Budget (Scotland) (No 2) Bill: Stage 3
The next item of business is stage 3 of the Budget (Scotland) (No 2) Bill. As no amendments have been lodged, we move straight to the debate on the motion that the bill be passed. I invite members who want to speak in the debate to press their request-to-speak buttons now. I call Tom McCabe to speak to and move motion S2M-2359, that the Budget (Scotland) (No 2) Bill be passed.
Today sees the conclusion of the final stage of our consideration of the 2005-06 budget bill. There has been a year-long process during which our spending plans for 2005-06 have been thoroughly scrutinised by Parliament and the people of Scotland. When the Budget (Scotland) (No 2) Bill has been passed into law, it will be complex and technical legislation. As members know, the bill sets out the framework by which Parliament and the Finance Committee control the Executive's expenditure, and against which we prepare our accounts. It sets out how much the Executive can spend and what it can spend it on.
The bill sets out three main types of control. The first is a cash control, which is the maximum amount of cash spending that can be incurred in a financial year. There are five separate limits covering the Scottish Executive and each of the direct-funded bodies—the Food Standards Agency, Audit Scotland, the Forestry Commission and the Scottish Parliamentary Corporate Body.
In his opening remarks, the minister said that the budget is for controlling the Government's expenditure. He will recall that, during a previous debate, we had a little exchange on the subject of accruals that relate to income. Leaving aside the fact that we might continue to differ on definitions, is he now in a position to tell us whether there are any measures in place that will ensure that the Executive maximises the opportunities for income, particularly on disposals, so that the public purse gets the maximum benefit?
I assure Mr Stevenson that that is always the approach that we take; it always has been and always will be.
The second control is a resource control. That covers the net total of resource consumption that can be incurred in a financial year. Again, separate limits are set out for each department in the Executive and for each of the direct-funded bodies. There are 15 separate limits.
As members know, there is a difference between resource control and cash control. The term "resource" includes non-cash items such as capital charges and provisions that are not covered by the cash control. Those non-cash items were introduced as part of resource accounting and budgeting to ensure that the full cost of services is reflected in accounts and budgets. It is important to note that resource is not the same as cash, and that resource includes additional items that are not cash. Our cash funding is therefore rather lower than it might appear at first from the total of our resources.
Thirdly, there are controls over our receipts. Again, those controls are set for each department of the Executive and for the direct-funded bodies.
Those three types of control set a total of 50 separate limits that form the framework for parliamentary control over the Executive's expenditure. Each limit has a purpose that sets out what the resource can be used for, so the budget bill is at the heart of everything that we do; it sets our budgets and defines how we use our money.
Our spending plans have undergone considerable scrutiny by all sectors of society and we have sought to make the process as open and transparent as possible. The process has been one of inclusive consultation and it forms the basis of our system of government. As I said in our earlier debates, we are not complacent. We will continue to work with Parliament and the Finance Committee to improve the budget process, to streamline our documentation and to increase accessibility to the process.
I am sure that members will breathe a reasonable sigh of relief that today's debate marks the end of the current budget process after a busy few months. We will have a short break from such matters to allow members to recharge their batteries, but we will welcome members back from the summer recess with the draft budget to kick off the 2006-07 budget process. Looking further ahead, I am sure that it will come as no surprise that the Executive's thoughts are already turning to the next spending review in 2006. We will, of course, keep Parliament informed of progress, which might be quicker than some people think.
For this afternoon, however, we remain with the 2005-06 budget. The budget drives forward our partnership agreement commitments by developing our transport networks, our schools and our universities, by putting in place the infrastructure that we need to grow our economy and by providing the front-line staff who will deliver excellent public services. The budget will strengthen our communities, enhance quality of life for all and make a difference where it matters most. The budget bill will enable all of Scotland's people to enjoy the opportunities that our prosperity brings.
I move,
That the Parliament agrees that the Budget (Scotland) (No.2) Bill be passed.
