It is a pleasure to move on to item 2, under which we will take evidence from the Scottish Parliamentary Corporate Body. Item 2 is on their submission for the 2002-03 budget.
The committee must consider two documents together.
Thank you very much. I remind members that we are dealing first with the corporate body's budget submission. We also have before us a letter from the Presiding Officer to me, dated 6 September. I wish to clarify for the record that the figures contained in that letter—albeit that two months have passed—still hold good. Is that the case?
Yes, I think so.
That is fine. The second paragraph of the letter from the Presiding Officer states:
I ask Stewart Gilfillan to give details about that.
That increase is due largely to the increase in the cost of the Holyrood project. The increase in current expenditure is about £2.5 million, and the remainder is in capital expenditure—largely on the Holyrood project.
Where will that increase come from? Should we understand that it will come from the Scottish Executive reserve?
In a sense it is just an increase over what we had previously bid for.
But would the reserve be the source of the additional funds?
Yes.
It is not used until it is drawn down, as I understand it.
I understand that.
It is something of a paper exercise until the real figures come through.
The first paragraph of Sir David Steel's letter refers to providing us "with more detailed plans". I have the disadvantage of not having been on the committee when and if it discussed the matter previously, but is the SPCB budget submission that is before us today—this single sheet—the "more detailed plans"? It strikes me that there is not very much detail in it that we can probe. The headings are all general, with large figures.
It depends on the level down to which we will consider the matter. Executive departmental budgets deal with much bigger figures than will be contained in the SPCB submission. Detailed management of the figures is a matter for the corporate body to go into in detail—although the Finance Committee can probe particular issues of concern. We could include huge numbers, but I am not sure that that would be particularly valuable to the committee, which—I think—is concerned mostly with trends and major headings.
I was not party to the agreement that was apparently made to provide us with more detailed plans, but if the sheet that is before us is the "more detailed plans", I would hate to have seen the less detailed plans.
As agreed, figures are formally defined as level 1, level 2 and level 3. Level 1 is basically our one-line budget bid, about which Sir David wrote to the committee in March. The committee has been provided with a greater level of detail—the submission already contains far more detail than the committee will get from the Executive or any other bodies.
I understand what you are saying. Clearly, the smaller the budget that we are dealing with, the less satisfactory is the level 3 detail. It becomes very little detail, which makes our job difficult. I can understand that it might come down to asking what an individual was paid and clearly we do not want to get to that stage—at least not today.
It is largely a question of the difference between the Finance Committee's role in the general trends and the more detailed look that the corporate body will have. We are in a position to answer any particular questions that members have on the detail, but the submission probably gives members enough indicative information to enable the committee to do its job. I think that that is the main point.
I wish to clarify line 1 on "Property Costs" in the detailed plan. Is the increase of £3 million in those costs the result of dual running costs?
I do not think that the increase is entirely because of dual running costs. There is also the fact that we have other premises on St Andrew Square.
Yes. It is largely the result of taking on additional accommodation at St Andrew Square. When we submitted our budget submission a year ago, we did not know the full costs of that.
Will those premises come on-stream next year?
They are already on-stream, but we had not taken account of that when we submitted the budget bid last year.
We do not want to get into too much detail, but £3 million is a big increase. Are you predicting that that increase will be permanent, or does it come from the costs of running two properties?
Are you referring to the increase between 2002-03 and 2003-04?
Yes. The first line shows that the property costs will increase from £4.155 million in 2002-03 to £7.105 million in 2003-04.
That increase is largely accounted for by our projection of what we might have to pay in rates for the Holyrood building. I can assure members that we are trying to negotiate that cost down. However, the figure is based on professional advice and it is what we feel it prudent to budget for. I am hopeful that the figure will come down.
Is the negotiation with the City of Edinburgh Council?
The negotiation has not started yet, but it will be with the City of Edinburgh Council. At the end of the day, we will go all the way to an appeal if we are not happy with the valuation. The issue is to do with how the building should be valued.
I want to clarify the assumptions on which the line for MSP pay and the line for MSP office staff and accommodation costs are based. Am I right in thinking that the assumption is that MSPs would be paid 90 per cent of what MPs are paid? That was agreed some time ago, but has not been agreed more recently. Does the £8 million-odd figure for MSP pay reflect that?
Yes.
The office, staff and accommodation allowances for MSPs were adjusted recently, but there was a very considerable hike in allowances for MPs at Westminster. The SPCB's figures do not suggest any sort of hike. Are you assuming that the review body will not increase office allowances for MSPs even if it increases MSP pay?
