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We are undertaking stage 2 scrutiny of the budget and we are required to report to the Finance Committee on the spending proposals in the environment and rural affairs portfolio. We have before us several documents that will help us to consider the issue: the Executive's spending review proposals for 2005-2008; the draft budget for 2005-06; and a letter from the minister responding to the issues that we raised when we last discussed the matter, which was in the spring of this year.
I am happy to do that. I am grateful for the opportunity to have this discussion early in my tenure of this brief. Preparing for the discussion has been helpful in focusing me on the wide range of responsibilities that fall to the environment and rural development portfolio.
Thank you. As I suggested at the start, I would like us to work through the budget methodically, for the benefit not only of the committee, but of the minister and his officials.
You are right to start there, because the nature of the process is that we are required when we come to the spending review, as we have done this year, to identify a number of key targets that highlight and focus what our efforts and priorities will be over the three-year period. We have clearly done that, and in the process of doing that some of the former targets have dropped off that list. However, in a general sense, we feel that all those targets have either largely been met or will continue to be targets for the agency that is responsible for implementation. For example, some of the former targets on water will continue to be the responsibility of Scottish Water and we shall want Scottish Water to continue to monitor them.
So they have not actually disappeared?
They do not cease to be targets, nor do they cease to be monitored, unless—as has happened in one or two cases—we feel that they have largely been met, when they no longer need to be monitored in the same way. I think that David Dalgetty would like to add something.
The only exception that I can think of is the previous target for the less favoured areas scheme, which the committee did not think much of and which we have simply replaced in the spending review this year with what we regard as a new target that captures rather better the underlying purpose of the spending. That is the only example that I can immediately think of, of replacing a target that we agreed with the committee was inadequate.
Most of the rest of the targets that have been replaced would fit more closely to the pattern of the target on recycling by local authorities. We had set a target for 2006, but it has been superseded, as I announced last week, by a new target for 2008. Of course, we shall still expect local authorities to meet their 2006 targets on the way to meeting the new target for 2008.
Do those changes get captured anywhere in a progress chart that would come back to us? That would obviously be useful for different agencies and for the Scottish Executive. Is there any transparency about that process?
You will understand from the timetable for the year and the formality of the process that the point at which the committee is considering output measures as opposed to the forward plans, either in expenditure terms or in output terms, is at what we call the annual evaluation review stage, which coincides with the first stage of the budget every year in March. You saw the first so-called annual evaluation report this March at the first stage, and you will see the second of them next March. In principle, it is in next March's document that we expect to see reports on the achievement of performance against targets. I expect the number of targets listed in that AER for the Environment and Rural Affairs Department portfolio to be rather longer than the list shown in the document before us, but there will still be a question about where we draw that line. We need to get a feel for the committee's particular interests, because we could end up putting in 1,000 targets that are measured at different levels within the organisation.
That was useful and provided clarity. We might want to reflect on the issues that we have considered before and check whether we have missed anything that we previously thought was important.
I have been through the budget process in various committees in the past five years and I find it particularly frustrating. If the process is to be meaningful, we must get some common ground so that we can monitor and track issues. Committees have asked for that every year for the past five years, but it has not happened. If we are serious about the process, we must be able to track issues.
That is a fair question. To respond to your initial point, the process was bequeathed to us by the consultative steering group, as I am sure members understand. I am sure that the Finance Committee, in considering how best to make ministers accountable for the budget, may consider other possible processes. We are considering an annual budget, most of which—with the exceptions that I mentioned—was announced some time ago. The new information that is potentially available is about the two following years. I am sure that there is wide interest in finding a better way to examine the budget.
What does the phrase "disadvantaged areas" in target 7 mean?
We are trying to identify areas that suffer a disadvantage. Part of the answer to that will depend on the work that we do in the next few months to identify where improved service delivery is needed. The disadvantage that we have in mind is disadvantage in receiving services. The focus of the target is to ensure that communities have adequate access to services, wherever they are located.
I return to targets. Are there now two layers of targets: key targets, which you have decided to brand as overall Executive targets, and lesser targets for different organisations? Do you set out anywhere why some targets are key targets and some are lesser targets?
