Budget 2001-02
Now that we are suitably refreshed with coffee and biscuits, we will resume and move on to item 6 on the agenda, which is our consideration of the 2001-02 budget. The minister is giving evidence. Does he wish to make an opening statement before we address specific aspects?
I do, because I am aware that some of the issues that have been raised in the public meetings of committees are important to members; I want to address them briefly. I am genuinely not clear about what my appearance here is meant to address: whether it is the overall shape of the document, individual budget line inquiries or the consultation process. If we get into a particularly detailed line of questioning, I hope that you will not mind if I use the officials who are present.
In addition, it is my long-term hope for the budget process—which was designed on an all-party basis for good reasons—that we get to a stage over the next few years where, at this time of year, we have an open and frank debate about the shape and the priorities of the Scottish budget. That will be a good and integral part of the process, and it is achievable. It is a fundamental function of devolution that we work in that direction.
The current process draws to a close at the end of the month; I recognise that it has been difficult and that there are challenges in the early stages. I am also conscious that this year is the first time that the system has been tested. There are lessons to be learned about the provision of information, and I suspect that the committees will learn lessons from how they have handled this part of the process. I am comfortable to be part of that learning process.
When we assess the stage 1 process—and I am sure that the Finance Committee will want to be involved in that—we should measure its success against appropriate criteria. If there are any criticisms of the process, they should not be made as a result of misunderstandings or misinterpretations of what this part of the budget exercise is about. However, criticisms represent an opportunity for us to debate the fundamentals of the trends in national spending in Scotland.
As part of the spending review that is currently under way, and as part of the budget consultations, the sort of issues that I hope we will tease out over the next few weeks—if they have not been teased out a great deal so far in individual committees—are whether, for example, the priority given to education and health increases in expenditure in comparison with other areas strikes the right balance, and, with regard to local government, whether the relative priority given to education and social work is the right balance. I know that comments will be made on that, and I hope that we can learn from it.
It is clear that the committees have not found the stage 1 budget scrutiny process easy. Perhaps the committees have been discovering some of the difficulties of trying to work within a fixed budget. In a comparatively short time, they have had to get to grips with a range of complex figures. They have had to make difficult strategic judgments on the relative priority given to particular services. I hope that those difficulties can go down as experience gained. Once the committees are more familiar with the budgets and have discussed issues within the budget time scale each year, some issues might come up automatically as part of the budget process. That will be a good thing.
Initially, one of my concerns about stage 1 this year was that the committees might become too embroiled in the detail. It is important that we try to concentrate the stage 1 process on comparatively high-level figures in the annual expenditure report. It is always possible to write in more detail, but in providing more detail initially, we might find that we have less strategic direction and more questions, that less real debate takes place and that we get drawn into specific issues that the Parliament can deal with in other ways, at other times of the year, through parliamentary questions, statements and debates.
I am not persuaded by some of the comments that I have read in the press and which have been made in committees, that the report should be expanded in some way. One of the things that we could do over the next few weeks is consider whether such a report is the right approach. Obviously, the resource accounting and budgeting changes are coming. We will have to review the format of the document in any case.
The document has three audiences: the committees of the Parliament; the academic audience, which needs the figures for the record; and the public of Scotland, who might need the information in a slightly different format if they are genuinely to take part in the consultation process.
It would be helpful if I were to meet the conveners of the committees, individually or collectively, before we go much further into the summer, to learn from their experience of convening committees that have discussed the document thus far. I would be happy to do that. Perhaps the Minister for Parliament and the committee could make moves in that direction.
It might also be helpful if officials in the finance department of the Scottish Executive and those responsible for links between the Executive and Parliament were to meet with someone from the office of the chief executive of the Parliament, to consider the way in which, over the first 12 months, we have provided financial information to the Parliament. The written agreements will kick in shortly; I understand that they might even be lodged on the day of the debate on the report at the end of the month.
