Finance and Sustainable Growth
Question 1 was not lodged.
Further Education Colleges (Funding)
Discussions between the Cabinet Secretary for Education and Lifelong Learning and I take place regularly on college funding issues.
I am pleased that the cabinet secretary meets so regularly with his colleague, Michael Russell. Although I welcome the funding so far, does the cabinet secretary recognise that the additional funding will in no way address the permanent imbalance of college funding in Scotland? Is he aware that for every £5 spent on further education in Glasgow, only £2 is spent in Lanarkshire? I acknowledge the complex social and economic problems faced by Glasgow, but Lanarkshire shares exactly the same problems. What will the minister do to address that imbalance?
I think that Karen Whitefield will acknowledge from her experience of chairing the Education, Lifelong Learning and Culture Committee that decisions on the allocation of funding to colleges are taken by the Scottish Further and Higher Education Funding Council, which takes those decisions independently of ministers, although it operates under a framework set out by ministers.
Many of my constituents go to local colleges in order to access higher education institutions such as Glasgow Caledonian University, where a rally against cuts was held yesterday. Does the cabinet secretary believe that it is a good use of education funding for GCU bosses to spend more than £1 million on a campus in London while planning major cuts to funding in Scotland, meaning further job losses and a poorer standard of education?
Obviously, individual institutions, of which Glasgow Caledonian is one, must take decisions about the appropriate use of their resources. Our further and higher education institutions are involved in activities to encourage students from other parts of the United Kingdom and other countries to come to study in Scotland because it is an important revenue source to many of them. Although such decisions are best taken by the institutions, all of us who depend on public finance must take careful and prudent decisions to ensure that we maximise the effectiveness of public expenditure in an increasingly tight financial environment.
Cash-releasing Efficiency Savings
Annual efficiency outturn figures are published only when savings have been delivered and verified. The Government is working to deliver the target level of savings by the end of 2010-11.
I thank the cabinet secretary for his response. The First Minister has said that the Scottish Government can achieve efficiency savings of 2 per cent per annum on an on-going basis to help to avoid cuts in front-line services. Does the finance secretary agree?
Yes, I agree. An essential part of how the Government acts is that it constantly examines how we deliver public services and use public money to ensure that we maximise the effectiveness of all the resources that are available to us as we go into an environment in which they will be under enormous pressure. The Scottish Government’s efficient government programme, which we are implementing and which our predecessors implemented in 2005 to 2008, has been an important part of sustaining that effort, and the Government will continue that in the years to come.
The big difference is that for the word “efficiencies” we should read the word “cuts”. I need look no further than the Audit Scotland report, “Improving public sector efficiency”, which says:
Not for the first time, we find ourselves in a situation in which Mr Kerr is arguing in opposition the absolute opposite of what he argued when he was a minister. Then, he would have said that he was not cutting public expenditure, but merely pursuing efficiency. That is exactly the approach that this Government is taking. We seek to ensure the maximum effective use of public money, and that is what the efficient government programme is about.
Business Rates
All businesses in Scotland, including those in Edinburgh, benefit by more than £200 million in 2010-11 from our decision to match the English poundage rate. On top of that, around 60 per cent of ratepayers in Scotland are better off after revaluation, even before appeals and reliefs reduce bills further, with an average annual saving of more than £1,300 per property. In England, where there is a transitional relief scheme, the reported average saving is £770.
I thank the minister for his reply and for his recent letter to me. I have gone back to the Edinburgh business community, which remains adamant that, in the absence of a transitional relief scheme, the massive hikes in their business rates mean that many Edinburgh businesses are losing out severely, particularly in the retail and tourism industries. Is the minister prepared to meet me and the local chamber of commerce to look at the analysis of the work that it has done by talking to local businesses? In my constituency, for example, many businesses have lost out, even though the minister has not intended for that to be the case, and they are now facing a hike of up to 70 per cent in their rateable value and 43 per cent in business rates, to give just one retail example. Given that tourism is a £2 billion industry in Edinburgh, and rateable values have risen more than 40 per cent across the board, local businesses are very worried about the Edinburgh economy and the situation in Scotland as a whole.
I would be delighted to meet Sarah Boyack and the local chamber of commerce.
I want to ask the cabinet secretary about the overall yield from business rates taxation in Scotland since the Scottish National Party came to office.
If that detail is contained in written answers, it will be correct.
Economy (Fiscal Stimulus Programme)
We must continue to support the economy and growth in employment at this crucial time.
Now that we live in this Con-Dem nation, does the cabinet secretary agree that the key issue for Scotland remains the need to secure the recovery? Is it not still the case that an acceleration of capital spending should be an essential part of the Scottish Government’s arsenal for job creation and economic growth?
