Budget Process 2005-06
Item 2 on our agenda is consideration of the budget process 2005-06. I welcome Mary Mulligan MSP, who is the Deputy Minister for Communities; Mike Neilson, who is head of the housing and regeneration group in the Scottish Executive Development Department; Angiolina Foster, who is chief executive of Communities Scotland; James Hynd of Communities Scotland; and Kay Barton, who is head of the social inclusion division in the Scottish Executive Development Department. I do not know whether the minister wishes to say something before we move to questions.
I would like briefly to make a couple of opening comments; I know that we are pushed for time, but I am pleased to have this opportunity to discuss with the committee the "Annual Evaluation Report 2005-06". Members have been introduced to the officials who are here this morning to assist me in responding to questions.
The "Annual Evaluation Report 2005-06" represents a subtle change of name from "annual expenditure report". The purpose of that change is mainly to differentiate the report from the stage 2 draft budget document, which will be published later this year. I acknowledge that there is a plethora of documents, but I hope that that will not cause the committee any difficulties. The annual evaluation report now focuses on the key targets and progress towards those targets. It provides the baseline budgets for the forthcoming year. Stage 2 will reflect the outcome of the spending review.
At first sight, it appears in the AER that the budget provision between 2004 and 2006 is being reduced by £43 million a year, compared with the draft budget document of last September. I state that resources are, in fact, increasing. I am sure that the issue will be raised in questions, when I will be happy to address it in more detail.
Tackling poverty sits at the centre of the social justice agenda and closing the opportunity gap for Scotland's most disadvantaged people is one of the Executive's top priorities; it remains at the centre of all our efforts. I hope that we all agree that work continues to be the best way out of poverty. Major investment is being made in education and training and in assisting people back into employment. In the communities portfolio, our investment in tackling poverty and disadvantage has a number of strands, which I will be happy to address in more detail in response to questions.
I highlight the recent discussions on affordable housing. The Executive is involved in a review of affordable housing and the issue is a priority because we recognise its importance for a number of our strategies. Again, I will be happy to provide details when I respond to questions.
We are aware that the Executive has responded to the Finance Committee's final report on the 2004-05 budget process. However, ministers have not responded to the specific recommendations that were made by the Communities Committee. Given that we published our stage 2 report to the Finance Committee last November, why have we not received a response?
I understand that the committee should have received a response, but only this week. We received the committee's report in February—I accept that some weeks have passed since then. I need to investigate further in the Development Department the delay since February in responding to the committee. I apologise for that; the committee should have received our response by now.
Even if we had received it, it would have been very difficult for us to read it, take it in and reflect on it in order to formulate questions in time for the next stage of the process. It would be useful if production of the response could be shifted back a little. There will be a discussion about how the process is managed in future so that it is more satisfactory for all concerned.
You have already reflected on issues that relate to my next question. The AER appears to show that closing the opportunity gap is not a key priority in itself, as in previous years, but has been subsumed into the priority of "Stronger, safer communities". I am sure that you would contest the argument that the change could be interpreted as a downgrading of closing the opportunity gap. However, the issue is not receiving an above-average increase in real-terms budgetary growth. If it is being funded partly in other places, and the Health Department, the Education Department and so on are responsible for delivering some of the communities agenda, it would be helpful for us to know how that process works. How do the Minister for Communities and the Deputy Minister for Communities influence or shape what is happening to budgets in other areas in order to deliver the kind of services that we would support?
As I said in my opening statement, I refute any suggestion that the Executive is reducing its commitment to closing the opportunity gap. The inclusion of that commitment in the introductory comments in the AER shows that the Executive recognises that it is a cross-cutting issue that is not reserved to the communities portfolio. It is not just in the communities budget headings that we see spend on closing the opportunity gap. The commitment is not just an add-on, and other departments recognise the role that they have to play. For example, I mentioned employment; the Enterprise, Transport and Lifelong Learning Department is considering ways to encourage people into training programmes and work opportunities and ways to support them in that process. It is essential to recognise that that work is a central plank in our policy rather than an add-on, which it might have seemed to be as part of the communities agenda. On that, I am supported by Andy Kerr, the Minister for Finance and Public Services. When he gave evidence on the budget process to the Finance Committee yesterday, he referred to the cross-cutting nature of closing the opportunity gap and the emphasis that the Executive places on it as a cross-cutting measure. We must recognise that closing the opportunity gap will be funded throughout the departments, but it is also important to work with, and to bring additional spend from, other partners.
To show the committee how the figures on spend on closing the opportunity gap are developed, I ask Mike Neilson to explain how one can read through the figures to produce the results that one is looking for.
