Plenary, 11 Sep 2003

Meeting date: Thursday, September 11, 2003

Official Report 716KB pdf

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Partnership Agreement (Funding)

The next item of business is a statement by Andy Kerr on delivering for Scotland and funding the partnership agreement. The minister will take questions at the end of his statement so there should be no interventions.

I have notice of a point of order.

On a point of order, Presiding Officer. The guidance that applies to Executive announcements states:

"Where an announcement is of sufficient significance for a Ministerial statement to have been programmed into the business of the Parliament, the details of that statement should not be released to the media before the statement is made."

This morning, we learned from the radio and The Scotsman that £6.5 million has been pledged to the national theatre. I understand that in the statement we are about to hear there will be an announcement of funding for the national theatre, although The Scotsman has more information about the details than we do even now.

I ask for your ruling on whether that is a clear breach of the guidelines. If that is the case, can we ask the Minister for Finance and Public Services to express regret and give us an assurance that such a breach will not recur in this session?

I have had the opportunity to study both the newspaper report and the substantive document. The protocols agreed between the parties in the previous session are specific. A significant statement—a statement dealing with matters of policy or budget—must be made first to the Parliament and must not be read in the pages of the media.

I judge the comments in The Scotsman today to be significant. I believe that on this occasion the guidance has been breached. That is unfortunate and I wonder whether Mr Kerr would care to comment.

I would very much like to comment. I share the anger and unhappiness of members in the chamber about this matter. I will get the opportunity at a later date to vent my anger at those whom I suspect are responsible.

I assure members that I have spoken to Frank McAveety—the minister responsible—his press team and the press office of the Scottish Executive and I am assured completely and utterly that the information was not released by the Executive in any way, shape or form. I will seek to resolve the difficulty and ensure that the discourtesy that has been shown—which, I have to say, is a discourtesy to me as well—is dealt with in due course.

I regard that as a satisfactory response. I call on Mr Kerr to make his statement.

In May, we signed the partnership agreement, "A Partnership for a Better Scotland", which sets out our programme for the four years of this session, in which we will combine investment with reform and modernisation with delivery. It is a programme to make a difference and a programme for the people of Scotland.

We listened to what the people told us at the election on 1 May. They want delivery of their priorities to tackle crime, raise attainment in education, and make improvements to the health service. We will work to encourage and stimulate economic growth. We will work to tackle poverty and disadvantage, to improve and sustain our environment, and to help all our communities to live in peace and safety. We will provide the stability of a strong and determined Government to deliver the change and the improvements that Scotland needs.

In this first year, we will continue the process of improving public services and tackling the real issues that matter most to the people of Scotland. We are determined to deliver on the promises that we have made. The people of Scotland expect our Parliament to do that and they expect the Executive to listen to their concerns, respond to their wishes and make a positive difference to their daily lives.

There is a great deal of work to do to improve public services; to tackle poverty and disadvantage; to improve and sustain our environment; and to help all our communities to live in safety. Above all, we must work to encourage and stimulate economic growth, which is the critical basis for Scotland's future. We have set out our vision for a Scotland where enterprise can flourish and where opportunity exists for all, and for a Scotland with the confidence to face the challenges of a global society.

Today, I will explain how we are going to fund the next three years and our approach to funding over the life of this parliamentary session. We know that the resources of government are the resources given to it by hard-working individuals, families and businesses. We know that they get the best from the money that they have, and we recognise that, like them, any Government is duty-bound to ensure that every pound spent is a pound spent to bring direct benefit and deliver the right result.

At the election, we said that we would be

"prudent with the Scottish budget",

and we will; we said that we would be

"careful with your money and use it wisely",

and we will; we said that we would balance the budget, and we will; we said that we would invest for the future, and we are; and we said that we would only fund expenditure that would bring results, and we are.

Today, I am publishing the draft budget for 2004-05, which gives a detailed account of next year's spending plans. It is available to all members at the back of the chamber. I am also announcing the allocation of resources carried forward from last year. Together, they demonstrate prudent and sensible planning to meet Scotland's needs. We are doing what a prudent and mature Administration does—managing budgets across the year end and not spending for spending's sake but focusing on delivering what we promised, delivering what we were elected to achieve, and delivering to make a difference.

The system of end-year flexibility that we have used for the past few years is common sense. It is good financial management and it is good financial practice. It allows us to carry forward resources from one year to the next. For example, the road that made sound economic and environmental sense but got delayed because of planning difficulties in one year still makes the same sound economic and environmental sense the following year. Our system of end-year flexibility means that money is neither lost by being returned to the Treasury nor wasted in a rush to get it out the door. Those bad old days are over.

We use EYF in a planned way to carry money forward for specific purposes, to handle any slippage in capital projects, and to avoid any last-minute pressure to spend at the year end. In spite of all that members have heard in the media over recent weeks, the level of resources that has been carried forward from last year's expenditure plans is down from last year's figure of £643 million. The amount for 2002-03 is £394 million, which is just 1.9 per cent of our £21 billion budget. That shows prudent financial management and it shows that our systems are working. It shows that we do not just spend money at all costs, but release resources at the right time to secure steady delivery.

I have some good news for the chamber: we have a windfall of £196 million this year. The Treasury has accepted responsibility for funding more of the costs of housing stock transfers and money will come to Scotland. Members will appreciate that some of our commitments have on-going costs and the extra money is a one-off windfall. We will be prudent and use the money to meet pressures over the whole life of the session.

Good government is about making choices and deciding on investment in competing priorities. Businesses told us that they are looking for investment in Scotland's infrastructure and the skills necessary to build the future of Scotland's economy. Our policies help to deliver; the economy is starting to deliver also. We are working with businesses to ensure that we increase investment in research and development, promote enterprise in schools and extend broadband connectivity across Scotland. We have also introduced a small business start-up finance scheme.

We are committed to rail links to Glasgow and Edinburgh airports and completing the central Scotland motorway network. We are starting to close the remaining gaps in Scotland's infrastructure. We are helping business and ensuring that there are better links to the global market.

Members will know that we budget also for business rates income over the five years of the revaluation cycle. We have set aside income for the cost of appeals and we have made allowance for variations from local authority forecasts. As we approach the end of this revaluation cycle, most appeals have been resolved. We have frozen the rate poundage this year and no business is paying more than expected. Therefore, income from business rates is up by £148 million in 2002-03.

Today's draft budget shows how we will fund the commitments and meet the challenges detailed in "Building a Better Scotland". It reinforces and takes forward the decisions that we made in the previous spending review. We are building on our stable finances to ensure that we deliver for Scotland.

The budget shows how we will take forward our commitment to invest in excellent public services, sustainable development and environmental justice for all our communities. We are closing the opportunity gap and promoting equality for all. We are building a Scotland that we can all be proud of, in which communities are safe, secure and clean—places where people want to live and work. We want a Scotland with a growing economy.

We want to give every child and young person the best possible start in life. Helping our children to realise their potential is the key to giving them self-fulfilment and equipping them for the future. Our schools play a vital role in unlocking their potential. To help realise our goal for excellence in schools in Scotland, we will increase teacher numbers to 53,000 by 2007. We will target those additional teachers on reducing class sizes to a maximum of 20 for maths and English in secondary 1 and secondary 2, and to a maximum of 25 in primary 1. We will also increase the number of specialists working across the boundary between primary and secondary.

In line with many teachers and parents, we believe that it is time to improve safety around Scotland's schools. The level of road accidents around our schools is unacceptably high and must be reduced. Therefore, I am pleased to announce that we will fund the introduction of 20mph speed limits around all our schools in Scotland.

Improving Scotland's health is central to the welfare of our society. Our poor health record is well known. To tackle that, we are taking strong action to promote good health, by introducing a range of measures to encourage safer, healthier lifestyles. Today, I am pleased to announce that we will fund digital hearing aids and a phased introduction of free eye and dental checks. We will also provide more funding for more nurses for Scotland.

We want a Scotland where everyone can enjoy a decent quality of life. As part of that objective, we are determined to work to create a safer Scotland by reducing crime and combating antisocial behaviour. It gives me great pleasure to be able to commit more resources to this central objective. I hereby announce the allocation of £65 million to tackle the key priority of making our communities safer. In addition, we are increasing funding to secure more police to help drive down crime, and to ensure that police officers are released from prisoner-escorting duties so that they can concentrate on front-line duties.

We believe that culture and the arts have a role to play in today's diverse Scotland. Our vision is for a Scotland in which our cultural life is inclusive and accessible. Therefore, I am pleased to announce that we will fund the creation of a national theatre for Scotland to commission and create work across Scotland.

In total, we have added to portfolio budgets an additional £148 million in 2003-04, and £160 million and £217 million in the following two years. That is an additional £525 million in the draft budget.

In due course, a significant proportion of that money will be made available to local authorities. Our local authorities are working in partnership with us to deliver improving public services at the local level in education, policing, safer communities and many other vital services.

I plan to hold a significant reserve for allocation in the next spending review in 2004. That is a responsible course of action. It is a prudent step to take now to ensure that we can deliver our promises over the life of the parliamentary session. It is setting aside resources to cover pressures that will inevitably arise.