There are lessons to be learned from the first 12 months, for example, whether the expectations about what the Executive can provide to Parliament on a regular basis are realistic; and what information—and the format of that information—would be helpful for members, for clerks and for others in the Parliament.
Those are two suggestions: first, that we get some feedback from the conveners on the process; and secondly, that officials could meet to discuss how to conduct the exercise better next year, and to learn from our experience.
The process involved asking the committees and the general public for their input into the overall shape of public spending in Scotland. I am pleased that we have made a start. The committees have begun to address budgeting issues seriously in a way that would never have been part of the parliamentary process at Westminster. That is a good development.
The two public consultation sessions in Dumfries and Greenock were wide-ranging and interesting. There was genuine feedback about areas that people feel are under pressure at a local level and areas where people feel that we could spend the money better, releasing more resources to front-line services. I would be happy to provide feedback to the committee on those events, once it has been completed. We have also received more than 120 written responses to the document from individuals and organisations across Scotland, which is way ahead of what we would normally expect for such an exercise. That is a good development.
Stage 1 has an important place in the future budgeting process. We will have to work hard to extract maximum value from it, but I am convinced that we have got the basics right. If we learn from this year, we can make real improvements next year.
I realise that I have not referred to the numbers contained in the document, to the overall structure of the budget or to the strategic issues that I have been encouraging everyone to address. However, I was conscious of the fact that we have now reached the end of the committees' consideration of the annual expenditure report and I wanted to concentrate on the particular points that I have addressed. I hope that that is helpful.
Thank you, minister. You made a point about the learning curve. The committee is also aware of that—we are in the first year of this process and we want to improve it. We want to make the figures that are produced more accessible; you mentioned the public consultation that is taking place on that. It is a question not just of what the committees of this Parliament can get out of public documents such as "Investing in You", but of what the wider public can get out of them. The committee feels not that there needs to be more information per se, but that there needs to be more accessible and immediately understandable information. At some stage, I will ask you to comment on how the public consultation process will fit in with what the committees are doing and with the Parliament's debate on 28 June. I know that the public consultation period ends on 19 June, which is less than a week away. I hope that there will be a way of feeding that into the debate that we will have on 28 June.
Obviously, the committees have reported in detail and you have not seen the detail of those reports. The Finance Committee has considered that matter; we are learning from the process as well. We would be interested to know what you feel. Would it have been better if you and your officials had received all the committee reports, so that you could have answered questions on the detail of the reports? The fact that you have not been given the detail clearly restricts us, and we might want to do something about that in future.
All the committees have said to us that they have not had sufficient time to do this work. That is the result not simply of the limit on the number of days available, but of the competing demands on committees' and individual MSPs' time. I have already written to the Presiding Officer on behalf of the committee to say that the way in which the Executive's business is programmed for this part of succeeding years must take into account the work load that is placed on the committees. I am sure that we will improve on that next year.
Members will want to ask about specific points. I would like to concentrate on two recurring points that were made in the responses from the committees. The first relates to the figures that are provided—in real terms and in cash terms—and the way in which they are presented in "Investing in You". Wherever possible, those figures should be presented side by side, so that comparisons can be made more easily than is the case at present.
My second point concerns targets. In your letter of 12 June, which was a response to my letter of 4 June, you commented on targets. The third bullet point in the letter refers to underspends and the 75:25 split, which, you say, is intended to create a contingency fund. If targets are being set, there should be greater clarity on the expenditure that is expected. The underspends to which you refer seem to have an impact on targets. What sort of underspends are we talking about? How great will they be and what effect will they have department by department?
Those are the broad issues that I would like to kick off with. I know that other colleagues will want to make more specific points.
You have raised four issues, convener. I will look into what we can do between 19 June and 28 June to pick up lessons that have been learned or feedback that has come from the public consultation, to help inform the debate in Parliament on 28 June. I do not want to commit myself immediately to providing a comprehensive report in that time scale, but we can perhaps give some indication of the shape of the responses, if that would be helpful and possible. The public consultation has gone well. The degree of interest in the first year has been encouraging, and it will grow year on year.