I thank the minister for raising, albeit very prematurely, the prospect of summer holidays. Whether that is yet another election tactic and whether it is a successful one remain to be seen.
Our budget process does not excite the people of Scotland as much as it should. When ministers have talked in previous debates about the many people who attended their budget meetings, I suspect that they have over-egged the pudding somewhat. Certainly, audiences for Finance Committee meetings on the budget process did not need a large room to accommodate them. Although more members are now present in the chamber than is normal for a budget debate, I suspect that today's attendance owes more to the coming statement on Scottish Water's objectives than it does to the budget bill.
I want to spend some time reflecting on why the budget that should be so important—arguably, the budget is the most important event in any Parliament—does not excite interest either out there or in here. The first and most uncontroversial reason that I could think of is that much of the meat of the Executive's budget is contained in the departmental detail—for example, the health budget or the education budget—which it is not within the purview of finance ministers or spokespeople to provide. However, I understand why discussion of those details should take place in other debates and in other committees.
A second reason for the lack of interest is that huge areas of expenditure of public money in Scotland are not contained in today's budget because they are on so-called reserved matters. Those matters are of great importance to the people of Scotland. For example, there is a major controversy over public sector pensions, but this Parliament would need an order to be passed before it could change the conditions of public service pensions in Scotland. The main debate is being held south of the border. It is arguable that the same applies to defence and social security.
The third reason why we pay less attention than we ought to the budget is the lack of debate about the revenue with which we fund expenditure. For taxpayers, the short-term revenue implications are arguably much more important and much more likely to excite discussion than the resultant expenditure. However, Parliament never gets a chance to discuss issues that we should debate, such as the balance between indirect and direct taxation, which has swung so much to the former over the years; the level of corporation tax, which does nothing to stimulate our economy and is one reason why the Scottish economy continues to lag behind that of the rest of the United Kingdom; whether we could set up an oil fund with revenues from taxation on Scottish oil; and whether, had we set up such a fund many years ago, Scotland would be in a better position than it is today.
The Executive will argue that we have Scottish representatives down at Westminster to make those decisions for us, but I am not convinced by that. After 5 May—I presume that that will be the date—decisions on those matters will be made by 646 members at Westminster, of whom only 59 will represent Scotland. I doubt that those 59 will influence what happens down there to any great extent.
I am grateful to the member for giving way in what is a genuinely interesting speech but—as he has mentioned decisions—perhaps he can clarify whether the Scottish National Party has come to any decisions. Does the SNP agree with Mr Mather that Scotland should have lower taxes or does it agree with Ms Grahame, who has said that the SNP should have higher taxes as part of its policy on revenue?
I argue that it is possible to have both. It is possible to have lower tax rates and a bigger tax take. Perhaps one of the reasons why this country's economy stays in the doldrums is that Executive parties do not grasp that we can encourage business by cutting the rate of tax and at the same time increase the tax take because the economy prospers. Had this country learned that lesson some time ago, we would not be in the dire state that we are today.
My second point about our representatives down at Westminster is that if a proportional system of government is good enough for Scotland to make decisions on how to spend the money, why do we not have a proportional system of government at Westminster to make decisions on how we raise the money in the first place?
I am genuinely pleased to take part in the budget process, although I wish that it was a complete process rather than an unsustainable process of spending other people's handouts, especially when—more to the point—it is our money they are handing out to us. It will be true in the years to come that this process is not sustainable and that it will not last.
As members will recall, I have in the past compared the Minister for Finance and Public Service Reform to a mafia don or a sinister local government hard man. I say that as a compliment, of course, and not in any negative fashion. We look to the minister to introduce prudence and efficiency to the finances of the Scottish Executive.
Today we have received from the minister, in the form of his budget, an offer that we cannot refuse. We cannot amend the budget in this process and members of the public might be forgiven for thinking that there is no alternative to the Scottish Government's budget proposals. After all, no amendments have been lodged to the bill and, indeed, the budget process is characterised by there having been only one amendment lodged in the previous four years. Whether or not it was meant to be this way, the procedures conspire to discourage alternatives from reaching the Parliament formally.