In some cases, money is being held in reserve either until negotiations are complete or until plans are further advanced. I make no apologies for that. It would be irresponsible and unwise to announce in advance how much money we have put aside for the ScotRail franchise, for example, or for concessionary bus travel, while negotiations are still under way. In areas where we are developing our plans further, it is important to allocate the right amount, to make best use of taxpayers' money, but I emphasise that we remain committed to delivering those commitments, and that we will make the allocations when the time is right. The reserve line for the current and next two years totals £323 million. Just like EYF, prudent use of the reserve is an important tool in operating a stable financial regime.

Today, I have set out our draft budget to fulfil our commitments. I have also explained how we are handling EYF. I have set out a prudent financial course for the life of the parliamentary session. We believe that the spending plans that are set out in the draft budget will help to deliver greater economic prosperity, better public services and an improved standard of living for the people of Scotland. It is about delivering what we said we would, and ensuring that resources match commitments and that we fund sensibly for the life of the parliamentary session. The measures are sensible and prudent, and will deliver policies that matter—the policies that we were elected to deliver.

I commend the draft budget to the Parliament.

On a point of order, Presiding Officer. Copies of Mr Kerr's very welcome statement are available now. Would not it have been more sensible if they had been available at the beginning of his speech, so that members could follow it? Unless my eyes deceive me, the press get copies, and my recollection—which may be wrong—is that sometimes in the past we have had copies of statements at the start. I am not criticising Mr Kerr; I am suggesting an improvement to the system.

I will discuss that matter with the Government officials. We will try to assist as much as possible, Mr Gorrie.

The minister will now take a limited number of technical questions on issues raised in his statement. I will allow around 12 minutes for those questions, after which we will move to a debate on the statement. It would be helpful if members who wish to ask questions indicated so now.

First, I acknowledge with thanks the advance notice of the statement. The Scottish National Party welcomes the fact that the Executive has wisely decided to adopt SNP commitments to have more police on the beat and to have smaller class sizes. My party leader spent a great deal of time during the election trying to bring round the Executive to that point of view, but it is better that a sinner repent, so we are delighted that that has happened today.

The minister has not explained why this announcement was not made when it was due in June, nor have we yet received a breakdown of the underspend of nearly £400 million among departments. The one concrete piece of information that we have is that the level of the contingency fund—the reserve—has risen massively. In the draft budget it was £29 million for this year. We now learn that it has increased to £120 million. Next year it was to have been £42 million but it has risen to £58 million. For the following year, it has risen from £142 million to—as they say in darts—£180 million.

Will the minister assure me that what occurred in 2001, when the Minister for Health and Community Care complained about the former First Minister filching money from the health budget, is not happening now? Has the minister raided the health, education and justice budgets to fund a new slush fund for future Executive announcements?

If SNP members thought that I was implementing the SNP manifesto, they looked heck of a glum to me as I announced more teachers, more nurses and more police for Scotland. The SNP did not have a commitment on secondary 1 and secondary 2 maths and English; the partnership has a commitment on that and so we will deliver it.

On the reserve, I invite Fergus Ewing to poker school. If he wants to tell me how much he has to gamble with and what his cards are, he is welcome to play poker with me any time. As I pointed out in my speech, the reason for the reserve is that when we go into negotiations with those who are to supply services to us, it is not the best strategy in the world to tell them how much money we have to spend. With the announcement, we are ensuring that we will be able to fund our commitments throughout the life of the parliamentary session.

The reasons for the underspend are simple and straightforward, and have been reported to the Finance Committee of the Scottish Parliament. For our commitments to future spend—where resources are required for future years—we can carry over £28 million. For capital slippage—for instance because of planning, issues such as foot and mouth and bad weather, and for road-building projects—we have £101 million. There are demand-led changes, which exist throughout the Executive's budget, particularly in the enterprise portfolio, because money is either returned to the Executive or certain organisations do not apply for resources. There are other variances, including the contingency budget within the Executive's budget, and other bodies, for example the national health service and local authorities, return money to us at the end of the year, which ensures that the money is spent wisely. There are good, solid, valuable and proper reasons for the underspend in the Executive.

Prudence is not a word that I would associate with the SNP. Since 1 May 2003, the SNP's spending commitments have included the extension of hepatitis C compensation to all relatives; the upgrading of Gartnavel to a full accident-and-emergency service; more money for Lothian and Borders police; additional funding for the national galleries; support for Unison-backed pay claims; spending on nursery education for three and four-year-olds and more childcare centres; money for modern toilets, closed-circuit television, shelters and customer information at all Scottish railway stations; more money for Church of Scotland care homes; local government funding for animal welfare initiatives; and the renationalisation of the railways.

The Executive is proud of its track record. We will continue to maintain the budget in a prudent manner, which is what the Scottish people expect us to do.

I, too, thank the minister for having the courtesy to provide the statement in advance, although it would make better sense if we had more time to debate the budget, rather than spending time on preambles and questions. I intend to cut to the chase with my questions.

The level of resources that is being carried forward from 2002-03 is £394 million. Can the minister tell me whether that sum includes previous carry-forwards? What is the carry-forward from years previous to 2002-03? Furthermore, the Chancellor of the Exchequer has let it be known that he might have to make cuts to his spending plans—his revenues are not meeting his targets and his expenditure is growing. What provision, if any, has the minister made for spending cuts by a Labour Government at Whitehall?

Finally, it is interesting that the minister is staying with the coalition deal to deliver free eye tests, a benefit of which the Association of Optometrists said:

"the money could be better spent targeting care at those most in need."

Why is it prudent to enable the minister, on a salary of more than £70,000, to become eligible to receive free eye tests instead of using such funds to target those in real need?

The EYF figure for 2000-01 was £718 million; the figure for 2001-02 was £643 million; and, as we have just announced, the figure for 2002-03 is £394 million. There have been a succession of reductions in EYF, which is a measure of the increased monitoring within the Executive and of our ability to reduce the underspend. I do not intend to reduce that target to zero, because I think that it is healthy and proper to have EYF. I have been heartened by some of the reporting on the matter and by other's comments, saying that EYF is a valuable initiative and principle.

Mr Monteith raised a point about the commitments that were made in the partnership agreement. I say to him only that the Scottish people endorsed those commitments, and I suspect that the Scottish people are more credible than the Conservatives. The clear policy commitment that the partnership parties made found support and was followed through in the Executive agreement. We will fully fund the commitments in the agreement.

On the current media coverage of the chancellor's strategy, I retain full confidence in the chancellor. He is by far the most successful chancellor in recent history in respect of the resources that he provides not only to the UK but to Scotland.

In my statement, I said that we will ensure that we can fully fund our commitments, and I have set aside a reserve to do that. I am clear and confident that I will be able to match the funding commitments and political priorities of the Executive in the 2004 spending review.

What funding is available in the budget for the implementation of the Land Reform (Scotland) Act 2002? I am thinking in particular of the resources that will be made available to develop the core path network that is mentioned on page 154 of the draft budget. How does the Executive intend to ensure that local authorities allocate sufficient funds to do that?

With due respect to the member, although I appreciate the points that he made, it is the minister who is responsible for such matters who will ensure that the resources that are allocated from the centre are spent on those areas. I am not at liberty to say what the detailed spend will be in each of the budget categories that the member mentioned.

Figures of £631 million, £642 million and £662 million are given for the spend on motorways and trunk roads over the next three years. Will the minister confirm whether those figures include a provision for the M74? If so, how much will it cost?

As I said in my speech, we will complete the central Scotland motorway network. The motorway is much needed to deliver for the Scottish people and Scottish business. I hesitate to give precise figures, as the matter is for the Minister for Transport, but I am assured that the Executive remains committed to that motorway.

Will the minister say a bit more about the carry-forward into portfolio budgets over the next three years? He mentioned that £148 million, £160 million and £217 million in additional funding will go into those budgets. Will he say something about the overall balance between capital and revenue in the budget and clarify the amounts that are to be spent on infrastructure against the revenue spend?

Will the minister say more about the highly welcome resources that are to be targeted at closing the opportunity gap and addressing equalities issues? I am thinking of the welcome commitment to spend £35 million on the sure start Scotland programme, £10 million on safe havens for women and £9 million on equal opportunities, and of the £2 million that is to be given to the Scottish Further Education Funding Council to teach English to asylum seekers.

Those resources are welcome and topical in many ways. It is clear that ministers have responsibility for the detailed budgets in each portfolio area. The Executive has sought to ensure that we will fully fund those commitments. The detail is contained in the budget document.

On the balance between capital and revenue, I appreciate and understand the views that the Finance Committee has expressed in the past. I have sought to reassure the committee that we will ensure that the balance remains affordable and fundable. We will meet the requirements of the Scottish people for more schools and hospitals. We will also, and more particularly, meet the needs of business in relation to broadband investment and the substantial investment that we are making in the top-priority area of our transport portfolio. I reassure the member about the balance. I will discuss the matter with the Finance Committee in due course.

I think that we have prudently and properly ensured that, over the lifetime of the session, as well as over the next three years of the spending-review period, each of the commitments made will be funded to the full.

