Official Report 223KB pdf
I welcome everyone to the 25th meeting in 2005 of the Communities Committee and remind all those present that mobile phones should be switched off. I apologise for the slightly late start to the meeting—unfortunately, I was held up in traffic—and for the inconvenience to the minister, his officials and committee members.
You have stolen half of it—I was going to introduce everyone who is with me. However, I will do the other half, if that is all right. It is really just a brief introduction.
Thank you. I hope that you will not find it too challenging, but I want the committee to ask detailed questions that will allow us to get helpful information for our budget scrutiny.
If that is a question about the next spending review period, it is difficult for me to answer. Obviously, many things must happen before that is announced, including the announcement from Westminster and the internal procedures in the Executive, which will start long before the Westminster announcement. However, I am strongly committed to the objectives that I have outlined and make it clear that the Executive is collectively committed to them.
How does the Development Department ensure that setting of priorities is systematic and rigorous for the purposes of spending and of allocating funding? We could probably all come up with a list of subjects that we think need to be addressed and that we would view as priorities.
We try to set broad-ranging priorities and I know that some people have voiced criticisms to the effect that there are too many Executive priorities. It is tempting to go down the route that the convener describes because there are many worthy objectives that we may wish to pursue. The Executive has tried—I hope successfully—to be strategic in setting its priorities. There are five priorities set out, but we could, in a sense, almost whittle them down to three that would cover the three level 3 tables in the budget document. The first of those tables relates to
In November last year, the Minister for Finance and Public Service Reform launched the Executive's efficient government plan. In this year's draft budget, the use of efficiency savings has been identified for reallocating resources. I am interested to know how efficiencies have been identified under the communities portfolio. Why have only £40,000 of savings been identified in next year's budget? That is almost nothing compared with savings of, for example, 2 per cent in education and 2.5 per cent in health. The following year, there is to be a 0.4 per cent saving in communities, but there is to be a 3.7 per cent saving in education and a 3.3 per cent saving in health. What are the reasons for the relatively low level of efficiency savings in the communities budget compared with other departments?
I will make two general observations before passing over to Carole Oatway, who deals with cash-releasing savings in Communities Scotland, which perhaps represents the biggest contribution that we will make to the published figures.
As Mr Chisholm said, Communities Scotland has taken a significant look at how it could contribute to the efficiency agenda. One matter that we are considering is making cash-releasing savings in the next three years. We measure our programme in terms of unit approvals and we often give approval well in advance of spending, so one difficulty is that we cannot make efficiency savings quickly. We need to plan for such savings, which is why the cash-releasing savings that we propose will build up over the three years.
The minister talked about the possibility of greater cash-releasing savings. Forgive me—I am not entirely clear about what that means, which I know is my fault rather than yours.
Since Carole Oatway is working on the subject, she is probably the best person to answer. Our cash-releasing savings will come from Communities Scotland.
I will have another go and see whether I can make the situation clearer.
Are economies of scale involved?
Some of the work is about economies of scale, but there are other threads—I did not want to bore you rigid. We have found over the years that, as house prices have increased in Scotland, competition for land is much greater, which is why we have several initiatives that are aimed at more efficient procurement of land. For example, we work with other public sector organisations that own land to try to strike deals to buy land at more reasonable prices. We also work through the planning legislation to try, where affordable housing is required, to share land that comes from private sector developers. We also work with rural landowners in respect of land that might come on stream at a more reasonable price. We are not just working on bulk procurement, but on some of the elements that go into the products. We also hope that the RSL sector will come up with ideas about how we can change our procedures to facilitate more efficient running of the service. Our work has several strands.
How do you propose to report back to Parliament, given the emphasis that the Executive has placed on efficiency savings and the reduction that it is hoped will be achieved through them?
We will report to the committee, or in any other way that is required of us, as part of the general work on efficiency savings by the Minister for Finance and Public Service Reform. I am not involved in the details but, in simple terms, we are trying to achieve more for the same amount of money; obviously, we are trying to make the money go further. We must consider the matter seriously, particularly in relation to the housing budgets. The budgets are increasing, but housing demand is enormous, so we must consider all possible methods to make, as we want to do, the existing money go further. Another way of describing the aim is to say that we want to achieve the same objectives for less money and therefore to achieve more than we would otherwise achieve with the same money.
Progress against cash-releasing savings targets will be monitored by Audit Scotland. There will be a fairly rigorous and systematic process of monitoring progress on all the efficiency targets. I am sure that the results can be made available to the committee.
