Budget Process 2004-05
We move on to our second agenda item. I welcome Frank McAveety, the Minister for Tourism, Culture and Sport, and ask him to introduce his officials.
Okay, but that is a big challenge already, convener. On my immediate left is John Mason, who is head of the Executive's tourism, culture and sport group. To my immediate right is Donna Bell, who is the team leader of the Executive's education and enterprise and lifelong learning finance division. We also have Laura Petrie from Historic Scotland.
Thank you. Do you wish to say anything in general about the budget before we move on to questions?
I have two or three brief comments to make. The draft tourism, culture and sport budget for 2004-05 includes resources that were allocated from the 2002 spending review. The budget was subsequently revised to take account of commitments in the "A Partnership for a Better Scotland" document. Since 2002-03, two major funding additions have been made as a result of the discussions around PABS. The first is the extra £3.5 million in 2004-05 and £4 million in 2005-06 from the central reserve to establish the national theatre for Scotland. At the present time, the board and artistic director are being recruited and we have charged the Scottish Arts Council with the responsibility of developing the project.
The second substantial change relates to the £16 million that the committee will recall was set aside in the central reserve to fund the Euro 2008 bid. Unfortunately, we were not successful in that bid, but the resources have now been allocated to sportscotland to assist in the provision of the new national and regional indoor training facilities projects that we are consulting on; sportscotland has issued a prospectus for those facilities and bids are due by the end of next March. We have extended the deadline by a couple of months to facilitate the partnerships that we think can emerge.
The only other change since 2003-04 is an adjustment to the budget for the national institutions. The reduction of £6 million primarily reflects the recalculation downwards of the cost of capital charges—from 6 per cent to 3.5 per cent. That percentage reduction applies generally to all public bodies and has an important impact on the national institutions, because of the size of the estates that they hold. The rest of the targets and objectives for the portfolio are as set out in "Building a Better Scotland".
The figures in the draft budget all take account of the change in capital charges. Is it correct that we run into trouble only if we compare this document with the draft budget for last year?
Yes.
Not all the budget heads in your portfolio are under your direct control. Money is given to other bodies, such as VisitScotland and the Scottish Arts Council. What is the position if those organisations underspend on their budget allocation for the year? Have they been given the money, or do they draw it down as and when they need it? In either event, what happens if at the end of the year VisitScotland has not spent its £31.76 million?
Knowing the organisations with which I am dealing, I think that they will spend right down to the wire. Recent history indicates that, by and large, they spend the budget allocated to them. In the recent past, the Education, Culture and Sport Committee drew attention to a small underspend in the budget for Historic Scotland. That issue has been addressed. Laura Petrie from Historic Scotland may want to comment on the matter once I have concluded my remarks.
The dilemma that we have in the portfolio is that most of our money is allocated to autonomous bodies that have their own boards. Those bodies are charged with the responsibility of allocating resources to the priorities that have been set out broadly by the Executive, in discussion with the boards of sportscotland, the Scottish Arts Council and so on. Rightly, most day-to-day and month-to-month decision making is a matter for those organisations. I need always to be conscious of the arm's-length principle. Often in public debate there are calls for the minister to intervene directly, but many issues have been predetermined in documents such as the sport 21 agenda or the cultural strategy, as set out by the Scottish Arts Council and the Executive. That is a challenging situation.
We all welcome the fact that, in the Executive, if money is not spent, it is not necessarily lost. Organisations do not have to buy 100 computers on the last day of the year just because they have the money to do so. Are the bodies for which you are responsible capable of carrying forward an underspend, should they have one?
I ask John Mason to deal with the technical aspects of that question.
John Mason (Scottish Executive Education Department):
I will describe the process in more detail. Organisations receive an annual allocation, profile it for us and draw it down on a monthly basis. We monitor that and make adjustments during the year, if possible. Last year, the underspend for the whole portfolio at the end of the year was about £800,000, of which around £500,000 was down to Historic Scotland's grant scheme. The rest was down to slippage in a capital project. Both underspends were able to be carried forward into this year. There is no record of revenue underspends in any of the bodies for which we are responsible. For good reasons, capital projects may miss their slot on a monthly basis. Arrangements are in place to allow them to carry forward the money into the following year, so they do not have to spend it.
The route development fund exists to encourage direct links from Scotland to elsewhere in the world. It is designed at least in part to boost tourism as well as business. How has the Government's part of the fund been used so far? From which airports are you hoping to encourage the development of direct links in the near future?
The route development fund is primarily within the Minister for Transport's remit. However, that does not—
I accept that, but the tourism element is very important.
I was about to say that that does not mean that there is no crossover with the tourism portfolio in that respect, to ensure that people have access to Scotland. In the past year, Edinburgh airport has managed to secure most of the direct links under the route development fund. Obviously, there has been some contention with other projects elsewhere that are seeking to reach that point. VisitScotland has certainly identified a number of ways in which it would like other airports to have more opportunities as far as bids are concerned.