I certainly think that it is essential that we maintain investment in the public infrastructure of Scotland. The way in which we have deployed accelerated capital expenditure has helped us to take account of the fact that, recently, we have had a much lower level of private sector activity than we have had in recent years. The Government believes, as we asserted before and during the election, that a programme of accelerated capital expenditure would help to support the development of the economy. We will continue to make that case to the new ministers in the UK Government.
I am sure that the cabinet secretary will have noted the latest construction insolvency figures, which showed that in the fourth quarter of 2009, 22 construction companies in Scotland became insolvent. That number almost doubled to 42 in the first quarter of 2010.
It will be a very interesting parliamentary experience to listen to the unremitting whine that is coming from the left-hand side of the chamber. If today is a taste of what lies ahead for the remainder of the session, it will be one big left-hand whine from the Labour crowd over there.
Should the fiscal stimulus be paid for by an increase in borrowing or an increase in taxation?
As Mr Brown will be aware, the last borrowing figures for the United Kingdom in the 2009-10 financial year showed that borrowing was £15 billion lower than the then Chancellor of the Exchequer had anticipated. The type of stimulus package that we are talking about would equate to a United Kingdom cost of about £3 billion. Clearly, a £15 billion borrowing requirement has been avoided, as a consequence of the performance of the economy. Our pitch to the former chancellor was that a proportion of that—I stress a proportion, and only 20 per cent—could have been used in a fiscal stimulus. I offer that helpful suggestion to Mr Brown, who I always knew was a very influential figure in politics but is now even more influential with the direct line that he will have to the United Kingdom Government. Mr Purvis also has his direct line to the Secretary of State for Scotland, the Secretary of State for Business, Innovation and Skills and the Chief Secretary to the Treasury. We will not forget that one in a hurry.
You are being rude.
I am not being rude. I am being as helpful as I possibly can be to encourage my colleagues in the Liberal Democrat and the Conservative parties to use all the new influence that they now have at their disposal.
Access for All Small Schemes Fund
I wrote to Chris Mole, then Under Secretary of State for Transport, on 13 April 2010 expressing my disappointment at the budget reduction, and urged him to reconsider the decision.
I thank the minister for that answer. He will already know that the access for all small schemes fund has made a small but very significant contribution to increasing access to our rail network for some of the most vulnerable in our society. From hand rails and variable height ticket counters to access ramps and sign language information, a lot of good progress has been made using that fund. However, much still needs to be done. May I therefore ask the minister to make further representations to the new UK Government to ensure that this decision, made in the death throes of the Labour Government, is reversed as soon as possible?
The access for all small schemes fund for 2010-11, which is provided by the Department for Transport at UK level, was originally set in October 2009 at £7.9 million. We received the information that it was being reduced to £3.9 million and the consequence was that our share fell from £796,000 to £390,000. As the member said, some of the most vulnerable people in our society are supported by this modest amount of money. It seems passing strange that a party whose rhetoric was committed to social justice should choose to make this small financial cut that will have a big impact. I will most certainly approach the new minister to see whether there can be a change of heart.
Scottish Budget (Cuts)
I plan to meet the Chancellor of the Exchequer at the earliest possible opportunity to discuss the implications of any future cuts to the Scottish budget. The Scottish Government will work to protect Scotland’s interests in any future United Kingdom budget settlement and will continue to work in partnership with local authority, health service and other public sector colleagues to ensure that the resources that are ultimately allocated to us are used in the best interests of the people of Scotland.
Bearing in mind the financial disaster that is the UK debt mountain created by Labour, and the impending savage cuts that are expected from the new Tory and Lib Dem UK Government, does the cabinet secretary agree with Labour’s David Whitton that we should limit free prescriptions, free pensioner travel and free school meals, which would adversely affect many people in Scotland whose lives we should be trying to improve?
I have not caught up with Mr Whitton’s latest contribution to the debate, so I will leave his remarks to stand for themselves.
I should be flattered that Mr McMillan follows what I say in the press with such keen interest. However, it would help if he got his facts right. I did not say that I supported the ending of universal benefits. I see Mr Brownlee nodding in support of me.
The member is meant to be asking the cabinet secretary a question.
Indeed. I will get round to asking the question. [Interruption.] I was just defending—
Will you ask the question, please?
Indeed I will.
Mr Whitton, ask a question!
The question is, if the cabinet secretary is so keen on defending those things, will he defend Greater Glasgow and Clyde NHS Board, which today declared 1,200 redundancies?