On the issue of timetabling, we delayed the publication of the report this year because of the announcement by the chancellor in March of the additional money. At the end of this year's process, we will examine how we will take account of the timing of the chancellor's budget statement in future years. We will consider whether we should publish earlier to ensure that the chancellor does not make his announcement while the document is at the printers or whether we should publish later, on a timetable that is agreed with the Finance Committee, to take account of what he says. It is a difficult management arrangement. I think that it is right to hold stage 1 at this time of year. If we are to give a response to the consultation and to the committees in the chamber each year before the summer recess, it is not easy to see how that timetable can be rearranged. I am certainly quite happy that, initially at least, officials should consider that matter in the Parliament and the Executive and that we should return to both those issues well in advance of next year's arrangements.
On the two other issues that have been raised by the committees, it is not just a matter of examining the presentation of the real-terms figures and the cash figures, although that can be improved. There is also an issue about the end-year flexibility impact on different budget headings. Perhaps we need to find a way of extracting some of those figures to give the year-on-year comparison a degree more transparency and accuracy. I am happy to examine that and any other suggestion about the way in which figures interrelate on the pages of the document and on what might need to be taken out. I must have answered a dozen parliamentary questions in the past three or four months about the comparison between local government spending three years ago and today. So many of the answers have had to be qualified by references to Strathclyde Passenger Transport Executive or the changing arrangements for the social inclusion partnerships that I think, when there have been significant changes in budgets as a result of end-year flexibility or for other reasons, perhaps we should build them into the comparative figures in a way that is more clear for the reader who is approaching the figures for the first time.
On the issue of underspends, we are currently in discussions with the Treasury about the size of the end-year flexibility that is available as a result of the 1999-2000 budget. I hope that we may be able to make that information available to Parliament before the summer recess, but I cannot guarantee that. I would prefer not to make that information public when Parliament is not meeting. As soon as we have that information, we will decide what is required and what is not required, and will give that information to Parliament as soon as possible.
I want to raise the matter of public consultations and how this kind of information is made available to ordinary people. The public consultations that you are holding are very useful. I know that you are going to Aberdeen tonight, which will be much appreciated.
A question that has exercised the committee over the past few weeks is how the information is made more accessible to people at different levels, given that, as you say, there are different audiences for it. How might that be achieved? It occurs to me that there is potential for producing this kind of information electronically—I know that my colleagues think that I have a bee in my bonnet about this. Then we could have our cake and eat it. We could look at the information at whatever level we want. It might be useful to consider multimedia presentations that can be located in libraries so that they are accessible to everybody. Then everybody can listen to what you have to say about the Scottish budget. As has been mentioned, "Investing in You" costs £16.50, which is not particularly accessible for people on low incomes.
Many of the committees came back with comments on gender-disaggregated statistics. There seems to be a lack of good, hard information when you try to consider what the outcomes of programmes have been and what it has meant in terms of different age groups, people with disabilities, gender or whatever. How can that be considerably improved?
First, the document that we published was put on the website, which meant that people had access to it. We also circulated a lot of copies without sending people an invoice. This year, for the first time, we produced the shorter leaflet, which is general in its approach, but was an effort to have something that we could hand out at consultation meetings or that members could use locally—some have chosen to do so.
There are three distinct audiences for this. There is an issue about members of the Parliament being able to access the information that gives them the opportunity to help to shape the budget. There is also an issue about putting the spending plans and record of the Executive on the record for academic and other purposes. Another issue is about providing information to the public on the shape of spending in a way that allows them to accurately contribute, in an organised fashion or otherwise, to what we have done. Providing that information in electronic form is definitely one way of doing that. I agree with Elaine Thomson that that gives us an opportunity to provide it in multiple designs, so that people can access it in their own time and their own way.
We must also find a better way of producing the printed information. I hope that we can achieve that, although I do not want to run down the efforts that went into producing the "Investing in You" publications. A lot of work went into them at a busy time for those involved. The latest publications are significantly more accessible than those produced in the past.