Organisations such as the Scottish Environment Protection Agency, Scottish Water or Scottish Natural Heritage have in their annual reports—or documents that set out their operating plans—targets that they seek to meet. In that sense, a range of targets apply to public sector bodies in using public funds, which we give them, to achieve the overall objectives that they set. The key targets and objectives that you see listed relate to the three-year spending review period. They are top-level targets, but they are also there to indicate the priority areas for development over that period.
On efficiency savings, I understand that each department has to achieve savings of 2.5 per cent per year for the next three years, which, over three years, would mean efficiency savings of 7.5 per cent. How do you intend to achieve that?
The responsibility for that lies with the Minister for Finance and Public Service Reform. In other words, the figures will appear in the Administration budget; the figures that you have are for the Environment and Rural Affairs Department's spend and investment. It is an interesting question, but it is perhaps better directed towards the Minister for Finance and Public Service Reform, as he has responsibility for identifying savings, not only for his department but for each Executive department.
I just want to clarify that response. The prophets of doom who are looking for indications in the figures before us of cuts and of the axe being wielded are misguided.
That is right to a degree. I have described the position regarding the department's budget, but within the department's remit are public agencies that have their own efficiency targets. For example, Scottish Water has already achieved substantial savings and will be expected to continue to pursue efficiency targets as part of the basis on which it is funded.
You said that Scottish Water has achieved efficiency savings. However, it is clear that that has meant that there is a lot less manning of water facilities and jobs have been lost. I would not like to be dubbed a prophet of doom, but from my visits to water facilities I saw that efficiency savings are making it more difficult for Scottish Water to carry out its job efficiently. We could do with hearing whether you see the loss of jobs, particularly in rural areas where there are small water schemes, as an efficient way to cut costs.
It is important not to characterise efficiency savings as budget cuts. Such measures are intended to create savings and more efficient use of resources. The measure of efficiency that we will apply to Scottish Water—as we would to any other agency—is whether any savings that it has made will assist it to deliver its services more efficiently. That is what we want our agencies to do. An enormous capital investment budget is required because of the continuous underinvestment in water over many years prior to devolution. The requirement to increase efficiency in order to meet that capital budget will mean that Scottish Water, like every other agency, will be required to make what savings it can without diminishing the efficiency of the delivery of those services for which it is responsible.
I am sure that we will want to return to the issue of efficiency savings, because the minister said that Alasdair Morrison was correct only to a degree.
Pardon?
You said that Alasdair Morrison was correct only to a degree.
Your initial question was on the department's budget and he was correct in what he said about that. The agencies are slightly different, as I hope I have now explained, in terms of where the responsibility for efficiency savings lies.
I have a question on the general context of the increases over the next few years. We are told that the department's share of total Executive spend is to decline from 4.7 per cent to 4.4 per cent between 2004-05 and 2007-08. How does that reduction in spend compare to that of other departments?
I am sure that, if Mr Lochhead has the figures for one department, he will have them for other departments.
I do not. Although I looked for them in the budget document, I could not find them.
I am afraid that I do not have the figures for other departments in front of me. Mr Lochhead will be aware of the substantial increase in overall funding that is being applied across the board. Clearly, the percentage increase to which Mr Lochhead referred is also an absolute increase of some moment that applies across all departments. I ask David Dalgetty whether he wishes to say anything about the overall Executive budget and where the Environment and Rural Affairs Department's increased funding stands in terms of the overall picture.
As an avid finance man, I am not sure that I have examined in any great detail the relative performance of ministers in terms of these matters. Mr Finnie tried to address the point in the response that he gave recently to the convener on the first stage of the review. He suggested that too much could be made of what might, from time to time, seem to be variable shares in the aggregate cake. That does not necessarily suggest that a decision has been taken that the Environment and Rural Affairs Department's spending as such has a lower priority than that of any other department. The issue is complex.
I think that that is right. Although I was not involved in the preparation of the department's bid in the spending review, I was involved in the Enterprise and Lifelong Learning Department bid. I assure Mr Lochhead that ministers do not start by asking what the department's percentage of the overall spend should be and how it can be maintained. Ministers start by asking what services we want to deliver and then how much it will take to deliver them.