I have a question about the housing budget, although I am sure that I am going to get the matter wrong. Table 2 on page 5 of the Scottish Parliament information centre briefing shows the communities level 2 spending plans in real terms, at 2005-06 prices. The top line of the table shows the figures for delivering good quality, warm, sustainable and affordable housing. For 2005-06, the figure is £1.049 billion, but it does not increase thereafter—the figure for 2007-08 is £1.017 billion, which is not even flatlining, but falling. The minister said that the affordable housing budget is increasing, but that does not seem to be the case.
The level 3 table has a separate line for affordable housing. Although it is flatlining between this year and next year, there will be a big increase in 2007-08, which will reflect the far bigger number of building starts. I reported that the number of planned starts this year is 6,400, but that will go up to 7,000 and then to 8,000, which clearly shows that more new houses will be built. Christine Grahame referred to the housing line as a whole, which includes the supporting people budget, in which there will be a cash reduction. Another point that may come up again if I am asked more questions about the central unallocated provision, is that part of the reason is the profile of the spend. To complicate matters even more, the third point that I should make is that some housing expenditure is not included in the line, most notably that from the CUP which, as I said, we may speak more about, and the massive amounts of money—about £440 million—that local authorities spend on housing.
Are the level 3 figures for 2005-06 to 2007-08 given at 2005-06 prices?
Most of the tables are cash, unless otherwise stated.
Is there not a fall between 2005-06 and 2006-07?
It appears that there is a cash fall, but a lot of that is to do with the profile of the expenditure. It is certainly not a fall in terms of the number of new houses that will be built next year.
I will not delve into the "profile of the expenditure", but I would like to know what it is. What does that mean?
I gave the figures at the beginning of the meeting—there are 6,400 approved starts for this year, which will rise to 7,000 and then to 8,000. Those numbers are on an increasing profile. Of course, community ownership is also included in that line, so some of the profile is to do with when the community ownership money kicks in. A lot of that money will kick in in 2007-08 rather than in 2006-07. The figure is an amalgamation of various housing budgets. The actual money for new homes is not falling, but the profile of the community ownership money is different. I think that that reflects some of the changes.
I will have to read that later.
It is extremely complicated.
That is why I am going to read it later.
You can be sure that I have asked all those questions many times myself. To be honest, some of this stuff could be a little more transparent—
Hold that thought, minister. Could we have it in a more transparent form next time?
The matter is inherently complicated.
It would be useful to members of the committee—certainly to me—if the figures could be made more transparent.
I am glad to see that the minister acknowledges that the matter is complicated; most of us would agree.
Obviously, the situation that Mary Scanlon is talking about was part of the spending review settlement. That is not something that has appeared this year; it was in the draft 2005-06 document. Some of the decrease is to do with the ending of the Glasgow Housing Association's central heating programme, which will finish in 2006-07. Some of the thinking around the spending review was that the current central heating programme would end in the spring of 2006; many people would by then have got central heating systems so, to a large extent, that investment would no longer be required. People assumed that because of that, and the ending of the GHA programme, not quite so much money would be required.
We have moved from a situation in which there was a large stock of properties with no heating or irreparably broken heating to one in which we are focusing more on properties where there is partial or inefficient heating. As we consider how to strike a balance between repairing and extending existing systems and installing completely new ones, and as we look for ways of improving efficiency incentives for installers—the discussion paper to which Mary Scanlon referred mentions that there is currently no effective cost control on installers—we should be able to achieve improved, extended and upgraded systems for a given amount of money. We will therefore have a more efficient programme from 2006 onwards.
Can I take it that in the light of the expected exceptional demand from the pension credit cohort for the warm deal programme, you will consider whether the budget can be changed for 2007-08? Can the budget be amended only after the £11 million cut in 2007-08? Is there flexibility prior to that time?
The usual time for changing and adjusting budgets is the spending review, which will not take place until 2008. I have said that I am keen to see whether I can expand the budget for the warm deal a little bit, but it would obviously not be changed to a major extent because that would depend on underspends in other budgets and so on. As I have explained, it was planned that the GHA programme would end and so it was assumed that we would not need quite the same level of resources for the new programme. I will see whether I can give the budget a slight boost before the spending review. However, there cannot be a major boost, because no extra money will come in before the review.
Before Mary Scanlon starts her new line of questioning, John Home Robertson has a question on efficiency savings. I ask Mary Scanlon to indulge me and allow him to get in.