We had a positive meeting with Engender and the Equal Opportunities Commission about the disaggregation or reflection of issues of gender and discrimination inside budgets. We are considering how to take that issue forward. I do not think that I am giving away any secrets if I say that it is not a straightforward issue. A lot of the work that has been done in other countries, and in the UK, in relation to women's budgeting has been on tax and benefits rather than on spending programmes. It is not straightforward for us to find a constructive way forward, but we are committed to trying to achieve that. I hope that, before the summer recess, we might have an opportunity to outline our plans to members.
We are short of time, so I will just ask Jack McConnell a series of questions.
Would you agree that we can follow on with questions given the tightness of time? I do not know if your officials are in a position to provide responses in advance of our report, but it might be that there is quite a lot that we will have to mop up after this meeting. Will you comment on that?
Once you have the joy of seeing the committee reports, you will see that, while the committees are also in a learning process, the key theme is the presentation of the document. I know that people have put a great deal of effort into that, but given the new context, there is much concern about it. I do not want to make partial points on that, but there is a concern about presentation, to which I hope you will give due consideration.
A moment ago, you mentioned that you were in negotiations with the Treasury about the underspend. From your comments at previous committee meetings, I understood that there was no need for such negotiations, as you had full flexibility. Why do you have to have discussions with the Treasury, if you can reallocate all your underspend?
I would also like to ask about your letter to the convener. You have invested the money from the chancellor's March budget immediately into health and enterprise, but some of that money is still unallocated. Can you tell us how much money is still unallocated, when you expect to allocate it and in what form, and when that will be announced? Which priorities have you altered from the chancellor's budget, or have you merely allocated the money on the basis of a population share of the changes elsewhere?
Finally, you will see from the reports of the Health and Community Care Committee and the Local Government Committee that there is much concern over the cost increases within specific areas. The Local Government Committee's report states that
"the current system, where the Executive expects that pay increases will be funded by ‘efficiency savings' is unsustainable."
What are your comments on that? The Health and Community Care Committee's report says that the increase in cash that is being made available
"does not translate fully into real terms growth in the capacity of the NHSiS to deliver services as real inflationary pressures in health are above the general deflator of 2.5%."
The committee is very interested in that issue, and your comments on it would be gratefully received.
I am at a slight disadvantage, as I do not have copies of the written reports. In future years, it would be helpful to have sight of them, although I recognise the difficulties in trying to put together a composite report.
For that reason, we do not expect detailed responses.
I can give an absolute undertaking that, if those reports were provided to the Executive in advance of this meeting each year, they would be treated with confidentiality. As well as the published report of this committee, it would be useful if those individual reports could be passed on to me. I could then distribute them to ministers so that they would receive useful feedback from the committees.
My view on the health spending is clear: there has been a real-terms increase. How that is spent under individual budget heads, according to relative increases and decreases in demand and inflation, and on individual items of expenditure, will probably be the subject of debate for the next few months. However, there can be no doubt that the significant increase in real-terms spending in health, which followed the chancellor's budget statement, is going to make a huge difference. It surpasses our expectations when we began drawing up our budget document, although the announcement was clearly made before the document was published and we were able to change it as a result. Some of the figures were not included at that time partly because we had not made final decisions in the areas of health and enterprise but also because, in education, some of the money is spent centrally and some is spent locally, and we would not have been in a position to allocate the difference between the central and local government budgets.
I am well aware of the view that is consistently expressed by local government in Scotland on the way in which we expect some—not all—of the pay increases for local government employees to be financed from efficiency savings. We have received strong representations on that issue, which we have taken on board. We will include them in our current discussions with local government officials on the comprehensive spending review. My publicly expressed view is that I am open to suggestions as to how that might change, but there must be a measure for efficiencies within the local government finance system as a year-on-year driver. If there is no direct link between efficiency savings and pay, there must be some other link. The debate goes on, and that will be one of the issues that people will pay regard to when the spending review comes to a conclusion later in the summer.