The member raised a number of positive areas in which we are to deliver the partnership agreement, but there are many others. I am sure that, over the course of the next few weeks, ministers will make announcements on those specific measures.

I ask Jeremy Purvis to make his question brief.

I will keep to your guidance, Presiding Officer. I have a technical question for the minister, which has two unrelated parts. First, given the rumours that there might not be a further Treasury comprehensive spending review, will the minister expand on his response to Mr Monteith about how he will build on the Executive's longer-term funding? Secondly, can the minister give the Parliament guidance on when he expects the discussions among the Executive departments on EYF funding to be concluded?

Despite its title, the spending review is not only about spending; it is about ensuring that the money is spent properly, that it is measurable, that there is accountability and that we get value for money.

I will continue the good practice of previous ministers for finance and the spending review of 2002 to ensure that we examine not only the extra money and resources available, but how we use our current resources. I assure the member that the spending review is extremely deep. It requires ministers to justify what their money will achieve on every line—the difference it will make to change the lives of the people of Scotland. They must demonstrate performance indicators that Tavish Scott and I can be confident about when assessing the impact of their policies. The spending review is a large and in-depth process that I intend to continue into 2004. I have already presented to Cabinet an outline of the principles of the spending review in 2004.

All ministers now have the details of EYF in the budget document. In due course, they will be able to provide members with details of how the money has been allocated from me to them in their budget areas.

With a budget of £21 billion and a saving of 1.9 per cent, when does the minister envisage doing away with the obscene practice of selling the homes of people of my generation when they go into residential care homes?

I remind the member that I am talking not about savings, but about moneys that the Executive has agreed through Parliament that we require—for example, for some of the roads we have in our programme and the commitments that we have made to trained nurses and teachers. If we were to allocate that money elsewhere, the priorities that we have set would not be met. If they were met next year, it would mean that the money would not be available for something else.

The word "saving" is not appropriate in this case. It is true that resources are underspent and that they are available to us, but we want to ensure that where departments have not managed to fulfil a commitment by the end of 31 March, they can still fulfil that commitment in April, May or June of the following financial year. The Executive has no plans to alter the current arrangements.

I regret the rather large number of members who have not been called for questions. I hope that, in the ensuing debate, they will be able to make their points, by intervention or by question.

As I mentioned earlier, the probation of the ministerial statement has been delayed considerably. It is late by a substantial margin. The Minister for Finance and Public Services will be aware of the Latin motto of the clan Kerr. Classicists in the chamber will know that the Latin motto "Dexter sero sed serio" means "Late but earnest". I am pleased that the minister is living up to his clan motto by being both late with the statement and in earnest.

The underspend is £394 million. That is less bad than the underspend in previous years. Last year it was £450 million. In 2001, it was £643 million. The year before that it was £718 million. We congratulate Andy Kerr on the fact that his record is less poor than that of his immediate predecessor, the present First Minister.

The first serious question is whether underspending is a matter to which blame attaches. The Executive has a successful record of underspending—it seems to be an endemic and habitual practice. The same explanations that we receive every year are wearing thin and are rather unpersuasive—all the more so since the Holyrood budget is largely fixed, unlike the Westminster budget, where they have full control over their finances.

With a largely fixed budget, subject to a couple of variations such as business rates, surely it is possible to expect that departments are able to spend the whole of their budget, or at least far more of it than they have spent until now.

The sum that Fergus Ewing is referring to is, of course, less than 2 per cent of the entire block, and it is not an underspend. What would the SNP's end-year flexibility be? What would the amount be? What would the percentage be? How would it cover future spend, capital slippage, demand-led changes and contingency reserve?

It would appear that Keith Raffan is posing a multiple-choice question, but I am absolutely delighted that he has asked it, as it is a gift of a question.

Why does the member not answer it, then?

I shall tell Mr Raffan one thing that we would have done. We would have ended the penalising of Scottish businesses, which have paid higher business rates since the Parliament was created than businesses in England have paid. We would have ended the tax introduced by the former Minister for Finance, Jack McConnell, whereby those paying Scottish business rates pay a higher business poundage than those south of the border. That tax, which I helpfully call Jack's tax, has been roundly condemned by virtually all business organisations, as it imposes a higher level of taxation on Scottish businesses than exists for businesses south of the border.

Does Mr Ewing agree that opinion in the business community is not quite so clear cut on that issue? John Downie from the Federation of Small Businesses said in March this year:

"We want to see investment in schools, transport, broadband infrastructure before we see a cut in business rates. Businesses will always welcome tax cuts, but cutting business rates won't stimulate growth."

Does Mr Ewing agree with that comment?

Not for the first time, and I suspect not for the last, I completely disagree with Richard Baker, as do the overwhelming number of businesses, which see nothing but rising business rates and water rates, more regulation, higher insurance costs and more indirect taxation.

That brings me to my first serious point. Mr Kerr seems to think that the burden of taxation on business is perhaps a matter for amusement. I know from going around my constituency and other parts of Scotland that the anger about the level of water rates is palpable. The increases faced by some businesses are extraordinary, and the lack of any intervention by the Executive to tackle the problem is lamentable. One constructive suggestion has been made by Bill Anderson of the Forum of Private Business and circulated to all MSPs. It is a modest and costed proposal—that £4.1 million could alleviate some of the unfairness in the charges—and it is well worth exploring.

I would like to answer Mr Raffan's point, but I see that he has gone away.

I am here. I am listening intently.

That is very wise. The SNP would have made that reduction in business rates. We have always said that we would, and it would have been perfectly possible to implement such a reduction.

Will Mr Ewing give way?

The member should hang on a second.

Of course, it is more difficult to implement a new spending programme. Ministers are fond of making announcements early, but then they find out from their civil servants that implementing the programme is far more difficult than they thought, and that is one of the reasons why we have the massive underspend.

In the partnership agreement, in part 1, line 1, sentence 1, the Executive says:

"Growing the economy is our top priority."

I quote that just in case there is any doubt. However, I notice that in chapter 7—on objectives and targets—of the glossy budget document that arrived just a couple of minutes ago, there is not even a target for the level of growth. It is the top priority, but there is no target at all. The Executive's prime objective, which we share, is to grow the economy, but it is an objective that the Executive has not even turned into any form of target.

The SNP supports the general strategy of "A Smart, Successful Scotland", but I have three substantial objections to the Executive's failure to deliver action and to implement that programme. First, this Parliament lacks the powers of any self-respecting state in the United States of America or of any German Land, never mind any of the independent nations. Those narrow nationalists in Finland, in Ireland and in Denmark all have one thing in common—a more smart, successful economy than ours, and higher living standards. That is the first problem.

The second problem is perhaps new and had not been commented on until Professor Midwinter—not always the most fervent supporter of the Scottish National Party—pointed out that the history of spending on higher education under the devolution regime shows that it is the lowest priority in the Executive's education budget. We want smart, successful people. Presumably that means that education must be some kind of priority. However, in his evidence to the Enterprise and Culture Committee last week, Professor Midwinter said that the higher education budget is to grow at a much slower rate than the budget as a whole. He states:

"That implies that there have been political decisions to reduce the education share of the overall cake."—[Official Report, Enterprise and Culture Committee, 2 September 2003; c 27.]

Is that not interesting? How are we to achieve a smart, successful Scotland when, according to Professor Midwinter, education is the lowest priority and is receiving the lowest increase.

I am moving towards some kind of conclusion, Presiding Officer, unless you are going to add on time for the helpful interventions that I had.

No. You have 55 seconds.

Thank you; you are charitable as always.

Thirdly, public money must be spent effectively. I ask the Minister for Finance and Public Services, or his deputy, if they will tell members how they ensure that money is spent effectively. What checks and balances do they have? It appears to me that much public sector spending is demonstrably wasted in a series of areas, especially, if I may say so, among some quangos and non-departmental public bodies. I am sure that the minister will want to reply to that, although he might want the help of his spin doctors. I understand that they are now at record levels, even after the Hutton inquiry. Hutton might come and go but the Labour and Liberal Democrats' 43 spin doctors are well funded and apparently here to stay.

I welcome the opportunity to debate the ministerial team's budget proposals, although it would have been helpful if there had been more time for questions after the ministerial statement. I am not particularly pointing the finger at the ministerial team for the way that the debate has happened, but we are now having a debate where there is neither opportunity to see the detail behind the headline figures, nor a motion to debate. We are all therefore putting ourselves at some disadvantage in terms of the quality of the information we can extract from the ministerial statement. The Parliament must think seriously about that.

As I said earlier, the underspend is posted at £394 million. I recognise that that amount will never disappear, and nor should it. I happen to agree with the minister when he says that it is right to have some kind of contingency. I acknowledge that it is right that funding can be carried forward and I recognise the principles that the minister laid out about where end-year flexibility can be allowed and where it can work. All those principles are honourable and supportable and are ways in which we could have prudent finance, particularly in local government. The evidence might be anecdotal and difficult to pin down, but we all know that there has often been a rush to fill potholes on 30 March, rather than on 3 April. That represents a commitment to spending funds that might not have been necessary at the time, just so that budgets were met and money was not clawed back.

