher numbers, to which costs will also be attached. It also talks about our ambitious schools programme and the investments that we require for that and it makes reference to the creation of a leadership academy. Those are four quick illustrations of what is in "ambitious, excellent schools" and we have funding for them all.
Some of that money is within our existing baseline. For example, we have, I think, £45 million a year for curriculum matters in the division that Gill Robinson operates, so we will simply attach that existing resource and reprioritise activity that we have been undertaking in curriculum development into the curriculum review. From the spending review, we have secured resources for the leadership academy and the ambitious schools programme—£8 million between the two of those measures, which are in the budget—and sufficient resources to fund the commitment to employ 53,000 teachers.
Those are four examples of measures that are in "ambitious, excellent schools" and for which we have resources, but they are not the only ones. As you go through the document, I would be happy to answer any points of detail.
You mentioned earlier that, in the spending review, there was an exemption from efficiency targets, although, from yesterday's Finance Committee meeting, I think that we are still awaiting information on the likely direction of those targets. Given that a lot of the costs in education are staff costs, where do the efficiency targets that might be placed on local authorities feature in the debate? How will they impact on the comments that you have just made?
There are two ways of looking at that. One relates to cash efficiency and how we measure inputs and outputs in those terms. We are rapidly increasing the number of teachers at the same time as school rolls are falling, so the unit cost per child is rising, which makes us seem, on the face of it, less efficient. However, the clear policy direction is to ensure that we have more resources in our schools to allow for smaller class sizes to intensify and enrich the learning experience. That is why we are exempted from the 2 per cent efficiency gain, which would otherwise mean putting cost pressure on the service at time when we are trying to expand places.
That does not mean that we do not expect schools and local authorities to work more effectively and more efficiently. Doing so is about working smarter, releasing time and investing that released time into productive activity to bring about better attainment in our schools. It also involves how we build our schools—the physical infrastructure—and a range of other things that we still expect local authorities and individual schools to work on to try to gain the efficiencies that we are looking for. It is about creating space and opportunities to enrich the whole learning experience even more. We may be exempted from the cash side of efficiency, but we are not exempted from considering ways in which we can improve the performance of our system and I have given members illustrations of some of the ways in which that can be done.
I know that other members want to come in, but Wendy Alexander has a question on that matter.
I do not know whether you will be able to give answers to everything that I want to ask about, minister, but I will try to get answers. At the Finance Committee meeting yesterday, finance officials confirmed that Executive departments will collectively make £500 million of savings. However, they also said that individual departments' contributions had not been reflected in headline budgets and that we needed to wait for those figures. You have given us useful information today about an exemption for the Education Department.
A much more significant development yesterday was that finance officials confirmed that a different approach had been taken to the local government settlement. Because it was assumed that local government would make £150 million of savings over the next three years—a 2 per cent saving—the grant had been reduced by that amount. In Scotland, of course, more than 50 per cent of local government expenditure is on education and a significant proportion of expenditure goes on social work. Has there been any discussion with your officials about how that £75 million of savings in education, which have been assumed from local government, will be found?
We have volunteered a couple of items in the spending review, which would make part of our contribution, although I am talking about very small sums of money relative to the total. I recall, for example, that there is a line for new national qualifications development. Those are all developed, so we will remove that line. A line has also been overtaken by new expenditure on educational maintenance allowances, which displaces previous expenditure in local government in relation to bursaries. Those are two examples of where we have made specific cash contributions to the savings target.
Beyond that, we have been clear in the discussions that we have had with the local government community about teachers' pay. It should be remembered that we have just settled a four-year deal on teachers' pay. Prior to entering the spending review, we had detailed discussions with colleagues about how the deal would be funded and whether we could give a four-year commitment to it. We made it clear to local authorities that we would fund all the cost in the spending review period, although they are making a contribution in the earlier period. Those things were all calculated.
Further discussions are still to be had with local government colleagues about those matters, but the point that I am making is that, in a cash sense, we were exempted from the normal thinking in order to allow our policy objectives—which are top-level policy objectives for the Executive—to be achieved. That means that, if one bit of the system is exempted, the target for the remaining bit of the system rises marginally.