In the west of Scotland, Prestwick airport has recently been successful and the British Airports Authority has made some overtures about identifying opportunities for Glasgow airport. Further north, we are committed to finding ways of securing direct flights from Aberdeen and Inverness airports. After all, much of VisitScotland's research indicates that people in Scandinavian countries are willing to visit Scotland, and it is important that people have direct access to the closest airports.
From memory, I think that, under the route development fund criteria, operators have to offer flights to and from Scotland five times a week to qualify for funding. I know that ministers are discussing whether some flexibility can be introduced to assist other locations in Scotland that might not be able to create the volume to justify five flights a week. Perhaps in that regard we could consider a pattern of flights over a month or two.
Within the past week, Snowflake, Scandinavian Airlines' low-cost airline, has concluded an agreement with Highlands and Islands Airport Ltd for direct flights from Sweden to Inverness airport two days a week. Obviously, if the route development fund criteria stipulate that there should be flights to and from Scotland five times a week, the operator could not have received financial support from the Executive.
Instead of interfering directly in the commercial decisions that some companies make about the volume of passengers to justify the introduction of a particular service, the route development fund could assist that process at the edges by kicking in when companies decide to provide such services. However, any services that are funded from the route development fund need to be more effectively synchronised with VisitScotland's marketing strategy to ensure that we receive maximum benefit from the two strands.
This week, we have heard Scottish Opera's pleas for another £1.5 million. Is there any prospect that it will be bailed out yet again? What areas of the budget would we have to sacrifice if that happened?
We have indicated to Scottish Opera that our commitment as far as the budget allocation is concerned is as we said it was. At the moment, we are having discussions with senior figures in Scottish Opera to find ways of addressing some on-going issues that have emerged over recent years about the company's funding and its capacity to operate within its budget envelope. It would be far more preferable if those discussions remained private, because we are talking about a major institution and the many staff who have given service to it.
On the route development fund, will you carry out research into the routes that have received funding to find out whether the operators are encouraging more Scottish tourists to holiday abroad instead of encouraging foreigners to holiday in Scotland? Many of us feel that that approach is leading to a tourist deficit and is doing our tourism industry more damage than good.
I assure the member that we examine those figures. As the recent visit to Barcelona indicated, there is an increasing parity between Scottish visitors to that city and visitors from Barcelona to Scotland. We need to try to ensure that that balance starts to move in our favour. That may not be route development, but it is an important aspect of travel.
As committee members who were present during yesterday's discussions with Superfast Ferries know, there is also an opportunity at Rosyth. Superfast Ferries is finding that increasing numbers of passengers from mainland Europe are accessing Scotland through Rosyth. The evidence from the returns that we have had from VisitScotland so far indicates that, over the summer period, a significant number of central and eastern European visitors used the Rosyth ferry as their route into Scotland. We need to ensure that the service is marketed more effectively. That is why I was delighted to be present with Christine May and many others at yesterday's tartanisation—as we might call it—of Superfast Ferries. The ferry now has its own tartan so that it can showcase Scotland more dramatically when it gets to mainland Europe.
We need to continue that work. I can give an assurance that, as part of our sustainability and investment agenda, both the Minister for Transport and I, along with the Minister for Enterprise and Lifelong Learning, are examining the effectiveness of the route development fund to ensure that Scotland is the main beneficiary of that investment, rather than the reverse.
I notice that you said "increasing parity", which I take it means that the route development fund is still causing a tourism deficit.
That is the case in that location, largely because the marketing has essentially been about encouraging people to go to cheap-flight destinations from Prestwick. We need to try to ensure that we market in those destinations so that people from them reciprocate. Recent discussions with Prestwick have indicated that the figures are now much better.
The other issue is about how we showcase Ayrshire and the south of Scotland to people when they arrive at Prestwick. I know from previous discussions that members have been concerned about that. We need to ensure that folk have the opportunity to link into marketing initiatives at a local level through the area tourist board at Prestwick. Too often, many folk use Prestwick as an entry point without necessarily staying even for a day or two in the south and south-west of Scotland. I know that Chris Ballance and others have been anxious about that in the recent past and we need to try and do a bit more on that issue. We have had discussions with Prestwick and others to consider how we can showcase to visitors who enter through that airport the benefits, history, culture and interests of that part of Scotland.
I notice that the draft budget has sections on sustainable development and eco-tourism. Will you give us the definitions that you used for sustainable development and eco-tourism when you put those sections together?
I could trust a Green to ask me that question—and to raise it at the next conference.
Without avoiding answering your question, I think that we are at an early stage in trying to devise and develop what we mean by green tourism and eco-tourism. Obviously, VisitScotland wants to look at developing that market, in particular for young people. There is a real opportunity to market more effectively Scotland's youth hostel network and its landscape and natural habitat. VisitScotland is trying to brand a series of products under the green tourism badge.