I welcome the process, but I ask the minister whether he is able to explain how much of the £394 million was carried forward from previous years, because there is a further carry-forward built into each figure in each year. Although I accept that there was a small matter of an election taking place between the end of March and today's debate, we have a situation where we are debating the issue in September because of that delay in the announcement. The result is that local authorities, public bodies and the like have only six months to be allocated their funding and to spend it. Therefore, I have no doubt that a significant element of the £394 million will reappear next year, because it is not within the bounds of possibility that the Government and its agencies will be able to spend all that money. I simply wish to tease out that point with the minister.

As I understand it, a significant proportion of the underspend or carry-forward money in recent years has been used to pay for Holyrood. By this time next year, perhaps we might not need money to pay for a substantial contingency for the building or indeed to pay for carrying the project forward.

I will leave the minister to answer that point; who am I to say whether it is true or not? In any case, it is important that we are able to break down the figures to find out how they have been arrived at.

The current information does not allow us to identify how much of the carry-forward has already been committed. In his statement, the minister partly answered that point by saying that there must be funding to carry on building projects that have been agreed to, but have not yet received planning consent. Again, we are not clear about how much of the £394 million is free income that can be reallocated. I hope that one of the ministers will address that in the closing speech.

My questions on the statement also touched on how the London Treasury's overall spending proposals affect the Scottish Executive's funding and spending plans. Given that there will be a planned increase in spending of £4.1 billion over three years, we need to understand how that money can be spent and what decisions can be taken with it. However, the increase is predicated on targets for growth that the Chancellor of the Exchequer has so far failed to meet and indeed has had to readjust.

I am genuinely concerned—not just because of my finance portfolio, but because I am a unionist—about the possible effects if the chancellor sets certain spending targets and then finds them to be unrealisable. As far as future spending plans are concerned, we know that information tends to come out of the Treasury, not through press releases, but in the form of smoke signals rather like those that one gets when a pope is chosen at the Vatican. There is genuine concern that those at number 11 Downing Street might not be able to meet their spending commitments and might have to borrow more money, tax more or cut spending.

I think that the minister and his team recognise that the Scottish economy has real problems. For example, we know that the number of business start-ups fell from 25,000 in 1997 to 18,000 in 2002 and that the figure for business start-ups in the first quarter of 2003 was 17 per cent lower than in the previous quarter. Moreover, we know that exports over the past four quarters have fallen 21 per cent from their level in the previous four quarters.

However, we find from the statement that businesses have contributed £148 million more in business rate payments. That suggests that there should be some relaxation for businesses when the economy is clearly in some difficulty. As a result, we should consider introducing not tax cuts, but business rates relief. After all, we are talking about an underspend. Furthermore, water rates relief should be introduced. I would therefore welcome any comments that the minister might make about how he might relieve business rates or Scottish Water's business charges.

Today we debate the financial foundations of continued investment in Scotland's public services and the partnership Executive's priorities of stimulating growth, bringing innovation into health and education and ensuring that Government policy is shaped around the needs of the individual in Scotland. On behalf of my Liberal Democrat colleagues, I endorse the draft budget, which was announced today.

The funding commitments that are outlined in the document that has been published today reflect the partnership agreement and the Liberal Democrat commitment to make the budget deliver for people. I am pleased that much of the Liberal Democrat manifesto is reflected in the draft budget.

As people are our best resource, the focus on skills training and entrepreneurialism is welcome. The funding growth in those areas shows the Executive's commitment to developing the Scottish economy. Scotland's diversity is reflected in the characteristics of my constituency, which has the lowest wages in mainland Scotland, but the highest number of start-up companies run by women. Some of the most traditional Scottish industries, which have suffered in recent years, are represented in my constituency, but the Shell LiveWIRE Scottish young entrepreneur of the year has established his young and growing business there and other new, innovative ventures exist.

The draft budget's commitment to innovation, through resources for renewable energy, increased investment in research and development and the establishment of the annual business forum, are particularly welcome. The expansion in the coverage of the enterprise in education initiative from 10 per cent to 100 per cent of schools is also welcome. In the 1980s and 1990s, we did not take advantage of the potential for wind power, but we must not lose out on the potential of tidal and other forms of sustainable energy—with Liberal Democrats in Government, we will not.

I thought I should let the member get into his stride before intervening, but he said in his earlier peroration that he welcomed the number of commitments from the Liberal Democrat manifesto that were in the draft budget. Does the member believe that, on his salary of some £50,000, he requires a free eye check?

I am a member of this Parliament, which legislates for the people of Scotland, who deserve more investment in education and health.

In education, the budget will put people first by increasing teacher numbers to 53,000 by 2007. The growth in the number of teachers will mean not only that pupils who enter primary level will have a better start, but that those aged between 14 and 16 will benefit from vocational education. There will also be better support for students. I am pleased that the expansion of funding for higher education will continue, even though the system in England is catching up with our figure for entry levels and funding as a percentage of the overall budget, as the principal of the University of Glasgow, Graeme Davies, stated last year.

In health, the budget puts patients first with a commitment to provide free eye and dental checks and digital hearing aids for those who need them and to increase the number of nurses and dental students. That is important not only for the hospital sector, but at the primary care level. The increase of 1,500 health professionals, such as radiographers, physiotherapists and chiropodists, and the funding for another 1,000 community places for people who leave hospital will make a real difference.

In transport, the budget will put the passenger first. The budget will also create safer communities and maintain record police numbers. We all recognise that the key to success in delivering the services we want lies with local government, health boards, the voluntary sector and a range of public services. Together, we must deliver for Scotland. I support the Executive in providing the financial tools to do that.

It is strange to be participating in a debate on a budget without David Davidson, who has contributed to every such debate in the Parliament until now, generally with the same speech.

I welcome the fact that the draft budget booklet is much thinner this year and that the format is undoubtedly superior to previous formats. I congratulate the Executive on the parts on equality, which are at the end of every section. The information is detailed and clear and the commitments are well set out. I would welcome the duplication of that pattern for other issues such as sustainable development and closing the opportunity gap. The Executive could learn something from the way in which the information on equality is presented.

I emphasise that the overwhelming fact about the budget is the £1 billion growth from last year. In my time in various forms of government, which goes back to 1990, there has never been such a sustained period of growth in the amount of money available as there has been in the past four years. That growth is now being carried forward for another year. I know that that must exasperate the SNP, and that exasperation was best illustrated when Fergus Ewing lapsed into Latin—that is when we knew he was really in trouble.

I was pleased that Brian Monteith modified his stance on business rates. A couple of weeks ago, he was reported in the newspapers as arguing that end-year flexibility could be used to bring down business rates. There are two issues with that. First, that would be a one-year windfall, so it is effectively impracticable for a whole series of reasons, including those concerning consultation. The other argument that I would put to Brian Monteith and others is that, when business representatives have come before the Finance Committee, they have repeatedly said that their top priority is not so much to do with business rates—although they would like them to be lower as, naturally, people want to reduce their costs. Rather, what would make most difference from their point of view would be more investment in public infrastructure. They want better roads, better railways and investment in skills. That is being delivered, and that is what a substantial element of the budget is about.

Will the member take an intervention?

I hope that it will not be in Latin.

I do not know the Latin for "business rates". My point is a simple one. The level of underspend every single year is at least double or treble the amount required to reduce business rates in those years to English levels. Surely we could have made that reduction.

Fergus Ewing has probably not been listening. Brian Monteith recognised that that cannot be done with EYF in a single year; perhaps Fergus does not understand that. I hope that it is something that he picks up as we go along.

One crucial issue needs to be addressed. The budget is a budget for the whole of Scotland, but I think that the future of Scotland very substantially depends on what we do about the economy, infrastructure and regeneration of west central Scotland. The Clydeside conurbation should be the biggest priority for this and future Administrations. We have to get Clydeside moving—and I mean not just Glasgow, but the whole area around the Clyde. There are important projects to be realised, such as the Clyde waterfront project and the projects relating to the M74 that are detailed in the budget. Those projects must be made to work, and I hope that the Minister for Finance and Public Services, in taking forward the budget and making the difficult decisions of allocating funds among different priorities, recognises the need, from Scotland's point of view, to ensure that Clydeside works to its full potential. I firmly believe that the area that I and others represent has not necessarily had all that it needs out of budget expansion in recent years. I hope that, now that we are getting and spending more money, Clydeside and the co-ordination of investment there are given a very high priority.

I would like to say something positive about the budget, and the most positive thing that I can say is that I am pleased that the Minister for Finance and Public Services has taken on board some of the suggestions that have been made by successive Finance Committees. I particularly like the sections that identify new resources, which were not included in the previous budget documents. They mean that we know broadly where the additional moneys are going to be allocated. However, as Fergus Ewing and Brian Monteith have pointed out, we might in future need to see where the cuts are coming from. Perhaps the heading should refer not to new resources, but to changes. At some point, as is the case with any economic cycle, there will be a downturn—and I rather suspect that it might be coming sooner rather than later.

