Equal Opportunities Committee, 20 Apr 2004

Meeting date: Tuesday, April 20, 2004

Official Report 133KB pdf

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Budget Process 2005-06

Agenda item 2 is on the budget process 2005-06. I welcome Professor Arthur Midwinter, the budget adviser to the Finance Committee. He has prepared for us a helpful briefing paper on the budget process, which is a good starting point for our consideration of equality issues. I am sure that committee members will have lots of questions on it.

I will start with the issue of outputs and outcomes. The committee would welcome information on those, but my experience is that outputs and outcomes deal with numbers or, if you like, bums on seats. However, I am interested in qualitative outcomes that mean something to the aspirations of the people concerned. Previously, you spoke to us about the idea of equality audits. Could the committee develop that idea by asking the Executive to initiate an equality audit? Good words and good intentions about equality are all very well, but we need proof that things are working.

The Treasury guidance on outputs and outcomes suggests that they should be quantitative. My view is that output and outcome figures are not answers in their own right and that we should interpret them against wider policy objectives to make sense of them. The notion that all that is needed is a few simple performance indicators that can be put in a league table is just nonsense.

An equality audit could constructively assess how relevant current performance indicators were and what they meant in practice. I regard an equality audit as being a supplement to mainstreaming equality in the budget, but my instinct is that mainstreaming will take a long time. Given that the Executive is waiting for the results of its pilot studies, I am not sure whether it feels that it should enter into mainstreaming equality just now. I suggest that the committee raise the issue with the minister when she gives evidence on the budget.

The work could be done by the Executive or by the committee, if it was so minded, but to do it properly would be a big exercise. The Rayner studies of 20 years ago tried only to work out cheaper ways of doing things, but they used to take three to six months. A more serious exercise that tried to assess the effectiveness of policy for a range of groups would take longer. If the committee were minded to do such an exercise, it should move quickly. The summer recess is a good time to do the legwork, if the committee perhaps had a team of researchers working with it on the issue.

That was helpful, thank you. The Executive has made quite a play of mainstreaming equality and having equal opportunities as a budget heading; indeed, the minister has made it clear that that is an Executive priority. We would be interested to know how that is working and what kind of audit is taking place to ensure that the Executive is delivering on its priority.

Thank you for your briefing paper, Professor Midwinter. Paragraph 8 is on spending plans and you give figures in tables 1 and 2. However, there are significant gaps, as you point out. In paragraph 8, you say:

"However, this is still an incomplete account, as some activities by departments—which deal with problems of equality groups—are not costed in this way."

How are they costed? Are they costed in any way at all?

They are probably not costed; they are dealt with as part of a wider policy. The people who run the services tend to say, "If we generally invest in education, this will have a particular benefit for these high-need groups." However, I doubt whether we can put figures or benefits on that, which is where mainstreaming would probably come in. In my paper, I specifically identified those parts of the budget that I regarded as directly benefiting equality groups in some way or as being aimed at a particular problem. The Executive has always argued that there is a level at which spending on education, health and so on benefits equality groups, because those groups have higher-than-normal needs. However, we should not just take that argument at face value. We ought to probe it rather than just assume that it is true because people say that it is true.

Spending on education has grown for 20 years or so, but there is a huge debate among education researchers about the best way of tackling inequalities. Some believe that the best way is simply to put money into education; others believe that the best way is to target inequalities. Therefore, we should not just assume that improving spending on a mainstream function will have a spin-off benefit for the equality groups about which the committee is concerned. The committee ought to probe statements about such spending. That is what I meant in my paper.

I was keen to pull out for the committee from across the portfolios references to equality in terms of spending and targets. That is why I drafted my paper as I did. The Executive has two approaches to equality: specific initiatives and mainstreaming. However, spending on particular services that people consume as citizens should not be counted as being particularly beneficial for specific groups. We all get such services, which are our right as citizens. However, Executive department initiatives try to deal with an equality dimension. My approach probably differs from the Executive's.

In paragraph 8 of your paper, you talk about equality proofing the budget. Is the Executive breaking down the budget? For example, is it gender proofing the budget? Are there signs that the Executive is looking at its spending in terms not only of targeting but of how policies affect particular groups? I talked previously with you about the adverse effect that compulsory competitive tendering had on women as a group. Are there signs that the Executive is looking at its spending, policies and priorities with an eye to their possible adverse effects?

You would be pushed to find signs of that in the annual evaluation review. I am outside the system, but my understanding is that guidance is given to departments about the construction of the budget and within that they are advised that, if they make a new spending proposal, they must say how it will advance cross-cutting agendas such as equality or sustainability. However, such documents are not in the public domain, so we do not know from the outside how crucial they are in the final analysis. My understanding is that the Executive is using the two pilot studies as a basis for providing a mainstreaming toolkit. I would guess that there is not as much analysis going on behind the scenes as you think there is. However, that is only a guess.