On negotiations, the end-of-year flexibility issue that we have to resolve with the Treasury is the timing of our announcement, as the national books are put together and announcements are made about end-year flexibility. The parliamentary timetables at Westminster and in Scotland are different, and I would like to make this clear to members before the summer recess. I hope that we might be able to do that. I would anticipate that the Treasury may make its announcement while we are in recess. July tends to be the time of year when such things are done, and we are having discussions about it.
You made another point at the beginning, Andrew: I wrote down "more responses", but I am not sure what the point that you made was.
The two remaining points that I made were, first, when you would make your announcements on the allocations that are still to be allocated, which exist outwith the sums in this budget and, secondly, whether you will give an undertaking to answer as soon as you can the responses that still have not been mopped up.
Members may have issues which would appropriately be answered in other formats, for example, parliamentary questions. I am happy to continue to oblige with as much information as I can on that front. If there are outstanding issues for which committee members would like to request further information or clarification, I am happy to try to oblige, although I cannot promise always to give you everything that you want.
On the issue of the money now allocated from the March budget announcement, I believe that a statement was made to the Parliament about that last month. At the time, it may well have been the subject of some comment from you, Mr Wilson. I suspect that we might find that the Official Report quotes us both.
We will have to move on. I think that every member wants to ask a question, and Keith Raffan is next.
I will begin with a couple of brief points, because I want to cover quite a bit.
How many people attended the two consultation meetings in Greenock and Dumfries?
Approximately 70 at each.
How were the invitations extended? How representative were the people who turned up?
The invitations were extended to a broad range of local community organisations from the public, private and voluntary sectors, with a view to getting people along who already perhaps had an interest and a degree of knowledge about the budget.
To some extent, it was an invitation to be plagued by questions, comments and vested interests. In fact, the meetings have gone very well, and people have not always stuck to their own particular interest, but have commented more generally. We took the view that that would be a way of generating an informed audience, but one which also had something to say.
Something that you will probably agree with is the Stirling assembly, which I think is a great innovation. Its meeting on the budget was attended probably by 150 representatives of community councils, the voluntary sector and several MSPs, including me, Richard Simpson and Sylvia Jackson. I think that the same format should be suggested to local authorities throughout Scotland. Stirling is innovative in that regard. I learned a lot about that council's budget and about the points of concern there.
The timetable is tight, and we are out of kilter with Westminster, which is a problem. I do not want to go into that matter, but the earlier we can get the information, the better. Because of the timetable, it is absolutely crucial that the document is accessible and contains robust information. I do not want to go through the details of committee stuff. You have not seen it, and it would be unfair—and I am always fair. The point is that it has been necessary for committees to correspond with you to get extra information, which you were happy to provide. If it had been available at the start, however, the delay of having to write to you would not have happened. That would make it easier for committees, at a time of year when they are under great pressure. It is crucial, therefore, that the information is all included.
The actual document was too slim, and not substantial enough. Both were too slim, in fact. Like Elaine Thomson, I have bees in my bonnet, but what can we do? We have covered underspends, and you know, minister, that we need the real-term figures—I sound like a broken record. We need to address the underspend issue, because if money is carried forward, it is difficult for us to know what the baseline is.
All that has affected what the committees have said: they feel that they cannot reallocate expenditure because they do not have sufficiently robust information.
I hear what you say, Mr Raffan. I have picked up some of what has been said in the committees. I am happy to examine the provision of additional information in detail. That will be easier to anticipate next year, as a result of the requests which have come from the committees this year. My only plea is that, before we commit to a style of document or level of information for next year, we do not get bogged down in the search for greater detail in this process, as opposed to an MSP's on-going work such as going to the library, asking parliamentary questions, covering matters of interest, probing, challenging and finding areas that they want to push in a committee.
That is the whole point. If there is an index and the information is well presented, no one will get bogged down.