Under the sustainability agenda, VisitScotland is looking at how the hospitality industry might identify hotels that wish to consider the sustainable use of the products that they develop to demonstrate that those hotels have reached a certain standard in, for example, catering, cleanliness and the use of resources. Visitors who are concerned about those issues do not want to be seen as tourists who are exploitative of the environment, and the hotel product needs to recognise that so that those visitors can make those choices.
Those are some of the elements involved. I would not say that I am an expert on the issue—perhaps John Mason can plunge in to assist me—but it strikes me that a lot of work has to be done on it. We would welcome contributions from folk who have a particular interest in the matter.
Eco-tourism is a growing market. VisitScotland is increasingly marketing eco-tourism products, particularly on the near continent to the Dutch and the Germans, who are very interested in green tourism in its broader sense. VisitScotland's green tourism scheme has a lengthy set of criteria, which, in effect, are the criteria against which all the facilities are assessed. We can provide those details for the committee so that members are aware of what is taken into account.
I would be grateful for that information.
The other issue that I want to raise is about visitscotland.com, which comes within the minister's remit but is not actually in the draft budget. A real problem is the fact that the primary duty of visitscotland.com is to SchlumbergerSema, which is its US parent holding company. Its second duty is to the site users and its third duty is to the accommodation providers that it serves, but nowhere is there a duty to Scotland itself or to non-accommodation tourism providers in Scotland. It exists as an accommodation booking service. That is its purpose, and it receives its income from the money that it makes out of accommodation booking. That problem means that there is no internet-based Scottish tourism presence; the only thing that we have is a booking service. Is VisitScotland aware of that problem? Do you have any interest in addressing it?
I am aware that visitscotland.com has now appointed some senior personnel to address the concerns expressed over recent months by accommodation providers or other individuals. That opportunity to engage with those senior personnel has been welcomed by everyone, because it is a matter of customer relations.
The future of visitscotland.com is utterly dependent on its capacity to work alongside VisitScotland in showcasing the product of Scotland. VisitScotland's key objective will obviously be the marketing strategy. That is something that the previous Enterprise and Lifelong Learning Committee and the Scottish Executive accepted, and I hope that we are moving towards addressing the issue of marketing. Much of the debate in the ministerial committee has obviously been about how we can address the concerns that have been raised.
To date, visitscotland.com has received more than £7.1 million-worth of bookings, and it is willing to look at ways of adapting entry points into the website to take into account many of the concerns that have been raised in the recent past. The situation is much better than it was when I inherited the post, but the issue must continue to be at the forefront of VisitScotland's concerns.
In terms of comparative costs, the charges of visitscotland.com are no greater—in fact, they are substantially less—than the charges of most other bookers that charge commission. It is reasonably competitive in the market. We need to ensure that there is a better linkage between visitscotland.com and VisitScotland, and, more important, between visitscotland.com and the local network, so that diverse products across Scotland can find themselves on that website quickly and so that individuals can develop their interest in those products. There is continuing work to be done on that. I may not know about the matter in detail, but the situation has certainly dramatically improved since the appointment of what might be termed a troubleshooter—although I do not think that that is necessarily the most appropriate term—to intervene early to address the needs of the individuals who care about the service.
Could I ask another quick question?
You have had a fair crack at the whip already.
To return to the budget, there is a target for 75 per cent of accommodation to be bookable through the internet by the year after next. What exactly does that mean? There is some vagueness about that. It does not mean that someone could actually book accommodation just by sitting at a personal computer and entering their requirements. As I read it, the target means that, although the accommodation is listed on the internet, there may have to be some human involvement, because it is not a direct booking system. Is that correct?
Yes, that is basically correct. Full details about all the targets, what they mean and the methods by which they will be assessed were published after "Building a Better Scotland" was produced; that information is available on the website. Each of those terms is defined, as is how we measure whether the targets are being met or not.
I have one specific question and one general question. My first question is about the target 5, on creative industries, which seeks to establish methods of measuring the contribution of tourism and the creative industries to the Scottish economy as a whole. I notice that one of the milestones is for the methods to be agreed and established. What progress has been made on that? There is also mention under the milestones of having a
"Review of creative/cultural industries information under way."
I would like an update on where that stands.
I will make three points. First, I have asked for the specific issue of creative industries to be addressed as part of the consultation on the cultural review that we will engage in over the next few months. That will be very useful.
Secondly, on the immediate target itself, I have met Jim Wallace to discuss the issue twice because there is a massive crossover between my portfolio and Jim's work. I do not know whether we have got it right in respect of how we link with the role of enterprise networks. We have had two meetings with David Reilly as we want to drill that down more effectively. We have given a commitment to each other that we will come back to discuss the matter. The point that always comes up is that some local enterprise networks will engage with that aspect of their role very positively but others do not give it such priority, although it is not the case that they do not do that work. We must make that link more effective.
The third big issue is connections between schools and the knowledge economy. We must work more effectively, not only with the enterprise sector but with education institutions in both the school sector and the further and higher education sector. I know that in the past many of us, including Mike Watson, have said that we must do much better with the art colleges in Scotland. That is a massive issue.