If Mr Whitton has been the inadvertent victim of a possible misquoting, I am sure that he has now put that well and truly on the record in the extensive and elaborate preparatory comment that we heard before his question. In doing so, however, he committed the same kind of offence of which he accuses my colleague Mr McMillan, because Greater Glasgow and Clyde NHS Board has done nothing of the sort that he suggested—nothing whatsoever.
Scottish Investment Fund Funding (Lanarkshire)
No Lanarkshire-based third sector organisations have received investment from the Scottish investment fund. Two applications were initiated but have not as yet been progressed further by the applicants.
The cabinet secretary will be aware that there was a high level of demand for investment from the fund. What consideration has been given to maintaining the Scottish investment fund beyond 2011?
As Mr Wilson will be aware, all questions about future budget decisions will be addressed when I deliver to the Parliament the financial settlement for 2011, the timing of which is subject to when we receive from the United Kingdom Government the information that is necessary to form a view.
Business Rates Incentivisation Scheme
Detailed discussions between the Scottish Government and the Convention of Scottish Local Authorities on how a business rates incentivisation scheme would operate are continuing, with the intention that an agreed scheme will be introduced in 2011-12.
The cabinet secretary will know of my on-going interest in business rates collection by Glasgow City Council, whose non-domestic rates collection rates have been around 94 per cent for some years. That is lower than the Scottish average by upwards of 2 per cent, which in cash terms is a substantial loss to the city. As a major business centre for a far wider and more populous conurbation, Glasgow faces understandable challenges in achieving higher business rates collection levels due to a number of factors. Does the cabinet secretary agree that an incentivisation scheme that permits local retention of extra revenues would be best piloted in Glasgow? I urge him to consider that suggestion. Which model would he consider most appropriate for Glasgow? I reiterate that I would like Glasgow to be included in any pilot business rates incentivisation scheme.
I will certainly consider Mr Doris’s suggestion about the possibility of undertaking a pilot scheme in Glasgow. I am keen to take forward a business rates incentivisation scheme to continue the work that the Government has supported over the past three years to motivate and encourage local authorities to see themselves as performing a significant role in encouraging economic development at local level. We all have a vested interest in ensuring that we have a prosperous economy in all localities of Scotland, and I think that a business rates incentivisation scheme would assist that.
I welcome the fact that the cabinet secretary confirmed to the Economy, Energy and Tourism Committee yesterday that he will meet Aberdeen and Grampian Chamber of Commerce to explain his policy decisions on business rates. Does he accept the chamber’s calculation that this year’s rates increase, net of any reliefs, will cost businesses in Aberdeen city and shire more than £30 million a year?
Mr Macdonald’s point had the interesting caveat that it was before reliefs. As I said in my answer to Sarah Boyack earlier, the rates revaluation process provides a benefit of the order of £200 million, which the Scottish Government has used to fix the business poundage rate at the same rate as that in England. Without that, business rates bills would have been significantly higher in Scotland. Mr Macdonald needs to reflect on that in assessing the information that he has set out to the Parliament today.
Voluntary Sector (Support)
Over the past three years, we have sought to empower the third sector to join in the delivery of the national purpose, which will benefit everyone in Scotland. We have provided more than £90 million to grow the sector, to support the development of voluntary organisations and social enterprises and to promote volunteering. We have brought senior figures in the sector into discussions with the Scottish Cabinet and we have brokered a powerful agreement between the sector and the Convention of Scottish Local Authorities and the Society of Local Authority Chief Executives and Senior Managers. The sector has risen to that challenge and, in the years to come, we expect that it will be a powerful force to support those who are most in need in difficult economic circumstances.
Given that the voluntary and third sector is often viewed by local authorities as an easy route for making cuts during periods of tightening public expenditure, and in view of the fact that at stage 3 consideration of the Public Services Reform (Scotland) Bill the Scottish National Party and Labour voted against amendment 77, which would have required public authorities to take into account the joint statement between COSLA, the Scottish Council for Voluntary Organisations and the Government to promote the third sector, what will the minister do to ensure that family support services, citizens advice bureaux, women’s aid and other vital local services that are delivered by the third sector are not squeezed?
The member comes to the chamber with a false premise. We have increased funding for the voluntary sector. I chaired a meeting on 13 April at which we brought the voluntary sector together to engender yet more cohesion. If the member still has the deep concerns that she has just voiced, I would be keen to see them in writing and to engage with her more fully on the matter.
At the Finance Committee, it was noted by local authority witnesses that, although there has been willingness on the part of local authorities and the voluntary sector to work in partnership, there are issues of differing governance and regulation systems to overcome. Are the cabinet secretary and ministers taking any action to assist smoother working operations, to allow the voluntary sector to maximise its extremely valuable role in the provision of public services?