I have a follow-on question. One of the issues that emerged from Ross Finnie's most recent letter to the committee was the issue of sustainable development. How do we crack the issue of following through the spend on sustainable development? Picking up on the last point that you made, minister, we cannot judge the Executive's commitment to sustainable development by looking only at the Environment and Rural Affairs Department budget. Ross Finnie has the overall ministerial responsibility for sustainable development and yet it is difficult to judge the overall spend on this area.
Again, like the issue that Richard Lochhead raised on other departments' funding, sustainable development is an area that involves spending across departments. Clearly, if we are to look at the spend on sustainable development, it is not sufficient to look only at the Environment and Rural Affairs Department's budget. Quite a lot of what is being done to address sustainable development is being done by other departments. In particular, the promotion of renewable energy—an area that I know well—is the responsibility of the Enterprise and Lifelong Learning Department. Another example is the improvement of public transport services, responsibility for which lies with the Minister for Transport.
Although BABS II makes explicit SEERAD's cross-cutting responsibility, how does it work in practice? How do your officials work with officials from other departments on the determination of priorities? Is the current situation adequate? Do you have the right tools? Do any changes need to be made?
I think that there are two main answers to those questions. First, there is the Cabinet sub-committee on sustainable Scotland, which is chaired by the First Minister and of which Ross Finnie and I are members. Official support for the sub-committee comes from the sustainable development group within SEERAD. SEERAD ministers have regular bilateral meetings with colleagues to address sustainability issues across the Government, and there is our greening Government policy, which is about how the Executive addresses sustainability issues within its own estate, work force and administration. That, too, is useful in addressing some of the issues.
I understand that the CSCSS sets priorities at quite a high level, but when the detailed operational plans and spending are being considered, how do you iron out the possibility of contradictions? It needs a bit more than occasional bilateral meetings and a top-level meeting of the CSCSS to talk about the big issues; there is a need for somebody to have an overarching role.
The bilateral meetings and the meetings of the Cabinet sub-committee are held in the context of Cabinet policy and the high-level commitment to sustainable development as one of the key drivers of policy throughout the Executive. They do not exist in isolation, nor are they separate from each other; they are part of the overall co-ordination of policy. Like the other high-level targets that we have set, such as closing the opportunity gap and growing the Scottish economy, we expect sustainable development to be taken on board in all departments and policy areas. The Cabinet itself will keep an eye on that if any question arises about it.
I speak as an official from a department that sees manifestations of the sustainability agenda. Without telling tales out of school, it is fair to say that, when we consider options for policy and spending during the spending review, there is a sustainability test for all proposals, so the impact on sustainability policy would be considered as a matter of course in the final decisions about spending priorities. Also, sustainability is embedded in the value-for-money approach to all spending decisions as a key issue that must be taken into account alongside all the other economic arguments.
Does your department monitor that with other departments? Do you assess whether decisions have been made according to the principles of sustainable development?
I would not monitor it in the Finance and Central Services Department, but I would expect the management in the departments that are in charge of the projects, policies and expenditure to apply the clear guidance on sustainability to the analysis of, and outcomes that they seek for, the programmes for which they are responsible. There is a framework in which to do that.
Do you know that that is the case? How do you monitor it? You have a cross-cutting responsibility for it and you are saying that you assume that, because the ministers have all signed up to sustainable development, it is being delivered through policy, targets and spending. Who monitors it? You have the responsibility within SEERAD.
We could provide the committee with more detail on that issue. My problem is that I am a finance creature, and there is a separate structure in the Executive for monitoring sustainable development issues across the Executive. If any of the people in that structure were here, they could answer your question rather better, but I cannot. I am sorry.
That would be useful. Our clerk, Mark Brough, informed us earlier that there would be some communication between us and the minister's officials after the meeting, and we could put monitoring on the list for that discussion. It follows on well from the work that we have done on sustainable development this year, so we would want to follow it up.
We would be happy to do as suggested. In response to Mark Ruskell, I state that the sustainable development team within SEERAD has responsibility for working with other departments. We will give the committee more detail on that.
I am conscious that we are whacking through our time. Do members have any other questions on high-level process issues before we move on to specific topics and policy issues?