Mike Neilson (Scottish Executive Development Department):
I will give a brief warning about looking at the headline figures without considering what is underneath them. There are two big points. First, in making comparisons between portfolios, we should remember that health accounts for a large share and it has a large increase in real terms. The picture looks different if we take health out of the calculation of increases, and when we do so we see that the communities portfolio is a priority.
Secondly, there is a lot going on underneath the headline increases, and that makes it difficult to take the figures at face value. A particular example is the move to the prudential borrowing regime in local authority housing; in 2003-04 there was £130 million in the budget for borrowing consents to local government, but in 2004-05 and 2005-06 that has been removed. That does not reflect a reduction in borrowing; it means simply that under the prudential borrowing regime the money does not count as Scottish Executive public spending. The underlying picture is quite different. As the annual evaluation report shows, in 2004-05 and 2005-06, in exchange for losing £130 million of borrowing, we have gained about £70 million of grant. The overall picture shows that the portfolio's spending power is quite substantially increased.
I understand the point about spending on closing the opportunity gap, but if that is targeted as a spending priority, the committee would surely expect more money to come to it. I hear what you say about the £130 million that has been removed, and about the housing grant—that was good news for local authorities, and they welcomed it.
Is there any monitoring system that would allow the Communities Committee to see where moneys are being spent to reduce poverty in other areas? You spoke about housing and the minister mentioned getting people back into employment. How could we break down those figures to see in which particular areas we are gaining money? The minister says that we are not losing money, but others say that we are. For example, if we were £10 million down in a particular area, would that money be spent in another area?
Each department will produce its own figures for what it spends. Within the Executive, a sub-group is looking at how to close the opportunity gap. That sub-group has recently started meeting and it is chaired by my colleague Margaret Curran. It will establish targets within each of the departments to enable us to review how they are spending that money and what they produce. We are not just concerned about how much is being invested in those programmes; it is essential that we recognise what the programmes produce. The Cabinet delivery group that will monitor the progress that is being made in achieving the targets will be crucial in identifying what investment has been made. It will also identify the achievement of the targets that have been set.
There are a number of different avenues for review of that process. The Communities Committee will have an opportunity to see how spend on some of the cross-cutting issues is progressing, but some of that work will be down to departments, which will set targets. For example, the Health Department will set targets on heart disease, which is often related to poverty, so it will be able to produce that information. The process will be combined.
Kay Barton (Scottish Executive Development Department):
Following earlier discussions with the Communities Committee and the Finance Committee, the Executive is trying to improve the information that we provide to you about how some of the major spending blocks are meeting the objectives for closing the opportunity gap through their programmes, especially after discussion with both committees last October. We will try in future budget documents of various kinds to give you better information, perhaps more along the lines of the kind of detail that you have had in the past about equalities matters that cross portfolios. The only problem with doing that is that it is sometimes difficult to analyse the very big spending blocks' contribution to objectives in closing the opportunity gap.
However, there is more that we should be able to tell you about what those big spending programmes achieve and about specific initiatives in the programmes for closing the opportunity gap. For example, the sure start programme in the education portfolio is targeted at the most disadvantaged families with the most vulnerable children. We will try to improve the information that we give to committees for their scrutiny of those matters in future.
I would have thought that the bigger the spending block, the more important it is to get that information. If huge chunks of public spending are done without understanding of the priority of closing the opportunity gap, we have a problem. If health and education are not being driven by that priority, we would want to pursue that further.
We are hearing that moneys are being transferred to other budget headings with prudential borrowing in local government. Should that also mean that responsibility should transfer with the money and that the Executive—I recognise that this is contentious—should not set objectives for what become other people's responsibilities?
It is not like you, Stewart, to be contentious.
It is important that we share our responsibilities. When the Executive allocates resources, it has a responsibility to deliver on its stated targets. Closing the opportunity gap is at the forefront of what the Executive is trying to do. We know that we will not be able to do that on our own; different departments throughout the Executive will make their contributions. The convener's point about what other departments can achieve was apt. If we consider the targets and priorities that the AER sets out for other departments, we see that the Scottish Executive Education Department has set targets that relate to closing the opportunity gap, as have the Scottish Executive Health Department and others. We need to ensure that they deliver on those targets.
We must recognise that we will also work with partners outside the Executive. Partners in housing have welcomed the opportunity to take decisions locally about local spend. The prudential borrowing regime gives them that opportunity and the freeing up of set-aside moneys adds to the pot and enables our partners to respond to local circumstances.
You said that you share responsibility, which caused me considerable unease. Do you accept that, although the work to achieve the Executive's targets must be shared and will involve many agencies—in public services and beyond—it is vital that responsibility should lie at a single point, so that someone can be held to account for making things happen, regardless of the failures of people who are outside the direct reporting line of the person who is responsible? Do you accept that, although the work can be shared, it is important for committees—and for public life in general—that there is absolute clarity about the single point at which responsibility is exercised?