I apologise. I want to explore a point that Carole Oatway made on the theme of efficiency savings. We are all in favour of efficiency, but she seemed to say that the Executive is anxious to take advantage of bulk procurement of housing. That is understandable, but we should bear in mind the fact that much of the greatest need for affordable housing is in smaller communities and rural communities where, inevitably, it will be more expensive. Can that be taken into account? If you set benchmarks for costs, is there not a risk that that could drive housing associations to concentrate their new build under the programme on bigger sites in urban areas?
No. Carole Oatway can comment in more detail, but what she outlines is within a broader framework of decisions about where investment is to take place. The amount of money and the proportion of the programme that is going into affordable housing in rural areas are at record levels. This year's allocation for affordable housing in rural areas is £97 million, whereas it was only £41 million when the Parliament started. The need for affordable housing in rural areas is certainly being taken into account—that is the overriding factor. Within that allocation, what Carole Oatway has described will apply.
I will come back to the central unallocated provision. I am sorry about my digression. I refer to the affordable housing investment and community regeneration fund headings on page 114 of the draft budget. I note that under the affordable housing heading there is a
It really means only the reprofiling of expenditure; it is a small sum of money. The biggest transfer to the central unallocated provision was last year because of the reprofiling of the community ownership programme. I think that £85 million was transferred from the affordable housing budget into the central unallocated provision last year. That money is sitting there and will be drawn down whenever Glasgow or anybody on the community ownership programme needs it. It actually boosts the housing line, which Christine Grahame was concerned about. We can add that £85 million—indeed, we can add all the affordable housing money in the CUP—to expenditure over the next two years. It is sitting there from the previous spending review period because it was not ready to be used, mainly—indeed probably exclusively—for community ownership. The £6 million is a sort of appendix to that. Most of the slippage on affordable housing took place in 2004-05 and an extra £6 million is there now. That money is sitting waiting to be spent on affordable housing.
You are talking about an increase in money to the central unallocated provision, but the budget document mentions a
The document does not mean that there will be a decrease—it means that the money has come out of the main budget. There is a main budget line that is £20 million less than it would otherwise be because money has been transferred to the central unallocated provision. Is that right, Alisdair?
Yes. Page 113 of the daft budget document refers to changes that have been made since the publication of the 2005-06 draft budget. The change that has been made in respect of the community regeneration fund is that £20 million has come off the community regeneration fund line and gone to the central unallocated provision, from where it will be transferred back and spent in the following financial year. That is because of the delays.
But a decrease of £20 million is going to—
It is a decrease in the budget line but not in the overall spend on the programme over the three-year period.
Let us consider the spending plans for affordable housing and the figure of £6 million. There will be a £4 million decrease between 2005-06 and 2006-07.
Where is that stated?
On page 5 of the Scottish Parliament information centre briefing.
Is that the same figure that Christine Grahame asked about? There is a cash reduction.
Christine Grahame asked about level 2, but I am asking about level 3. A reduction of £4 million is illustrated.
That is a more general question, which I answered earlier. Different factors are involved. That is different from the transfer to the CUP. Transfer to the CUP is part of the story and not the whole of the story.
I am not sure whether we have made much headway, but I have a final question. Is the money that has been transferred to the CUP available to the communities budget as and when you deem it to be required?
Yes.
I will leave things at that.
I have a brief question. Can you guarantee that, when the time comes, the moneys that have been placed in the central unallocated provision—or the CUP, as people are calling it—will be available, or will they go into a great big slush fund in respect of which at some point in the future other ministers or the Cabinet can determine different priorities? In other words, is there an absolute guarantee that that money will be available when it is needed?
Yes.
I am glad that you agree with the committee that the budget process needs to be more transparent. We asked for that last year. You can imagine how difficult it is to get our heads round it—at least you have the backing of the civil servants, who brief you on it.
The general view is that affordability varies throughout Scotland and even within each local authority area. The definition in planning advice note 74, which members may feel is rather broad, is
I have sympathy with that response.
Minister, you mentioned people who cannot afford to buy, so are we now talking about affordable housing in terms of owner-occupation?
The point is to estimate the amount of affordable housing that is required for a particular area. It would then be desirable to assess how many people required social rented housing or low-cost home ownership. It would be reasonable to have some estimate of how many people were able to buy, as that would give us some indication of how many people required social rented housing—or indeed other rented housing—or low-cost home ownership.