The committee could consider probing further into that. You referred to the Executive talking behind the scenes about advancing mainstreaming, but the opposite of that has not been mentioned, which is the adverse effects that policies might have on certain groups.

The equality audit concept is one of the ways in which the committee could probe such matters in great depth. The committee could call witnesses in the normal way and have researchers go into the system to get evidence out of it. From the documents that I have seen and the discussions in which I have been involved, I am fairly clear that the approach is one of incremental and modest change rather than radical change.

As I point out in my paper, it is significant that four departments do not mention equality—they have no equality objectives or targets. Particularly in the case of public sector employment, there is no reason for there not to be some kind of target. The Executive funds the public sector in the same way as it funds its own departments. Public sector employment really ought to have targets that are similar to those that the Executive has set for itself.

The Executive seems to have been squeamish about insisting that public sector agencies have such targets. I agree that if the money and resources come from the Executive, those agencies need to demonstrate that they are mainstreaming equality.

If the Executive has an agenda and it has put in place service-delivery agencies to deliver the programmes that are approved by the Parliament, it is perfectly sensible for the Parliament to have some kind of report on their performance. Particularly in the case of the big services in health and local government, it appears that no data on the dimension of employment are presented. We have data for the Executive, which is a big employer in Edinburgh but a small employer in Scotland as a whole in comparison with health and local government.

The committee might feel that it would be worth while for us to raise the issue with the minister. Would you mind telling us a bit about the pilots? I know that that is not your remit—it is the minister's—but I am hearing whispers from members that they want to know more about them.

I have not been involved in any discussions about the pilots.

I understand that.

I have heard that the Executive is looking at two case studies. It is using one of the techniques that were developed under gender-based budgeting to look at the effect of the spend on its stop smoking campaign. The other pilot involves the participation of women in sport. The Executive is saying, "If we were to look at those areas through a gender-budgeting perspective, what would be done differently and what kind of data would be generated?" I understand that, on the basis of the findings of those two exercises, the Executive is trying to develop a mainstreaming approach to the budget.

Given that both projects are below level 3, which means that small amounts of money are involved, I am not sure what the general lessons will be. I will probably get access to the documents once they are in draft form. The pilots were agreed by the equality-proofing budget advisory group, which I attend as an observer on behalf of the Finance Committee, as a way of trying to take the issue forward.

Last year, as the committee might remember, the Executive commissioned research on the budget process to try to find a way forward. The main message was that no single model was readily available that could be lifted from another country and implemented in Scotland. The Executive decided to take the approach of setting up pilots. I see my suggestion of an equality audit as supplementing that work; it would be another way of doing things.

I suggest that, rather than doing an audit all at once, the committee could decide to do it over a number of years in some depth. The danger of doing it all at once is that it would remain superficial. The budget process is difficult enough to get through because of the speed with which it has to be dealt with: committee members get the documents and have to read through them quickly and outside bodies have to create submissions in very short timescales. We zip through the process and yet we are spending £27 billion.

It will be important to have some kind of audit on a regular basis to match against the previous year and to track developments—

That is particularly so because the system is not geared to generating that kind of information. The Parliament has to take the information forward with the Executive. From what I know, I think that the Executive would be willing to co-operate with the committee if it decided to go ahead on that basis.

I am still struggling—and probably always will struggle—with the budget process, which I find difficult. You say in paragraph 11 of your paper:

"the Committee could also use the budget process to identify any gaps in funding on the basis of its work."

This year, the committee is holding a disability inquiry. Time and again, we are picking up on the fact that there are minor and major gaps in funding. Is that something that we could tie into the budget process?

My experience over the past three years is that the Executive is open to committees' proposals, particularly for initiatives that are below the budget level. Often the things that interest committees are below budget level 3; they are part of a programme—or are projects within a programme—rather than one of the programmes that are costed in the budget documents.

A couple of years ago, there was an example in relation to health. Although I cannot remember all the details, I remember that two items—they cost about £6 million, which is a small amount of money—were drawn to the Executive's attention. The Executive was not aware that there was a problem. If the committee feels that it wants to push issues such as disability, it can certainly set that out in its recommendations to the Finance Committee.

The Finance Committee's arrangement with the Executive is that the Executive will cost things for the committee if necessary. It is an easy matter if the committee simply wants to say that one of the Executive's current programmes should be a priority: members do not have to cost it; they just have to state it. If the issue concerns something that is below level 3, the Executive will do the costings. The Executive is co-operative in trying to take forward participation by committees of the Parliament.

As we pick things up during our inquiry into disability, we could probably cross-check the information with what is going on in the Executive to see whether there is anything new or existing that is of interest.

That is something that we have to bear in mind. A number of organisations have told us that a major issue for them is the resource problems that people face.