I understand your point about the clarity of the document and people's ability to access the required information. That might mean a less slim document. On the other hand, members would not necessarily appreciate sitting with a huge document that contains too much information. Although such a document will be appropriate at a certain point in the year, this part of the process is meant to be the strategic overview. I am very happy to discuss improvements to that.
As far as I am concerned, if there is a good index that allows me to access information, I would rather have all the detail. No one is going to read through the damn thing; people are going to look for certain information in it. The main requirement is that such information should be readily accessible.
I want to raise several important points. We have covered salaries in local government. When I asked the First Minister about ring-fencing at First Minister's question time, he said that it accounted for a tiny amount of the local government budget. Afterwards, a minister told me that it accounted for about 10 per cent. That is a cause for concern.
Secondly, because a lower share of the assigned budget will go to local government, there will be an impact on the voluntary sector. Local government is one of the primary supporters, along with the lottery, of that sector.
Finally, and most important, there is the whole question of cross-cutting issues such as drugs and the difficulty of finding out what the Scottish Executive is spending on treatment and rehabilitation. There is a cross-cutting ministerial committee; however, such a cross-cutting approach is at the Executive level and has not reached the ground yet. I am currently on an inquiry into drugs, and we do not have an overview on the total amount that has been spent. What will you do to help us with that problem?
On local government, we have undertaken a review of the system with COSLA, and we are working hard to improve the system for next year. For example, focusing on outcomes might be a better way of identifying expenditure on the voluntary sector. You said that ring fencing accounts for 10 per cent of the budget. Local government colleagues make the key point that there are other ways in which the budget, in effect, influences them to ring-fence specific areas. It would help if we could change that approach and still deliver what we all want. If we were able to build a three-year budget plan for local authorities within that new approach, they could give a measure of stability to voluntary groups through grants. That would be a good thing and would address some of your points.
Although we make no promises on making progress on local government finance, we hope that progress will be made, because—as Keith Raffan and I have both stated—the status quo will not be acceptable for next year.
On issues that concern committees, there will be a relationship between what happens at this point in the financial year and what happens throughout the year. Drugs provides a good example of that; a committee will be able to examine that issue in some detail during the year and accumulate information on finance and other aspects of service delivery. At this time of year, the committee will be able to feed that accumulated knowledge into the budget process.
That is part of the reason for our having these difficult discussions now: the committees are still accumulating that knowledge and experience. As the years go by, once the committees have developed their direction for what they regard as major priorities for a change in emphasis or strategy, they will have an opportunity at this point in the year to influence the budget on something that they debated back in November and on which they produced a report. That is the way that it should be done, in my opinion. I hope that the discussions between the committees and ministers about the drugs strategy and about funding to tackle drugs will continue and will feed into our decisions.
I am determined, as part of our spending review over the summer, to get a handle on drugs spending and to use that as a good example of cross-cutting budgets that maximise the value that we get from our expenditure. At the public consultation in Greenock last night, the point was made very clearly by a woman who gave that very example. She mentioned how spending from different departments and agencies can have an impact on the problem of drugs, and how, by tweaking spending, we might deal with the problem in a slightly better way.
I want to mention certain things that do not seem to be open to scrutiny, or that try to resist it. An example is the Scottish Prison Service, with which I have had problems. I would be happy to discuss that with you when you are wearing your ministerial hat for ensuring openness.
My next point concerns getting some information from the drug action teams, and my last point is that the Executive seems to be feeding money to the SIPs for tackling drugs, but that the DATs are not aware of that. There must be co-ordination to avoid duplication, and to ensure that money is not being wasted.
I hear what Mr Raffan is saying on that, but I am not completely up to date with all the details of the various budgetary arrangements. Members and ministers have made the point that we need to co-ordinate drugs spending and our drugs strategy. I believe that the work that is under way will lead us in that direction.