I note from the Official Report that Stewart Stevenson pursued that issue with Margaret Curran at her most recent appearance at the committee to discuss the matter—other members of the committee might have been a little uneasy at the time.
It is important that there is accountability in relation to the achievement of targets and the delivery of the real changes that will make a difference to people in Scotland. There must be a line of accountability. I am always keen to work in partnership with people and to share responsibilities. Local authorities have their own responsibilities as democratically elected bodies, but I recognise that there is accountability within the Executive in terms of ensuring that that work is carried forward; the buck stops here.
You have published four documents that contain social justice objectives: the "Social Justice Annual Report"; "Social Justice: A Scotland where everyone matters: Indicators of Progress"; "Closing the Opportunity Gap: Scottish Budget for 2003-2006"; and the AER that we are considering today. Are you satisfied that the performance measurement indicators are best suited to the purpose of closing the opportunity gap? I listened to your comments and it is obviously easy to measure heart disease and waiting lists, but social justice indicators are much more complex—I certainly struggle with them.
The measurements that we currently use will give us useful information about how we are achieving the objective of closing the opportunity gap. However, the approach is not static and we need to keep the matter under review, just as we review the targets as we achieve them or as they become more or less relevant. It is important that we continually review the way in which we gather figures that enable us to make judgments about whether we are achieving what we set out to achieve.
For example, our central heating programme aims to install central heating for a wide range people, including older members of the community and people in socially rented housing. We have moved some way towards that and we are on target to improve 70,000 houses by 2005-06. That information will allow us to examine how many people are still living in fuel poverty and what will still have to be done to address that. It is important that we have that information. At the moment, we are looking at the right kind of indicators but we cannot sit back and imagine that that is the end of the story; we need to review them continually.
Mike Neilson talked about looking below the figures and you have talked about recognising what they produce.
With regard to households becoming homeless, target 10 in the annual evaluation report says that
"the proportion of total applications recorded as repeats reduced from 11% to 7%."
However, that is only one small piece of information from the Development Department's statistics release of 20 January, which also says that the number of households in local authority temporary accommodation doubled between 1997 and 2003, that the number of those in temporary bed-and-breakfast accommodation trebled and that the total number of households in temporary accommodation doubled. It also shows that the number of households with dependent children in temporary accommodation rose by 500 to 1,924. Tables 7 and 8 in that statistics release are not good news in relation to the issue of families in temporary accommodation.
You have chosen to ignore those figures because they are not beneficial to your purpose and have instead concentrated on something about repeat applications. Anyone reading the annual evaluation report would think that everything has been a great success but the honest figures in the statistics release show that you have left out the bad news and put in the good news.
According to the AER, everything is hunky-dory. Would you like to comment on the matter that I have raised? How can parliamentarians measure the figures properly if you do not put the full figures into the AER?
We have 17 targets in the report. However, we recognise that we work in many more areas and that, therefore, not every area of work is recognised in the targets.
We decided to make target 10 a target because we recognise the substantial difficulties that are caused by repeat homelessness. Becoming homeless is traumatic for anyone, but we recognise that repeat homelessness brings even more difficulties. Once someone is established in that homelessness-housing-rehousing circle, it is difficult to break out of it. We felt that it was important to recognise that repeat homelessness is a major issue that we need to tackle. We have to recognise that any of us can become homeless at any stage and that support mechanisms need to be in place to ensure that it does not happen again. Our efforts have been built around ensuring that families and individual people do not get caught in that pattern.
I accept your point about the rise in the figures that you mentioned. We recognised that that rise would occur once we introduced the Homelessness etc (Scotland) Act 2003 because it allowed people who previously had not been accepted as being homeless for the purpose of the figures that we were producing to register themselves as being homeless in order to get support to resolve the situation. We put in place mechanisms to deal with that. Local authorities were given £127 million to fund our homelessness provision. That was to be used to offer support services and temporary accommodation and to fund other measures for dealing with housing issues.
Temporary bed-and-breakfast accommodation was mentioned. We have already said that we are very concerned about the use of bed-and-breakfast accommodation for families. We will continue to work with local authorities on providing alternatives to such accommodation. The situation is not acceptable and I will not try to justify it. As part of the affordable housing review that I mentioned in my introductory remarks, we will consider options for meeting the demand for permanent accommodation, so that local authorities are more able to cope with the emergency homelessness situations that arise. We have set one target on homelessness—to reduce the number of households that present for homelessness more than once in a year—but it is essential that we recognise that there are many associated issues that need to be dealt with. We are not running away from the figures but are working hard to tackle each and every one of them.
