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The committee agreed to focus on the reform of the common agricultural policy, because that is the big issue of the year. The budget process is running to a tight timescale and we have to report to the Finance Committee by 18 May. The purpose of talking to the minister today is to allow us to use our next meeting to think about what we want to put in our draft report.
I know that the committee understands that we will not be able to present final proposals for the 2005-06 budget until we have completed our consideration of future spending priorities as part of the 2004 spending review. That makes the situation difficult for all the committees. Spending totals for 2005-06 were agreed in the 2002 review and, over the next few months, we will consider the 2004 review period for the three years beginning from 2005-06.
As you say, because of the spending review it is difficult for us to explore what you are about to do, although we will try. We have scope to try to explore what you have done.
David Dalgetty will be happy to provide additional information.
The minister may devolve that question.
The points that the committee made during its consideration of the 2003-04 budget were taken on board.
That question is definitely one for me to answer.
I will try to answer the specific question about the climate change targets, which I think were mentioned on the previous occasion as well. Part of the problem is that the budget document, which must cover a vast range of activity, shows a limited number of objectives. Below the level that is shown in the AER, there will be any number of far more detailed targets and objectives. I can confirm that we still have targets on climate change, but they do not appear in the AER largely because we spend relatively little programme money on the issue of climate change.
I understand. Not all priorities necessarily require huge amounts of money, given that things may be done by other people. Our perspective is that we have been unable to track those targets through the process. Let us leave that issue on the record.
I want to follow up on Ross Finnie's answers to us when we discussed the 2004-05 draft budget. I am quite concerned about the targets for water. Target 1 is:
As you know, Scottish Water's capital spending is the subject of a special inquiry by the Finance Committee; the report is due to be published later this week.
We are in the middle of Scottish Water's investment period, and the mechanism that has been established with Scottish Water Solutions means that we will not move forward until we consider the next quality and standards period, which falls after 2006. The minister took the point on board and he shares the committee's concern about the development pressures in a number of areas. He, too, is concerned that we should examine whether there are ways in which more of those problems could be addressed, within the aggregate of resources that is available to Scottish Water. However, I would not expect the budget for 2005-06, which reflects priorities that were set in 2002, to reflect any of those considerations. Ministers will take the matter on board as they consider the future provision for Scottish Water in the context of this year's spending review.
Q and S II and, prospectively, Q and S III will address the issues that you raise on development constraints and the proportion of capital that ought to be allocated for new entrants into the regime. Scottish Water issued a report today, I think, that demonstrates a welcome and marked increase in its capital programme. We continue to monitor and review Scottish Water—indeed, I met it last night—to ensure that it is maximising capital investment within the constraints of capacity in the civil engineering industry. We expect that investment programme to be completed during the review period, which runs to the end of 2006.
I hear what the minister says, but I am disappointed that the provision was not written in from the start. When the then Transport and the Environment Committee considered the Water Industry (Scotland) Bill, the point was made that we would need funding specifically for rural housing development. That was agreed to, but proper provision was not made for it, so I look forward to something being written into the budget in 2006.
Part of the discussion that we had with Scottish Water last night was on progress with meeting targets, one of which is stipulated here. There is continued dialogue between SEPA and Scottish Water on the exact compliance rate, which is subject to some debate between the parties. We want to minimise all the concerns arising out of sewage treatment works. The target is designed to do that and we will work with our colleagues in local government to achieve that.
That target was set two years ago in the spending review of 2002. All other things being equal, I expect that a lower target will be announced at the conclusion of this year's spending review in September. Progress has been made during the past two years, but the possibility of further progress is not closed off.
Although I did not mention this in my response to the convener, we will want to integrate the target-setting regime between Scottish Water and SEPA to take account of that process.
That is something that we will want to consider in more detail afterwards.
On the way in which money is parked, there is an unexplained rise in the costs of the rural stewardship scheme from £13 million in 2004-05 to £30 million. Is that parking of unallocated Treasury commitments, as discussed last autumn? Previously, we criticised the targets as being difficult to measure and hard to relate to specific outcomes.
That is the modulated match funding to which I referred in my preamble.
Okay. Thank you for that.
The exact number of claimants in any year will depend on several factors, including farm mergers. Without prejudicing the outcome of the spending review, I can see that there is an argument for reconsidering how we measure the effectiveness of less favoured area spending and what targets we set for it. It is a very important measure to encourage production in economically fragile hills and uplands and I do not doubt the contribution that it makes to the businesses to which you refer. We want to maximise that beneficial outcome, so we will consider the effectiveness of what we are doing and the targets that we have.
Will you tell us about that in detail in due course?
Yes.
If I understood the question correctly, it was whether we will publish the names of individuals who receive LFA payments and how much each LFA payment recipient receives.