That question leads us into a slightly different area. We do not know what recommendations will be made on MSP pay, but we have assumed that MSP pay will be kept at least at 90 per cent of MP pay, which is the current arrangement. Whether MSP pay should be greater or less than 90 per cent of MP pay is a matter for the Parliament.
Is it possible to tell us what the figure was for MSP office, staff and accommodation costs for 2000-01, so that we can see how much the increase to £8.231 million—the costs for 2001-02—was? I accept Robert Brown's argument, but providing that detail would help to quantify matters.
Donald Gorrie's question perhaps goes beyond the remit of what we are dealing with today, but if the figures are available they might be of interest.
I have the figures. In the annual outturn accounts for 2000-01, the figure for MSP office, staff and accommodation costs was £6.2 million. The fairly significant increase reflects the cost of the recent review.
I want to stick with the first section of the SPCB budget, which deals with resource costs. Do you have figures to show how the MSP office, staff and accommodation costs are split between what is spent in the parliamentary complex and what is spent outwith the parliamentary complex?
Largely, the line that is called "MSP Office, Staff and Accom. Costs" is what is paid out through the allowances scheme. Everything else—such as centrally incurred postage, which comes off a central contract—is contained within the line "Running Costs".
Can you provide an indication of how the running costs have changed over the time that the Parliament has been in operation?
I do not have that level of detail in front of me. As far as I know, there has been a steady increase in running costs, but not a great increase. I think that running costs is one of the budgets on which we have underspent. For example, we made quite a large provision for centrally provided postage—which was projected from the figure at Westminster—but that projection has proved to be wrong. We have been able to reduce some budgets and make some savings.
If certain items are underused, is it likely that some of that money will be transferred to running offices out in the community?
That is a matter for the Parliament. At the moment we cannot vire—to use the technical term—from SPCB administrative costs to the allowances scheme. The allowances scheme is controlled by a statutory resolution of the Parliament. If the Parliament passed a resolution to increase the level of allowances we could, if necessary, vire underspends from other budgets to fund that.
The key point is that the SPCB cannot do that administratively. We are controlled by the Parliament's orders in that regard.
I accept that, but it is nice to have that on the record.
We did not introduce that at the beginning because we did not have the systems in place. Having started off without such a regime, we have until now taken the view that members might be resistant to having to punch numbers into photocopier machines. That sort of question could be asked as part of a general review of the way in which we deliver services to members. If members and their staff were willing to live with a regime that more closely monitored their use of central resources, I for one would be more than happy to introduce it. The key is whether members think that such a system would deliver the best service.
I know that this is pretty unlikely, but are there any other areas of significant underspend?
To which financial year are you referring?
I refer to any financial year. Are there areas in which there is a significant underspend in comparing projected figures with actual operation of the Parliament over the past couple of years?
There has been a consistent underspend on staff pay. The underspend has occurred because we are usually running at about 90 per cent of complement. One always aims to fill posts and one must budget for full complement, but in practice we tend to carry 30 or 40 vacant posts. That is the result of staff turnover and because we are living in a fairly tight labour market. We are examining the situation; perhaps we need to start making judgments on whether to reduce that budget slightly. On the other hand, we always try to get up to full staff complement to relieve pressure on certain key offices. The pattern of underspend on staff pay is caused by vacancies.
Are those figures comparable to Government offices?
We have not done a comparison, although such a comparison might be interesting. I think that the number of civil service staff in the Scottish Executive has increased significantly over the past two or three years. Although the pressure has eased off, rather than simply maintain a steady state we have had to increase the size of the organisation as new demands have arisen. It would be interesting to make a comparison between the Executive and the Parliament on that issue, but I guess that the Executive is more or less in the same boat as we are.
One also needs to keep staff numbers in check and keep an eye on how the numbers are going. In the recent past, the SPCB has given quite a bit of time to considering whether some staff are needed only to deal with the changeover to Holyrood. Issues such as how long staff will be in post and whether they are necessary have been closely considered by the corporate body.
Surprisingly, one area in which we have underspends is members' allowances. At the moment, we feel that it is prudent that we make provision for all members spending their full allowances. Clearly, the pattern of the past two years is that members have not spent their full allowances. It might be that we can start making certain assumptions and reduce that budget. At such an early stage, however, we must be careful before we do that.