I refer members to something that the minister said in the stage 1 debate. Even the amendment to which Brian Monteith referred was not an amendment to the budget bill; it was simply an amendment to a motion on the Finance Committee report.
I accept Mr Morgan's point; what he describes is all part of the procedural process. As it is difficult to have formal alternatives to debate—
Will the member give way?
No, I must make progress, but I hope to be able to give way to Ms Alexander's charms later.
I want to propose an informal Conservative alternative to the budget proposals. I am sure that it is not by any means the only alternative, but the Conservative alternative would include a cut in business rates, costing some £140 million, to a level that is at least that of those that pertain in England. A Conservative alternative budget would increase spending on roads by a further £100 million, which can be costed and priced from within existing resources. A Conservative alternative would provide for 1,500 more police officers to ensure that the soaring crime rates were attended to. The Conservative alternative would allow councils to cut council tax—an issue that is at the heart of this week's financial debates—by removing the financial burden of £614 million of funding that schools require from council tax. Instead, schools would be funded by direct grant from central coffers. There are other areas in which we would make changes; I have mentioned only four.
In setting out the Conservative alternative budget, the member has highlighted what he sees as the good-news part of it. Will he please spell out the bad-news part about the areas in which the Conservatives would make cuts in public services?
You are in your last minute, Mr Monteith.
I realise that, Presiding Officer, which means that I cannot give way to Wendy Alexander. However, I am sure that she will be interested in the point that Bristow Muldoon has raised.
Mr Muldoon asks how we would do all this. Well, we would use the very same efficiency gains that are to be made by his ministers—whom he supports like a puppy—but in a different way. The Executive has not yet committed those gains, but we would commit them to school expenditure and council tax cuts. We would use changes in the structure of Scottish Enterprise to fund a cut in business rates and we would use efficiency gains to improve our roads.
The question is a no-brainer—there is an alternative that would give us better outputs and outcomes and lower taxes. It is just a pity that we cannot propose it formally.
One benefit of having been outside Parliament until recently is that I have been able to observe the changing nature of Scottish Executive expenditure. In that respect, I have been pleased to see the gradual introduction of the coalition's priorities into the financial equation. For example, there are more nurses in our hospitals, more teachers in our schools and more elderly people receiving free personal care. Such measures provide a path to the future, and there is more progress to be made. People are seeing that those actions are being taken and the budget document provides the financial evidence that these things are happening.
I know that the minister said that this will be the last time we see the budget document in its present form; nevertheless, we should see it not just as a spending document for today but as something that provides a path to the future. Although every financial document provides only the clichéd snapshot in time, this document shows not only where we are in the current financial year but how much of the expenditure is to be used for the country's longer-term benefit.
As with all other financial documents, this document is only two-dimensional and fails to supply immediate answers to, for example, the drop in planned capital expenditure. However, anyone who is involved in large capital projects will know that the lead-in time for carrying out consultations, land purchase and invoicing does not fit easily into a 12-month period. I was pleased to hear at yesterday's Finance Committee meeting that there was still a massive capital commitment to the water service. A bald look at the document suggests that spend will be reduced; however, it is all to do with the phasing of projects.
It is important not only to examine spending priorities but to look at the overall Scottish economy, which is the beating heart of, or driving force behind, all this. Without a successful and profitable economy, all our ambitions could well be dashed. If there is no money to fuel the agenda of the Scottish people, any future programme will founder. As a result, we must point out that the Scottish economy is growing faster now than it has at any other time in the past four years.
I understand what the member says. However, Scotland is growing at 1.8 per cent while the rest of the UK is growing at 3.2 per cent. Surely such a gap gives reasonable cause for concern.