You mentioned in your opening remarks that progress is being made on the Executive's target of 21,500 new approvals by 2008. The feeling that I get from professional housing organisations and tenants organisations—which I am sure are in touch with you—is that, although that is a good target, which everyone would like to be met, it is not enough. What progress is being made on the target? Do you feel that it will meet the needs of other Executive policies, such as the step towards abolishing priority need and the modernised right to buy? What effect will the target have on housing provision?
There are two issues. On the first issue, I will repeat what I said at the beginning. We are meeting the targets that have been set for this review period and we will continue to meet them through to 2008. However, you have raised a second question, which was controversial when I was at the committee last year. The issue arose with the previous spending review and will no doubt arise with the next spending review. Is the overall amount that we have put forward sufficient? No doubt that will come up in the debate tomorrow.
That is fine.
I need to work this out, because my head is hurting a bit. You have targets and budget lines for affordable housing, but you do not have a definition of the term.
Oh, we do.
But it is very sweeping. Surely, even if you concentrated only on three categories such as urban, rural and remote, you would be able to come up with a tighter definition of affordable housing. After all, banks and building societies have an idea of what constitutes affordable housing. Could you have a tighter definition that would assist you in finding out what the need was and what money would be required to deal with the issue?
I should have mentioned in my response to the previous question that we have a practical definition of affordable housing, but I simply assumed that it would not satisfy your requirements. By affordable housing, we mean social rented housing and low-cost home ownership. Indeed, that forms the basis for our figures and for the delivery of our programmes.
I have cited three categories in which there might be a divergence in, for example, the meaning of low-cost home ownership. After all, what constitutes low-cost home ownership will be different in an urban area such as Edinburgh and Glasgow, in an urban area such as Dundee, in a rural area such as the Borders and parts of East Lothian and in remote areas and islands. I appreciate that coming up with such a definition might require a difficult juggling act, but it would give you a better idea of the number of homes that are needed.
The issue will be absolutely crucial in our preparations for the next spending review. Indeed, the affordable housing review, which was carried out before I became minister, examined local housing markets. The more work that I do on housing, the more I realise that the different housing situations in different parts of Scotland need different balances of requirements. As a result, we need detailed information about local housing markets.
So the figures come out of the work that you have done to date.
Yes. Mr Neilson might want to say a little bit about the work that was undertaken for the previous spending review.
Although we are constantly trying to improve the picture that we have, we know that there will never be a magic number at the end of the process. For the previous spending review, we concentrated on a Scottish-level analysis of need and local housing strategies. However, we found it quite difficult to tie those issues in because, at a national level, areas of surplus tend to offset areas of shortage. As a result, we have tried to take a more consistent approach at local authority level to tie in the various aspects. The very differences that you have highlighted make it difficult to have a one-size-fits-all solution and a great deal of judgment is required in tying the local picture to a national approach. We have tried to do that with the projections for 2012 and have formulated an exercise that we hope will provide us with better information early next year.
So you are seeking to improve the process, which is flawed at the moment. Can I call the process flawed?
We are trying to refine it.
I think that "refine" is probably the word that I am looking for.
It is a 136 per cent increase.
But I take it that that is at present-day prices, so we are not comparing like with like.
That is true.
Thank you. I did not see that £97 million figure in the budget document.
It is not in the budget document.
It would be useful for the committee to have such information, so that there is more transparency.
I asked about that issue, as it is quite technical—when I was considering it, I was taken back to my finance bill days at Westminster. All the advice that I am getting is that the changes will not have a significant effect. I realise that the matter is controversial but, apparently, a large number of people can already use their pension funds in that way; there will be a fairly modest increase in the overall number. I will keep a close watch on the situation. I do not know whether any of my colleagues regard themselves as experts in that area; if they do, they can speak up.
You do not have to be an expert to realise that if someone is getting tax relief, which makes a property attractive to them, they will go and buy it. There has been a 40 per cent increase in homelessness in the Borders. That situation will not improve if people can buy up cottages, do them up and sit on them for ever. That cannot be a good thing for rural areas.
You can be sure that I am aware of the issue. I have asked about it more than once. When I hear different views being expressed, I seek advice and I shall continue to do so in this case. I shall certainly keep a close watch on the situation. All the advice that I am being given is that the change to pension provision will not have a significant impact.
Will you define "significant"?
I am being told that—
Will the effect be neutral?
