Enterprise and Culture Committee, 14 Dec 2004

Meeting date: Tuesday, December 14, 2004

Official Report 303KB pdf

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Budget Process 2005-06

We move to agenda item 5. Members might remember that, when we discussed the budget, we asked both the ministers to whom we spoke, Patricia Ferguson and Allan Wilson, to provide us with follow-up information. Patricia Ferguson provided detailed follow-up information—in fact, she provided more than we requested and I, for one, am satisfied with it. However, I am not satisfied with the follow-up information that we received from Allan Wilson, especially the information on the Scottish Enterprise budget. To my mind, the reply has all the hallmarks of civil service officials who are determined not to give the committee what it wants.

In the draft budget, the Scottish Enterprise budget is presented in four broad lines. Growing businesses accounts for £100 million or so. Then there are another two lines, plus one on management and administration that accounts for about £80 million. When we asked why £80 million is being spent on management and administration, the civil servant told us that the money is not being spent on that. If so, why does the budget say that? I put the matter on the agenda to get feedback from members on whether they agree with my view that we should tell the minister that the response is not good enough. We need far more detailed information on Scottish Enterprise's budget. It is not our job to rummage through the organisation's corporate plan; it is the department's job to provide the information for which the committee has asked.

I agree. Appendix 4 of the minister's letter, which contains the figures on Scottish Enterprise, gives a figure of £136 million for management and administration, which does not equate to the figures in the broader outline in the draft budget. Also, the figures on operational and running costs bear no relation to the figures above them. It is by no means apparent where the figures on operational and running costs have come from and what the definitions of those terms are. We need more clarity.

I want to clarify the committee's role in the matter. There is an important question about the Executive's allocation to Scottish Enterprise, which we probed at the session with the minister. There is also the line beneath that and the issue of how the agency allocates resources. Is it appropriate for the committee to drill much further into that latter point, given that the Audit Committee, of which I am a member, spent considerable time examining those issues? The position is resonant of the discussion that we have just had on the Transport (Scotland) Bill. However, as ever, I will be guided by the convener on such matters.

Susan Deacon has put into words the niggle that was at the back of my mind. Is that not a question for the committee to ask of Scottish Enterprise, rather than of the minister, if it is an appropriate question for the committee to ask? I think that it is, and I do not see why we should not ask it if that is what the committee wants to do. I am conscious that there is a difference, having previously been a member of the Scottish Enterprise board. It is for the chairman and chief executive to come here and tell us how Scottish Enterprise has allocated its funds.

I have asked the chief executive about that, and he said that he has to present the level 3 data in the way that he has done because he is ordered to do so by the Executive. Only two agencies are asked to present the data in that way: Scottish Enterprise and Highlands and Islands Enterprise. For the level 3 expenditure of VisitScotland or any of the other quangos for which we are responsible, there is quite a comprehensive breakdown. The gobbledegook about the expenditure being directed at strategic objectives renders the level 3 figures meaningless.

We are not the Audit Committee. It has a different job; our job is to ensure that the money is being spent effectively on enterprise, training and all the other things on which it is supposed to be spent. To be frank, I do not see why the Enterprise, Lifelong Learning and Transport Department should not provide the committee with the information that it requires.

That is if it has it at that level. You have been told by Scottish Enterprise that it gives the figures to ministers, so the ministers must have them, and we are interrogating ministers, not Scottish Enterprise, on the budget. We can call in Scottish Enterprise at another time and ask its representatives about the figures but, at the moment, the issue is part of the budget scrutiny. If the ministers have the figures, we are not asking them to go to any additional lengths to put the information together. No staff time is being asked for if the information already exists, as Scottish Enterprise says it does. We speak to ministers about the budget; to go to another, outside organisation as part of the budget scrutiny is not correct. I understand what Christine May says, but the matter relates to the budget process and is therefore in-house.

If the information is provided to the minister in the form that we want as part of a comprehensive, detailed round-up of the level 3 spending, let not us not trawl through all the chapters of the network operating plan, but have another go and ask the minister once more whether we can have it.

There is something seriously wrong if we are told that there is a budget of £80 million or £136 million—whatever the figure is—for management and administration, but when we ask for a breakdown, we find that it is not management and administration, but a whole load of other things. How can we measure the effectiveness of the enterprise spend when we get that kind of response?

There is no reason why, in the letter to the Executive, we cannot say that it might wish the two enterprise agencies to present it with figures in a more understandable format, which it can pass on to us.

That is all that the committee asked for when we questioned the minister.

It would observe the nicety of what Mike Watson said.

Yes. Are members happy that we write to the Executive along the lines that Mike Watson suggested?

Members indicated agreement.

There is still resistance in the civil service to giving the Parliament what it is looking for, and we as parliamentarians need to take that on.

I seek your guidance on whether there is anything that the committee can or should do about this issue. We got back further information on the individual learning accounts spend—or, rather, non-spend. The point is that money was budgeted for ILAs but was not used, because the new scheme is not in place. Coincidently, we have also received from the clerk a progress report on the introduction of the new ILA Scotland scheme. It is not part of our formal papers, but I think that it is in the public domain anyway. Am I allowed to refer to it?

Yes, I think that it was announced yesterday.

I have a concern, which I know that others have voiced in other forums, about how long it has taken for the new scheme to come to fruition. Given that the committee has been contacted formally on that, is there any scope for further questioning on the matter? To return to the budget, I am concerned about whether there is any connection between the delay in implementation and the financial pressures on the departmental budget to which the resources have been reallocated. Could or should that be referred to any further in our budget deliberations?

I will make a suggestion. I think that Allan Wilson is due to appear before the committee on 25 January. [Interruption.] I have been told that Jim Wallace is due to come on 18 January. That is even better.

Why is it better?

The clerk informs me that both Jim Wallace and Allan Wilson are coming on 18 January. It gets better and better—why do we not have Jack McConnell as well? The main subjects to be discussed are renewable energy and smart, successful Scotland. If the ministers are agreeable, we can also raise ILAs. Would that be satisfactory?

Yes, if the committee is comfortable with that.

I do not think that anything will happen between now and 18 January to change the situation. The scheme will not be up and running for months.