Indeed, we are. We very much encourage third sector organisations to apply professional management methods, both for their own protection and for better delivery of the outcomes that they seek. The most tangible point is that the Big Lottery Fund is funding the development of a bespoke version of the European framework for quality management, which will give the third sector and its interface organisations the opportunity to adopt management practices on a par with the best. As I said earlier, we very much encourage that continuing coming together and the triggering of further discussions involving the third sector to deliver the outcomes that are required under single outcome agreements.
Economic Development (Highlands and Islands)
Highlands and Islands Enterprise received grant in aid of £58.7 million during 2009-10 for economic development activities. It received additional income from the European Union and revenue from capital assets of about £12 million. A final figure for total expenditure on economic development will not be available until the accounts for 2009-10 have been completed.
I am pleased that we have a healthy budget for Highlands and Islands Enterprise. There is one project that HIE has funded that has not reached its full potential: the Cairngorm mountain railway. It is held back by a rule that bars people from leaving the Ptarmigan top station to go on to the mountain. Will the cabinet secretary instruct HIE to do all that it can to get that restriction lifted, so that the railway can reach its full potential?
As an aside, the last time I travelled up the Cairngorm mountain railway, what prevented me leaving the top station was not a rule from government authority but about 15ft of snow—a rather physical obstacle.
In March this year, 53 Highlands and Islands Enterprise employees were made redundant, with an average severance package of £63,600. According to Highlands and Islands Enterprise, the employees could be
As Mary Scanlon will know, with the focus that we have given to Highlands and Islands Enterprise, we have provided very active support to the development of growth opportunities in the Highlands and Islands economy, in addition to maintaining the important and unique role of Highlands and Islands Enterprise in relation to the social and economic development of the most vulnerable and economically challenged areas in rural Scotland. That is the purpose of Highlands and Islands Enterprise, and the obligation on ministers and the organisation’s board is to ensure that the resources that are available to it are most effectively deployed to achieve that vision. That is the approach that we have taken with Highlands and Islands Enterprise—I would have thought that that vision and approach would be respected on the Conservative benches—and we will continue to do that in the years to come.
Scotch Whisky Industry (Meetings)
Ministers regularly meet representatives of the Scotch whisky industry to discuss a range of issues.
I thank the cabinet secretary for that ultra helpful answer.
There has been an extensive dialogue with the Scotch Whisky Association on the question of minimum pricing.
No, there has not.
I am not sure why Mr Brown is shaking his head. I have had conversations with the Scotch Whisky Association about minimum pricing, so I know full well that there have been discussions with it about the question.
Question 13 has been withdrawn.
Bus Services
The Scottish Government is committed to bus services in Scotland. We are taking forward a number of initiatives with local government partners and bus operators to maintain and improve bus services, including statutory quality partnerships, punctuality improvement partnerships and the appointment of a senior bus development adviser.
The minister will be aware that Lothian Buses is the biggest publicly owned bus operator in the United Kingdom. As the company does not have a private shareholder that is seeking to maximise profits, the travelling public in Edinburgh and the Lothians benefit from low fares and one of the most modern bus fleets in the UK. Does he therefore share my concern that City of Edinburgh Council, the largest shareholder in Lothian Buses, has removed from the board a number of directors who are committed to the firm remaining independent and in public ownership? Does he agree that it would be hugely detrimental to staff and passengers if Lothian Buses were sold off to a private operator?
The member will be aware that this minister is a regular user of Lothian Buses services—the number 22 is rarely without my presence.
Do you spend all day on the buses?
I think that some Liberal members think that I am being too liberal with my time on the buses but, believe me, it is highly enjoyable.
Credit Unions
I confirm that we are aware of the Financial Services Authority’s recommendation in its consultation paper to raise prudential standards.
The minister will also be aware of the legislative reform order on credit unions that was promoted through the United Kingdom Parliament just before the election. Does the minister share my concern that the raising of the capital threshold seems to indicate a preference for regional rather than local credit unions? What is the minister’s view of that? Is he worried that the new limits might inhibit the establishment of credit unions, particularly at this difficult time? Has he discussed the issue with his UK counterparts? Does he have any concerns about the reliance on external financing that appears to be part of the assumptions in the consultation paper?
I sympathise with the points that Robert Brown raises. It might be the case that some of the arrangements that are undertaken as part of an exercise to ensure robust financial management arrangements in credit unions will affect the character and nature of some credit unions. Part of the strength of credit unions, as I have seen in many visits to credit unions throughout the country, lies in their location and their proximity to their communities, which engenders confidence on the part of members of the public.
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