I can come back to Mike Watson on the specific details about how we can measure the milestones and targets, if that would be of use to him.
I notice that the target is set for 2004, so I presume that it will be completed by then and that the information will be published. It would be of general benefit if that is available to the organisations to which you refer.
You mentioned the review that is under way; it has attracted quite a lot of publicity with regard to the Scottish Arts Council, Scottish Screen and so on. You also mentioned the higher education sector and specifically the art colleges. Will they be part of the review and expected to make a contribution to it? If funding as a whole is reviewed, is there a possibility of, as you said, linking with Jim Wallace's responsibilities for the provision of resources to the art colleges and the creative industries sector, whether through the Scottish Arts Council, Scottish Screen or any other organisation that is part of the review?
I am keen to have a fairly broad perspective to facilitate that contribution.
It would be wrong of me to give a prescriptive view today of what will emerge over the next two or three months. There is an opportunity to open up the debate. Within the next few weeks the Cabinet will discuss the outline of the review. I would like an innovative approach to be taken so that we do not hear only from those who usually make submissions to the committee or the Executive on such matters. I know that in the past we have discussed with individuals how we can get other voices in and perhaps hear from people within art colleges who might be able to suggest interesting ways of looking at how they are funded and how they connect across with enterprise and cultural development.
We should also try to hear from lots of others who are probably not currently in the creative industries—particularly young folk from disadvantaged communities. How can we encourage individuals in those communities to see the creative industries as offering them a potential career opportunity or a way to improve their life chances? I would like to develop that aspect. We will try to address those matters in the review process. I hope that something will come out of the discussions that we have had with Jim Wallace and other ministers and that that will be reflected in the broad perspective that emerges over the next three or four months.
I will now raise a more general issue that is not strictly—in fact it is not at all—to do with what we are discussing today; I refer to lottery funding. That obviously has a very important connection to the issues that we are discussing, because a lot of what the organisations to which you referred do is dependent on lottery funding of one form or another. A review of lottery funding is taking place because the Community Fund and New Opportunities Fund are being merged. If lottery funding projections continue their current downward trend, how do you intend to address some of the shortfalls that could result for some organisations, whether the Scottish Arts Council, sportscotland or Historic Scotland? If less lottery funding was available, would it be possible in the negotiations for spending review 2004 to make up any shortfall that emerges?
I do not think so, given the overview of spending patterns in the Exchequer. We need to prepare the ground with the major institutions that receive lottery funding and to work with partners and individuals who received funding for big bids in previous years. A more realistic approach to what can be done may need to be taken. Ways may need to be found of making connections with other funding agencies, whether in health or education, or in the tourism, culture and sport portfolio. Other partners may emerge to fill part of the gap, but people may have to be more aware of the resources that are likely to be available and tailor their demands to them. Collectively, we must prepare everybody for such challenges, which reflect the substantial downturn in lottery ticket sales and income.
The merger of NOF and the Community Fund may offer opportunities to help groups that are shunted between the funds. We have talked to NOF and the Community Fund about a one-stop-shop approach to ensure that individuals do not hear from NOF, "We would like to help you, but that is really the Community Fund's role," and from the Community Fund, "We can't help you—that is NOF's role." We need to find better ways to deal with such situations.
The Department for Culture, Media and Sport has issued a consultation in which we are engaging that will have an impact on iconic projects, for which the DCMS remains keen to have funding, and which will develop an idea for a youth fund. Those proposals might fill some of the gaps if financing is allocated from lottery funding. Those are embryonic issues.
The proportionate effect on your portfolio could be higher than that on any other Executive portfolio.
Absolutely.
That is why I raised the issue.
I am conscious of that. The matter is part of the debate that the committee needs to have with the Minister for Finance and Public Services about the possible disproportionate impact of changes and other factors.
I will ask about progress towards targets. You have answered Mike Watson's questions on target 5. Target 3 says:
"Applications for Regional Selective Assistance … of £2 million and over will be assessed against the Executive's sustainable development objectives by 2004."
Any project that wants regional selective assistance of more than £2 million is a big project. Will you tell us now—or later—what progress is being made against that target?
I also have a more general question about associating elements of the budget with targets. What Cabinet discussions have taken place on realigning the budget so that we can assess spending against targets across the main priorities?
That was a wonderful googly question—thanks very much, Christine. My worry is about whether target 3 has been transposed from the enterprise and lifelong learning portfolio. That is a killer question, because we have no answer to it.
I am happy to have the question answered in writing. If the target was transposed from another section, why was that done?
I am puzzled about why that target is in the tourism, culture and sport section of the budget.
I, too, was puzzled—that is why I asked the question.
I wondered where the figure of £2 million came from.
Perhaps the target relates to sports facilities.
The last time that I saw it, that was not one of our targets. Something has gone wrong and that target has been transposed from the enterprise list of targets into our list.
So no big cultural projects have applied for RSA of £2 million or more.
Not that I am aware of, but we will write to the committee about that.
