Financial Scrutiny
I asked for this item to be put on the agenda because I think that we should reflect on how the Parliament's first budget processes have been conducted and decide whether we are content with the procedures that are involved.
The Finance Committee inherited the financial issues advisory group—FIAG—report. The Procedures Committee has been reviewing the consultative steering group recommendations to establish whether they have been implemented adequately through the Parliament's standing orders and procedures, and I wondered whether the Finance Committee felt that there could be scope for reviewing the application of the FIAG recommendations, as a parallel exercise to that which is being undertaken by the Procedures Committee.
In my view, we would not want to do that in precisely the same way that the Procedures Committee has adopted, because our exercise would be different. The committee might want to consider whether it feels that the FIAG recommendations have been implemented and whether there is any scope for modifying those recommendations in the light of our experience of financial procedures over the past two years. In that context, it occurred to me that, given that we have the experience at our disposal and that FIAG examined the budgetary models that apply in other devolved contexts, it might be worth re-examining other models and finding out how ours stands up in comparison with the methods of conducting budget processes elsewhere.
There are issues around how well other committees of the Parliament, as well as this one, can conduct their budgetary reviews in their subject areas. We now have on board Professor Arthur Midwinter, who is helping to develop the budget with us and, potentially, with other committees.
A number of approaches, therefore, are available for reviewing the financial monitoring and budgetary procedures, and I suggest that it might be good for the committee to begin to do that. I simply propose that as a potential area of work for the committee. It is really just a suggestion.
Two or three points spring to mind. First, what powers does the Parliament have and how can we influence them and the decisions that are made? The Parliament would have to decide on any changes to the budget process, should we come up with any firm recommendations. Presumably the clerk will be able to update us on that at some stage.
Secondly, there has been extreme dissatisfaction on the part of various committees over the past three years. Part of that involved the teething problems at the beginning of the parliamentary session, about which nobody is arguing—the Parliament will evolve in time.
I also sit on the Audit Committee, of which Brian Adam is a former member. I think that there has to be some connection between the Finance Committee, with its forward-looking view, and the Audit Committee, with its reflective view. At the moment, the Audit Committee—about whose remit I am not very happy—tends to consider specific items that are referred to it directly from the Auditor General for Scotland; it does not examine the decisions that were made in the budget process, or the outcomes. We are interested in examining the outcomes, and we have been discussing that for the past two years or so.
That sort of discussion has to be timetabled in such a way as to lead to a debate in the chamber, so that the Parliament may, at the end of that period, however long it may turn out to be, make a decision. All the other committees—and, in particular, the conveners—would like to comment on the impact on the committees' workings. There is a huge amount of frustration among them, much of which comes down to the qualitative aspects of the budget process, as opposed to the quantitative aspects.
I am happy to support the convener's suggestion that we conduct a review, but I think that a paper needs to be produced to specify what we might examine.
I intended just to float my idea to find out members' responses. Perhaps we could produce a paper to set out how we might proceed from here.
This is the third budget round for David Davidson and me, and I agree that it would be appropriate for us to take a look at the process. It is becoming obvious to me how long and drawn out the process is, and perhaps it does not need to be like that. The committees' input to, and relationship with, the process could perhaps be improved.
The Finance Committee previously conducted an informal, minor review of some aspects of the budget process; it would be worth looking at what was done before, so that we can build on that.
I agree that it is always valuable to consider other models and how people conduct budget processes elsewhere. A fairly wide exercise was carried out by FIAG in the first place, when it was preparing its report. I cannot help feeling that we should modify the process in the light of our experience and to fit our requirements here in the Scottish Parliament, rather than spend too much time considering other models, unless there is something particularly obvious or valuable to be learned from elsewhere.
I agree with what has been said. Having gone through the budget process once, I am not clear about what would have been different at the end of the process if we had simply not bothered. Nothing much seemed to change compared with what we had at the beginning, to be honest. A review of the effectiveness and aims of the budget process would be useful.
The paper on the budget process that we agreed previously showed how constrained we are in dealing with it. In effect, we cannot make any amendments.
Actually, that is not right.
Considerable frustrations have been voiced by the Finance Committee and other committees about the process. I think that the convener's suggestion about a fundamental review of the process is well worth while.
Perhaps the clerks should go through previous committee Official Reports to ascertain where the frustrations lay. They could even go back to the debate, early in the session, about the Public Finance and Accountability (Scotland) Bill, when a number of concerns were raised about the process. To be fair, some of those concerns have been worked through with the Executive and successive finance ministers have made, or agreed, changes to the process. However, there are still a few things to be considered.
Having been a member of a number of subject committees, I am aware of the level of frustration that exists. I am also of the view that I tended to know a lot more about the choices that were being made when I was involved in local government than I do in this context. There are some issues of transparency that we could push forward.
The FIAG report envisaged that the Finance Committee could have a specific role in developing budgetary suggestions and alternatives, as could some of the subject committees, but that power has not been used. We might want to ask what would make it possible for a committee to take an alternative view on a budgetary issue. There are a number of issues to do with enabling, empowering and clarifying that we could cover as part of our review.
Elaine Thomson mentioned alternative models. I was not suggesting that we go through exactly the same exercise as FIAG did with international comparisons, but we should not be blind to such comparisons. We might want to review FIAG's work and see whether there are any further models or examples that might be relevant to our experience and practice.
We are considering a paper from the clerk, which deals with stage 2. It always strikes me as rather odd that when we get to stage 2 we are unable to pursue any recommendations for change—only the Executive can do that. If the Executive listens, that is fine. If it does not, the budget is rubber-stamped and out the door. That strikes me as one of the fundamental weaknesses of the process, never mind the work that is done in getting to the bill itself. There are refinements to be made in that process, but being able to pursue recommendations for change would at least allow us to have a proper debate, as happens with other bills. That is not happening, and has not happened, in dealing with budget bills.
People will always moan about budget processes. No one is ever really satisfied with them, least of all members of Opposition parties, who would like to be in the Executive's place and therefore always moan about the budget. I mean no disrespect to Opposition members when I say that they always moan about the budget; that is their job, after all.
If the Finance Committee and other committees were encouraged to state in simple terms where their dissatisfaction with the process lies, a discussion with the Executive could ensue about what the Parliament sees as shortcomings and how they might be rectified. If there is no such dialogue, members could still be complaining 10 years from now about shortcomings in the budget process. Over the past few years, Executive ministers have taken on board some points that have been made and have been prepared to modify some things, although perhaps not as much as some would like. Clearly, that is not satisfying the Parliament and perhaps it never could. Rather than getting over-involved in a discussion that is, for want of a better phrase, a greeting meeting, perhaps the Finance Committee and other committees should lay down in simple terms what they think the shortcomings are. That would allow us to engage the Executive in a discussion about how it feels any changes would impact on its ability to administer the budget properly.
Is not the point that we spend far too much time talking about the process and not enough on the content and outcomes of the budget?
There is an issue about whether we are spending too much time on the annual budget review, rather than considering a biennial review or what comes out of the spending reviews. There are a number of issues about how we manage our business, about the procedures that the Parliament operates and about how other committees are being empowered or otherwise in the process. All those things could come out of a review of the initial principles and an examination of how they are being applied.
I sense that committee members would support such a review. We could sketch out a paper for the next meeting to lay down a basis for how that could be done. I could speak to the clerks with a view to seeing what resources would be needed to support us in conducting such a review. There is a deadline for applications for such resources at the end of this week. We could make a general bid for support, but it would be for the committee to define more precisely how the work would proceed. We could discuss that further at our next meeting. Is that agreed?
Members indicated agreement.