I continue to contend that you are economic with the bad news and profligate with the good news. Although repeat applications are a factor, there is no doubt that tackling homelessness has been a central plank of the Executive's strategy. As a new member of the committee, if I had not taken the time to examine the underlying figures, I doubt that I would be asking any questions today. In my opinion, you do not support good relations or impart information honestly when you choose to highlight one part of the press release that contains good news, rather than the exceptionally bad news that it also contains.
The majority of households—64 per cent—that applied were single-person households, mainly consisting of men. When we think of homelessness, we often think of single women and single parents. I would like to be provided with more information. I accept the point that you make, but we should expect more honest data. I do not think that the AER fully reflects the situation. I would have had more respect for target 10 if it had covered the points that you have made about homelessness. I ask for the good news and the bad news to be included in future in the information for targets that the Executive is on course to meet.
Obviously, when we set the target, we intended to respond to and meet it. In some ways, that is no different from what happens when we set any other target. The important point is that we are providing the information—which Mary Scanlon has—that shows that there are difficulties in other places. We will continue to respond to those. I have tried to outline to the committee the many different ways in which we are dealing with issues that relate to homelessness. The Executive has been praised for the homelessness legislation that the Parliament passed in the previous session, which recognises issues that were previously ignored and which we are now making progress on. The issue that we are discussing is just one of the issues that relate to homelessness and has been included in the targets.
I would like the minister to clarify this matter. In my opinion, the Homelessness etc (Scotland) Act 2003 is one of the better pieces of legislation that the Parliament has passed. It is among the most progressive pieces of homelessness legislation not just in Britain but in Europe as a whole.
Before the Homelessness etc (Scotland) Act 2003 was passed, were only those in priority need—categories such as people with dependent children and pensioners—entitled to temporary accommodation while their homelessness application was assessed to determine whether they were entitled to permanent housing?
In all the years before the homelessness legislation was passed, we had a wheen of what might be called the hidden homeless. Are you saying that most of the figures that Mary Scanlon quoted represent those who were the hidden homeless?
Absolutely. The legislation to which Elaine Smith referred was intended to open up the problem and to allow us to recognise rather than hide from the issues that needed to be addressed. The figures that Mary Scanlon produced show that we are being honest about the issues and about the people who find themselves homeless for whatever reason and who look for temporary accommodation, advice, support and alternative arrangements.
The Executive has worked hard with stakeholders and with local authorities, which have been given not only legislation to deal with, but financial support from the Executive to ensure that they can offer the additional services for which people who were homeless before would not even have been considered.
The evidence is that the increase in applications relates to widening the scope of the legislation. The evidence is good, because it shows that the groups with the big increases—especially single people—will benefit most from extending the legislation. Some circumstantial evidence shows quite a close link between the two matters.
I have a few questions that will follow up other questions. I remain unclear about whether a genuine increase is being made in the communities budget to reflect priorities such as closing the opportunity gap. The figures suggest that the increase in the communities budget will be less than that in some other budgets. Will the minister reassure us that the verbal priority is matched by a financial priority?
In real terms, spending has increased, but as a proportion of the overall Executive budget, it has probably stayed level. However, the impact of our spend has increased, because of initiatives such as those that Mike Neilson described, under which moneys that were previously under our headings and our budget have been transferred to others for spending. The impact is that we have produced more for the money that is spent. The real-terms figure has increased.
I was pleased to see that the Minister for Communities chairs the delivery group on closing the opportunity gap. What mechanism ensures that the money that is provided achieves what it is meant to achieve? MSPs always hear anecdotal evidence that lumps of money are sitting around and not being used because nobody knows what to do with them and that money is being spent on programmes that are ineffective in achieving their objectives. How do you check that the money that you spend achieves what you want?
As I said, Margaret Curran chairs the Cabinet delivery group on closing the opportunity gap, which has met twice. Targets and methods of doing what Donald Gorrie mentioned—examining the spend and its outcomes—are being established. The group's intention is to establish and announce those targets soon, so that we can judge how we work towards those targets and what the outcomes of the spend will be.
Ministers from all the main spending departments are members of the group. Each will bring knowledge of their department's spend and of how it is being concentrated on meeting the targets on closing the opportunity gap. By working together, we are more productive than if the departments tried to produce those results on their own. The aim is to make the additional spend more effective at closing the opportunity gap.
If everyone co-operates splendidly, that is great. However, I am sure that that does not always happen in all countries in either national or local government. People are focused on their own priorities. There will be a health board, an enterprise board, an enterprise company and a local authority with quite legitimate priorities of their own and they might not reflect the priorities that are set from above. Who is in charge of ensuring that the various people involved at national and local levels deliver the priorities rather than quietly chugging along pursuing their private priorities?