Indeed. However, the issue at hand is not what you are doing with your own budget—as I say, we await the details. It has been confirmed that £150 million of savings in local government in Scotland have been assumed, more than half of which will come from education and social work. Are you leaving directors of education and directors of social work to get things right on their own in finding their share of those savings, or have there been extensive discussions on how the education and social work elements of that £150 million should be found?
We are in the middle of discussions with the local government community about all those matters. In particular, our discussions are about how we should allocate the resource for the extra teachers. There are specific challenges. For example, if we want to have 53,000 teachers by 2007—we are absolutely committed to that target—we must have a mechanism with the local authorities to ensure that the extra cash that we are putting in on top of the existing cash will buy extra teachers and not leak away elsewhere in the system. We have had preliminary discussions with the local authorities about how that can be managed without our ring fencing funding in the traditional way, but those discussions have yet to be concluded. There is an awful lot more discussion to be had about all that.
I have one final question. In the English spending review report, the chapter on the education departments indicated how the education savings would be found and stated that they would be externally auditable. That raises the question whether the same savings will be externally auditable in Scotland and whether your discussions with local government will be visible. If you could write to us in due course, saying how you expect the savings to be realised and whether you expect them to be audited, that would be helpful. In the rest of the United Kingdom, at the end of a 14-month process that began last July, there was considerable transparency to ensure that individual education authorities got resources to the front line. It was not left to their discretion whether to bother with that.
When we conclude our discussions on the arrangements with the local authorities, it will be in everyone's interests to understand exactly what has been agreed. I need to know that because I have to ensure that the commitment that we have got will be met. There will have to be quite a lot of detail about that. We want to give local authorities a good deal of flexibility in how they apply the resource, but the way in which we arrive at what resource they get will have to be explicit and open.
We have spent a bit of time on that issue and need to move on. Rosemary Byrne has a supplementary question.
It is a quick question on targets 7 and 8. When are we likely to get a progress report on how those targets are developing? Is there anything available at present that could tell us that?
I cannot tell you off the top of my head, but I will check. If there is anything that we can give you about the rate at which we are increasing training, residential child care and so on, we can get that to you. I do not know whether Colin MacLean has that information to hand.
A set of statistics on social worker numbers was published last week, so there is up-to-date information on target 8. That is part of a regular series of statistics to be issued.
We will check the other point and get back to you on that, convener.
My understanding is that there may well be an issue with regard to improving skills and qualifications in the residential child care work force, where it has proved difficult to make progress on those things. Some detail on that would be very welcome.
I will look at that. We are trying to address the fact that we have low levels of qualified workers in those settings. Currently, only 27.6 per cent of care staff are either qualified or are undertaking qualifications. An additional 30.4 per cent of care staff are either partly qualified or are undertaking qualifications that, if completed, would make them partly qualified. However, 42 per cent are not qualified at all and not dissimilar figures are apparent for those on supervisory grades in those settings.
It is worse at the managerial level, I think. Managers are not qualified to the appropriate level in a significant number of cases and that is reflected right down the grades.
Absolutely. That is why we are putting money into training and trying to increase the number of places to address that issue. Those staff are working with the most challenged young people in our society and we must ensure that the qualifications structure is improved over time. I am happy to provide the committee with more detail if we can find that for you.
Has the timescale for that target moved at all—it is set at 2009, which seems quite a long way away—and do you believe that it will be achieved?
We intend to achieve it and I have no reason to believe that we are not en route to achieving it. We have not changed the deadline, which is 2009, but we have changed the percentage of qualified workers that has to be achieved within that time. In the second bullet point of target 7, we have increased the required percentage of qualified early-years, child care and support staff from 66 per cent to 85 per cent. I will check the development of the first bullet point of target 7.