I thank Mr Mather for his intervention. However, if he has read what Professor Donald MacRae has had to say, he will know that the growth rate in the last quarter of 2004 was 2.5 per cent. I acknowledge that that rate is still behind that of other countries, but we are trying to change our economy from one that is based largely on manufacturing to one that is based on high technology and service industries. The member also forgets the investment that we are making in the future.
The SNP's economic plans centre largely on a three-letter word—oil—and a proposal that is based on the Norwegian oil fund model. However, it is interesting to note that, this morning, it was reported that the Norwegian Government is using some of that fund to subsidise its salmon farmers, who are dumping salmon into Scotland. Such an approach is undermining the Scottish salmon industry and destroying the Scottish economy.
The budget is not perfect, but only those who live in an unreal world or who write their own school reports believe in total perfection. I would have liked a better economic growth rate, more start-up businesses and more support for this country's manufacturing base. However, we are where we are.
I am a new boy in Parliament, but the next time I am down in the cafe I shall watch SNP members not only having their cake, but eating it.
Another day, another budget debate. I would like to start my contribution to this debate by quoting remarks that were made by the minister, Tom McCabe, in his closing speech in the previous debate on the Budget (Scotland) (No 2) Bill. He said:
"I have some difficulty with Mr Ballard's comments about the nature of the Executive's budget, because I absolutely agree with him. He said that the budget is predicated on the Executive's obsession with growing Scotland's economy—and he is absolutely right. That is why I can stand here and cite the statistics that I have already mentioned."—[Official Report, 27 January 2005; c 14063.]
I will leave it to other parties to argue whether that obsession is bearing any fruit in raising the Scottish rate of economic growth.
Does Mark Ballard think that the current rate of economic growth in Scotland—which is a little more than half the rate for the rest of the UK—justifies the minister's claims or his complacency?
Mr Mather makes a fair point. If the Executive's obsession is with economic growth, it does not appear to be delivering on that obsession.
I move on to the substance of my speech, which is about the fact that this is environment week. In environment week, we will hear considerable concern being expressed about our impact on the environment. There will be a great deal of discussion about what we can do to improve our environment. We should congratulate Scottish Environment LINK on organising environment week here in the Parliament and we should reflect on its work and its commentary on the Parliament.
I highlight a point that is made in Scottish Environment LINK's report "Second Term, One Year On: Government Progress on the Environment in Scotland". I recommend the report particularly to finance and enterprise spokespeople in Parliament. In commenting on the report, Fred Edwards, the president of Scottish Environment LINK, stated:
"Sustainability is the vital cross cutting issue. Yet this is the area where the gap between expressed intention and reality is particularly wide. The Executive has pursued unrestrained economic growth as a single, overriding goal, unqualified by considerations of sustainability. Research on life satisfaction has demonstrated that levels of satisfaction do not correlate to economic growth."
We must recognise that economic growth is not a panacea and that it will not, on its own, bring the environmental and social welfare, the social justice and the environmental sustainability that we all want.
The Scottish Green Party will not support the Budget (Scotland) (No 2) Bill. I ask all members to reflect on the fact that this is environment week. We will hear a great deal from environment spokespeople, but we need to hear something from finance and enterprise spokespeople on the challenge to all of us to take environmental sustainability seriously. Until we move away from economic growth and have a budget that puts the needs of people and of our planet first, we will fail to meet the challenge of environmental sustainability.
As members know, fairytales sometimes convey important truths. A fairytale has taken hold of the Scottish budget process, and that fairytale is "Peter Pan". As we have already heard this afternoon, in the Scottish budget fairytale Peter Pan McConnell is the beneficiary of good fairy Tinkerbell Brown's block grant. Members will recall that Mr Darling had only a bit part in the Peter Pan story. However, such a view of Scotland's budget process is straight out of Never-Never Land itself. The Never-Never Land aspect of the Scottish budget process comes from the lost boys on the Opposition benches because, from the September day when the budget is announced, the lost boys of the Opposition fly off to Never-Never Land, never to return until spring, when the bill has been safely passed. From the start to the finish of that process, the nationalist lost boys—Neil, Morgan and Mather—all fly off to Never-Never Land. Whatever the budget proposes, they are in a Never-Never Land talking about the need for more people, more oil, more powers—indeed, anything other than the Executive's spending plans.