There is another technical point about which I have argued from the beginning. We predicted that EYF ought to be around 0.5 to 1 per cent of the budget, and we debated whether we should put a limit on it under the Public Finance and Accountability (Scotland) Bill, which was considered by the Parliament in its first few months. I wonder whether we could have the percentage change noted in the budget documents. It is nice for ministers to announce large numbers, but it is easier to understand them if we can see the changes from the previous budget in both absolute and percentage terms. I reiterate that plea to the minister.

It is interesting that the minister has announced an additional £196 million for stock transfer. I presume that the money is for debt write-off, but I would like to hear that it is for some other, positive, purpose that will make a difference to people's lives through additional investment in what is euphemistically called social housing. I suspect that the £196 million that was announced today is the consequence of some technical amendment, although it would be inappropriate for me to suggest that that money should not be made available.

Can the minister give us more information about the impact on students of the new resources to which reference is made in the various green documents that have belatedly come into our hands? I am prepared to give way to him now, if he wishes to say something. Fergus Ewing rightly pointed out that there is a funding gap in higher education—both Andrew Cubie and Professor Arthur Midwinter described that to the Enterprise and Culture Committee. The share of Executive expenditure that is allocated to higher and further education will shrink in future years. Will the additional money in future years for student support go directly to maintenance support, or is it intended to bridge the gap to secure our universities' future? I would be interested to hear the minister or his deputy address that in winding up.

Welcome as the announcement of resources for the national theatre is, the leak of that news in The Scotsman and on the radio is unfortunate. I make a plea for Aberdeen in the debate about how much money is to be spent, as I gather that the nature of the theatre has been determined. Given that the arts belong to the whole of Scotland and that a significant proportion of the Scottish Arts Council grant is spent in the central belt, I ask that serious consideration be given to locating the commissioning agency for the national theatre in Aberdeen. We have a wonderful theatre that is about to undergo modernisation and refurbishment and that might make an ideal location for the national theatre.

In the partnership agreement, the new Executive said:

"Our commitment to the environment is demonstrated in every section of this Partnership Agreement."

Indeed, the Executive peppered the partnership agreement with little green trees to prove that. Have those trees taken root in the budget?

There is little in the budget that tackles climate change in a meaningful way. A massive reduction in Scotland's use of fossil fuels is needed. Indeed, Tony Blair said that a 60 per cent reduction by 2050 in the use of carbon dioxide in the United Kingdom is essential to tackle climate change. Although energy policy in the broadest sense is still reserved, there are many ways in which the Executive could tackle the source of the problem—not least through more vision in its transport policy.

What does the Executive say that it will do to tackle climate change? Under objective 4—"tackling climate change"—on page 149 of the draft budget document, it proposes the introduction of flood-prevention measures. That is not tackling climate change—it is trying to build our way out of the problem that is caused by climate change. We need action to tackle the issues that are associated with climate change, rather than simply to build higher walls.

The Scottish Executive's transport plans are an environmental embarrassment. Since 1999, the Scottish Executive has effectively made road building its priority, expanding the roads programme that was inherited from the Tory Scottish Office in 1997. Predict and provide still reigns in transport policy. According to TRANSform Scotland, the leading charity in the field, there has been a £1 billion road-building programme since 1999. The largest transport project in Scotland is the construction of an elevated motorway, the M74 extension, which is estimated to cost up to £500 million—more than the cost of the new Scottish Parliament building. That puts the £27 million that has been allocated to 20mph speed zones and home zones—welcome though it is—in perspective.

Will the member give way?

I am sorry. I do not have enough time in a four-minute speech.

Also, the budget document does not contain a target for the reduction of levels of road traffic. Twice as much money is being allocated to motorways and trunk roads, including capital charges, as is being allocated to rail services and other public transport.

However, there are ways in which the Scottish Executive could begin to make amends. Money in the integrated transport fund should be ring fenced for small-scale, localised transport initiatives, which lost funding after the abolition of the public transport fund in 2002. That fund was, for instance, a key source of funding for cycle lane provision throughout Scotland. Strategic environmental assessment should be implemented through primary legislation and applied to transport projects. Most of all, we need targets for road traffic reduction.

As I said before, climate change is one of the biggest environmental threats that we face. The 60 per cent reduction in carbon dioxide emissions that Tony Blair has called for will require a transformation of our economy and society. Without targets for CO2 reduction and the reduction of road traffic and a strategy to achieve those targets, all those little green trees that were in the partnership agreement will wither and die.

It is natural that I welcome today's ministerial statement, as it shows that the Executive will deliver on the priorities that were outlined by Labour in our election manifesto. Too often, the aspirations of political parties are not matched by practical proposals for ways in which they will be afforded. Today, pledges have been matched with spending commitments: pledges on crime matched by investment in more police; pledges on education matched by the promise of 53,000 more teachers; and pledges on health matched by the proposal for more nurses. There will be greater investment in public services each year for the next three years.

Two of the key areas that Labour highlighted in the election campaign are reflected in spending commitments that have been announced by the minister today: making our communities safe for our citizens and growing Scotland's economy. Tackling antisocial behaviour is about getting the right legislation. It is also about giving the police the resources that they need to do their jobs. I therefore welcome the announcement of more police officers and the £65 million extra for legislation on antisocial behaviour

The north-east has areas that have acute problems with drug misuse and, over the summer, there were many worrying incidents of youth crime in Aberdeen, committed by a minority of young offenders. The announcement of funds for extra police officers and the investment in schemes to tackle antisocial behaviour are therefore welcome.

Making Scotland a safer place goes hand in hand with making ours a more prosperous nation. I believe that the Executive's strategy for the economy is right. During the election campaign, and again prior to today's statement, we heard the main Opposition parties saying that they would prioritise cutting business rates instead. The Executive is right to be far more ambitious for Scotland by prioritising investment in skills, innovation and enterprise and fully embracing the strategy of "A Smart, Successful Scotland".

At the heart of that strategy is investment in the intermediary technology institutes. With the ITI for energy based in Aberdeen and the ITI for life sciences based in Dundee, the north-east is in an excellent position to benefit from that policy. I believe that it is the right strategy for ensuring that the excellent research and expertise that exist in Scotland make the fullest contribution to our economic growth. The universities in Aberdeen and Dundee are well placed to make their contribution to the strategy.

I was pleased to hear the minister state again today that the Executive's investment in infrastructure is key to a stronger economy. I am also pleased that the partnership agreement outlined that there will be early work on the western peripheral route. At the risk of infuriating my Green colleagues, I suggest that the speedy progress of its construction will be of huge benefit to the local economy.

As I have mentioned, I welcome the extra resources for health, in the form of new nurses. I was also pleased to hear about the additional resources that are being allocated for free eye and dental health checks. Nevertheless, I highlight the need for more dentists—especially NHS dentists—in the north-east to enable those checks to be carried out. I welcome the commitment to a dental outreach centre in Aberdeen, which is part of the partnership agreement, and I hope that that is the start of real progress on the issue.

The ministerial statement shows that Labour and the Executive are ensuring that the north-east will benefit from investment in public services and infrastructure, and that it will be at the heart of the Executive's work in growing Scotland's economy. I believe that the statement shows why the Scottish people were right to vote for policies that will make Scotland's communities stronger and safer, and our nation prosperous. I congratulate the Scottish people on their excellent judgment and the minister on his statement.

When I listen to budget debates, my mind goes back to the days when I was a member of Glasgow City Council. I recollect the angst and effort involved and the time taken by all parties to produce budget considerations. Yet here we are in the Scottish Parliament dealing with a budget of £21 billion and the matter is given scant debating time. Perhaps there is a lesson to be learned from that.

One lesson that we have learned today is about the Executive's mindset. The Executive has given much consideration to many issues but, despite what the glossy book in front of Mr Mundell says, the fact is that the state of the Scottish economy is only on the fringe of the Executive's thinking. It is a fact of life today that Scottish business is becoming increasingly uncompetitive. That is happening for several reasons, which other members have articulated well. One reason for Scottish business becoming uncompetitive is the higher rate of business taxation in Scotland, particularly the extortionate water charges that have been imposed over the past year.

Mr Kerr had the opportunity, of course, to do something for Scottish business, not by changing the amounts of taxation involved but by giving some taxation money back. One of the most important issues to face the Parliament—I accept that Mr Kerr acknowledges this—is the question of employment. We must acknowledge that employment in the private sector is not as high in Scotland as it is in comparable jurisdictions. We cannot all work for local authorities or health boards. That fact must permeate the Executive's thinking. Unless the Executive is prepared to do things for business, there will ultimately be job losses.

I listened to Fergus Ewing. I always like listening to him when he talks about the economy because much of what he says makes sense. However, I looked along and saw Linda Fabiani. Then I heard the litany of expenditures to which the SNP had committed itself. Mr Kerr quite properly alluded to that. Given those expenditures, Fergus Ewing's speech and the one that I am sure that Jim Mather will make are as nothing, because the rest of their party are so left-wing and thirled to public expenditure that what Mr Ewing and Mr Mather have to say collapses into dust. The SNP policy simply does not work.

Will the member give way?

I will do without the heckling from the cheap seats.