I made a more general point about associating budget lines and totals with the achievement of priorities. Has the Cabinet discussed when we might reach that position?
The discussion that is needed to satisfy the intention behind your question has taken place. Instead of waiting for an issue to pop up and ministers then having to meet to resolve it, we need to work out the key priorities and deliver on them. The problem is that that means hard choices for all the ministers involved and for the Parliament's collective perspective on its priorities. It is difficult to do those things effectively and I am trying to encourage debate within the tourism, culture and sport portfolio. Whoever is in the post cannot deliver on many of the issues unless we make inroads into and connections with other big-spend areas, such as spending on young people's needs in education and health. There is a real need to deal with that issue.
I have had discussions with all the major organisations in my portfolio about how seriously they are engaging in targeting their spend towards closing the opportunity gap and ensuring that we intervene in areas of substantial disadvantage. If we consider all the different bodies, we can see that targeting is uneven across the portfolio. Certain agencies are switched on and are trying to target their resources appropriately. Others have just come out of the cave and seen a bit of sunlight so we need to encourage them. It is going to take time but we need to do it.
I have two questions for you; the first is specific and the second is more general. I turn you north to tourism in the Highlands. I am interested in how much your department co-ordinates with other departments. For example, in west Sutherland, there are communities such as Kinlochbervie and Lochinver where the fishing has gone away but where we have identified opportunities for bringing in pleasure boats, which would be good for tourism. That would cut across your department's bows, if I can use that expression.
How much co-ordination is there between your department and Ross Finnie's, or between Donna Bell and her equivalent officials at Robb's Loan? It strikes me that if Finnie has decommissioning money left over, that could help you to achieve your aims of the promotion and encouragement of tourism. I am sure that that would be equally true of other parts of Scotland.
We must continue to work harder and more effectively to create those connections. There are a few things that might be of interest to the Highlands and Islands. For example, I have discussed with the Deputy Minister for Environment and Rural Development the promotion of development in the Cairngorms within the tourism product, in terms of sustainability, and the development of the national parks. Again, we want institutions to collaborate. It is fortuitous that you asked that question because this week I wrote to several organisations, including VisitScotland, to say that I want them to open up that debate and report back to me in a reasonable time about the strategies that they are putting in place to ensure that they work more effectively.
Another big issue that will arise in the next few years—I am to have a meeting very soon about it—is the year of Highland culture in 2007, which I think is a real opportunity. I know that Highland Council has appointed an individual to take responsibility for that event but more momentum is needed, and we must utilise the opportunities created by Inverness's unsuccessful bid to be the capital of culture to extend it much more widely.
We also have to examine how the Scottish Arts Council and all the agencies that it funds can work and link up better with area tourist boards and others to showcase Scottish traditional culture more effectively. That is one of the things that attract people to Scotland, particularly to the Highlands and Islands.
That answer is welcome as long as you remember to shift your eyes from the hills towards the edge of the sea as well. Who knows what we could do.
One of the issues that were discussed at the Thistle awards on Friday night was the promotion of the edge. There is a willingness to engage in that work, but it would be helpful if individuals were to come up with innovative ideas on how to pull the agencies together. Often agencies go for the tried and trusted formulas, but we want to find new markets. This was a very good summer for Scottish tourism, and we want to ensure that the greater number of visitors is sustained by a range of opportunities throughout the country.
Good. You will hear more from me. My second question is perhaps more to do with Laura Petrie's field. I am aware of the successful work that has been done on Historic Scotland's objectives for building preservation trusts in various parts of Scotland. Do you have any comments on how that work is going in terms of your budget and targeting money? Could it be broadened out still more?
Laura Petrie (Historic Scotland):
Work is being done to develop city heritage trusts for Aberdeen, Stirling and Dundee. Those trusts will be implemented legally by the start of next year. There is a lot of work in progress in discussions with the councils to appoint people for the city heritage trusts and to establish sources of funding for them. That work is one of our spending review targets.
That is first rate. I am sure that you know, but I point out, that additionality—keying in extra money—is attractive to an organisation and a department such as yours. You can up the budget yet again. Is anything else happening in the more rural parts of Scotland, outwith the cities?
In relation to the building preservation trusts that we have at the moment, the future work is the creation of the city heritage trusts. We have building repair grants—which are used throughout Scotland, not only in urban areas—that can be used to help work and as part of rural regeneration.
I will stick with tourism. I was looking at the figures for VisitScotland and quickly trying to do some mental arithmetic. VisitScotland will receive about a 10 per cent real-terms increase over two years, which is a substantial uplift in funding. What sort of projects will the funding increase be spent on? What research is being done into VisitScotland's effectiveness, particularly in marketing Scotland as a destination to other parts of the United Kingdom and overseas? How tightly are we ensuring that we get value for the additional money that is going into VisitScotland?