I do not know whether the advice is that the effect will be absolutely neutral, but it will certainly be very near neutral. I am happy to continue to look into that, although we do not have control over the policy. If we had serious concerns, we would certainly be prepared to raise them with the Westminster Government, but we need evidence. If you feel that you have evidence that I have not been given, I will be happy to consider it.
In some areas of Scotland, there is a dearth of private rented accommodation. The change at Westminster could, if handled properly, increase that supply in certain contexts. The Executive could usefully monitor the impact of the changes that are supposed to come through in the next budget. Private rented accommodation has a role to play in some rural communities. If people are encouraged to buy properties as a result of changes to pension rules, they might put those properties to good use. Therefore, measures that could stimulate that market, in addition to an incentive to people who buy property for pension reasons to invest in that market and make the properties available for private rent, would benefit some communities.
That is a different and interesting perspective, which we should note as part of our general consideration of what is going on. The situation is not simple; the consequences of the change are complex and not all negative, as was suggested in the first instance.
I return to the issue of affordable housing. You said that you are on target to meet your commitment to build 21,500 new homes in Scotland, which is to be welcomed. However, Mrs Craigie asked you a specific question about the implications of the abolition of priority need by 2012, which I am sure will be touched on tomorrow during the debate on homelessness. Although I support fully the principles behind the homelessness legislation—as I am sure everyone here does—I think that it is right to reflect the concerns from local authorities throughout Scotland about the implications that that policy might have on the numbers of affordable homes required in Scotland. Is there sufficient flexibility in your budget to allow for the creation of greater numbers of affordable homes over and above the target of 21,500 that has already been set?
There is not a great deal of flexibility in the current spending review period, but I entirely agree that all our work on homelessness will need to feed into the next spending review, which will have to deal with those issues. Within spending review periods, small sums of money can be moved from one budget line to another because of an underspend or even because of a decision to reallocate priorities, but the sums of money involved must be quite small. Given the large sums of money that are involved in housing budgets, I do not think that there will be a great deal of extra resources, except in so far as we are successful in the efficient government work that has been described. It is hard to see large extra sums of money coming on stream for housing prior to 2008. However, all our work on priority need will obviously need to feed into the next spending review.
Can you give us a commitment that the Executive is looking at that issue just now in preparation for 2012?
Absolutely. I am sure that we will say something about that in tomorrow's debate.
The convener has just asked the most important question. As the minister knows, some areas already have an acute housing crisis, which will only get more difficult when the priority need test is abolished. However, we will have to return to that issue.
That is an interesting line of inquiry. I believe that the Scottish Federation of Housing Associations carried out some work on that, but I understand that it faced some difficulties. For example, is affordability to be calculated on the basis of an absolute amount of rent or on a percentage of someone's income? Complications arise no matter which way it is calculated.
We could have a formula that was based on the national minimum wage.
I can see the way that you are thinking. Perhaps what you have in mind is that an affordable rent should be a percentage of the wage of someone who works, say, 35 hours a week for the national minimum wage. However, I do not know what figure we would end up with from that. On a United Kingdom-wide basis, Scotland will be nearer the figure than England, because our rents are generally lower than rents in England. However, as you know, rents serve a number of purposes, not least of which is to fund housing investment. In arriving at a desirable rental figure, would we be able to sustain the desired levels of investment that such rents help to provide? I see what you are saying, but the matter is quite complex. I will be interested in any suggestions that you might have. It is attractive at one level to think that we should have what you suggested.
I am well aware that the issue is complicated and cannot be settled today, but do you accept my proposition that there is a need throughout Scotland for housing in which people on the national minimum wage, who may be in public service employment or in other relatively low-paid jobs, can afford to live?
Absolutely. We certainly need such housing, but there is obviously an interrelation with housing benefit. What we might call the devolution implications would also be profound. Although it is obviously attractive at one level to transfer people to lower rents, that would mean that they received less housing benefit, which would mean that the Scottish Executive would pay more money for housing. Those issues need to be taken into account in the devolution context.
Let us look at how deprivation is being tackled. For example, the community regeneration fund is an important development. Can you give us a flavour of how the department feels that community planning partnerships are getting on in developing regeneration outcome agreements? What progress is being made in that area? Does the department have evidence that the resources are being targeted appropriately and that we are getting results for the money that is being invested?