Does Mr Aitken accept that we put out our spending pledges in our manifesto, which committed us to cutting business rates? Obviously, we can all talk about proposals, but the SNP commitment was put into its manifesto and that is what we are talking about in the debate. Can we get back to reality and away from the works of fiction in which Mr Aitken now seems to be interested?

The only work of fiction that seems to be around is the SNP manifesto. I accept that what Fergus Ewing said is correct. However, the fact is that the sums simply did not add up for the additional expenditures that the manifesto highlighted. The people of Scotland recognised that and Mr Ewing lost 20 per cent of his colleagues. That is a fact of life.

Seriously, we must consider a number of economic issues. Unless the Executive is prepared to change its emphasis, there are troubles ahead. Mr Kerr was able to give a fairly upbeat statement today. However, in two years, once Gordon Brown's economic largesse is a thing of the past, I suspect that Mr Kerr's statements will be more downbeat.

I want to come specifically to Mr Kerr's comments on health spending. Yet again we heard, in Mr Kerr's speech and in the figures, that there is a commitment to health in the form of increased health spending, including the provision of 12,000 new nurses by 2007, which all members would welcome. However, MSPs will be briefed in Argyll and Clyde tomorrow about £13.5 million of health cuts this year, including a reduction in the number of clinical posts.

I have to wonder—when we are bombarded by the figures and the great words in the statement—whether we are witnessing the Max Factor approach to funding: purely cosmetic. In Argyll and Clyde, there are three separate campaigns to stop the closure of hospitals and the cuts in services. The minister is the man who does the sums, so I will ask him a question: how can he square the fact that he is putting more money into services and professes a commitment to health with the fact that there are three different groups of people on the street protesting against cuts and closures? I do not know about his dancing prowess, but I ask him not to give us a soft-shoe shuffle and blame the problems on the health board. If he is putting more money into health, we should be seeing that money coming through the system and there should be no people campaigning against accident and emergency wards and hospitals closing. People feel that the Executive is kidding them on and I would like the minister to explain how the situation that I describe can possibly be the case.

Further, if there are to be cuts in clinical posts, where will the 12,000 nurses be working in 2007? Campaigns such as those that I described are taking place not only in my part of the country; people across the country are fighting similar cuts.

The minister made a big issue of the £65 million that is being set aside to deal with antisocial behaviour. Given that there are 785 persistent young offenders and the target is to reduce that sort of offending by 10 per cent by 2007, that works out at £800,000 per offender. I was utterly disappointed that that was highlighted in the speech. In most communities, people who provide voluntary clubs and activities for many groups of people, particularly young people, spend every year scrambling about for money to keep those groups going. In Paisley, it costs £33 an hour to hire a classroom on a Saturday morning—£100 for a three-hour session.

Will the member give way?

I am sorry, but I have only seconds left on the clock.

Surely it would be better to have some sort of commitment to providing free access to schools for community groups and youth groups. As an aside, I have to say that the issue is further complicated in schools that are funded by private finance initiatives as it is private companies that get that £33 an hour. Making that change would be a much better way in which the Executive could show its commitment to young people in our communities.

Finally, I point out that, given that free school meals would cost only £74 million a year, that policy could easily have been accommodated in each of the underspend figures in the past three years.

I welcome the minister's statement on the funding of the partnership agreement and the use of end-year flexibility. I appreciate that more detailed announcements will be made in the coming weeks by the portfolio ministers and the First Minister.

I congratulate the Executive on bringing the sum down to £400 million this year. That figure is down £225 million from the previous year, which is a 39 per cent fall from that year and a 45 per cent fall from the 2000-01 figure of £718 million. I believe that the Executive is doing well in managing the Scottish budget.

However, in contrast to what Fergus Ewing seems to believe, I do not think that end-year flexibility is necessarily a bad thing. As the minister said, EYF for 2002-03 represents only 1.9 per cent of the Scottish budget. I further note that the consequentials from Westminster bring the total up to £600 million. In a Scottish budget where 98 per cent of the budget is fully committed and 60 per cent is spent by health boards and local authorities, that 2 per cent can make a significant difference.

If so much of the budget is fully committed or under the control of other bodies, the true underspend is significantly higher than 2 per cent as the part that the Executive has control over is far smaller than the full 100 per cent.

Obviously, the matter depends on how one does the calculations. I am merely saying that that 2 per cent is important. It is also of great importance that it be carried over into following years and I welcome the fact that Andy Kerr, like his counterpart in Westminster, is being prudent and recognising that the situation might not always be rosy in years to come.

Over the summer recess, I, like many other members, met a large number of constituents who brought to my attention a variety of concerns. I had one representation on civil partnerships and two representations on Dungavel. I am not saying that those issues are not important, but I received a total of only three representations on issues that some parts of the media think MSPs should be beating themselves up over.

In contrast, I had scores of representations on issues such as antisocial behaviour, neighbour disputes and litter and vandalism. I welcome the £65 million to tackle that and I particularly welcome the fact that in the social justice budget, there is a budget line for initiatives tackling antisocial behaviour. Those will not be about punishment; they are initiatives to divert people from antisocial behaviour. The funding will rise to £12 million in the following year and £17 million in the year after that.

People talk to me about the need for more police on the streets, the need for people to feel safer and the need for more closed-circuit television cameras on the streets, which is a pledge in the partnership agreement. There was a fight outside my constituency office over the summer—and no, it was not between David Mundell and me—but the police did not arrive for 45 minutes, because the CCTV cameras had not picked it up.

There is also a need to reduce waiting times and a need for more nurses, such as specialist endoscopy nurses and auxiliaries in hospitals to give nurses more time with patients. I therefore welcome the NHS spend increase from more than £7 billion to nearly £8 billion over the next two years.

I welcome the increase in national theatre funding. I believe that it was leaked to the papers slightly wrongly, because on page 63 of the draft budget the figure looks more like £7.5 million to me. I welcome that as part of the ministerial team that in previous years wished to progress that but was unable to do so because of the problems with the theatre infrastructure. It gives the lie to all those who said that the Scottish Executive and the First Minister in particular did not care about the arts. I do not always agree with The Herald, but I agree very much with the statement in today's editorial, which was that the national theatre

"will need to work with schools and communities to ensure that the place of theatre is firmly rooted in modern Scotland."

In chapter 7 of the draft budget, on enterprise and lifelong learning, objective 1, target 2 is to

"Improve productivity levels in Scottish industry compared to OECD competitors."

I would like to add my tuppenceworth to that. The minister will be relieved to hear that it is only small change that I will be talking about. I would like something to be spent on meeting that objective by ensuring that the Scottish work force is physically and mentally fit to meet it. I would like some of the small change from the £394 million end-year flexibility to go to that.

I understand what the minister said about the allocation of priorities by ministers with specific portfolios. However, perhaps the Minister for Finance and Public Services is in the best position to recognise that a year-end fund of small spending money might be established. There is something of a parallel with small businesses that cannot get a small loan from the bank or from any lender. If they want millions they can quite often argue a good case and get it, but the person who wants a small loan just cannot get it.

Much the same could be said of the organisations in which I am interested in relation to promoting fitness in the general population. I met representatives of sportscotland last week. Ian Robson and Allan Miller both told me of their great concern that in the community clubs to which Frank McAveety referred—the sports clubs that are the bedrock of sporting activity and fitness in the community—coaches are in short supply. There needs to be a fund—a relatively small amount of money that might not even need to be recurring money—to provide for the training of coaches, or else many such small community clubs will go to the wall. The same is true of training administrators to administer local funds and so on.

I am asking for a small-change fund, which might act as a stop-gap fund for sponsorships that may go out of fashion or simply come to an end. The BAA games in Edinburgh were very successful and were absolutely terrific. Schoolchildren from all over Scotland took part. However, the sponsorship deal has now come to an end. We therefore need a small amount of money to bridge the gap between the ending of that sponsorship and the beginning of a new one.

I concur with Brian Monteith: it is a good idea to have end-year flexibility. EYF could provide a small-change kitty for the essential items of expenditure that can be forgotten because they are so small. I appreciate that the Minister for Finance and Public Services will not do that by himself, but he could kick-start the idea.

I start with two comments about what has been said in the debate and to put the record straight about something that the minister said when he talked about the partnership agreement having been endorsed by the Scottish people. I am glad to accept that the partnership parties gained a majority of the seats in the Parliament but, unless I missed something, the partnership agreement was not arrived at until after the election. It has therefore been endorsed only by the two parties involved.

The minister expanded at length on why end-year flexibility was a good thing. Nobody disagrees with that or with the ability to carry forward an underspend.

Fergus Ewing does.

No. I repeat that we do not disagree with the ability to carry forward the underspend; the problem is with the size of the underspend that is carried forward. The argument is over the amount. The minister—and his deputy Tavish Scott will obviously follow the same line—loves to confuse those two issues.

It would be helpful to Parliament if Alasdair Morgan would clarify the size of the underspend.

The size that we would like is considerably smaller than the size at present. If the minister is not aiming to get the amount down, he is not following what his predecessor said in the debate on 20 September 2001 when he made that precise commitment.