You will be pleased to hear that we are not trying to replicate the Westminster system in which the people who are in charge of ensuring that priorities are delivered are in the Treasury. We are trying to develop a system in which ministers work together to achieve cross-cutting aims such as closing the opportunity gap. That policy is stated in the document for all to see and we recognise that it has to be one of our priorities. Through the Cabinet sub-group on delivery, we can identify the targets that are aimed at closing the opportunity gap and ensure that they are within the spending plans of the departments. The targets that are set will be based on ensuring that the departments are travelling in that direction. By working together in that way, we can achieve the results that we want. Because everyone is channelling their efforts towards the targets that the sub-group sets, we will be able to see where problems in departments arise. As a member of the sub-group, I am assured that ministers are totally committed to taking on the overarching theme and addressing it in their portfolios.
That is helpful. In England—from whom we can sometimes learn—there is evidence that targets can have a downside. If your target is to produce lots of fizzy water, you can end up producing less still water, which some people want to drink. Do you continually review your targets to ensure that they are not distorting the overall policy?
Absolutely. The targets will be public and we will be aiming towards them, but it is extremely important that we keep them under review. Some might be achieved earlier than others—in which case, we would want to set other targets—while it might become obvious that some targets are not achieving our aim. We need to keep the targets under review to ensure that we are making the difference that we set out to make in relation to the overarching aim of closing the opportunity gap.
For 2005-06, you have £861.05 million to spend. Only two of the 17 targets that you have in the annual evaluation report refer to money: target 13, which refers to £5 million; and target 14, which refers to £11 million. How does the other 98 per cent of your £861.05 million relate to the targets? How much of that £861.05 million do the 17 targets cover and what are the targets for the rest of the money?
That is such a nice question that I am going to ask Mike Neilson to refer to a chart that we can produce for the committee.
Taking a step back from the detailed figures, I will say that there is no doubt that the spending review discussions relate the money to the targets. Unless you can develop targets that are seen to be delivering important priorities, you do not get the money, which is meant to be spent on the targets.
It is difficult to answer the question in terms of how exactly the rest of the £861.05 million relates to the targets, but if you take target 1 as an illustration—18,000 new and improved homes—the first line of the communities spending plan essentially shows that the Communities Scotland development programme will have £254.4 million in 2005-06.
You used the qualifier "essentially". Does that imply that there is money from other sources in target 1, or does it conversely or additionally imply that the £254.4 million does not apply only to target 1? In other words, is there a one-to-one relationship? How can I tell that from the AER?
The top line in table 8.01 shows that the development programme is key to delivery of the 18,000 homes. Some of those homes will also be delivered through the new housing partnerships spend, which comes under the community ownership line in the table. Some other aspects of the development programme are relatively small scale and do not contribute directly to new build. If the committee wants to consider the development programme in more detail, it would be more appropriate to ask James Hynd.
James Hynd (Communities Scotland):
I will pick up on what Mike Neilson was saying. The figure of 18,000 homes that is in target 1 is the development programme, but contributory units are also coming from the new housing partnership programme. That money was announced in the past so we are not announcing it now and we did not announce it when the development programme was announced earlier this month.
We tend to avoid putting amounts of money into targets because the target is not to spend money; it is to get the desirable output or outcomes and to deliver ministers' priorities. The cross-cutting nature of many of the targets makes it difficult to identify and isolate individual sums of money and attach them to targets. I am afraid that the position is complex, but table 8.01 in the AER helps to tie the two together. It is difficult to get a complete correlation.
If, in pursuing the target, it became evident that more resources were needed, would there be an easy way of doing that? The process works in both directions: the Executive sets the target and the money tracks it, but alternatively, you could be set a certain amount of money and that amount would define the targets.
Resources are allocated by ministers, but if it appeared that target 1 was not on course to be delivered, we would bring that to ministers' attention and they would decide whether to add to the available resources to deliver the target.
I can see that that line implies that for each of the houses that you plan to build in 2005-06 you are spending something in the order of £38,000, which sounds credible.
There are 17 targets in the AER and communities expenditure is listed under a series of headings. Are you saying that if we were to take the contribution that the funding for communities makes to those 17 targets—acknowledging that there might be contributions from elsewhere—we would allocate all of the £861.05 million? If not, what approximate amount is being spent on things other than those 17 targets?
I do not want to pick a particular number because we would have to go through the reconciliation very carefully. The basic point is that all the spending relates to the priority objectives. A small proportion of it might not fit neatly under one particular heading. For example, the funding for the Scottish Building Standards Agency does not obviously fit a specific target, but the spending is necessary. We could send you a table that makes that link and identifies such examples.