That is an important area, and you have raised a key question. We would all pay tribute to some of the excellent work that has been done by social inclusion partnerships. However, we felt that we wanted to target the money better and focus more on outcomes, rather than just funding projects because they seemed like worthwhile projects to fund. There has been far more focus on outcomes, which has led to the regeneration outcome agreement process. Some people in local authorities have had some complaint about that and, if it is felt that there has been too much bureaucracy, we are willing to look at specific situations and to streamline some of that. The principle has been that we want to be surer that the money is going to deliver specific outcomes. It has been a new and quite thorough process, which is why—if I dare mention the CUP again—the start of the programme slipped a little bit and why the money is sitting there in the CUP to be spent at a later date on the community regeneration fund.
You are focusing on the working for families fund. In August, the Executive announced another £30 million for the working for families fund, which was welcomed. That equates to £15 million over two financial years to 20 local authorities. Deprivation is not confined to certain geographical areas but exists in small pockets throughout Scotland, even in affluent areas. It is clearly important to ensure that resources are directed to where there are significant levels of deprivation, but we must not forget that deprivation exists also in small communities. How were those 20 local authorities chosen? What are we to say to people who are on low incomes—parents with other difficulties—whose needs the working for families fund addresses but who are not in those 20 local authority areas? Is there an opportunity to develop the fund in the future to address the needs of people in small pockets of deprivation in areas that do not appear in deprivation indices?
That is an important issue, which we must think about carefully when we are looking at our budgets for closing the opportunity gap, although other departments have to do the same in other ways in targeting resources. The issue has come up in connection with the working for families fund and, in my constituency recently, the financial inclusion fund. Kay Barton deals with both those funds, so she may wish to add a little bit after I have spoken.
I will just clarify how we decided which authorities would get a share of the money. As the minister said, we did not use the same measures for the working for families fund that we used for the Scottish index of multiple deprivation and the community regeneration fund. We used the number of children in families who have members who are on key benefits—in other words, job seekers allowance or incapacity benefit. The first 10 councils had the highest numbers of children who fell into that category and the greatest concentration of them within the population. The next 10 authorities that we chose this year—which will get new funding from next April onwards for a few years—also have high numbers of children who are in families who live on low incomes, although their concentration in the overall population of children is slightly lower.
It is clear that it is difficult to find the right answer; indeed, there may not be a right answer. If the intention behind the working for families fund is to refine over time the definitions of deprivation, it will be helpful to do so because, in time, more families may qualify. My concern is that the inclusion of one or another variable in the indices can considerably tilt the definition as it applies to a geographical area. For example, if someone living in a rural community has a car, they are defined as not being deprived and are therefore excluded from access to funding. However, unless they have a car, they have almost no chance of getting work, because the car is essential in some parts of rural Scotland. Someone who has a car may be deprived and have a car simply because there is no other means of transport.
That has been taken account of, as far as I understand it. For precisely the reasons that you gave, the car is not used as a deprivation indicator in rural areas, although access to services is. Two different things are involved. The community regeneration fund, including the new formula, is being reviewed and evaluated—I touched on that earlier. We can try to learn lessons and see whether it can be improved.
From what I understand of the answers, it seems that councils have a lot of discretion and can spend the funding on whatever services they deem fit. I find it surprising that the Executive is currently writing up what works to allow good practice to be adopted. I would have thought that before you allocated £30 million and an additional £15 million, you would want to know exactly what the good practice was, how to target the funding and how to advise local authorities on the ways in which they should select areas of deprivation, be they rural or urban.
The simple answer to the question is to be found in target 7 for the portfolio, to which I referred. On one level, it should be quite easy to measure the number of parents who have been directly helped into or towards employment through the fund. The sum is a precisely focused one. There is a lot of good practice, but it is not a situation in which we either know everything or know nothing.
When we devised the programme, we drew on two main things from the available good practice. Parents who are thinking about working find child care costs to be the single biggest barrier to work or to improving their position in the labour market. We knew that our programme would therefore have to help parents on low incomes with their child care costs. That is one of the things that the working for families fund definitely set out to do and that is happening.
It is my understanding that the working families tax credit includes child care costs. That is obviously a Westminster benefit. If you are giving money from the Scottish budget to parents for child care costs, that will reduce the amount of working families tax credit that those parents will be eligible for.
If we were giving funding directly to parents, there would be an interaction. We have had to be very careful with working families tax credit. In some cases, we give the subsidy to the provider of the child care place; in other cases, we support parents financially until their working tax credit comes through. We have had to design the way in which we give financial support to make sure that parents do not lose out on the benefits and tax credits to which they are entitled.