I have a question about special schools. Provisional plans for specific grants are for £292.5 million in 2005-06 but for only £271 million in 2006-07. That represents a drop of £21.5 million. A child who suffers from dyspraxia and cannot walk or eat unaided needs a great deal of assistance, as do children who suffer from cerebral palsy or who are deaf or blind. At present, such children are looked after in the public sector in special schools. Can the minister give some reassurance that funding for those special schools will be maintained and that the position of those children will be secure? If so, that would give some peace of mind to the teachers and the parents of those children.
As you know, there are national schools that receive funding directly from the state and there has been debate, over the past four or five years, about the future funding of those schools. We have given an absolute guarantee to maintain that funding for, I think, a seven-year period, so those schools are not going to be subjected to change.
As the committee will know from its work on the Education (Additional Support for Learning) (Scotland) Bill, we have invested an extra £12 million in the current year and £14 million in the next year, which is consolidated into our baselines for the future, for support for those who have barriers to their learning. As you may have picked up from the budget documents, we have transferred some of the spending from one part of the budget to another for special needs—it is a direct administrative transfer, so there is no reduction in funding. In one of our other budget lines against additional support for learning, there is an increase in the current or coming year that will be maintained right through the spending review period.
I assure you that, far from there being any reduction in funding, there is an increase in funding to support the implementation of the Education (Additional Support for Learning) (Scotland) Act 2004 and to target exactly the groups of people whom you are talking about.
Does that mean that, in the meantime, there will be continuity of provision for special schools such as those for children with dyspraxia who need a great deal of additional assistance?
Absolutely. Our overall spending on those who have additional support needs, whether they have dyspraxia or whatever—I would not want to focus on any specific category—is set to increase rather than decrease.
I also have a question about rural schools. Target 6 in "Building a Better Scotland" is:
"Provide a modern, high quality learning environment through the completion of 300 either new or substantially refurbished schools by December 2009."
Does that in any way imply that there will be a reduction in the number of rural schools?
No, not in itself. As you are aware, over many years there has been a pattern of rationalisation of schools in rural areas and in urban settings. Part of the extra investment that we are putting into school buildings—which is now colossal, with more than £2 billion being released into the system; we have never seen anything like that before—will help us to meet our targets.
As a consequence, local authorities are, rightly, taking a long-term view of their school estate and asking what kind of schools they will need not just next year, but in five, 10, 15, 20 or 25 years. Given the fact that we have predictable falling school rolls, that is inevitably leading some local authorities to think about how they manage their school estate. However, nothing is implied in the target to force the closure of schools—quite the reverse. More money than ever before is being invested in school buildings, so there is probably less pressure than ever to rationalise so that less investment is required.
That said, throughout the past century, schools and other provision have been looked at. That is why there are a lot of debates at the local level about the future of those schools. Such matters are determined at a local level, with the normal local democratic processes at work.
I have to confess that I am somewhat confused by the budget documentation. If it has been designed to confuse, it has succeeded, as far as I am concerned.
Wendy Alexander touched on the need for targets to be linked to priorities. I would like to see more evidence of budget figures being linked to targets. There does not appear to be a great deal of explanation of why some budget figures have gone up and some have gone down. For example, you indicated that there has been movement between budgets for additional support. Table 3.03 shows that, in the 2003-04 budget, something in the region of £33 million went into the two categories of "Pupil support and inclusion" and "Additional support needs". However, by 2007-08, the figure is being reduced to £23 million or £24 million. Nothing in the documentation explains that reduction. I assume that it is because money has been moved to a different heading, but the budget documentation does not get the message across as to how spending is being allocated and why certain things are happening. Your target is to have a support package for every child who needs it, so the amount of money allocated should relate to the priority that you are giving to that target and that should be clear in the budget figures.
I have been dealing with public sector budgets for more years than I care to remember. There is always an element of change in the administration of budgets; bits of money always get moved between budget lines. The best I can offer you is to say that we will happily set out where money has been transferred from one budget line to another. We would have no difficulty in doing that and it would help you to follow our track.
You raised a particular point about pupil support and inclusion and additional support needs. I reiterate the point that I made to Lord James: the overall resource available for additional support needs is increasing, not diminishing. We need to implement the new Education (Additional Support for Learning) (Scotland) Act 2004, so we are providing an additional £12 million this year and £14 million next year, plus other adjustments on expenditure, which, although minor, are all in the right direction. Some moneys have transferred from one budget line to another for administrative purposes. I will ensure that we provide further information on the transfers.
