Strategic Spending Review
The next item of business is a statement by John Swinney on the strategic spending review. The cabinet secretary will take questions at the end of his statement, so there should be no interventions.
Yesterday, at the University of Glasgow, the First Minister and I launched our Government economic strategy. The strategy brings together every strand of policy to support our purpose of increasing sustainable economic growth in Scotland. It is designed to raise the level of economic growth in Scotland to equal the rate of economic growth in the United Kingdom by 2011. Of course, we want to go beyond that, to ensure that Scotland equals the economic success of small independent European countries. That is what the Government means when we talk of a new age of ambition for Scotland.
A day on, I am proud to deliver to Parliament the first budget of the ambitious Scottish National Party Government. Our economic strategy sets out the route map for higher growth for our nation; the budget sets out how we will invest to deliver greater prosperity for Scotland, to deliver our commitments and to deliver on the hopes and aspirations of the people of Scotland. A copy of the budget is available for each member at the back of the chamber and in the Scottish Parliament information centre.
Since May, we have already taken a number of crucial steps toward delivering on the Government's strategic objectives. To build a wealthier and fairer Scotland, we have refocused the enterprise networks, we have provided this year an additional £100 million investment in our university and college estate and we are legislating to remove the unfair tolls on the Forth and Tay road bridges. To ensure a healthier Scotland, we have taken action to remove hidden waiting lists and we have protected local accident and emergency units that were threatened with closure. To create a smarter Scotland, we have invested an extra £40 million in school buildings, employed more teachers and introduced a bill to scrap fees for students in higher education. To make Scotland's communities safer and stronger, we have committed to invest in our prison estate, we are taking action to tackle the scourge of alcohol-related crime and we have plans to deliver 1,000 extra police on the streets of Scotland, which the Cabinet Secretary for Justice set out earlier this week. To deliver a greener Scotland, we have set an ambitious target of an 80 per cent reduction in emissions by 2050, we have outlined our plans to invest £1.6 billion over seven years in a sustainable rural economy and we have made clear our opposition to new nuclear power stations in Scotland.
The Government already has a record to be proud of, and it is just the start of what we intend to deliver for the people of Scotland. However, our plans for the next three years must be set against the background of the worst financial settlement since devolution. Next year, our budget will rise in real terms by only 0.5 per cent, in comparison with the 11.5 per cent increase above inflation that the previous Administration received in 2003-04. The annual average real-terms increase for Scotland over the next three years is only 1.4 per cent. That situation, when oil prices are at a record high, reminds us of what Scotland could achieve if we had the ability to balance our own revenues against our own spending. It is some contrast that Scotland's budget is increasing in real terms by 0.5 per cent next year, when the budget of equally oil-rich Norway is increasing by almost 10 times that rate, which shows what small independent countries can achieve for themselves.
The budget is delivered against the backdrop of inherited spending pressures from the previous Administration and spending decisions that have been taken in this session of Parliament against the wishes of the Government, such as that on the Edinburgh tram project. No previous Scottish Government has had to plan as tightly or draw on such financial discipline. Against that background, I have acted to ensure that maximum resources flow to key public services.
First, the Government has faced difficult decisions. We are in a tough financial climate and we will not be able to deliver on all our commitments, as we would have liked. We are a minority Government and our budget proposals must be endorsed by Parliament. Therefore, we must consider, in a tight settlement, where policy commitments will also command parliamentary support.
I know that there is insufficient parliamentary support for student debt servicing or for moving from loans to grants, and we must therefore prioritise funding on policies that we can deliver and which will be supported by Parliament. I am therefore not allocating funding for student debt servicing in the period covered by the budget. [Interruption.]
Order. This is a statement, not a debate, and it should be heard as such.