I turn now to the timing of the debate. With budgets, all parties and all spokespeople on committees find that the devil is in the detail. It takes days if not weeks to find where the truth is and to identify the inevitable spin or gloss in the ministerial presentation. Even if we consider only the first tables in the documents and try to compare them with last year's figures, we find that we cannot compare the figures directly because the departmental set-up has been changed. For example, transport has moved. It is impossible for us to debate this issue when we have had the documents only for 20 minutes or half an hour. That does not serve the objectives of the Parliament in scrutinising the documents and being open in doing so. We have to be able to do that in a more informed manner. Even those of us who have become anoraks, faute de mieux, in finance find that exceptionally difficult.

The minister made great play of the fact that the budget is going up by, I think he said, £525 million, as if that was largesse that he was dispensing to the people of Scotland. Let us be quite clear. The figure has nothing to do with that—it comes to him automatically from the underspend, from the increased rates income that he mentioned, or because of the operation of the Barnett formula. The minister does not have a choice in the matter; he gets the money.

The minister also said that his statement was significant. It must have been, because the Presiding Officer ruled that it was and I would certainly not contradict him. However, if we consider the figures for this year's budget, which Des McNulty said had increased by about £1 billion—if I heard him right—and if we compare like with like, we see that departmental expenditure limits have gone up by £338 million. That is less than the rate of inflation and certainly less than the underspend. If the change from last year's figures is less than the rate of inflation, where is the great largesse? The same argument applies if we look at the figures for the next two years. If I am wrong, I will gladly so concede, but I think that the minister is blowing his trumpet about an increase that is less than inflation.

The minister told us how £150 million more was coming in from business rates and he explained why that was. Whatever the reason, the fact is that there is £150 million less in the pockets of Scottish business than there was in the previous year. Is that a good thing? Would not those businesses be better off with that money? Is it right that, from the only tax over which the Executive has real control, the revenue is actually increasing while the economy is stagnant?

I apologise to the two members whom I have not been able to call, but we must now go to the closing speeches. Time is very tight because we are behind the clock.

I congratulate the minister on his statement and the additional spending announcements that he has made. I am glad to see that he is a friend of prudence, even though the relationship between prudence and the Chancellor of the Exchequer is somewhat rocky at the moment. However, Mr Kerr is keeping up that firm relationship with that very important person in the management of our finances.

I never thought that I would say this, but just as Mr McNulty said that he missed Mr David Davidson, I actually miss Mr Andrew Wilson. He at least would have understood the question that I put to Mr Ewing. Of course, he would not have answered it, but he would more elegantly have avoided answering it. He would not have exposed his complete ignorance, as Mr Ewing did, of what end-year flexibility means.

I will not give way to Mr Ewing, because I am about to give him a seminar on what end-year flexibility means. We know that he is new to his brief, but we are trying to be helpful. I suggest that he moves from Latin to English. It is difficult enough understanding him in English without his speaking classical languages.

I agree with what Professor Arthur Midwinter said yesterday. Of course we need a contingency reserve as a cushion in the current uncertain economic climate. The term is end-year flexibility; we need to get away from this word "underspend". Mr Ewing is following Ms Cunningham—they all use the term but do not understand what it means. End-year flexibility is not necessarily money that has not been spent. The term may refer to money that is already committed and spending that is already planned. It also covers capital slippage, devolved spending to NHS boards and the contingency reserve. That is why I asked Mr Ewing about all those points.

Mr Morgan then answered the question—at last. What would the EYF be under the nationalists? "Oh, well just a bit smaller than the Executive's." After all this artificial row that they have created over the past few days, they do not even understand what they are talking about.

I welcome today's spending announcements. I hope that we will see increased spending on some of the issues that I am most concerned about, such as combating drug misuse. It is important that we ensure that funding reaches the front line and that we have more places on residential and community day programmes, to which the money does not seem to be feeding through effectively at the moment. I was glad to hear what the deputy minister said about the review of those services, but we also need more resources for the national plan for alcohol. I hope that the minister will address that point. The local plans are coming through from the drug and alcohol action teams, but money is needed to implement them.

I must not be churlish to Mr Ewing. I have to welcome him as the SNP's shadow minister for finance—the third in as many years. I hope that he will not forget the fate that befell his two predecessors. Mr Andrew Wilson lost his seat and is now with the Royal Bank of Scotland in a somewhat less senior position than that which he held with the SNP. I am glad to say that he is not handling personal accounts, because I have my account there. Mr Wilson was followed by Mr Morgan, who also lost his seat but slipped back in through the list.

There is a lesson there for Mr Ewing: the SNP needs to be more careful about their spending pledges. Do members remember those golden days at the end of 1999, when the SNP proposed spending an extra £1.383 billion—all in the space of three months. To be fair, Mr MacAskill was responsible for nearly half of that. He was totally out of control at the time. I never thought that I would say this either, but he is now a figure of Crippsian austerity compared with the Scottish Socialist Party and the Greens.

In that wonderful interview with Mr Bernard Ponsonby during the election campaign, Mr Sheridan had to admit that hardly any of his manifesto was costed. He wants to nationalise all those companies that closed factories in Scotland and put all those people out of work. He wants to nationalise ScotRail and the public utilities—

Mr Sheridan never gives way to me, and I will not give way to him. Sit down.

The Scottish Socialist Party's spending commitments are totally out of control, but even it is restrained compared with the Green party. I am glad that at least one of the Greens is here. I am able to announce to the chamber that their additional spending commitments currently amount to a total of £22.64 billion, which would more than double the block. That is not surprising when one considers Mr Ballard's antecedents are from the far, far left of the Labour party.

If the SSP and the Greens want the Parliament to become the six-party system that they constantly talk about, they must start behaving seriously—if we are to take them seriously. They need to start saying what their commitments are and what they will cost. They have done neither of those things.

I would prefer members who are making closing speeches to address their remarks to people who have taken part in the debate.

If Mr McAveety is looking for performers for his new national theatre, he has a candidate in Mr Raffan on the basis of that performance.

I apologise to Des McNulty for the fact that David Davidson was not able to give his customary performance. If he meets David Davidson in the street, I am sure that David will deliver a speech to him. I approached the debate with expectations over whether we would get the old Des or the new, turbocharged Des whom we have seen in a number of recent debates, but the performance was midway between the two. Unlike some members, he made some valid points.

On the subject of some of our new members, one thing that Mark Ballard needs to learn is that quoting Tony Blair in this chamber gets one nowhere because nothing that he says is taken to be Executive policy.

It is clear from the contributions, or lack of them, from our friends in the SNP that, as in previous debates—whether Andrew Wilson is present or not—they still have nothing to say. When I close my eyes I think that Mr Fergus Ewing could be a Tory, but when it comes down to it, as Bill Aitken pointed out, the left-wing spending pledges that are behind Mr Ewing ruin those potential credentials.

It was a bit troubling for Brian Monteith that Keith Raffan endorsed his speech. We will have to think long and hard about what Brian said today.

Mr Swinburne did not make a speech today, but the speech that he gave the other day was pertinent to what Richard Baker said. As Mr Swinburne pointed out, the UK Labour Government introduced free TV licences for people over the age of 75 when the average life expectancy of a male in Scotland was about 73 or 74. Likewise, it is all very well having free dental checks, but during First Minister's question time we heard about the difficulty that most ordinary people in Scotland have in accessing a national health service dentist.

That goes right to the heart of the draft budget, and everything else that was said by the minister, which was in the same vein as the points that have been made in all our previous discussions. The words are fine but, at the end of the day, simply throwing money at problems does not solve them. Unless within the Executive there is a real and genuine commitment to make the economy a top priority and to reform public services, the majority of today's announcements will be just as unproductive as the announcements made in previous finance debates in this Parliament.

Much of what we have heard today is symptomatic of the abnormal cash-accounting approach that is enforced in Scotland. Not for us the flexibility of full borrowing powers that Gordon Brown quite rightly deems so necessary in his management of the UK economy.

I say to Keith Raffan that, as for the underspend, there is always the suspicion that an underspend is a sign of failure to spend a justified and allocated budget. To be fair, it might be the case that the underspend is a sign of success and of being frugal or more effective in managing some budgets, or it might even be a sign of a legitimate delay in spending for reasons that are outwith the control of the spending departments, but the sad thing is that we are hearing nothing about effectiveness. Specifically, we are not hearing about departments finding new ways of doing things better that reduce costs and increase effectiveness. There is no mention of cost-saving, groundbreaking performance by even one department. There is no case-specific praise for effectiveness and no genuine delight that departments are being allowed to retain a large percentage of a managed and hard-won underspend. That could be a breakthrough in public financial management and would avoid the element of excess and waste that, as we all know, still accompanies the pressure on spending departments to spend within their budgetary year.

In real terms, such abnormalities have long been a function of Scottish governance. The danger is that, if they are allowed to go unchallenged, they will continue to do real harm to Scotland—if only by deluding people that all is well and thereby delaying our inevitable return to the world of normality, when the Parliament reclaims the power fully to manage its finances and to help Scottish businesses to compete. As Fergus Ewing mentioned, we could do that by using our resources intelligently and avoiding excessive and unexpected rises in water rates for vulnerable small businesses, for example.