The issue of end-year flexibility might be addressed now. Table 0.09, on page 7 of the draft budget document, tells us that the end-year flexibility for environment and rural development in 2004-05 is £91.854 million and that the figure for Scottish Water is £205.045 million. We are told that we are going to get documents in the autumn and spring that will tell us how that money is to be allocated. What degree of flexibility is there for allocating that money to priorities that have come up during this year?
A fair degree. We anticipate that much of that underspend will be brought forward to meet other priorities in the course of the year. The central unallocated provision, which I suspect the committee will have discussed, exists and the £91 million—the net underspend—has gone, in the main, in that direction. However, when we consider the opportunities later in the year, we will seek to make a claim on some of that for our priorities. Those have yet to be determined, and we will announce more on that later in the year.
I will be interested to hear that announcement. Can you give us an indication of whether the global sums are typical of end-year flexibility in the past couple of years?
I am not sure. David Dalgetty might know that.
The water underspend is separate, as there is a commitment from the Executive to fund a third of Scottish Water's investment programme over the current investment period. Those resources will come as and when they are required. The £91 million underspend is net of that. The elements of that underspend are the ones in which we have seen the underspend in the past year or two. The first is the strategic waste fund—a relatively new fund for which quite a big baseline was established two years ago. It has taken a while to get in all the authorities with plans under the waste fund, so we had underspend in the first or second year. However, we are fairly clear that the underspend will be required to meet future pressures on the fund. Another element of the underspend comes from spending on agricultural science pensions, which accounts for £16 million of the non-cash departmental expenditure limit.
Sorry, but that is not immediately helpful as an explanation.
It is to do with resource accounts and budgeting. Within the baseline under resource accounts and budgeting, DEL is broken down into cash DEL—money that can be spent on schemes, services, non-departmental public bodies, or whatever—and non-cash DEL, which covers non-cash costs such as the cost of capital and the depreciation provisions that we have to make for bodies such as NDPBs and agencies that use capital and incur non-cash costs. Those costs now have to be accommodated within the aggregate DEL.
I hope that we will get a chance to question the minister on the allocation of the money before it is allocated.
Yes. More than likely, we will produce a revised budget for the current financial year in November, which will detail spending across the board.
Convener, can we have an assurance that we will get a chance to question—
We have just had an assurance that the revised budget will be published and the committee will have the chance to explore that if we want to spend the time on it.
I take it that you refer to targets 1 and 2, which require Scottish Water to reach its efficiency targets and to achieve improvements in drinking water quality and in discharge of waste water. Those targets are deliberately set in terms that reflect the fact that some of the detail will have to await completion of the process of setting charges and agreeing the capital programme. Both of those processes are under way.
I want to ask the minister about new target 3 to
Yes. The budget has been set to allow SNH to address precisely those issues. In its response to the budgetary provision, we expect that SNH will identify where there are issues with the condition of sites that need to be addressed and the means that they intend to use to do that. Perhaps my colleagues want to comment on particular aspects.
In the light of the ministers' decision on resource allocation in line with target 3, we expect some formal consultation with SNH on the review of its corporate plan as we move forward. We expect to see the distribution of resources in the corporate plan being done in such a way as to enable SNH to meet the target.
In a sense, it is a bit like the water situation: we have set an overarching target and we expect the agency to turn that into precisely the detailed proposals for individual cases that you seek and to provide the definition of what it can and needs to do to meet that overarching target.
So the process is that you set the budget and then say to SNH, "You determine what is a favourable condition, given that you have only a limited amount of money to spend on it." Is there any other way round it?
Yes, we look to SNH to advise us. Clearly, some aspects will require ministerial decisions, but the organisation advises us on any shortfall in the condition of sites, what requires to be done and how it intends to do it. As a result, there is a dialogue; we do not simply give SNH something to do and tell it to come back to us in three years' time. We make the financial provision, seek the organisation's advice and then provide instructions as required to carry matters forward.
Without getting into the rights and wrongs of the decision, which I have rehearsed elsewhere, am I right in assuming that the current budget line does not include any provision for the relocation of SNH and its staff? Will the Finance and Central Services Department add it to the budget later on? I simply seek a reassurance that this budget is not the full story.
You are absolutely right to deduce that. It relates back to Rob Gibson's question about the budget's final form. Clearly, we will look to the central unallocated provision for the funding required to meet the costs of relocating SNH. We would expect to include the figure in the revised budget, which will be published in a few weeks' time.