However, despite the constraints that we face, we will deliver funding for a phased transition from student loans to grants, starting with part-time students. We will consult on further student support and graduate debt proposals in 2008, with £30 million available in year 3 to take forward the policy. As I say that, I remind Parliament what we are delivering for Scotland's students by abolishing tuition fees. That measure will go a long way towards providing a better deal for students in Scotland's universities and colleges, and it would not have happened without the SNP in government.
Secondly, in this budget, we will pursue a much more prudent approach to financial planning. We are obliged to—and will—live within the budget that we have been allocated, but we inherited an overallocation in the budget of £220 million. I intend to retain less than half of that overallocation as a key element in my plan to avoid future underspends in the budget. I want all of Scottish taxpayers' money to be used effectively. This Government does not want Scottish taxpayers' money to be locked up in the UK Treasury.
Thirdly, this Government came into office committed to a sustained programme of efficiency savings at a level of 1.5 per cent on an annual basis. In the light of the tighter financial situation, I have decided to increase the level of efficiency savings that will be required across the public sector. The target efficiency savings will now be set at 2 per cent each year, releasing £1.6 billion by the end of the spending review period for investment in front-line services. The achievement of that target will be a significant challenge and I make it clear that everyone in the public sector must play their part in delivering the clearer and simpler government that will make those savings.
Fourthly, I have negotiated with the UK Treasury an unprecedented agreement—an agreement that my predecessors were unable to negotiate—which will give access to our remaining resources, which are currently held at the UK Treasury. That amounts to almost £900 million of end-year flexibility that has been lying in Treasury coffers in recent years. It is Scotland's money and this Government has secured it on Scotland's behalf.
Those four decisions will build on our on-going work to streamline and declutter the government and public sector of Scotland. They will also build on our new approach to government, which will involve reducing significantly the number of quangos, simplifying the scrutiny and inspection regime and introducing a new performance framework based on outcomes for the people.
A key part of this budget and this approach is the development of a new and constructive relationship with local government in Scotland. I am therefore delighted to tell Parliament that I today signed a concordat with the Convention of Scottish Local Authorities on proposals that we both believe will deliver clear benefits for the people of Scotland. It is an agreement based on mutual respect and belief in our shared responsibility to the people of our country. Scotland's local authorities are key partners and that is why this Government will reduce ring fencing, enabling councils to allocate resources according to local priorities; allow local authorities to retain for the first time the full amount of their efficiency savings to redeploy to other pressures; recognise the democratic legitimacy of local government and devolve authority to it to make decisions that reflect local needs; and establish new outcome agreements with local government, aligned with Scotland's national priorities, which will be focused on what we want to achieve together for Scotland.
In return for this new approach to the governance of Scotland, local authorities will work together with the Scottish Government to implement a number of the Government's key manifesto commitments, which I will set out in my statement. In the Scottish Parliament information centre and at the back of the chamber I have placed copies of the concordat that I have reached with COSLA and which all Scottish local authority leaders will be invited to endorse. I stress to Parliament that the package on offer is conditional on the agreement of local authorities to all elements of the proposal.
The concordat between COSLA and the Scottish Government says that this
"represents the best outcome that can be achieved".
It represents for this Government an historic opportunity for national and local government to develop a cohesive agenda—an agenda of common purpose—that will improve the lives of the people of Scotland.
The Scottish budget that I am setting out today represents a crucial staging post on the journey toward a new approach to government. Unlike previous budgets in Scotland, this one will match our spending with the overarching purpose of government, which, for us, is to increase the level of sustainable economic growth. We will do that through each of our five strategic objectives. This is a new and joined-up approach to public spending in Scotland, which will focus all public spending on, and align it with, the achievement of greater Scottish success.
The framework helps national Government, local government, the Parliament and the public to understand our priorities and to hold us accountable for them. As a Government, we are ready to be held accountable for our actions by the people who matter—the people of Scotland.
In our election manifesto we set out our ambitions to build a greener Scotland and, in this budget, we are delivering. Investment will be targeted to help us make much greater use of our substantial renewable energy resource, reduce the climate change emissions from transport, housing and business and improve Scotland's record on waste management and recycling.