I heard you say that 2,000 parents have been supported. I take it that that figure refers to 2,000 families.
Yes.
What is the audit trail from the local authorities that are benefiting from the fund? What is the reporting mechanism?
We collect data from each local authority that gets funded, and we have standard information that the authorities give us. They collect information about each family. There are various things that we want to know in addition to the simple numbers. We are interested in knowing whether the programme is helping people who face particular barriers to getting into work. We are collecting information about people's personal circumstances and about the benefits that they derive from the programme. We look at all that information.
Is the information collected quarterly? Is there a standardised system for giving the data to your office?
There is a quarterly reporting system. Napier University's employment research institute is doing the monitoring and evaluation for us. When we start to publish the figures routinely you will see the spread of information.
When will that happen?
We will be able to publish the figures for the second quarter of this year, June to September, once we have collected the data. That will be before the end of the year.
How do you define "moving towards work"? I understand the idea of people going to work, but what does "moving towards work" mean?
We are flexible about the definition. It may mean somebody getting on a training course; it could be somebody taking up a volunteering opportunity as a stepping stone to work. For some parents who are already working, it might be protecting their position in work if their circumstances change, or it might be helping them to improve their hours or increase their earnings.
That is all in the data that we will be able to see.
Yes. Well, we will be able to see the shifts and the kinds of outcomes for parents. We may not be able to count exactly how many people have been on various different types of courses, but we will be able to get a broad view of what we call the distance travelled by parents.
I want to move on to the supporting people fund. Table 7.03 of the draft budget document for 2006-07 indicates that the budget for supporting people was almost £408 million in 2005-06; the planned allocation for 2006-07 is almost £388 million; and the planned allocation for 2007-08 is almost £384 million. I will leave aside just now the footnote that suggests that further expenditure might come from savings, because I want to concentrate on the figures that are in front of us.
We can certainly meet target 4. Target 5 is obviously complicated by the fact that more people are included in the homelessness figures for the simple reason that more people have homelessness rights than was previously the case. I still believe that we will meet target 5, but that obviously involves the wider debate about homelessness. However, target 4 is a specific supporting people target and we will comfortably surpass the figure to which it refers.
You say that anecdotal evidence suggests that the impact might not be as bad as we think it is, but that depends on who one talks to. The anecdotal evidence that I am getting is that there has been a clear impact. I am interested in the service review that you mentioned. When will you be in a position to share the results of that with the committee?
Alisdair McIntosh might want to comment because he is leading on the issue. I imagine that we will be able to share the monitoring returns fairly soon. The service review is a long process partly because local authorities wanted to be given time to do it properly and thoroughly. Alisdair might be able to give a more specific indication of when some of that on-going work could be shared with the committee.
As the minister said, the first set of returns is due at the end of this month. Provided that local authorities are able to keep to that timetable and that what they provide in their monitoring returns is sufficiently comprehensive, we should be able to come back to the committee fairly quickly thereafter.
I have more of an observation than a direct question. The 6 per cent limit that the minister spoke about has mitigated some of the worst problems that some of our local authorities faced but, anecdotally, it is not a panacea and has not made the situation better. It means that the reduction might not have such a dramatic impact at the beginning, but it could still have an impact over a longer period. At the very least, it is welcome that the minister hopes to return to the committee sooner rather than later so that we can look at the matter in further detail. Some local authorities, predominantly in the east of Scotland, are facing problems because of the cuts that have been imposed.
I realise that Malcolm Chisholm came into his job at a difficult time and that it might be difficult for him to answer this question directly. It would be useful if somebody could acknowledge that the situation has not been handled cleverly. The Executive has encouraged local authorities to provide service packages for citizens with some of the greatest needs—people with learning difficulties and all sorts of special needs—and local authorities have gone ahead and responded to that challenge to set up such care packages. To have to claw those packages back and scale down the work does not look good and creates difficulties for the individuals concerned. Will he accept that that could have been handled better from the beginning? Can we try to have longer-term planning for the provision of care for such people? The matter could not be more important.
We are certainly working on achieving that, which is the service review's purpose. As I said, the view is that scope exists for some efficiency savings. Given the general attitude of the committee and others to efficiency savings, I suppose that that view would be accepted in principle. I do not prejudge the situation; I accept that difficulties exist in some areas and I will keep a close watch on the matter. You are inviting us to go over events that in some cases happened several years ago, and I am not sure whether it is productive to say with hindsight that things could have been done differently. The Scottish Parliament and the Westminster Parliament also have an interface on the issue. It is probably best to focus on the future rather than the past.
