With those caveats, I move on to item 1, on the in-year financial performance report of the Scottish Parliamentary Corporate Body. The corporate body agreed last year to provide the committee with a financial performance report on a six-monthly basis. In front of us is the first such report, which covers the period from April to September 2001. Some parts of the report include updates covering the period to the end of December 2001.
I would like to make a few points by way of general introduction. As we have said to the committee before, the development of the Parliament has meant that the SPCB estimates and budgets have been a bit more speculative in previous years and have become a bit more realistic as time has gone on. That process has been shown through the more precise figures that we have now. The underspend that is predicted for this year is a bit less than it has been for previous years. That confirms the fact that the Parliament is now pretty fully into its stride in its current buildings, and that things are becoming a bit more predictable year by year.
You indicate that some of the underspend is underspend on staffing costs. In view of the fact that we have had some difficulties in getting all the services that the Parliament requires, are there plans to get up to establishment? Do we have the proper establishment? Has that been sorted out for the future? Those questions may stray into agenda item 2, but have we got it right, or were there some unique circumstances this year that meant that the staffing budget has been underspent?
That is always a developing position. I will ask Stewart Gilfillan to answer that in detail.
That is, as Robert Brown said, always a developing situation. In the course of this year, we have still been getting things up and running to an extent, and we have been carrying a large number of staff vacancies. We are now doing much better, however. The complement is 480, and we are up to 450 staff, so we are still 30 short. There is always an assumption of vacancies in any organisation—when staff leave or move around, vacancies are always carried—but we plan to improve on that figure of 30 vacancies out of 480.
Do we have any idea what the recruitment and retention position is? Are we finding it easy enough to recruit suitably qualified candidates? Are we retaining those whom we are training? I am aware that expertise in such areas as drafting legislation cannot simply be bought off the shelf. Are there any such areas?
We, like the Executive, have been having trouble in finding lawyers with the appropriate skills in the preparation of legislation, so that is an issue for us. We have a relatively small legal team, but it is fair to say that that is a pressure area.
Is the reason for our 30 vacancies that we have not attracted the candidates or that we have not advertised the posts yet?
The posts are mostly in the process of being filled. The figure equates to about 7 per cent. That is not an exceptionally high figure and it is gradually closing. Most of the posts are out to competition at the moment. The position is reasonably good, but I would like the number of vacancies to be lower still. With the recruitment in train, the current retention rates and what I hope is an improved pay settlement coming through, I am optimistic that, a year from now, the position will be better still.
When do you think that you will reach the point where the underspend—or overspend, if that happens to be the case—will be in single figures, or at least very small?
We are about to move into the flitting-to-Holyrood phase, which will in itself put additional uncertainties and pressures on the budget. There will be a period of time when people will be working both here and there. Extra work is involved in the flitting operation, so a projection for extra staff during that period has been made. After we have moved into Holyrood, it will take a year or so before the new levels of expenditure, which reflect the cost of the Holyrood building including rates, settle down. There will be a temporary bulge in expenditure as we get rid of the current premises and the constraints—
So that will take another two or three financial years?
Yes, probably.
As Elaine Thomson has moved off the committee, I am the sole survivor from the Finance Committee's original membership. I am beginning to understand why we were given a medal in advance.
The brief answer is that that is not the current position. We are estimating a modest underspend of perhaps £100,000 at the end of the year. The expenditure heading is very much a calendarised one, and depends heavily on the individual decisions taken by the 129 MSPs. The position at the earlier part of the year is not the same as the present one.
So you are effectively saying that there is a health warning on those figures, or that we should not take them to be particularly accurate—that they are nothing more than an in-term position.
They are accurate as at September 2001, the end of the six-month period covered, but this is now March 2002 and we can be more up to date on the position.
But the question still remains. At the time of that snapshot, where did the underspends appear to be, and why is the situation different now?
As the letter from Sir David Steel says, we were then doing our in-year budgeting on a fairly unsophisticated basis. We were simply dividing the annual budget by 12 and spreading it across the year evenly. Since that time, we have moved on to more sophisticated profiling methods. We showed a monthly budget across the year, and the figure included the two months of the summer recess, when members were, in the main, not spending as much on some items as they would at other times of the year. Since we started taking account of that variation in the monthly profile, we have come up with a more accurate prediction. As Robert Brown has said, members' allowances will probably be underspent by around £100,000.
I presume that the fixed costs of running offices and having staff are taken as constant throughout the year. Those costs would be predictable. We are therefore talking only about distance and travelling, and so on.
Yes.
It is helpful to hear such explanations alongside the information that we are supplied with.
No. I think that that has slipped in the current year. We have always considered carefully when we should do any IT capital refresh, bearing in mind the fact that we will be moving premises. Clearly, we want to do that refresh at a sensible time so that that money is not weighted. The laptop refresh is a separate project that is running a little late. It will be spread between this year and next and it has had some impact, but it is a relatively modest area of capital spend.
Mr Brown spoke about flitting to Holyrood. He was talking about figures that are a reflection of the past. Is there a firm date for moving?
The target date is May 2003. A number of unpredictable things will happen along the line, and no doubt we will talk about them later.
Is that date taken into account in your cost estimates?
Yes.
You were saying that the underspend from earlier in the year is no longer there. Will there be any forecast underspends, specifically on MSP costs?
The suggestion is that we are heading for an underspend of perhaps £100,000 on MSP costs.
Are you fairly confident that you are almost at break-even point and that your budget will roll out to be virtually 100 per cent committed?
You must remember that it is mostly a capped budget, apart from the travel budget and other bits and pieces. Office costs and so on are capped and cannot go above a certain maximum level.
That is fine.
Stewart Gilfillan made the point that we are moving towards a more structured and sophisticated in-year budgeting system. May we have a note to indicate how that is likely to work in future years? That would give us a useful reference.
Yes.
The forecast underspend has been a steady feature year on year. Would it be possible to amplify Stewart's point on the Holyrood flitting costs—and the bulge of expenditure that that will involve—and the method by which budget projections following the move to Holyrood will be put together? It would be useful for the Finance Committee to get a note about that before the next time we go through this process. We would like to know your estimates of the scale of the bulge and we would like to know what will happen to the budget process—matching the estimates and the actual expenditure—after the settling-down period.
A lot of preparatory work for the flit is being done by various groups. That will give us clearer indications and we could easily supply that information next time round.