If I may, minister, I should point out that, depending on when SNH comes to us with the final costs—particularly the costs of relocation and of redundancies for those who do not want to move to Inverness—we might have to add that figure into the final 2005-06 budget. It will come to us at some point between now and the middle of next year.
Thank you for that clarification.
I have another question about targets—indeed, you can probably guess what I am about to ask. The draft budget contains a new and extremely welcome target for introducing flood prevention measures, which is very much about tackling the symptoms of climate change. Are you thinking about introducing a specific Scottish target for greenhouse gas reductions into the Scottish climate change programme, which will be reviewed later this year? That would allow us to have a twin-track target that would deal with the symptom and the cause at the same time.
Such undertakings are made by the United Kingdom as a member state of the European Union and, internationally, as part of wider treaty commitments. As you point out, there will be a review of the Scottish climate change programme, which will consider a range of questions.
Do you acknowledge that the Executive's spending proposals over the whole BABS programme and the spending review might contain some contradictions? For example, your attempts to tackle climate change through promoting renewable energy might well be somewhat offset by other aspects of Executive spending such as road building. I am not passing judgment; I am simply saying that there are contradictions and that you have to make trade-offs according to your policy. How do we get a handle on that? After all, the current targets do not make it clear whether we are moving forwards, moving backwards or staying still.
You might want to explore the details of our transport budget with the relevant Executive department. Under that budget, significant investment is being made in public transport and important measures are being introduced to reduce the impact of vehicles on the environment.
I want to cover two separate matters. Dealing with abandoned vehicles is one of the priorities that you have listed. What discussions have you had with the United Kingdom Government about its interpretation or implementation of the end-of-life vehicle directive? It seems to me that the United Kingdom Government's onus on the last owner of a vehicle—who is likely to be some kid who has bought a clapped-out motor car—will almost encourage people to abandon vehicles and that there will be a much heavier burden on us as a result of how the directive has been interpreted. What work has been done to try to head off that problem at the pass, perhaps by loading the costs on to new cars to create a fund to cope with end-of-life vehicles?
I have not been involved in discussions with the UK Government on the issue, and am not sure whether colleagues have been involved. In general, we will be involved in the implementation of the end-of-life vehicle directive, as we will in implementation of the waste electrical and electronic equipment directive, which is parallel and will come into effect at much the same time. As one of the bodies that is responsible for implementation, we would expect to have discussions with the UK Government, which, as the member said, has the responsibility for it. However, the broad thrust of the end-of-life vehicle directive is clear, and, as you will have gathered, we will give budgetary support for that.
I worry about a looming crisis.
No. The scheme was intended to address issues relating to nitrates in nitrate-vulnerable zones over a fixed period and the need to put in more slurry pits and so on where nitrate effusions were higher than they should have been.
Right. I would like to pursue the withdrawal of support for the scheme for collecting farm waste plastic. Actually, I will pursue the matter separately.
Okay. We can return to that. We might want to pick it up in writing. Does any member have questions on rural development?
I was going to mention some things that Nora Radcliffe has just mentioned to do with waste plastics and so on, but if we are going to seek a letter, I will wait for that.
I think that you should.
On flexibility, can the minister advise the committee about the CAP changes? Many uncertainties surround CAP, and we do not know how the single farm payments and land management contracts will impact on our rural communities. What flexibility will there be? We do not know what issues will emerge that will impact on our rural communities.
Do you want to ask about fishing afterwards? I was going to deal with fishing as a separate topic.
The same sort of issue is involved—flexibility, and how that has been built into the calculations.
I will deal with the question on CAP first. In my introduction, I commented on the consequences of the yet-to-be-resolved CAP matters and said what we expect the total budget to be. It is worth drawing committee members' attention to table 9.07 in the draft budget. Members will note an apparent trebling of the rural stewardship scheme's budget for 2005-06. I fear that that is only because the higher figure contains many of the modulation payments. It has not yet been specified where those payments will go. As I said, the rate of modulation in our own budget has not yet been set. When we come to the final budget, some of the figures will have changed because we will have come to a final view on where the funding should go. Jim Wildgoose may wish to add to that answer.