We will protect our environment through record levels of investment in Scottish Water's infrastructure programme and we will provide additional funding for the Scottish Environment Protection Agency's efforts to reduce pollution. Further, we will invest record amounts in public transport, providing a total of £2.65 billion over the next three years for our railways, including Parliament's funding for the Edinburgh trams. We will also invest a total of £740 million over the period to support bus services and bus travel and we will increase by 40 per cent spending on direct support for sustainable and active travel. This, along with the work of local authorities, will reduce car dependency and increase the proportion of people using public transport, walking and cycling. That is investment that is good for our economy and the right choice for our environment.
We will do more. Over the next three years, we will invest a total of £154 million as we move towards becoming a zero-waste society, we will provide a total of £45 million for new woodlands, in order to absorb CO2 emissions, and we will create a new sustainable development and climate change fund worth a total of more than £30 million. We will treble support for community and household renewables generation to £13.5 million each year.
Further, because our climate and our environment are important to this Government's purpose and agenda, we will do still more. Our manifesto proposed a saltire prize to encourage innovation in renewables generation. I am proud to confirm today that we will deliver an annual prize fund of £2 million to reward on-going excellence in research. We will also deliver a £10 million horizon prize to attract the cream of the world's scientists, in order to put Scotland firmly on the international map. That will be the largest renewable energy innovation prize in the world, and it will be founded here in Scotland.
Our manifesto also set out our determination to make Scotland's communities safer and stronger and, in this budget, we are delivering. Our spending will help communities to thrive and become better places in which to live and work. We will equip our fire service to respond more effectively to local and national emergencies, with an extra £51 million over the next three years for a state-of-the-art communication system. We will invest an extra £107 million over the next three years in new prisons and an improved prison estate. We will develop a more cohesive approach to tackling the problems of drug misuse, with increased investment in the health and justice portfolios delivering £94 million in total over three years. Further, we will support a more coherent policy on punishment and prisons, including a shift away from short custodial sentences to tougher community penalties, backed by additional funding of almost £8 million over three years.
Before the election, we spoke of growing and vibrant communities across Scotland, and those are what we will deliver. A total of £54 million over the next three years will be made available to increase the capacity of our police service to protect the communities of Scotland and deliver 1,000 more police officers on Scotland's streets. We will take targeted action to help regenerate the most disadvantaged communities with the support of £145 million each year to tackle poverty and deprivation and help more people overcome barriers and get back into work.
The Government has set out how we will work with local authorities, developers and builders to increase the rate of house building in Scotland to 35,000 a year by the middle of the next decade. To meet Scotland's housing challenge, I can announce today investment of £1.47 billion in new and better housing as the Government's contribution to achieving that target.
In our manifesto, we set out the ways in which we would make Scotland smarter. We will work with local government toward improving the learning experience for children and young people by improving the fabric of schools and nurseries and by developing and delivering the curriculum for excellence. An increase to 570 hours of nursery provision in 2010 will benefit 100,000 three and four-year-olds and put us well on the way to meeting our commitment of 50 per cent more nursery provision by 2011. We will work towards ensuring access to a teacher for every pre-school child.
In partnership with Scotland's local authorities, I am delighted to announce that we will move as quickly as is possible to reduce class sizes in primary 1 to primary 3 to a maximum of 18—just as we promised we would do.
We will do more: we will legislate to extend entitlement to nutritious free school meals to all primary and secondary school pupils of families who are in receipt of maximum child or working tax credit in 2009. Following the successful conclusion of this year's pilot, we will further extend free nutritious school meals to all P1 to P3 pupils in 2010. We will give more school pupils opportunities to experience vocational learning, and, in collaboration with other parties in the chamber, we hope to improve support for children, young people and families at risk, including providing allowances for kinship carers of looked-after children.