In discussions with VisitScotland and others, the leverage figure that has been suggested is, I think, one in 12. There is a direct correlation between the amount that is put into marketing and the returns that we receive in visitor numbers. Some people will argue with that, but the evidence is quite compelling. The more that is put into marketing, the more Scots will use Scotland as a destination. More important, it gives us the opportunity to market Scotland in certain parts of the world in which people are more likely to be receptive to the idea of coming to Scotland. In its market research, VisitScotland will prioritise certain parts of America and Canada. Also, because of the development of the Rosyth ferry and further air links, there is an increasing commitment to market Scotland in certain parts of near Europe.
On the broader debate, we are in discussion with fellow ministers about how we sustain and develop Scottish tourism. One of the key, compelling arguments that has been submitted is to try to identify the marketing strategy more effectively. That is important, but there is another key point on which we need to do better. There is no point in improving marketing and access to Scotland if the experience that people have in Scotland is variable. We can go from having extremely excellent service to places where the service is not attractive enough, even though it is not low cost but high cost. We need to drive forward the quality agenda. That can be done with encouragement from us but only from inside the industry.
The next issue with which we need to deal—everything has a domino effect—is the quality of training and developing the connections between the visitor attractions in the Scottish tourism industry and the way in which individuals enthuse about them. Our Scottish tourism industry should not be the hotel or the visitor attraction, although those are two key components; it is about the journey that an individual makes. Do people feel confident about the area that somebody has visited? If we convey a sense of unhappiness or uncertainty about something, it will be conveyed strongly and we might not get the response or return visit that we want.
Only yesterday, I visited the Rosyth ferry—I mentioned that earlier. The quality of service that has been put in place for the Rosyth ferry and the fact that the customer seems to be paramount in that product were visible even in yesterday's visit, irrespective of the fact that I was there as a minister. I am sure that there would have been anxiety to perform well, but, when I looked around, I could see that the staff were switched on for everyone who was coming on to the ferry, which was still operating during our visit. That is something that we need to continue to develop.
I want to ask about the relationship between VisitScotland and the British Tourist Authority. You have been speaking about VisitScotland running campaigns in North America, for example. How does that tie in with what the BTA is doing? How do the funding arrangements between VisitScotland and the BTA work?
The BTA has a responsibility to market the United Kingdom abroad. In its discussions with the BTA, we want VisitScotland to ensure that Scotland is placed as dominantly and firmly as possible in the showcasing of the UK. People sometimes get a wee bit sensitive about this, but the iconic products that we have allow us to put Scotland at the forefront of marketing strategy in a more effective way than is the case for other parts of the UK. There are certain Scottish symbols, which are generally more positive than negative, to which people feel attuned.
John Mason may wish to comment on this, but I would say that the process is on-going. Because of the new devolved structures in the UK and the fact that politics is evolving through the new Scottish Parliament, it is necessary to ensure that the UK bodies do not consider that certain things are nothing to do with them any more and that they can leave the Scots to deal with their bit in Scotland and simply concentrate on marketing English and British tourism, as if they were synonymous. We continue to have discussions with VisitBritain to ensure that that does not happen.
That is correct. There is a continuing dialogue at ministerial and official levels and among the various tourism bodies. VisitBritain, as the British Tourist Authority is now known, markets on the basis of the budget that it receives from the Department for Culture, Media and Sport and from private sector sources. We do not pay VisitBritain to market Scotland; it markets on behalf of the whole United Kingdom. All of VisitScotland's budget is spent on promoting Scotland.
If the BTA was doing a presentation in North America and was marketing Scotland as part of that, VisitScotland would not make any financial contribution towards that.
It would not normally do so, unless it wanted to add to that presentation for a specific marketing objective.
Although the contributions for that are presumably paid directly to the Exchequer by the Scottish taxpayer.
Seriously though, have the difficulties to which you have alluded been exacerbated by the recent acquisition by the British Tourist Authority of the responsibility for selling England within the UK? There is a bit more of a tension now than there might have been before.
That has not really emerged. For what it is worth, my observation from having held a number of portfolios over the years is that people sometimes have not noticed what has happened in Scotland over the past four or five years. At other times, people have felt that we are totally on our own—although I know that that might appeal to you, convener. We need to ensure that Britain is marketed in ways that include Scotland. I do not detect anything problematic in that regard, although there is perhaps more awareness than in the past.
Yes. VisitBritain is a new body. There are always a few problems with setting up a new body but, by and large, we think that it is settling down well and is beginning to prove its worth. There is no great difficulty at the moment with Chinese walls between one part of VisitBritain that is promoting Britain and another part of it that is promoting English regions. We keep a close eye on that.
I wish to ask about two distinct areas. The first is about the funding of the arts. I realise that comparisons between what happens north and south of the border are fraught at the best of times, and I am increasingly unconvinced of their relevance in a post-devolution context. Nonetheless, the perennial suggestion is made in a number of quarters that the arts fare less favourably in Scotland than they do elsewhere in the UK. Given that we are here to talk about the budget, I wonder whether the minister would like to comment on that.