The transparency issue was raised.
I did not take that from the question.
It was part of my question. I am interested in outcomes, but also in transparency.
Sorry, I did not pick that up from what you said.
The issue comes partly from the evidence that we received from Oxfam a few weeks ago, during which the general issue of access to information was raised.
I understand the issue, although I did not think that Rob Gibson raised it. The issue might have arisen previously. To answer the question, we cannot publish that information because we have concerns about how the courts might view that development.
I have a quick follow-up question on rural development. The budget documents reveal significant changes in some schemes. The countryside premium scheme will increase significantly, by 277 per cent, although the end figure for the increase will be only £7.3 million. However, other schemes such as the environmentally sensitive area scheme, the organic aid scheme, the rural stewardship scheme and the agricultural business development scheme will be significantly reduced. I presume that the changes are wrapped up in discussions about modulation and future funding, but do you want to put the background on the record?
We have dealt with the 2004-05 budget. I do not like the term "parking of public expenditure provision", but that is one way of describing the situation. We made it perfectly transparent in the previous spending review announcement that we were deliberately parking the ring-fenced additional match funding money that we received from the UK Treasury in SR 2002 in the rural stewardship scheme line. We wanted that money to be shown in the budget, but we said that that did not mean that it would be spent in that way. The decisions on the use and distribution of that money are subject to events that are yet to happen. As members heard earlier, we hope that by the autumn we will be clearer on a number of those issues.
What about the organic aid scheme? I have it at the back of my mind that the minister recently made positive announcements about spending more money on that. I was surprised to see that it is to be reduced by 69 per cent.
The scheme is not being reduced by that amount. That is the original 2002 spending review figure.
That is why we are confused.
The next draft budget will contain a proposal for next year's budget that is entirely consistent with ministers' statements on increases in organic aid.
I am sure that that is clear, in a way.
I have a general question about the targets, some of which are slightly odd because they are not quantified. We reckon that seven out of the 17 targets are not quantified. Although it is said that we are on course to achieve them, it is difficult to measure progress. The targets are more like objectives. Is there anywhere where the targets are more firmly quantified, which would allow us genuinely to measure progress?
That cuts to the heart of questions that we have asked before, when we could not see targets working their way through.
I take the point, which I talked about in response to the convener's preamble. Targets need to be integrated across portfolios and throughout Government departments, NDPBs and agencies to ensure a uniform approach. Different targets appear at different levels in different organisations. For instance, any organisation for which I am responsible—whether SNH, SEPA or whomever—must have uniformity and integration of Executive targets with departmental, agency and NDPB targets. The aim of the current review is to integrate all that and to have a greater focus on output, outcomes and delivery. We want to improve that process ourselves.
Can we expect expenditure-linked targets to be attached to budgets in the future?
Having dealt with such matters for about 17 years, I understand the problem well. Many targets in large parts of the budget are relatively specific. Specific and measurable targets are provided on water, waste and other matters. In other parts of the budget, it is difficult to arrive at individual, single, precise, measurable and relevant targets that provide a proper measure. We work at that all the time and we try to improve on that. I would not like the committee to think that we brush off its views. We take them seriously.
That was the point. It is difficult for us to know whether progress has been made when a number is not attached.
I will take that on board.
The committee has just undertaken an inquiry into the national waste strategy, so we probably have a reasonable handle on how waste programme targets will be met, and we track that through your announcements. People almost need to have conducted an inquiry to have a feel for the relative success of implementation. Obviously, we cannot do that for the entire budget. The situation is not transparent from the document.
That is precisely the point that I was getting at. Waste provides a classic example of a series of targets on recycling rates, non-biodegradable waste, the reduction of landfill and other matters that are listed separately and do not appear in the list of budgetary targets. When it is said that a target is on course or slipping, more information should be made available about what that means. However, the greater challenge is to integrate all the targets in the partnership agreement, which contains myriad targets and objectives, to produce an easily read document annually that reports to parliamentarians and committees on progress. Arguably, the budget is not the best place to do that.
You have described the holy grail. We look forward to your returning to deliver that.
That is not my job.
Exactly. We have managed to go into much depth, so I think that we will wind up the discussion—the committee signals overwhelming assent to that. Could the clerks talk to the minister's officials about one or two objectives that have disappeared? A reference was made to other objectives that still exist but are not in the report. I do not want to go into that now, but is it possible to have a discussion, so that when we write our budget report, we can see where targets have gone? We have examples in writing that we will pass on to you.
Please feel free to write to us with any outstanding questions that we have not had the time or opportunity to respond to. My colleagues will answer them as best they can.
That is excellent.
I thank the minister and his officials for quite a lengthy session.
Meeting closed at 12:45.