The inquiry is probably an opportunity to tie ends together.

I would like to pick up on the important point about the outcomes of the targets and about just how much money is being spent. We are constantly hearing about people who are not getting the services that we feel they require. We also hear people putting forward sensible ideas about issues such as transport.

A lot of money is put into various portfolios as part of the budget process, but the question is whether the money should be targeted. There is no point in throwing money at something that will not deliver what we and others—the consumers of the budget, if you like—identify as important.

The paper is extremely good. Combined with the fact that, later in the meeting, the committee will discuss the disability inquiry, it has highlighted the gaps that exist. The fact that the two items have come together on the agenda today is extremely beneficial for us.

Even though the Executive has a fairly firm and clear commitment to developing outcomes, it is fair to say that there continue to be huge gaps in the links between the money and the outcomes. It is hard to monitor things, even for a specialist, particularly when the money goes in big lumps.

That is right, given that a lot of the money goes to other agencies where—

The Executive spends hardly anything itself. It passes on the money.

That is right, which takes us back to the agencies. We need to examine their outputs if we are to see whether the money is getting to the appropriate organisations. There is an issue around equality at the local level—I am thinking of local authorities, health boards and so on.

I found your paper illuminating. As a new member, this is the first time that I have dealt with the budget in this much detail. The paper provokes many questions about what the Executive is doing with the money.

Although I have too many questions to deal with at committee, one of the things that I found astounding is that no level 3 figure is given for enterprise and lifelong learning. Small projects are listed further on in the paper but, given that we are to discuss our disability inquiry later in the meeting, employment and further and higher education are huge issues in that respect.

My question relates to the ideology—the basis of the policy that has been developed in the Enterprise and Lifelong Learning Department. Where is the evidence that equality is taken on board? The absence of a level 3 figure goes to the heart of some of the issues that are raised by many of the groups that are campaigning on disability and equality. Can you shed any light on the question?

I understand that Margaret Curran has a co-ordinating role to play, given that she co-ordinates the Cabinet sub-committee that deals with the implementation of the Executive's strategy. When the minister comes before the committee to give evidence, it is perfectly in order for you to push her to find the answers to these questions—that is the purpose of the exercise.

There are other moneys in the enterprise and lifelong learning budget for things like low-income families. I think that an announcement was made yesterday that the English system is also to implement educational maintenance allowances. That said, I do not necessarily see that as an equality issue, but as one of closing the opportunity gap. The overlap between the two themes has led to problems, but that is the kind of thing that should be probed during the budget exercise. I am sure that the minister will beaver away on that on the committee's behalf.

I have a feeling that how the new strategy is presented could be interpreted as downgrading equality. I assume that members have seen the AER—all of you will have a copy of it somewhere at home. The Executive has changed its strategy and it now has what it calls the "four key challenges", which are economic growth, public-sector reform, strengthening communities and democratic renewal. If I wanted to be unkind to the Executive, I would say that it would be possible to defend every single spending proposal that might come before it under one of those headings. Why should those challenges decide what the Executive's priorities are?

The Executive had too many priorities last time: it had the five functions as well as equality, opportunity and sustainability as cross-cutting themes. It has presented the document this time as if equality and closing the opportunity gap are sub-themes of communities and as if sustainability is the only cross-cutting priority. Although it may just be that the Executive has not presented the document well, the committee needs to push the minister in order to get clarification of the priority that is to be given to equality under the new arrangement and on how the committee can monitor and audit the Executive's delivery.

I find it very difficult to see how that can be done within the new framework. As I said, it is possible to say that any proposal would advance any one of the four challenges. It is naive nonsense for the Executive to state that the objectives are inter-linked and that they do not compete with one another. When the cake is a fixed size, everything is in competition. The Executive should have clear priorities to guide it. The committee needs to get the minister to come out on how high a priority the Executive places on equality. It should raise that question on the basis of the statement and of how the Executive has presented the document.

In section 6 of your paper you say that some interest groups might regard the repositioning of the equality issue as downgrading. Given what you have just said, am I right in thinking that you, too, see it as downgrading?

The repositioning of equality is capable of being interpreted as downgrading, which is why the committee needs to get the minister on the record. This is the first time that the document has come out. I am happier with the new format, and happier that the Executive has fewer priorities than before. From the framework, however, it is not clear how I could monitor whether the Executive is delivering on equality. From how the document is laid out we cannot know that equality is a priority. I am fairly confident that some of the groups will think that it has been downgraded. It might just be an oversight, because of the new style that the Executive has used to produce the document this year.

But you suggest that it is a top priority for the committee to get clarification—

My reading of the document is that it does not show that equality is a priority. Equality is a sub-theme.

The committee needs to take that on board.