What it boils down to is the bottom line. I am simply trying to illustrate the difficulties that we have in seeing what you are doing. We are not yet convinced that you can demonstrate that you are managing every penny of the £861.05 million. Equally, I have no specific evidence that you are not doing so. All I am saying is that the report does not lead one to a specific conclusion, which is an issue that you should consider for future reports. I shall draw a line under that at this point, unless you want to say any more. Perhaps I should move on to other areas that I want to explore.
I would like to make two brief comments on that for the benefit of the committee. We recognise the fact that, in producing the figures, targets and various pieces of information, there is some difficulty in reading across. We are trying to make that simpler so that we can all understand it, because it is not as straightforward as it might be. However, as James Hynd said, we also need to ensure that there is some flexibility in the figures so that we can address issues as they arise if things start to slip. It is difficult to say exactly what proportion of the budget will be spent on what, but I appreciate that that kind of information is useful for the committee in reviewing the situation, so we shall attempt to provide it.
Nonetheless, at the specific point in time when the budget document is put together, there is no flexibility, and the document reflects what happens that day. What happens that day will have to respond to circumstances that change—both financially and in terms of requirements. Also, the targets are not necessarily aligned with a financial cycle and do not relate to spending from 6 April to 5 April the following year. Of course there are difficulties, but I am glad that ministers and officials recognise the difficulties that we have in seeing what they are trying to do.
I turn to some of the specific points, and particularly to target 4, to which we referred previously. As other targets do, target 4 illustrates a difficulty in relation to measurement. In a sense, you set the target and then set about measuring to find out whether you can achieve the target or what the right target is. Is it really sensible under those circumstances to say that you are on course? You might be on course—I do not know whether you are or are not—but is that an appropriate way of expressing targets? My general discomfort is caused in part by the fact that, because of my background, I feel that there are not enough numbers in the targets. I cannot really see how the targets fit with the numbers, which is a real difficulty for me.
When we describe our position in relation to the target, and to providing the kind of figures that might give Stewart Stevenson some comfort, as being on course, we are referring to our ability to collect the data that will indicate to us whether we are on course in reducing inequalities in education, health, justice and other elements. We are not claiming that we have made that difference already, but we are saying that we are on course to provide the information that will tell us whether we are making the difference and, if we are not, to respond to the issue.
Would it be fair to say that, rather than being on course, you are in course? In other words, you are making the effort that will get you there.
We are on that journey.
The phrase "on course" as presented in the report creates a different impression.
I will return to homelessness and housing issues. As you might know, the Chartered Institute of Housing in Scotland submitted a paper to the committee that outlined its concern about
"unmet housing need in Scotland as a result of housing supply and affordability issues."
We discussed that and it is clear that we have realistic figures about homeless people, whereas those figures were hidden under previous Administrations. I think that, like me, the institute would welcome the review that you talked about. Can I take up your kind offer to give us more detail about it?
I also have some specific questions. Will the review consider not just social housing, but planning matters such as the mix of housing and affordability in the owner-occupied sector? You will be aware of Shelter's recent report about children who live in unsuitable housing in Scotland and throughout Britain. I commend the Executive for its fuel poverty initiatives, but they have tended to concentrate on pensioners. How will you relate them to children? Under the review, do you intend to reconsider the right to buy, which was a social policy tool when it was introduced and could be seen as reducing further the availability of social housing?
There was a lot in that.
Do you have an hour?
If I miss something, I am sure that you will let me know.
We recognise the concern about the availability of affordable housing throughout Scotland, whether it be homes for rent or for low-cost ownership. That is why Margaret Curran instructed a review of the situation. I am aware that the report of the Barker review, which is a UK document, was published recently. We might be able to learn from Barker's treatment of some issues, but the report is not a specifically Scottish document, so we felt that a Scottish review would be appropriate. That is in process.
We have spoken to various stakeholders, including Shelter, the CIHS, the Scottish Federation of Housing Associations, local authorities and other registered social landlords. We have spoken to tenants groups, builders, developers and banks about dealing with affordable housing. We have considered planning issues, which Elaine Smith mentioned, as we recognise that the supply of land is important to ensuring that housing is affordable. The review has been under way for some months and we hope to conclude it shortly. At that stage, the minister may make a statement about how we want the housing review to proceed.
We acknowledge that the matter is not just a question of numbers. We have made a commitment to provide 18,000 new or refurbished properties in the next three years. We are aware that the CIHS has said that we will need 10,000 such properties a year in that period. I do not want to go into the numbers game, because that is not the only issue. We want to provide quality housing in the right places. As members know, some areas have a housing surplus while other areas have huge shortages that we must deal with. We need to take into account the differences between our rural and urban areas. We also need to consider what type of housing is being provided. We are told in the housing survey that house sizes are getting smaller and that therefore we should be providing smaller, one or two-bedroom properties. However, councillors in Edinburgh tell us that the pressure is on the council to provide family-sized housing, which is often not available. To address the problem properly, we must consider the specifics within the different areas, rather than just go by the headline figure of 6,000 or 10,000 houses a year.