Will the member give way?
Indeed I will. I give way to lost boy Mather.
I ask Wendy Alexander for clarification. Is she advocating a lower population in Scotland?
No. The point that I am making is that it would be unthinkable in England in a debate on the budget to start talking about population and immigration. Whether it is lost boy Jim "growth target" Mather, Alex "population" Neil—in fairness, he is not here, but he is usually talking about it—or Alex "oil" Salmond, it is all about escaping to Never-Never Land rather than scrutinising the spending plans.
If I sound a somewhat world-weary Wendy, I am. I looked to the Tories. Perhaps they could be relied on not to fly off to Never-Never Land. In fairness to Michael Howard, who is every inch a latter-day Captain Hook, he is pretty clear about the services that will have to walk the plank. He is clear that health and education might escape the plank, but he is also clear that his trusty crocodile, the James report, has the clock ticking on savings of £35 billion. In Scotland, however, we have heard not a word about the clock ticking on the Scottish equivalent of the James programme. Lost boy Monteith is off to Never-Never Land.
It all seems rather amusing, but in less than an hour we shall pass a budget that enshrines how to spend £25 billion. That is more than the total wealth of 100 other nations. Let us think about that. We are about to pass a budget that is more than not just the spending but the wealth of 100 other nations on the face of this earth, yet the Opposition's lost boys have simply nothing to say. Of course, as all children in Scotland and their parents know, the lost boys just did not want to grow up, and the flight of the Parliament's Opposition to Never-Never Land discredits a young Parliament and infantilises the debate. There is no serious engagement as there should be.
Peter Pan's Wendy was an optimist, and all fairytales have happy endings. At the end of "Peter Pan", the lost boys eventually grew up. I hope that, the next time we debate a budget bill that plans to spend more than 100 nations on this earth earn, we can look to the lost boys of the Opposition not to fly off to Never-Never Land but to start providing some proper parliamentary scrutiny. This Wendy commends the Executive for a set of sound spending plans for Scotland's budget.
If Wendy Alexander had had six minutes, she would presumably have got round to Captain Hook. I shall respond first of all to Alasdair Morgan's comments at the start of the debate about why these budget debates do not excite the interest that they might. I think that there is a straightforward reason for that, and it is not necessarily to do with problems in our budget process. It is to do with the amount of budgetary growth that we have seen year on year, particularly since devolution in 1999. The Parliament has been able to expand provision, to finance new services and to make progress with policy initiatives in ways that have been unprecedented during my time in government at all levels.
In the 1980s and 1990s, budgetary debates were all tinged with sharp constraints and the hard choices that had to be made. I do not want to go back to those days of hard choices, but we should acknowledge that, over the past five years, we have been in a privileged position. We have been able to spread a degree of largesse. We have provided new policies, new initiatives and new services that people have wanted.
However, we may well have to re-examine and re-evaluate some of those decisions in the context of different budgetary circumstances. We do not yet know the long-term cost of providing free personal care; we do not yet know the implications of our decisions on, for example, concessionary travel; and we do not yet know whether we have taken the right approach to higher education and whether the way in which we have funded student support is better than funding research more directly and creating research centres. I would argue that we have made decisions without quite the degree of budgetary focus that was needed. We have taken those decisions often because they seemed like good ideas on which we could achieve consensus. I am not arguing against any of those decisions, which may well have been the right ones. However, in future we will often have to make choices between different kinds of good things. We will have to be prepared to take tough decisions to be sure that we act in the interests of Scotland.