This is like the perennial debate about what the function of devolution is if it is not about making different choices. There is an idea that we could just have a replicated arts budget that is no different from what we inherited in 1999, but that is not a concept that fits devolved institutions.
The base on which the DCMS funding increases have been made is much lower than the base we have had in Scotland in recent years. The position is not directly comparable. Some of the choices that have been made within the DCMS are not entirely the choices that we have made, and many of the areas of the arts in which we have invested in Scotland have not been considered at all elsewhere in the United Kingdom.
It is really about the choices that we make. For example, we have made the choice—consciously and rightly—to provide music tuition for primary 6 children. That is a major commitment that has not been paralleled in England. We have also had recent developments through the allocation of the underspend—the end-year flexibility money—such as the development of the national theatre.
The issue must be how we utilise our budget decisions—not just the ones that have just been made, but those that we make in the future—to get the balance right. I go back to the point that I made earlier: unless we make a connection across the way with other big-spend areas, arts expenditure will always be dwarfed by them. We need to find ways in which we can utilise education money and health money as investment in the arts—helping the health agenda while helping the indigenous arts community. Those are much more productive areas, and I would like to direct funding towards such things over the next few years.
That leads me neatly to my second area of questioning—although colleagues may want to return to the first one themselves. Cross cutting and getting different departments to work together towards shared objectives have been perennial themes in the four cycles of budget deliberations that we have had since the Scottish Parliament was established. I recognise that you have been in your ministerial portfolio for only a relatively short period, but I wonder whether you or your officials would like to comment on how far things have come in the past four and a half years, in terms of putting in place the systems and practices within the Executive that facilitate the more cross-cutting—that is not a phrase that I like, but members will know what it means—approach on which you have commented several times today, in the context of the importance of making progress towards it.
There are two areas in which there has been some success. The first is the one I mentioned earlier: the commitment to provide music tuition in schools, which is a substantial funding commitment of more than £17 million that will allow us to do a lot of liberating work. The second area has been our success—which came before my time as a minister—within the tourism, culture and sport portfolio in getting some of the health money that was available, by identifying active and healthy lifestyles and trying to ensure that sport, in particular, was a beneficiary of that.
By using a bit of imagination in combining lottery money and sports funding, we have also found ways in which to develop a much more sustainable infrastructure, both locally—through sports co-ordinators and the community clubs agenda, which has massive potential in Scotland—and nationally, over the next three or four months, through the provision of national regional facilities, if that is done well. I do not want all the different parts of Scotland to fight among themselves over their little bits of territory; we are talking about national facility opportunities. We need to look at our geography and ask where things would best be placed and what kind of partnerships could develop.
Those are three areas in which we could do better. The other thing that we need to encourage is regional partnerships. That is as true in my portfolio as it is in health and in transport. Regional partnerships must, increasingly, be one of the ways in which people can develop things more effectively. The capital bases and incomes of some local authorities are far too small to justify big spend patterns. However, if three or four local authorities that are in reasonable proximity to one another work together with a genuine commitment to do that and to outreach, and if there are satellite developments that local authorities can pitch into, there might be more opportunities.
It is easy to say that, but we need to think about how we can bring people together more effectively. That is why I have been trying for a good while to meet the Convention of Scottish Local Authorities. COSLA is one of the key players and councils within COSLA can play a significant role. We need to do a bit better in that respect. John Mason may want to comment from his experience as a civil servant.
Just to give a personal view, I believe that the portfolio is increasingly making better connections with virtually all other portfolios. Clearly, we have a lot to offer on the youth agenda, not only in education but in youth crime. Moreover, it is fair to say that, as a portfolio that looks after creative industries and tourism, we hold two of the potentially key growth sectors for the Scottish economy over the next 10 years, which will go a long way towards assisting the Executive's priority of economic growth.
Other portfolios are increasingly linking with our portfolio because they appreciate the benefits of working alongside us. We must get away from the tourism, culture and sport portfolio being regarded as having money in its budget to do something, for example in health. There must be a collaborative approach. Just to underline that, I hope to see more joint bids from portfolio ministers for projects and new initiatives.
I would love to proceed further with certain issues, but I will restrict myself to a particular comment. Much of what has been said refers to connections at agency or departmental level, but I am interested in anything the minister can say about ensuring that the well-established principles and aspirations of the national cultural strategy are translated into practice at community level in organisations' individual experiences.
I note that objective 4, to which John Mason just alluded, is:
"To generate jobs and wealth for Scotland by assisting young people to be creative and enterprising, and by promoting and developing the tourism, cultural and sporting sectors of the economy."
The point about assisting young people to be creative and enterprising featured prominently in our plenary debate a few weeks ago on developing an entrepreneurial culture in Scotland's schools. I regard objective 4 as making a big statement, but its accompanying target is narrow because it refers only to "creative and cultural industries" rather than to what needs to happen in communities and schools to achieve the objective.
I welcome anything the minister might have to say about fostering a change of culture and achieving a step change in the levels of activity in our communities and schools.