As the footnote to table 9.07 makes clear, the new single farm payment is counted as annually managed expenditure and is therefore not scored in the table. That payment is roughly £400 million. That money will be paid out under European Union regulation and there is a fair degree of inflexibility—we will have to pay that money out.
I would like to explore in slightly greater detail the relationship between the countryside premium, organic aid and rural stewardship schemes. In previous years, funds have been switched from the countryside premium scheme to organic aid. In the projections, is that likely to be reversed?
I do not know about reversed. You mentioned three items; I made particular mention of the rural stewardship scheme because it is the largest, but they all include sums that are not yet allocated.
Yes, but in previous years, despite the projections, the funds for the countryside premium scheme have reduced and those for organic aid have increased. Is that likely to continue?
I am told that the answer is yes.
In the past, there has been some parking of the issue of rural stewardship. Is the figure of £29,888,000—also projected for future years—a theoretical figure, or does it represent a ceiling to the scheme?
I think that the answer is that it is a theoretical figure.
So it is not a ceiling and funding for the scheme could increase over time if necessary.
It is not a ceiling. The figures for 2004-05 and 2003-04 show an increase in the underlying spend. We might expect that to continue. An issue that arises is how the modulation money that is reflected in the £29.9 million will be allocated in future under the tier 3 arrangements for land management contracts. We will have to consider the rural stewardship scheme in that context. The scheme might continue in its present form or it might change slightly. However, we would expect the expenditure to continue to rise.
I have a question that follows on from that. Once the system for land management contracts has been worked out, will it get a separate line in future budget documents?
Yes.
My second question concerns the definition of "productive use" in target 6, which relates to land in less favoured areas. What do you mean by that and how will "productive use" be measured?
It will be measured by the number of cattle. That is probably the short answer.
The previous target was not very helpful in that it talked about the number of applicants applying under the less favoured area support scheme—it referred to a figure of about 13,500 applicants. The present target sets out what we are trying to do in terms of the productive use of the land. We will measure the area of land for which applications are made under the scheme, which will mean that we will be able to say how much productive land there is. That will be counted as being the area that is covered by the applications that are made under the scheme, so we will be able to measure directly whether the target is being met.
As I have said before, the next target is less easy to measure. In fact, it is not even very clear what target 7 means. How will the spending that you are proposing under targets 6 and 7 and the two targets themselves ensure that there is increased rural prosperity, improvement in the environment and continued sustainable development? I and other members of the committee are frustrated that we cannot get a good handle on rural development from the budget process because target 7 is so vague.
In relation to target 7, it is worth saying that the delivery of services in rural areas is not simply a SEERAD responsibility. That is why, in building on target 7 and turning it into something more detailed, we will need to work with other Government agencies and departments. We will hone that wider target to produce something more specific on the delivery of services to particular areas.
What is the timescale for that? Will you come back to the committee when that has been finalised?
I am sure that we would be happy to come back to the committee. The expectation is that we should have completed that work by the spring.
In your statement of priorities for 2005-06, you identify
That comes back to the issue that was raised in the questions about the specifics of the various pillar 2 or modulated objectives within funding for rural development. On paper, it looks as if funding for the organic aid scheme will suddenly dive from more than £8 million to just over £2 million but, as has been explained, a range of figures will be revised once we get to the final stage of the budget process, when we will be able to assess what we need to deliver on the different priorities.
Okay, that is clear; we are talking about the same issue again.
The organic aid scheme is our principal vehicle for doing that. Of course, even in rural areas, there are some limitations on what funding the Government can provide to particular players in the market against others. The organic aid scheme meets the state aid requirements and is therefore the vehicle that we use for that purpose. There are other aspects of the overall provision of support that are designed to encourage continued productive use of the land and might be of benefit to those who are engaged in organic agriculture, but the organic aid scheme is the vehicle that delivers the specific support.
Through the organic action plan, you identified a wide range of areas that need to be worked on, including public procurement, but I do not see any reflection of that in the spending. If the organic aid scheme is the primary vehicle and there is nothing else, how are you going to deliver the organic action plan?
It is the vehicle of support for organic agriculture, but public procurement would lie elsewhere.
Can we pick up that matter in correspondence? It clearly does not lie under the budget heading.
I would be happy to do that. There are other aspects that lie outwith our budget.