I disagree with Alasdair Morgan and Jim Mather when they say that it is all about powers. In the modern international economy, countries are fundamentally interdependent. The constraints on the tax decisions that we can take are actually set not by the powers of Government but by the economic balance that exists between different countries.
Powers by themselves will not make a difference. What is crucial is the way in which we spend the resources that we have. We must do so sensibly. That is why budgetary decisions are very important. They are not for the end of an afternoon—as they have been all too often in the past—with people thinking that there are no fundamental differences of substance, only differences of packaging, to paraphrase Brian Monteith.
We will have to make hard decisions in future. Perhaps at the beginning of Lent in future years, we will have to take oaths of self-denial. There will be things that we want to do that we will not be able to do because the resources will not be there.
The SNP consistently makes the point that growth levels are significantly higher in England—in the south-east in particular—than they are in Scotland. Of course that is true. London and the south-east of England are the fastest-growing and most economically dynamic area of Europe. To my mind, it is far better for us to be attached to, and involved with, that level of growth than to be separated from it. If we consider the pattern of growth in Scotland systematically—not selectively, as people all too often do—we can see that we have benefited from the union. I certainly hope that we will continue to do so.
Organisations such as Scottish Water have had to make hard choices. The choices to be made in order to preserve our competitiveness are difficult. We will have to face up to difficult choices in health, education and other areas. It is time that we started to take that process very seriously indeed.
I am happy to wind up for the Conservatives in this budget debate. From listening to previous speakers, it is clear to me that a difference of opinion is developing. The consensus between the nationalists and the Conservative unionists challenges what is being offered by the Scottish Government in two particular areas. The first of those areas relates to the idea that is propagated by ministers, former ministers and back benchers that more inputs mean more outputs. The theory is that the more money we pile into public services, the more positive results we will get back out. The reports by Audit Scotland and by the Accounts Commission show that that is patently not true. What do we find when we compare today's statistics with those from the dark, evil years before year zero, when the Conservatives were in power? I tear out what hair I have got left. We find that with fewer and smaller inputs, we got larger and better outputs.
I am enjoying myself now. As my speech is not scripted, I will carry on for the moment, although I will give way to the minister soon.
The second area relates to the idea that higher taxes mean higher revenues. The experience in many other nations reveals that cutting marginal rates of tax leads to higher tax revenues.
As the member knows, I yield to no one in my interest in efficiency issues in the budget. Perhaps Mr Monteith can explain to us why the Conservatives have never—not once in six years—moved an amendment to the budget at a meeting of the Finance Committee to reflect the position that he is advocating or, indeed, any other position.
I have made clear my position on that on many occasions, but I am happy to do so again. I believe that if one is to amend the budget, one should offer an alternative budget—an entirely new budget. I do not believe that one should change one part here or one part there. Any party that wished to produce an alternative budget would have to co-ordinate the work of reviewing spending proposals and recommendations for change with every committee and to bring all that together. Although I would like that to be done, I believe that it would be asking too much of any Opposition party to do it.
Furthermore, when members of local councils consider spending proposals, they have the help of council officials who provide detailed answers. Such detailed information is not available to Opposition members of Parliament. In councils, it is possible for opposition members to formulate cogent, rational alternative budgets that stand up to analysis. That is not possible in the Parliament. If Wendy Alexander wished to go down that road, I would be pleased to travel along it with her.
We have heard about Peter Pan, but Peter Pan was detached from reality; he never grew up. The Executive's economic policies are not grown up. Wendy Alexander told us about the whole panoply of Never-Never Land, but she should come over to our policies, or she will be like a Wendy house—an empty house at the bottom of the garden—rather than someone who is building real alternatives such as tax cutting, better outputs and better public services.