In doing that, do you acknowledge the need for a long-term commitment to providing services for those people?
Absolutely. The subject is very important. I am not saying that the issue that Tricia Marwick flagged up is more important than other matters, but in the context of what we are discussing today and during the debate tomorrow, it is particularly important in relation to homelessness. We must factor that into our plans for dealing with homelessness.
My question follows on from that and is about the impact on individuals of the supporting people initiative. It also connects with warm affordable housing. What analysis is done of the impact that supporting people in the community and warm affordable homes have on the health budget? We know that many health problems for the people involved and others relate to not having decent housing or being supported in the community. Across the health and communities portfolios, has any such analysis boosted your budget and reduced that of the Minister for Health and Community Care? That is not such a daft question, because we know that many health problems relate to such matters.
Obviously, I have a long-standing interest in health and housing, so I do not deny in principle what you say. We had exchanges about the issue on the radio last week. The work that we have done on the central heating programme and on reducing fuel poverty, notwithstanding the remaining problems, has benefited rather than harmed people's health. Research is being undertaken, although I cannot name research projects—I do not know whether Alisdair McIntosh can. We are conscious of the subject. The wider health inequality issues that will be raised in tomorrow's debate are one piece of a complex jigsaw of health improvement. I am mindful of that. The supporting people objective of keeping as many people as possible living in their own homes is central to health policy. I and others in the Executive are aware of those connections.
I will make two quick points. First, we have recruited a secondee from the care commission for the express purpose of getting under way a programme of research on impacts of the supporting people interventions, particularly on the most vulnerable among the client groups. We would be happy to share with the committee the research specifications for the various pieces of work that are being developed.
I am pleased to hear that.
I will add a comment because I have been involved in such work, too. Members may remember that, as Minister for Health and Community Care, I funded the Glasgow centre for population health, which has just started an interesting piece of work on the health impact of the housing and regeneration investment in Glasgow. Again, you could say that we are indirectly supporting that because we are supporting the Glasgow centre for population health and—
After six years of the Parliament, we are looking for something other than silo mentality and ministers having their budgets but not saying that if something is done in one area, there will be savings in other budgets.
I hope that what we have said indicates that some practical work is being done to join those things up.
The committee will look forward to receiving more information about that.
We have already announced the money for financial inclusion, to which I referred in the context of Euan Robson's question. Five million pounds of the £15 million a year for the closing the opportunity gap fund will be spent on that. We have still to announce the rest of the allocations from the fund, but I hope that we will be able to do that quite soon. We are looking at taking a cross-cutting approach to these matters, and we will have to make decisions about which interventions can make the most difference in terms of closing the opportunity gap. We are thinking about and discussing that with other departments; however, the correct thing to do will be to wait until an announcement is made—before Christmas, I hope.
It would be helpful if we could have the announcement before Christmas, so that we can ensure that all the money is spent in the financial year 2006-07.
On page 114 of the draft budget document, under "Growing the Economy", you mention the planning white paper and talk simply about
We are obviously looking at all the resource issues around the planning modernisation proposals. Some of that work will be a matter for the next spending review. We announced a planning development budget, which is included in the tables, and I remind you of the new table that has not featured in the budget before, which is in the portfolio chapters. In the local authority grant-aided expenditure line, a significant line for planning is flagged up, on page 120. That is not to say that we are not conscious of the issues that you raise, although I remind you that there is a bit of swings and roundabouts in the planning reforms, some of which will save local authorities money. We are certainly not complacent about the resource issue. Some of it will be to do with using existing resources differently and better. We are actively dealing with planning for personnel in the future, not just with local authorities but with the planning schools.
On planning, there is very little change in the budget. The figures are around £89 million, £90 million and £90 million for 2005-06, 2006-07 and 2007-08 respectively. Very little cognisance seems to have been taken of the future need for a vast increase in the workload of planning departments; it is certainly not reflected in financial terms.
It is even more complicated than that, as that is a GAE line rather than a budget line. We all know that that might not be the amount that is actually spent by local authorities. Within the next spending review period, we will be looking at resources for planning and, no doubt, that will include that GAE line.
Thank you, minister. I am grateful for your attendance with your officials today. The committee will consider its report to the Finance Committee on the 2006-07 budget at a subsequent meeting. I suspend the meeting briefly to allow the minister and his officials to leave.
Meeting suspended.
On resuming—