On the wider point of whether our spending is aligned with our priorities, I would argue that, for the most part, it clearly is. For example, we have key targets on increasing teacher numbers and we have put in the resource for that. We have just been speaking about additional support for learning; we now have new requirements on local authorities and there is additional support for that. We have provided cash for our priorities in relation to inspection in social work and children's services. There are other examples, so I would argue that there is, as is proper, a degree of alignment between the targets and the budget. Perhaps we have to consider further with our officials how we can better illuminate the information in the budget documentation that we provide.
On the target of providing a package of additional support for every child who needs it, your original target specified 15,000 vulnerable young children, but that figure does not appear in the new target. I therefore assume that you have revised the number down, or that some other revision has taken place. We have no feel for how many young people are in the category or for the extent to which we are achieving the target at the moment. For example, why have you moved the target deadline from 2006 to 2008?
I have raised two or three fairly interesting questions and this committee would certainly benefit from hearing answers to them—as would the general public.
Page 205 of annex B of the budget document sets out a reason for each change to a target. I do not think that I can really add to that; the information is there for you to examine.
I want to pick up on your point about the 15,000 vulnerable children. We think that the new target is much more appropriate because, when one tries to predict the number of vulnerable children, it is inevitable that there might be slightly more or slightly fewer than 15,000. What is important is that those children who need the package of services get it. That depends on good assessment of their needs. It is a question of turning round the 15,000 target, which might be wide of the mark either way, and saying that a child should get the package of support that meets their needs when they are assessed.
I have two further questions on that. Do you have a feel for the extent to which we are meeting that target at the moment? How formidable will it be to achieve the target and why have you moved the deadline for achieving it from 2006 to 2008?
That is set out on page 205 of the draft budget document. The target is challenging. Our desire is to ensure that every young child who requires a package of support gets it. The changes have been triggered partly by the Education (Additional Support for Learning) (Scotland) Act 2004 and partly by other changes that are around in the system. We are getting the professions to make a joint assessment of what a young person's needs are—not just their additional needs, but their wider needs in society—to ensure that they have the right package of support around them. That is why we have moved on integrated community schools and why we have at our disposal a range of other measures to improve the packaging of services. We still have a long way to go, but we are clear about the direction of travel. It is the assessment of a child's needs that should determine what services they get. We do not want just to put figures on that; we want to ensure that we are meeting our target. I would be happy to come back to you on some of the detail that you have asked about.
That is not the only target for which the deadline has been moved from 2006 to 2008. To the untutored eye, it might appear that you are failing in achieving those targets.
Oh, come, come. I can hardly believe that you have suggested that.
In any exercise that involves examining targets afresh and considering the period ahead, one must set targets that are stretching and demanding as well as achievable. It is a question of trying to find the right balance. It is difficult for you to read all of what is on page 205 at a moment's notice. I suggest that you read that page and if there are further questions that you want to follow up, please let us know and we will try to respond to them.
I have a specific question on the line on looked-after children and youth work in table 3.04. It is a bit odd that those two areas should be joined together; I think that they used to be in the larger group of youth justice. The figures under that heading appear to be pretty static—they remain at £13.3 million—even though there will be significant pressures as regards foster-children, on which there will be a parliamentary debate tomorrow. I think that I am right in saying that there is a need for about 700 additional foster-parents in Scotland. There are issues in the background about funding on an entitlement basis rather than on a discretionary basis people such as grandparents who take on the job of looking after their grandchildren. There will be important pressures under that heading.
We mentioned residential schools earlier on and, as regards youth work, there are the administrative burdens of implementing the Protection of Children (Scotland) Act 2003. We already know about the training needs, as the committee has raised that with you before. If we are to get best value from the voluntary sector in that area, central support for some of those burdens will be important.
Why does that line in the budget appear to be flat, which amounts to a decline in real terms?