I am happy to close for the SNP. As a member of the Finance Committee, I acknowledge that some progress has been made to evolve what remains an expenditure-only process. However, it still lacks top-level targets, which the Finance Committee and its adviser have advocated that it should include. The lower-level targets are not as outcome oriented as we would like them to be or as they should be. That is perhaps understandable, given the new light that the Federation of Small Businesses has just shed on the key outcomes. Scotland finishes bottom out of 10 small countries and has the lowest life expectancy of 24 Organisation for Economic Co-operation and Development countries.
In spite of the fact that the FSB report relied on gilded lilies, it produced poor results that are totally at odds with Scotland's huge potential. Frankly, I think that looking at gross domestic product per capita is inappropriate for a branch economy with population decline. Also, what the report says about life expectancy ignores the wide disparity in the figures and hides the fact that affluent retirees are coming back to Scotland and boosting the average. The educational attainment value that it includes is inappropriate, as we should really consider the productive retention of our educated and skilled people, whom we are currently exporting. Indeed, in looking at labour market participation, the report ignores migration and the large proportion of economically inactive people who would like to join the world of work. However, the document points the way and I am confident that, next time round, more organisations will come forward with harder facts and stronger recommendations that are capable of withstanding real-world scrutiny.
I want to talk about the real world. I totally reject Never-Never Land; a real world, with an interdependence of equals, is out there and is waiting for Scotland. It is the real world as measured on the Laffer curve. I say to George Lyon that it is one in which reducing tax rates works. It is the real world to which Sweden, Finland, Greece, Portugal and Ireland point us. Those countries have reduced their corporate tax rates by 50 per cent over the 10 years to 2000 and yet have seen their tax take boom and the proportion of tax that is corporation tax increase by 87 per cent. The model that those countries make is one that countries such as Slovakia, Slovenia, Estonia and Romania are queuing up to follow.
In the time that remains to me, I will focus on some specifics of the budget. At a recent meeting of the Finance Committee, I asked the Deputy Minister for Finance and Public Service Reform to confirm that the efficiency savings are calculated
"net of IT costs, possible redundancy costs and other capital equipment costs".
Tavish Scott replied by saying:
"No, I do not think that they are net of such figures."—[Official Report, Finance Committee, 1 February 2005; c 2284.]
That reply exposed a misunderstanding or a cultural and procedural difference between the world of business and the world of government. I ask the minister today to expand on what he said and confirm whether the IT costs, possible redundancy costs and other capital equipment costs are budgeted. Are they sitting under departmental headings waiting to be consumed?
I am equally keen to express my dissatisfaction with a process that is so unlike the world of business as to have lost much that is of value. In the business world, the proposers of planned savings, on being supported by management, would receive a budget with which to achieve the savings. They would be expected to account for the savings net of the cost of achieving the new levels of operational efficiency. Effort would then be deployed to monitor and record the extent to which the savings were realised. The characteristics of such a process are a continuous—indeed, often a mundane—search for efficiency; openness and accountability; cash consciousness; competitive focus; and ephemerality. It is not possible to carry forward the previous year's savings as a rolling total. Those are not characteristics that are fulsomely present in the recent efficient government initiative.
In the world of business, the idea that one can claim gross savings—devoid of their costs—and spend the total proceeds on other activity in the same business cycle and in the same department is inconceivable, no matter how worthy the cause. Equally, the idea that savings are simply to be made by squeezing the current model a bit more tightly or by automating existing procedures is not recommended. That idea is just as likely to create tensions and do damage.
The savings that work in modern organisations are those that get the full buy-in of all the people involved and that result in re-engineered approaches to the delivery of services. That is what we need to see more of. We also need to see a focus that everyone involved—most important of all, the Scottish taxpayer—finds credible.
It is my pleasure to wind up the final debate on the 2005-06 budget. The debate marks the end of the Parliament's deliberations and the real start to the plans that the Executive announced last September at the conclusion of the spending review 2004.
A number of important points have been raised in the debate about the process, the significant amounts of money that the budget contains and the need to meet the priorities of people throughout Scotland. It is important to recognise—indeed, I am sure that Mr Morgan does so—that budget roadshows are one of the highlights of the ministerial year. We learn much from them. The debate in committee is also important. No minister undertakes the scrutiny to which all of us are put with anything other than very serous consideration, which is as it should be.