Four big issues are probably involved. One is the development of new national regional sports facilities. For example, it is 2003 but Scotland still does not have indoor sporting facilities to the level that many other parts of Europe have had for a number of years, yet we are shocked by our lack of achievement in some of our national sporting endeavours, despite the fact that we tend to spectate rather than participate in sport.
If we get things right over the next three or four years, we can perhaps have much better national regional sports facilities throughout the country, which would mean that, wherever anyone was, there would be reasonable proximity to such facilities. If regional partnerships develop more effectively, people might be able to share facilities through community club developments, which are taking place throughout Scotland.
On creativity and so on, connections must be made and I expect the Scottish Arts Council to make them. The Scottish Youth Theatre must be inextricably linked to the development of the national theatre, which must be developed as a commissioning theatre that works with all the repertory theatres and others throughout Scotland to develop links with kids in schools and so on. We must also think about a much more effective way of linking that development's design and commitment to young people in schools so that they regard creativity not only in terms of giving pleasure to themselves and an audience but as an aspect of the economy. John Mason rightly alluded to that.
We need to work hard to get the measures in place and then genuinely encourage folk to take part. The evidence from consultations with communities in Scotland is that people are not daft and can make difficult choices. In the past two or three weeks, there have been stushies about public policy choices, but if we inform people early enough, they will make rational choices. We want to give people the opportunity to buy into the process. If we can do things better in the next three or four years, people will buy into the process. That will allow us to make the right choices for young people, so that individuals, irrespective of social class, background, income or previous aspirations, can say, "That's for me," and will be able to transform their lives and the lives of the people around them.
One of the previous committee's recommendations for this year's budget was that VisitScotland should improve impact assessments of its activities. In answer to Murdo Fraser's question, you mentioned issues such as improved market research. Has any work been done on VisitScotland's response to trends in Scottish tourism? That relates to the portfolio of priorities for next year, one of which is to promote our cities' many attractions. Although VisitScotland's strategy might be working for some cities, challenges remain in relation to other cities. In my region, tourism in Aberdeen fell slightly last year. Has progress been made on that issue?
VisitScotland has done work on the possibility that new markets will emerge. I mentioned earlier the work on eco-tourism, adventure holidays and sports-related activities—VisitScotland has increased its marketing of such holidays. Much of the debate in which the previous committee engaged was about the entry points for visiting Scotland. I know from letters that I have received from those who are passionate about the issue that there are many diverse views on it. Some people believe that cities are the gateways, while others think that cities hold on to tourists and do not allow them to move out. Other people say that, historically, VisitScotland has presented a cosy image of the country that involves rural Highland Scotland, castles and mysticism.
In my view, VisitScotland's marketing has changed massively in the past year and a half to two years; it now takes niche markets into account. The evidence is that people increasingly want short breaks. They will spend a fair amount of money, but they want quality and might only want to spend three to five days at their holiday destination rather than the conventional two weeks. We must find ways in which to allow people to spend two or three days in one place and to dabble in spending two days elsewhere.
VisitScotland has increased that type of marketing, but it must continue to do so. One of the key challenges that face Scotland and our major tourism agency, VisitScotland, is the fact that 10 accession states will soon enter the European Union. Those states have already sent folk throughout Europe to consider marketing—they are examining the Irish experience and some of our experiences—and will start to compete on the same territory.
I cannot respond specifically on the factors that might have resulted in the small downturn in tourism in the north-east and Aberdeen, which Richard Baker mentioned, but I am happy to respond to him in writing on the issue, if that would assist. However, speaking broadly, because the market and the consumers are changing, we must ensure that VisitScotland is flexible and does not have a fixed view of what works. Access through websites was mentioned earlier: during the Edinburgh festival, the number of people who booked tickets online increased greatly—more people booked online than went through the conventional horror of the queues in the Royal Mile. The internet will change how customers make decisions about where they go, which is why VisitScotland's marketing and website development must be more effective.
I cut Chris Ballance off earlier—he has time for a quick question now.
If we take out the welcome £7.5 million for a Scottish national theatre in the Scottish Arts Council figures, the SAC budget is almost standing still in real terms. Given all the laudable points in the budget documents about the arts, would you like the figure to go up in the long term?
I do not think that you will get a culture minister to say that he wants funding for the arts to go down, unless he is a right philistine. As I am middlebrow, I will say that I am encouraging people to try to find ways to increase the resources.
The Scottish Arts Council has had uplifts year on year since 1999. There is a standstill at the moment, but the council is substantially better off in 2003 than it was in 1999, when we inherited the situation as the Scottish Executive. That has been welcomed. The fact is that there is new money for theatre. Many people speculated that it would be replacement money, but new money has been found through flexibility. People have been putting their shoulders to the wheel to try to make the difference. As a minister, when it comes to resource allocation one has to argue one's corner with many ministers—it is a tough job.
I wish you the best of luck in the argument.
Thanks for your sympathy.
On that happy note, I thank the minister and his advisers for their attendance.