I acknowledge what Elaine Smith said about central heating. We should welcome the fact that the central heating programme has been a great success. Elaine Smith said that it had been targeted towards older people, but the programme in local authority housing, which is just finishing, and the programme in properties of other registered social landlords, which will finish next year, should address the issue for families, particularly those with children, with which we acknowledge that there is an issue. Discussions about where we go with the central heating programme when it is completed in 2006 still need to be had. I would appreciate members' comments about what they think would be appropriate.
Elaine Smith's final question was on the right to buy, which the Executive is not considering changing. Under the housing legislation that was passed in the previous session, changes were made to the levels at which people were entitled to purchase property. Many people who buy their property will stay in it and therefore it will still be used; it is not as if the property suddenly becomes vacant and is removed from the property that is being provided. However, we acknowledge that we need to respond as households get smaller and as demand increases.
I return to the issue of the number of houses that need to be provided. People have mistakenly used the information from the Barker review, which said that not enough houses are being built; that refers to the situation in England, particularly the south-east, rather than the situation in Scotland. In Scotland, something like 18,000 housing units per year are being built, whereas we are acquiring only something like 12,000 households a year, so we should have a surplus. However, the need is different in different areas, which is why we are arriving at a situation in which demand is outstripping supply. That is why we need to tailor the response; it is not just a matter of the number of houses that are being provided.
Thank you. That was a thorough response.
The minister mentioned planning. A specific point on which rapid action could be taken is that the Executive could make the necessary regulations to empower councils to require developers to produce, in an overall development, a certain number of houses with affordable rent; I think that that happens on occasion, but it does not happen regularly. That would help considerably. We do not need to argue about numbers, but I am sure that the more houses of that sort we can provide the better.
I agree absolutely and that is one of the issues that we are considering in the housing review. Donald Gorrie is right to say that some local authorities already work with developers in their area to achieve a proportion of affordable housing in developments. In my constituency in West Lothian, the local authority has been quite successful in working with developers to provide affordable housing within the area. Other local authorities may not have been quite as successful, possibly because of issues around the availability of land. We are serious about ensuring that land is made available where possible.
Just two weeks ago, my colleague Allan Wilson announced details of land in the north of Scotland that was made surplus to requirements by the Forestry Commission Scotland and which would now be available for housing; the commission will not have to realise the best possible return on selling the land, which it used to have to do. We acknowledged that there was unmet demand for housing and that by providing the land at an affordable rate we could provide affordable housing. That is an example of the Executive working together and looking at the supply of land. We need to ensure that our planning resources are focused on that. They have been part of the housing review and will continue as such. Planning resources have an important part to play, and I agree with what Donald Gorrie says.
We all agree that more affordable rented accommodation is needed in certain areas. I am speaking specifically about housing stock transfer. Where stock has been transferred, millions—or even billions—of pounds-worth of our moneys have been spent via the Executive. Should a report be made on the stringent checks that are made on those housing associations that do not follow through with their plans to build new houses, do not refurbish to the extent that they promised they would and have an underspend sitting in the bank while people are still living in substandard housing?
I would also like to ask about affordable accommodation for purchase by young people who are starting off on the property ladder, including those in rural areas. People who buy houses in regeneration areas do not have to pay stamp duty, and that is a big incentive for young people who are starting out. Would you consider introducing something along those lines for rural areas to make it more attractive for people to get on to the property ladder?
John Prescott made an announcement in Westminster about interest-free loans for key workers in certain areas down south. Might the Scottish Executive and the Scottish Parliament think along the lines of introducing interest-free loans to enable people to stay in towns and cities instead of having to move out because they cannot afford property?
I shall ask Angiolina Foster to comment specifically on registered social landlords, because Communities Scotland has the role of regulating them and ensuring that they respond. However, I would like to say a couple of things first.
We will be implementing our policy on stock transfer, and other local authorities are currently considering that. The intention behind the policy is to ensure that we free up for the areas in question additional resources that are currently being used to repay debt, so that we can produce the housing that we need. It will be for each local authority to consider whether that is one of the ways in which they can resolve the supply problem and the issue of the Scottish housing quality standard, which was announced recently. Community ownership will continue to be part of our policy on addressing housing need.
Stamp duty is a reserved matter, so we will not be taking a view on that. However, I recognise that we need to consider what incentives can be given to people to allow them to access housing in certain areas. You referred specifically to John Prescott's announcement on interest-free loans. I have already had comments from a lot of people who are not sure that that initiative will achieve what is hoped, as it may put additional inflationary pressures on certain areas. It depends on the circumstances from which buyers start, so it will not be a panacea for all problems. However, it is an option in resolving some of the difficulties that our colleagues in the south-east of England have.