It is a measure of the momentum we are generating that, while people are welcoming "Investing in You" and recognising the added value that it has given, there is a desire to move on. You have recognised that, minister. Part of that desire is to try to get long-term aims, such as the global strategy that the UK Government has discussed for tackling child poverty, expressed with a time frame.
We thought it appropriate to have a period of 10 to 25 years for some health-related matters; other budgets may have slightly longer or shorter time frames. It is then a matter of considering the intermediate objectives, for example in the comprehensive spending review, or, in the case of health, the health improvement programmes and trust implementation plans, which are five-year projects, and relating the budget—the bit that we are discussing now—to the targets for this year.
A number of committees expressed concern that the targets sometimes related to things that had been completed before this budget process started. Some other things took place in the course of the year, and others happened later. In the same context, we needed to get good baseline data—as up to date as possible—on those elements in order to understand that.
I would be interested to hear your comments, minister, about those points on the general structure.
The objectives and targets in "Investing in You" were, to some extent, an effort to relate the budget to overall objectives. That aspect of the document needs to be improved upon, with regard not just to specific content and sets of targets, but to consistency across the various chapters, in which different targets were expressed in different ways, and in which different bodies were either included or excluded.
I am keen to improve that aspect of the document, and perhaps the current spending review will give us an opportunity to do that. I hope that, in our spending plans for the next three years, we will relate our plans to the programme for government and to other clear sets of targets. We would then find a way of explaining that, in whatever documentation we produce this time next year. That would give the committees a better opportunity to fit the budget to strategic targets and to see whether we had carried out our plans.
The point is well made. Not only do we accept that, but the finance team—the department and myself, as Minister for Finance—want to work towards improving that part of the process and to expressing more clearly the relationship between targets and budgets.
My second point is linked to that, and concerns the point that was raised about real terms and cash terms. To some extent, that issue is insoluble, but nevertheless, many of the committees share a desire to try to get a little closer to the judgments that departments are making. That would allow us to demonstrate to the public your point that there are significant real-term increases in some budgets. It is quite difficult to get a feel for that if only a general inflator, or general deflator, is applied; information about the specific angle that has been taken, on what is a complex matter within each departmental budget, would make that less difficult.
I recognise the point that Richard Simpson is making. However, we face a conflict between publishing those figures that would appear in a budget bill, which are about authority to spend, and the more informative figures, or explanations, that might go into issues in a little more depth. The difficulty lies in getting the balance right. We have a duty and an obligation to publish the actual figures, but—whether during this process, at another time of the year, or by giving specific examples from time to time about the important issues of the day—we must find a way of debating and discussing an issue on the basis of the most accurate information. That is part of the learning process of how best to approach this issue.
I welcome that approach, which could form part of the discussions between you and the conveners, as you suggested. It would provide a partial resolution to the situation—I do not think we will ever achieve a complete resolution.
I will follow on from the point that Richard Simpson just made. Although you have not seen the committee reports, one of the broad themes to emerge from them was the lack of presentational coherence that Andrew Wilson mentioned.
Another source of concern for members of all committees is the problem of aims and objectives. The picture that emerges is of a desire for a document that is stronger on accounting for money, rather than one that helps us to measure progress towards our strategic goals. That point also emerged during our inquiry into the finance functions of the Scottish Executive, in relation to your specific role and that of your department.
Could you take a stronger role in setting the aims and objectives, or at least in trying to make the different departments align their aims and objectives? That would allow us to move towards a situation where we could see whether the money in the health budget that is spent on our social justice agenda would be better spent on local government or education. Could you develop that approach? I know that we are at an early stage, but if we are to make the aims and objectives robust, someone must take an overview. Are you ready to do that?
The slight difficulty with that suggestion is that we might reinvent the wheel. We developed the programme for government last autumn and I expect that at some stage, either annually or whenever, that document may be used to report on progress—it may even be updated. To some extent, that document provides a different focus for the aims, objectives and targets. We also have the social justice action plan and the social justice report, which is committed to an annual report of the progress that has been made towards its aims and objectives. Then we have the financial documents—no doubt, there are a few other documents around the place as well.