Approximately how much underspend is there in that area? Are members spending half their allowance, three quarters of their allowance or 90 per cent of it? You may not have the figures to hand.
I have the figure for the financial year 2000-01. We had provided a budget of just over £8 million, and it was spent only to the tune of £6.2 million. There was a £1.8 million underspend on members' allowances.
So about three quarters was spent.
Yes.
That is a story that has yet to make its way into the media. Let us see whether it does.
We should be careful; making assumptions about that budget at this point could be extremely dangerous. We have just stopped having dual-mandated members, who may have claimed allowances from Westminster and not from the Scottish Parliament. This year may be the first in which the costs associated with that change are reflected. Even then, it has been only since June that those MSPs have not held a mandate at Westminster. Touching that budget at the moment might not be clever.
We fully endorse that view. It is early days to assume that there will be significant underspend against fixed budgets.
We should also remember that not all the allowances are capped. Travel and accommodation allowances are not capped, so they are unpredictable in a way that the others are not.
Am I right in thinking that the non-Holyrood capital costs of just over £5 million for 2002-03 are primarily information technology costs?
That money is primarily for a technology refresh, which we would have expected to have done by now in any event. We would be the first to agree that our IT is not as up to date as we would like. As Robert Brown said in his introductory remarks, we reflected on whether we should just have that refresh anyway. What we will actually do is delay it slightly, so that we time it to coincide with the move to Holyrood. That seems to make sense and that is the professional advice that we are getting. Apart from some modest amounts for putting up new partitions and double glazing in the existing accommodation, almost all that money is IT capital.
Do the running costs of IT fall under the running costs heading?
Some IT costs will come under running costs and some will come under staff costs.
Most of the money comes under running costs. That is the major cost of the support contracts.
I note that, on page 2 of his letter, under the heading "Revenue Expenditure", Sir David Steel says that
We are talking about the financial year 2002-03. Those costs will come into play at the tail end of that year; there will probably be more in 2003-04.
When we finish giving evidence, we are going back to a meeting of the Scottish Parliamentary Corporate Body. We will be discussing in some detail the additional costs associated with the move to Holyrood, which we are still quantifying but which will primarily be short-term staff costs. If, when we have completed that exercise, the figures are significantly out, we will report back to the committee. That would still be our best estimate, but so far the exercise suggests that the figures are about right. We will complete the exercise in the next few weeks and will let you know if there is any significant change.
Would that sort of development perhaps be a result of the Holyrood progress group report that you anticipate producing at the end of the month?
Not really. Robert Brown talked about a sophisticated project planning exercise. There are something like 100 new contracts to let between now and the move to Holyrood, quite separate from the building itself. Just letting all those contracts is a huge effort and resources will be required. The specification and letting of those contracts will involve all the staff who provide existing services, so we have to find a way to free up the existing staff who have the expertise to let those new contracts while maintaining a level of service to members. We will have our first debate on that this morning, with some numbers attached. That accounts for the bulk of those additional costs.
You referred to the uncertainty of the costs of running two complexes at the same time. What is your best estimate of how long you will need to run both complexes together? What do you mean by running two complexes at the same time?
A lot of time is taken up in commissioning the new building and in checking IT and various other services. That is the major element. Over a period, staff and MSPs will be moved across. Paul Grice may be able to give you a clearer idea of the time scale.
The time scale could be as long as six months. The move will start on a fairly small scale. We will need security, facilities management and IT staff at the new site. Eventually, we will move more and more people down there over a period of time—possibly up to six months. You will have noted the rates issue. There comes a point at which we take ownership of the building and have to start paying rates on it, but we will probably still want to maintain at least part of the complex up here. There will be a period in which we have some double running costs and will need staff on both sites. Three to six months from now, we will have a much clearer idea. We are working on a detailed migration plan, which will inform that process. At the moment, we are giving you our best estimate, but we have not done the detailed planning for it. The outcome also depends on the final completion date of the building itself.
I take it that the rates in question are non-domestic rates.
Yes.
So they go to the Executive and are spread out equally among all local authorities.
Yes.
I am sure that the local authorities will be happy about that. You talked about a building in St Andrew Square. Is that a permanent building or a temporary one?
It is serviced office accommodation. We have taken nearly two floors there. As we have had to take on extra staff to support services to members, the main complex simply is not big enough. Stewart Gilfillan's teams are now based in St Andrew Square.
Once Holyrood is fully up and running, will you keep that building on?