That would make the budget more transparent.
One of the challenges that faces the committee is to hold the Government to account on rural development, but the majority of schemes under the rural development heading in the budget are agricultural, so the heading should be "agriculture", not "rural development". There are not many wider rural development issues under that heading apart from agriculture issues, which are important.
If I understand you correctly, your point is that the increase in the overall budget from 2004-05 to 2005-06 is matched by the increase in the budget line for the rural stewardship scheme and associated schemes.
Yes.
As you can see, the budget of £136 million increases by £24 million over the three-year spending review period, so it is not insubstantial.
Yes, but the increase is theoretical. If I lived in rural Scotland and saw that figure, I would think that it was a dramatic increase, but you cannot guarantee that that will be the case.
It will be, but the spending might not be under that heading. The distribution between the rural stewardship scheme and other support for rural development within the overall budget has yet to be settled, but the total is there. I am sorry if that was not clear at first.
Is that not the case only if you go for 10 per cent modulation?
No, it does not assume a 10 per cent modulation figure because, as I said, the rate of modulation for 2005-06 has yet to be settled. By the time that we get to 2007, it will be 10 per cent, but the progress from here to there has yet to be settled.
I am conscious that we are beginning to overrun our time but still have substantial issues to deal with. We might want to deal with fisheries and forestry in particular. I ask the minister to write to us about what could be seen as a discrepancy between historical and future spending in the budgets for research and sustainable action and for agriculture and biological science. Perhaps we could have an answer on that in a bit more depth afterwards rather than explore it in questioning.
In light of the fact that there are negotiations in December, what flexibility will there be? In the past few years, the negotiations have been bad for Scotland, which has led to huge economic difficulties for the catching, processing and onshore sectors, which have received next to no support from the Government. Given that we do not know what the outcome of the December negotiations will be, to what extent have you built contingency funds into your plans to ensure that the industry survives?
You will not be surprised if I start by saying that I do not accept your analysis of the outcome of the last two fisheries councils.
Your Government reversed the decision twice.
One at a time, please, Richard. You have asked the minister a question and he is now answering it. I might let you back in if you have a supplementary.
Let me start by pointing out that we should recognise that the budget process is separate from the process of negotiating with our European partners in order to attain sustainable fisheries. Table 9.09, which sets out the fisheries spending plans for 2002 to 2008, shows the expected increase in spending. Clearly, the work of Fisheries Research Services is critical in ensuring that there is a sustainable level of fishery effort to provide the scientific knowledge on which decisions can be based. Equally, the Scottish Fisheries Protection Agency delivers on our behalf measures that are necessary to ensure that there are sustainable levels of fishery. Members will see that the agency's funding has been significantly increased.
I have a small supplementary question. However, I should also point out that the fact that your predecessor changed last December's deal in April and September clearly shows that it was not particularly good.
Again, I would disagree with your analysis of the levels of Government support for the fish-processing sector, which I know well. Fish processing is eligible for fisheries grants, but not enough of the applications that are required to take advantage of them have been submitted to use up the budget line.
I am very tempted to close our discussion on the budget process at this point.
I have a question about forestry.
Is it a brief one?
It depends on how long the answer takes.
Well, I ask you to keep your question brief and ask the minister for a brief reply. If the question requires a very lengthy explanation, we could always ask him to provide some of his response in writing.
My question revolves around policy as well as the allocation of budgets. In his opening remarks, the minister mentioned that a great deal of timber production is going on. I am grateful for the introduction of the timber transport fund, which will have a big impact and alleviate some of the problems that are associated with such transport. However, as we go into this period of high timber production, I am concerned about the replacement of forests in Scotland. Is there a budget stream that will adequately cover responsibility for replanting clear-felled forests or does the budget contain a deficit that will result in bare hills, with all the associated local and international impacts on landscape and climate that that will bring?
That is a fair question. It might help to remind members that there will be a debate on forestry tomorrow, which will allow us to explore some of these issues in the chamber.
I will bring the matter up tomorrow.
Okay. I will speak to you about it then.
I thank the minister and his officials for attempting to answer our questions. I think that we have pretty thoroughly explored exactly what is happening, which is something that we have historically found to be very difficult. We will follow up some of our questions in writing afterwards.
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