Des McNulty was right to illustrate the sheer scale of budgetary growth that has come about since 1999 and which it is our responsibility to deliver. By the end of the current settlement period, core funding for local authorities will have increased by 55 per cent since 1999-2000. Over the next three years of the 2004 spending review period, there will be a 30 per cent increase in funding for further and higher education; a 47 per cent increase in transport spending to develop the infrastructure and fund new concessionary fare schemes; and a 35 per cent increase in funding for affordable housing by 2007-08. Health spending will reach more than £10 billion by 2007-08 to fund improvements in waiting times and commitments to primary care and health promotion. Those are all investments in the long term to ensure that spending matches priorities, meets the partnership commitments and builds a better Scotland.
We have taken matters forward through the budget process, under the scrutiny of Parliament, as is correct. In responding to points that have been raised by members, I think that it is important to recognise that spending on capital and resource is long term. Andrew Arbuckle, who is a new member of the Finance Committee, will recognise that the capital investment plan that will be announced shortly by Tom McCabe will give the long-term perspective that the Finance Committee and Parliament have requested of this Administration. Of course, Parliament will hold finance ministers to account over the period of the plan. The Executive's action is in direct response to some of the concerns that have been expressed about the need for a long-term perspective.
Mr Ballard of the Greens raised what he saw as the obsession with the Scottish economy. Presumably he therefore criticises our objective of moving into the top quartile of OECD countries and is not satisfied that we want to build on the second highest employment levels in Europe. People being in jobs and creating wealth may be unknown concepts for the Greens, but I hope that even they would accept that the "Framework for Economic Development in Scotland" and "A Smart, Successful Scotland" define economic growth in terms of economic sustainability. If we are to plead guilty to anything, this Administration pleads guilty to an obsession with growing the Scottish economy.
Mr Monteith's entertaining tour de force came somewhat unstuck on the basis of his spending commitments. He has been keen to criticise the SNP and, in his latter remarks, this Administration for spending commitments. However, if I got them right, he committed his party to spending £100 million more on roads and to funding 1,500 more police officers, which did not square with his "everything was all right prior to 1997" picture, because if we now have record police numbers, it is curious that he is committing his party to 1,500 more.
Mr Monteith also committed his party to a council tax cut of £614 million, all to be covered, we are led to understand, by the commitment that Mr Letwin has apparently given him that he can keep all the consequentials of the £35 billion of public spending cuts to which the Tories are now committed. It strikes the Parliament that the Conservatives, as usual, cannot have it both ways. The efficient government gains are built into our budgets. It is not possible to have efficient government aims built in and increases in spending. The Conservative position is a fraudulent one.
Mr Morgan made many protestations about the tax take, but before I get to that I must mention oil. He is keen to mention oil and recycle the old "It's Scotland's oil" routine. I remind him that many moons ago, when Winnie Ewing stood up in a hostelry in Lerwick and said, "It's our oil," she was tapped on the shoulder by a fisherman from my constituency who said, "Actually, it's our oil." The SNP has not coped with that since.
We look forward to the work of implementing the budget—which will come into effect in just under two months—and the commitments that it will fund. We look forward to the modernisation of our universities and colleges, enhancing our research capabilities and increasing participation, particularly by communities that have not previously benefited from higher and further education. We look forward to the major developments that are planned for our transport network, the new rail links and better-quality roads. We look forward to the development of our new school buildings, focusing our plans for Scotland's infrastructure, enhancing our asset base, providing the basics that business needs to expand and growing our economy.
Growing our economy is the Administration's top priority, and the budget will do that. It will deliver excellent public services; support stronger, safer communities; and develop a more confident and democratic Scotland. It is a budget for enterprise, opportunity and fairness, and I commend it to the Parliament.