That is where the next level of detail in the budget will be useful. You will find that some of the matters that you referred to are dealt with in other budget lines. I am not clear in which line fostering is covered. We have just put money into fostering, which Euan Robson will be saying more about in tomorrow's debate.
On looked-after children, we have announced in the past few weeks that we will provide local authorities with an additional investment of £6 million—I think that that is the correct figure—which has been found from other budget lines. As with any budget year, we are talking about estimates of expenditure at a particular time. If we find that we are under pressure, we have the capacity to vire money between headings to withstand that pressure. That is what we have done with looked-after children. Andy Kerr announced additional provision for fostering in his spending statement in September.
I look to the officials to keep me right on the details, but we have also transferred money for the voluntary sector into a unified voluntary sector fund, which I presume sits apart from the fostering provision. So other resources are available for that area. A series of movements have taken place within the budget lines to try to accommodate the issues that you raise, but that is not apparent from the budget line that you mentioned.
That is my point: if we get level 3 details from the Executive, we need, in one form or another, reasonably clear explanations about what the differences are from previous years—what has been moved and what has been added. If money comes from all sorts of pockets and goes here and there, that makes it extraordinarily difficult to carry out our job of monitoring the budget. I do not doubt what you say on the matter—what you are telling us is obviously good rather than bad news, but that does not appear to be the case from the budget lines.
That is one of the great dilemmas of the budget documentation. It is created at a particular time on the basis of our best estimates of costs and pressures at that time. However, things always change, which is why we have the capacity to move money around. I presume that the procedure now is the same as it was when I was the Deputy Minister for Finance and Public Services: the spring and autumn revisions to the budget track changes as we go through the year. That is done for the reason that you state: to try to ensure transparency in the movements in budgets and what happens with end-year flexibility. We can return to the nature of the movements through the system during the spring and autumn revisions. I have no problem with that, as the information is public anyway.
It would be helpful to have a note on how end-year flexibility impacts on the proposals.
I have allowed the questions on the issue to run on for quite a long time, but it is important.
I have a brief question on the efficiency issues on which Wendy Alexander touched. Seventy per cent of the schools budget goes on employee costs, but we hear that the efficiency element will not be applied to teachers' salaries, although I am not sure whether that applies to classroom assistants and other staff—I see that the minister is nodding. I am a little worried about the way in which the efficiency element will be applied because if it squeezes down on the remaining 30 per cent of the schools budget—if that is subject to fairly rigorous efficiency savings—directors of education might use that as a rationale to close schools. Can you offer any comfort on that issue? How will you ensure that the finance-driven rationale for school closures does not come back on to the agenda?
As you know, we have just issued revised guidance on school closures that makes it clear that the principal issue that authorities must consider in deciding on closures is the education of children. If anything, financial issues will drive rationalisation less than they have done in the past decade or more. We are putting more cash into boosting teacher numbers, which will potentially allow schools in rural areas to stay open when they might not have stayed open before because of pressures arising from the pattern of provision. In the past couple of years, we have given additional resources to local authorities specifically to allow schools to stay open. The authorities argued that the distribution formulae did not sufficiently recognise the issues in sparsely populated areas and that that put pressure on authorities to rationalise schools. We tackled the issue by putting in more cash and, as part of the future distribution of the money for new teachers, we intend to try to remove that pressure.
The efficiency savings will not drive the education system in the way in which Elaine Murray anticipates. The target of 53,000 extra teachers is opening up territory for discussion with local authorities. The issue is difficult and will take a lot of working through, because the implication of meeting the target is that a certain block of spending will become more fixed than it has been in the past in order to ensure that the extra cash allows us to meet the target on extra teachers. That is also true of other parts of local authority education spending. We fund school buildings through the contributions that we make to public-private partnerships, but that is the only place that that funding can go. It cannot go anywhere else in the system so, again, that block of expenditure is becoming more fixed than ever. A number of things are happening in education spending to make the position firmer than ever and to ensure that we can achieve our targets and objectives. The detail of that is being worked through with the local authorities.
With that, we draw the item to a close and thank the minister. However, his ordeal is not yet over.