I do not know what the lease arrangements are, but the accommodation is short term. The idea is that we will give up that accommodation when we move to Holyrood.
I want to ask about the lease on the old council property that we are using at present. What assumptions about exiting the property were made when that lease was drawn up? Will there be a premium to negotiate an extension? If so, what is it?
It was always assumed that we could enter into negotiations to extend the lease. As far as I am aware, no premium is involved.
So there would just be a pro rata extension. Is that definite?
There would have to be negotiations about the rent, but I hope that an extension would be pro rata. However, as far as I am aware, no premium is written into the contract.
I do not think that there are demands for any other parliaments to be set up in Edinburgh, so the demand will not be impossibly huge.
You talked about the potential costs of moving the Parliament outside Edinburgh next May, when we go to Aberdeen; you have made contingencies for that. When the decision was made to recommend Aberdeen over other alternatives, such as not meeting at all that week or shoving our meetings into one of the recess weeks, was that done on a financial basis? If so, why are we still talking about contingencies?
The decision was largely one for the Parliamentary Bureau, rather than for the Scottish Parliamentary Corporate Body. We have to produce the management to bring it into effect. The bureau made the basic decision, although the corporate body had input into decisions about the location. The costs of moving to Aberdeen should be seen against the background of the Parliament's desire to move around Scotland, so there are positives and negatives.
When the bureau made that decision, how firm a figure was available for the cost of the move?
We had fairly firm costs, did we not?
The SPCB provided two pieces of information. First, it gave an assurance to the Parliamentary Bureau that the Parliament could be run on that complex—in other words, that the services could be provided. That was the most important assurance. The bureau gave us assurances over a number of the options. Secondly, the bureau gave estimates of costs, which have gradually been firmed up as negotiations have continued with Aberdeen City Council. The estimates are reasonably firm.
What is the likely extra cost of moving the Parliament to Aberdeen next May?
The budget that we are working to is about £100,000.
When we were estimating the costs, we did not know what decision would be taken on the services to be delivered. Last time, some members thought that services could be improved. It also has to be said that when we went to Glasgow certain things were provided very cheaply. When we were doing the estimates, which was before the Parliamentary Bureau made its decision, we had to put a larger amount than £100,000 into the contingency.
I do not have anything on paper, but my recollection is that the cost of the move to Glasgow in 2000, over three weeks, was about £500,000.
The bulk of the cost lies in converting the Assembly Hall back to a mode in which it can be used by the Church of Scotland. The additional cost was about £100,000.
That will be about the same for Aberdeen, even though the Parliament is going to be there for only a week.
The cost is a combination of the level of service provided to members minus what the local authority can do. Glasgow City Council was extremely helpful to us in the accommodation that it provided.
Is Aberdeen City Council either unwilling or unable to provide that?
The council has been extremely positive and helpful. The accommodation is mainly on the university campus. We can produce more detail if you want. My recollection is that the bulk of the cost lies, as always, in putting in the cabling and IT services. The other significant cost last time—it will be the same this time—was broadcasting. Putting in a temporary broadcasting system is a significant cost. Those are the two significant elements over and above travel and subsistence costs.
As far as I am aware, both Aberdeen City Council and the University of Aberdeen have worked hard to ensure that the Parliament's visit to Aberdeen is as cost-effective as possible. I am pleased to hear that the costs are comparable to when we transferred to Glasgow, which is much nearer. As Paul Grice said, many of the costs are not related to distance and travel: they are related to IT and the refitting of the Assembly Hall.
Have we got a cost for next year's decommissioning and recommissioning of the Assembly Hall?
I have an estimate. The actual cost will be a contractual matter to be negotiated.
Could we have your estimate?
Yes, but I would be reluctant to give it while negotiations have still to take place with the potential contractors about the cost. All I can say is that we are confident that it will be less than it was last year, because the experience of having converted the building once means that less risk is inherent in converting it for a second time.
We look forward to getting that information at an appropriate time.
Have you made provision for the possibility that the chamber will not be available in May 2003? Are we likely to have to decant again?
That is a difficult question.
That is why I asked it.
The current expectation is that we will not need the chamber in May 2003. However, we will know better over the next three to six months what to expect, as we get more information on the programme and do a detailed migration plan for the period of spring and summer 2003. I am sorry that I cannot give you a more definitive answer.
That is okay.
I will disallow that question, as it involves speculation. It may be interesting, but it is not essential to the committee. That is the last of the questions on the SPCB budget submission.
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