The underspend in the budget that has been announced today is significant beyond its materiality on several counts. It highlights the abnormality of Scottish financial and economic governance, which would not be tolerated by a single state in the United States, and the Executive's lax approach to recognising publicly and rewarding frugal and effective spending of public money. It also reveals our lack of borrowing powers and the enforced—even self-imposed—non-competitive cash-accounting model that the Executive uses to manage Scotland's affairs, which, incredibly, puts Scotland into the same business-model category as the smallest business. The Executive's model is not vigorous and does not display credible ambition for Scotland to be a world beater. It is a model that lets a third-party competitor set Scotland's business strategy and which makes no attempt to maximise the country's revenue.

Every other developed country is able to create the conditions for growth and retain much of the resultant wealth within its borders. That generates more adequate funds to address social and infrastructure issues and prevent population decline in a perpetual effort to make those countries more prosperous and their economies more robust. Instead, our Government celebrates spending departments' failure to spend, as it sees that as another opportunity to get credit by recycling some of the underspend.

The Scottish people know from bitter experience that spending in itself does nothing. It is the impact of that spending on improving overall quality of life and life expectancy in Scotland that is important. What does the Executive's announcement say about the overall effectiveness of government spending and about our system of government? The fact that the Government has no target for economic growth makes it a laughing stock with the business community.

We want a very different Scotland—a Scotland that is able to grow its revenue year on year, to control its economy and sharpen its focus on the real needs of the Scottish people, and to measure its effectiveness at every step, by seeking to achieve improvements year on year. Other countries have done exactly that. In many cases, the process has involved a genuine cross-party consensus that recognised a crisis when it saw one and that drew down the powers that were needed to address the cause and symptoms of that crisis.

Scotland faces a crisis that will not be materially addressed by today's announcement. That crisis, which is the result of 30 years of low growth, is being manifested in population decline and family fragmentation. Members should consider what the Registrar General for Scotland said in his July report on Scotland's population:

"Historically, countries associated population size with military, economic and political power, and a declining population with weakening national identity and a loss of international standing. Perhaps more importantly, population decline is often regarded as being symptomatic of poor economic performance and may even reduce confidence in the economy."

Therefore, now is the time for Scotland to set a budget with real targets—a budget that encourages success rather than the failures of a flawed system of governance that is unique in the world and which accumulates more evidence of such failure every day.

That speech should have been entitled, "Here's one I prepared earlier." Sadly, "earlier" means about two or three years ago.

I am constantly disappointed by the nationalists; I should not be, as such disappointment is to be expected of them. They always go on about independence, separation and divorce, as if that is the solution to all our ills. Behind Mr Mather are the multispenders of Scotland—those who would tax hard-working families or business in Scotland. They want to leave the UK marketplace and become an overtaxed part of Europe. That is the reality of SNP policy on business. They talk about reducing business rates but, since May 1, they have provided a litany of spending commitments, not including those that some of their members made during the election campaign.

Many members talked about the Scottish economy, which is our top priority. We work through Scottish Enterprise, Highlands and Islands Enterprise and other organisations to ensure that our smart, successful Scotland strategy works.

Will the minister give way?

No, I will not take an intervention at this time.

I would rather take other people's word on the state of the Scottish economy. For example, Jeremy Peat recently commented in a recent Royal Bank of Scotland purchasing managers index report that in August, month-on-month growth in the private sector in Scotland was picking up to the sharpest in almost a year, and that new orders are continuing to strengthen. The latest PMI survey provides a great deal of encouraging news about the health of the Scottish economy. Of course, we never hear about that from the nationalists. It is their business—their stock in trade—to talk down the Scottish economy, which means, in turn, that they talk down the Scottish people.

The nationalists lecture me about business rates, but they lecture John Swinney about extending hepatitis C compensation to relatives or upgrading Gartnavel accident and emergency department. They should lecture John Swinney and Kenny MacAskill—we cannot forget him—about the money that they want to spend on Lothian and Borders police. They should lecture Roseanna Cunningham about the National Galleries of Scotland, Kenny MacAskill about the roads budget or Shona Robison about the Unison pay claim for nurses. I could go on but I will not, as I do not have time—it is just spend after spend after spend.

On the business-friendly face of the SNP, no business has endorsed the SNP strategy on reducing business rates. That is because no business is willing to endorse the SNP's proposed removal of money from the Scottish Enterprise budget. The Confederation of British Industry does not endorse that strategy, which would remove resources for vital training, education and employment opportunities.

The minister should ask the CBI about that.

I have spoken to the CBI and it does not endorse the SNP strategy. Of course, the CBI wants the Executive to reduce business rates; any business would want us to do that, but let us get the facts right. Our freeze on business rates, to which the Executive is committed, amounts to £28 million a year. We have limited any increase in business rates, which are less than 2 per cent of Scottish gross domestic product, to the rate of inflation.

However, businesses have something to worry about: the constant nationalist drone about separation, independence and divorce. What businesses want is what the Executive wants—investment in the smart, successful Scotland strategy and investment, which the Executive is making, in the infrastructure of Scotland. Spending that has never been seen before in Scotland is what is being delivered in our partnership with the UK Government.

Will the minister give way?

No. We do not have a lot of time and I want to ensure that I cover some of the points that were raised.

On research and development, I highlight the three groundbreaking intermediate technology institutes, the Scottish co-investment fund, our investment in the skills and learning agenda, business learning accounts and modern apprenticeships. Those are the things that will make a real difference to the state of the Scottish economy and which will deliver for Scottish business.

We have to make hard choices. Indeed, Nicola Sturgeon made a hard choice when she said that the Scottish Executive was considering whether to divert cash from some of the more affluent parts of Scotland to help Glasgow back to health. She said that she was 100 per cent behind that and although it would cause uproar in other Scottish towns and cities, that is tough. That is not the attitude of the Scottish Executive, however, as we seek to act for all of Scotland. We want to ensure that all of Scotland benefits from devolution and from the resources that it delivers.

The minister is anti-Glasgow.

Tommy Sheridan says that we are anti-Glasgow and yet the Executive has put resources into local authorities, health and transport to renovate and regenerate the city of Glasgow. That is what the Executive is about and that is what it will deliver.

We come to Brian Monteith's contribution. I will not discuss some of the matters that were reported recently, but—[Interruption.]

Order.

Let us get the facts out. At the same time as the Tory party is a tax-increasing party, it is also a tax-reducing party. It will cut back on public expenditure and on the innovation that we are creating throughout the public sector with more nurses, doctors and police but cannot sustain the increased investment in transport under the business agenda, because it wants to cut back on personal and other taxation. That cannot be done—the Tories cannot face both ways at the same time, although David McLetchie has done so. He asked why we do not find ways to cut taxes for individual families and businesses, yet a couple of days later he asked why we do not scrap the graduate tax and invest more money in roads and transport. He cannot have it both ways—it is not possible to talk about a reduction in taxation and spending money in other ways at the same time. That is exactly what the Executive will not do. My speech was about how we will contribute effectively to delivering for the Scottish economy.

A number of members raised important issues. Des McNulty mentioned Clydeside and the Executive is working with partners in the Clydeside area to ensure that we are seeking the regeneration that he mentioned. On Brian Adam's suggestions about the role of the Finance Committee, I am pleased that he recognises that the Executive is trying to come some way towards finding a more effective way of working with the committee. The Executive is putting more resources into student support as part of funding the partnership agreement and the detail is in the budget document.

Bill Aitken mentioned the heady days of local government, when big debates were held about finance. I cannot remember—perhaps other members will remind me—when an alternative budget was last presented to the Scottish Parliament by either of the two major Opposition parties. The other side of the local government debate is generally between two parties that say, "Here is what we would do with the money." However, neither party gives us any details, because they have no plans to offer the Scottish people.

It is past 5 o'clock, minister.

We support Margo MacDonald's initiative on fitness for work, on which work has already been undertaken. It is one of the four key themes of our health plan and we have set up a time-limited working group, involving employer organisations and trade unions, to develop proposals for tackling the problem. As we announced, the money that was previously assigned to the Euro 2008 campaign—£16 million in total—will be spent on providing indoors sports facilities.

I say to Alasdair Morgan that size does matter. The partnership with the UK Government has meant that the size of the Executive's budget has increased dramatically.

I finish on the point that we began with—the national theatre. I was genuinely concerned and upset about what occurred in the press, which I will seek to resolve. I recall that the great Scottish actor and trade unionist, Duncan Macrae, who formed the Scottish branch of Equity in the North British hotel some 50 years ago, said that we needed to start a long-running campaign for a Scottish theatre company. This Executive has delivered it.

On a point of order, Presiding Officer. As Mr Morgan mentioned, one of the problems with the debate was that we received the draft budget document at the beginning of the debate, which gave us no opportunity to raise important issues. The minister chose not to give way and, as a result of our procedures, I had no opportunity to point out that the draft budget has been cut from £22,854 million to £22,763 million. No explanation of that has been provided.

Your brief notice of that point of order was all of 10 seconds. Your point is largely a debating point.