I would not want anyone to think that I was being kind or generous to the Executive—I would never be that—but I wonder whether it is possible that the Justice Department has an equality component but has not identified it. That goes for other Executive departments that have not identified an equality component. Is that possible, or does that component simply not exist at all? Is the problem the laying out of the information, rather than the fact that equality is not included?

Professor Midwinter?

I am thinking through my response rather than just leaping in with an answer.

I do not know what is more worrying: the fact that those components are not present; or the fact that they are, but the departments do not recognise them. Both those possibilities are a problem.

I am a firm believer that the transparency of the process requires the equality components to be in the documents. If they are not in the documents, you assume that they are not present. If they are present, you should push to make sure that they are in the documents. Only if they are in the documents that have been approved by the Scottish Parliament can you say that the Parliament has signed up to the agenda and that the spending has your approval.

What we are discussing is quite new for almost all the departments. They have been used to simply running their services, which they view as their priority. They will have to get into a new mode of thinking.

If the equality components are not in the documents, whatever work might be being done behind the scenes will not be transparent or approved. Devolution is supposed to ensure that the Executive's actions are transparent and that its proposals are scrutinised by the Parliament. In that regard, the framework of the document that is before us is a step forward, but some of the detail is disappointing. You should push the minister on that.

Given that the Executive is talking about mainstreaming—which some might think of as downgrading—but has only just started to identify in some departments equality components relating to that, is it possible that in future years the equality components will not be specifically identified as they are at the moment?

Do you mean once they become mainstream?

Yes.

Ideally, those factors would be taken into account automatically and the Executive would not need to be asked to provide guidance as to how it is advancing its equality strategy. If that happened automatically, the budget process would be easy because it would entail only a simple costing; the plans for the ministers' portfolios would contain the relevant elements and the accountants would simply cost the process. However, we are a long way from that situation. For a number of years to come, the documents will be produced as they are currently. We are a long way from having everything mainstreamed.

If some departments are only just starting to identify equality components, I would think that the culture of some of the various departments would mean that some equality components have not been identified.

I am sure that that is true. I have no doubt that some departments are doing things that they are not aware are related to equality issues.

The priority for the committee is that we are moving towards mainstreaming equalities. In that regard, I am worried that some of the information that we are getting might be lost. We should be trying to ensure that we get a baseline. We need to understand where we are now, so that we can measure whether mainstreaming is working in later years.

I would assume that, once the pilot studies have been done, the department will come to the committee with a paper on how it proposes to make progress with that work. Certainly, the department will come to the group that I am a member of for advice on that. This committee should keep the emphasis on the subject in your discussions with the minister. I am sure that the department will be committed to the work, which is new ground for most of the civil service.

It is new ground, but there appears to be a commitment to mainstreaming equality. The idea of having an equality audit might allow us to consider what is happening.

It would help the process.

In the Communities Committee, you mentioned the big issue of poverty. Do you want to comment on that to this committee? Many equality issues relate to poverty, which has to do not only with a lack of money, but of opportunity, information and so on. Of course, such issues tend to impact more on women, people with disabilities and minority ethnic groups. For example, women are the heads of the majority of single-parent families and, because of that, they tend to depend more on social housing than on the private mortgage sector. What priority has the tackling of poverty been given in the paperwork that has been produced, specifically with regard to equalities issues?

My concern with the poverty strategy relates to the arguments that we were airing earlier in that there has been a failure to identify the resources that are going through to groups in poverty. The strategy is clear: the Executive wishes to reduce inequality. The Executive's set of indicators for measuring poverty at the absolute level are dependent on what happens to benefits at the Whitehall level and on what happens to the level of income in the economy.

The result has been that, although there has been a reduction in poverty on the absolute measure, there has been no real reduction in inequality over the first session of the Parliament. Partly, that has to do with how poverty is measured.

The strategy is geared to getting people back into work, but 20 per cent to 30 per cent of those who are poor are described in a Treasury document as being "persistently poor", which means that, for reasons of disability, age or whatever, they are dependent on benefits. The strategy of getting people back to work will not work for them. As long as the benefit level is rising more slowly than the income level, inequality will appear to be widening or remaining the same.

As we said earlier, in relation to what happens to the money once it gets to the health authorities and local authorities, it is difficult to tell from the available data whether access to services, and inequalities, are being reduced. The conceptual problems are similar to those that we discussed earlier.

I think that the overall strategy, which concerns supporting women back into work and so on, is sound, but I point out that it ignores a significant group of people. How the matter is being dealt with needs to be rethought. The spending review provides a good opportunity to push for that.

I suggest that the committee contact key stakeholders for their views on the budget process, particularly with regard to equalities issues and gender budgets. Do we agree to do that?

Members indicated agreement.

That would be helpful. Those key stakeholders will be preparing papers to submit to the spending review and so should be able to give you some good feedback.

I thank you for your paper and for your input.