Members will be aware that Margaret Curran, in her recent announcement of housing funding, referred to the retention of £20 million to support the housing review that we have been carrying out. One of the things that we might consider is some kind of land banking provision to provide housing at affordable rates. There could also be support options for those who are sometimes referred to as essential workers, although we may be talking about workers who need to be within a given area but who are priced out of the local market at present. That is one of the reasons why we have been talking to banks and mortgage lenders to consider what financial packages might be available to us in responding to that need.
There are a lot of issues that we still need to consider. I assure the committee that we are taking the issue of affordable housing very seriously, that we continue to listen to other people and that we are working up proposals that we hope will make a difference.
Angiolina Foster (Communities Scotland):
When a local authority sells its houses under a stock transfer, the stock enters the registered social landlord sector. Scottish ministers have regulatory powers over that sector, which have been delegated to Communities Scotland. The regulator will take a very close interest in a number of matters immediately following the stock transfer. Any ballot promises that are made by the new landlord will be monitored closely to ensure that they are fulfilled.
More widely, the regulatory regime for the sector has a number of performance standards, which all registered social landlords must meet. Those standards cover a mixture of service delivery quality issues, as well as the robustness of the management of the organisation, governance standards and so on. Every landlord is inspected against those standards with some regularity. In the case of stock transfer associations, the regulator will make a point of conducting a full inspection around two years after the transfer, precisely in order to check, in an in-depth fashion, issues of quality, delivery and so on.
I take the minister back to what she said in her opening statement about work on tackling poverty being at the centre of the agenda and one of her top priorities. The committee learned from a briefing by Professor Arthur Midwinter that spending on identifiable poverty-related programmes will grow by 15 per cent over the period 2002-03 to 2005-06. Although that increase is substantial, the overall Scottish budget will grow by 23 per cent. Should a higher increase not have been expected for such a priority area?
My next question also relates to tackling poverty. The recent report on households below average income shows that there is evidence of a reduction in relative poverty for pensioner households and for low-income households with children between 1996-97—the baseline year for the "Indicators of Progress 2003" report for social justice—and 2002-03. However, the same report provides evidence that there has been an increase in relative poverty among people of working age in low-income households. That raises issues around the working poor. You have said that the Executive feels that the best route out of poverty is through work, so there are issues there. What particular areas of the budget are targeted to assist that group?
I do not have in front of me a copy of the figures that were provided by Professor Midwinter, but my understanding is that we are not comparing like with like. It is therefore difficult to arrive at the conclusion that we are not giving the issue of poverty the priority that it should be given. Once we acquire those figures, I might return to that question. I could write to Elaine Smith to clarify where we are with that.
If you could write to the committee, that would be helpful. We would like that information to inform our report.
Okay.
On Elaine Smith's second point, about working people and issues of poverty, I think—
My question was not specifically about working people; I was referring to people of working age in low-income households, not necessarily people who are working.
As I have said, I think that we all accept that employment is the major route out of poverty. It opens up opportunities for people, and we therefore want to promote it.
Elaine Smith asked what we are doing to address those issues. The working for families line in the AER, for which we have funding of £10 million per annum for 2004-05, will address child care and employment issues. You will be aware that some of the social inclusion partnerships also have child-care remits and they are working on ensuring that there is adequate child-care provision so as not to prevent people from accessing employment or training.
We have provided moneys to improve debt advice and for financial packages for people with debt problems. It can be difficult for those who find themselves in difficulties with debt to take on employment, because of the other responsibilities that it brings. Debt advice can be one contributor to ensuring that people do not have to cross that hurdle.
I turn to elements of the promoting social inclusion budget. We are considering mentoring programmes, such as work that is going on with One Plus: One Parent Families to provide assistance to people who are seeking support in making the move into employment. Mentoring programmes can be simple but effective in ensuring that people can access employment opportunities.
Another example is the operation of SIPs. Last summer I visited a SIP in Dundee, which works specifically with people who need support to access training or work, whether they need something simple such as help with preparing a curriculum vitae or help with gaining the confidence to make an application, go through the interview process and so obtain employment. All that support has been brought together in the Dundee SIP, which has seen more than 4,000 people enter employment in the period in which it has been operating.
We acknowledge that employment is a central plank of tackling poverty and there are areas of it in which the Executive has a remit.
As there are no other pressing questions, we will finish this agenda item. I thank the minister and her officials for attending a session that lasted slightly longer than we had expected, but which will be useful for our report. I suspend the meeting for 10 minutes.
Meeting suspended.
On resuming—