If anything, the First Minister has ultimate responsibility for such an overview and for ensuring that all the aims, objectives and targets are pointed in the same direction and match one another. He also has responsibility for the programme for government and for the policy unit, which, at an administrative level, is responsible for co-ordinating that activity. The First Minister would be clear about that.
We must ensure that the work that we do in producing budgets matches those overall priorities. We must try to fit the aims and objectives that are expressed elsewhere, and the way in which they are measured annually, to the budgets that we agree. We could have done that better in this document; that is one of the things that we want to work on. I am happy to make a contribution to that process without duplicating the work that is done by others.
I have several points to make. First, you seem to take a schizophrenic approach to contingency funds in your letter of 12 June. Can you expand on the comments in that letter? We will have those funds, but they will not be de facto ones.
Secondly, what is your view of the relative impact of the public consultation? How much will it affect the budget? I do not think you will receive enough input to make it significant.
My third point concerns the apparent weakness in the relationship between objectives and targets. It would be extremely useful if the finance department could produce regularly updated and available deflators for the different activities in the public sector.
The point that we were making about the contingency fund is that it is good policy not to commit all the end-year flexibility money to the individual departments in which it is generated. That gives us a central resource that can be used for contingencies. There is no attempt to create some sort of secret fund that would be hidden away.
Much end-year flexibility will come as a result of the phasing of expenditure, but end-year moneys will also become available because certain planned items of expenditure have not gone ahead or because costs in a certain area have dropped. We must find a way of accumulating that money and using it to meet the objectives and targets that we are talking about. That is the purpose of the 75:25 split. We will review that annually, to determine whether it is working in practice, and that will be the subject of any information that we provide to the committee.
What was the other issue?
The importance of the consultation and its possible effect on your position.
The importance of the consultation is taken for granted. We would not make the efforts that we are making if we did not take the consultation seriously. Its impact will depend on the strength of the views that are consistently expressed and on whether they can be matched in budgets and the decisions that are made by ministers and the Parliament. I am keen to report back on the views that have been expressed, to find out how they match the priorities that we set. I suspect that trends will be reflected in different meetings and in the responses that we receive.
I do not doubt that we will receive many responses that are simply bids for money in areas of immediate concern to the respondents. However, we will also receive genuine responses concerning how people feel about the way in which we are spending public money in Scotland and our priorities. If that helps to educate us and to inform our decisions, that can only be a good thing.
My third question concerned whether you will consider the regular publication of actual deflators for different sectors of spend in public services.
We have a consistent and accepted pattern for calculating such things, although I understand that individual committees may want to consider the cost impact of certain services. I hope that the Parliament's committees will examine areas in which costs are decreasing as well as those in which costs might be increasing at different rates, and identify potential funding sources for us as well as the resources that are required. Rather than our taking an approach across the board, the best approach would be for committees that want to consider this matter in detail to start the process off by considering it in relation to individual instances.
We must be careful to ensure that the Scottish Executive finance department does not end up spending all its time providing such information instead of doing the sort of work that members have said is important, which involves looking internally as well as providing external information. We should also ensure that we do not provide so much detail that we confuse people. We must learn from experience. It might be helpful if the committees that have particular interest in such calculation took an interest in that over a sustained period. We would learn from that experience whether that would work elsewhere.
Thank you, minister, for contributing to a marathon session of almost three hours. If it has seemed like a long time to you, you should know that we have been here since 9 o'clock and will come back at 4.30 this afternoon. We are aware that this is the morning on which the cabinet meets, so your presence is particularly appreciated; it has been an important part of the process.
We will present the formal report to Parliament on 28 June, but we have also decided to produce a report on the budget process, including our comments and those of other committees, which we will publish in the autumn. We would like to include in that report the results of your public consultation. Could we have those in due course, so that we can feed them into the report and get the full benefit of the first year of the process?
Yes.
Thank you for your attendance and for answering our questions so fully.