A smarter Scotland is a key element in meeting our overarching purpose of increasing sustainable economic growth. In order to achieve that, we will once again do more. We will invest a total of £5.24 billion over three years in the further and higher education sectors in Scotland—a cash increase of almost 11 per cent. On capital, with the extra £100 million funding package that has already been announced this year, we will deliver 20 per cent more investment over this parliamentary session than previous plans would have done, maintaining the competitiveness and effectiveness of those sectors. That is record investment in Scotland's future from the SNP Government.
Before the election, we said that Scotland could be healthier, and in our manifesto we set out a series of proposals to deliver the faster local access to health care that people expect and deserve. In this budget, we are investing even more to achieve that healthier Scotland. We will target our spending to support people to lead healthier, longer lives that are economically productive. Our investment is focused on supporting better health across Scotland, reducing inequalities in healthy life expectancy and further improving our health service. That is why we will invest a total of more than £37 million over three years to strengthen primary health care in the most deprived areas of our country. It is why, as part of an overall package of more than £350 million over three years of new money in health improvement and better public health, we will invest a total of £85 million to reduce the harm done by misuse of alcohol, a total of £9 million for further action to reduce smoking and a total of almost £35 million on diet and physical activity for health and to help prevent obesity.
As the First Minister said a few moments ago, there will be additional funding for sport—extra money, increasing funding from £34 million to £43 million each year—over and above the £22 million over three years that is now earmarked to deliver a successful Commonwealth games in Scotland in 2014. Of course, there will be more significant investment, outwith this spending review period, in the Commonwealth games.
There will be extra investment over three years in prevention, screening and early detection of serious illnesses, and investment of £64 million for an immunisation programme to protect women against cervical cancer. We will provide £54 million to screen, for MRSA, people admitted to hospital and to help prevent the spread of infection. We will invest £41 million in a national screening programme to detect serious illnesses early.
There is more. Over the spending review period, there will be £30 million to ensure more flexible, out-of-hours access to primary care and £97 million to phase out prescription charges in order to ensure that sick people are not financially disadvantaged. Further, £20 million will be invested in better access to national health service dental services by introducing a prevention-based school service, starting in the most deprived areas, and by establishing a third dental school for Scotland in Aberdeen.
Central to our manifesto was a commitment to the people of Scotland for faster treatment on the NHS. That is why I am proud to confirm today that the Deputy First Minister has also identified £270 million—£90 million each year—to ensure that by the end of 2011 nobody will wait longer than 18 weeks from general practitioner referral to treatment for routine conditions. That is real progress under the SNP Government.
Before the election, we said that we would make Scotland wealthier and fairer, and we will deliver on that promise. The Government has made sure that we are targeting our spending effectively to increase our competitiveness; to make Scotland a more attractive place in which to live, work and invest; to generate more opportunities for work; and to ensure that the benefits of a wealthier Scotland are shared fairly throughout the nation. The enterprise networks, which were recently refocused by the Scottish Government, will receive £1.6 billion over the next three years to support the process of economic development throughout Scotland, supported by other measures to stimulate economic growth.
That is why we are increasing investment in Scotland's strategic transport networks and will provide more than £2.5 billion by 2010-11 to support the efficient movement of goods and people. It is why we are increasing support for ferry services from £74 million this year to £111 million by 2010-11, which, among other measures, will allow us to take forward our proposed Western Isles road equivalent tariff pilot. It is why we are providing record levels of funding for an enterprising third sector, with a £63 million development programme and a £30 million investment fund to encourage greater investment in assets, business development and the skills of those who work in the sector. It is also why we are supporting record levels of investment by Scottish Water to ensure that it delivers the levels of customer service and efficiency that we require in Scotland.
We entered the election in May offering a social democratic contract with the people of Scotland. Throughout my statement, I have highlighted the many ways in which we are honouring that contract, with higher levels of investment in front-line public services. The second part of that contract was our commitment to lower and fairer taxation. Our small businesses are the life-blood of our local town centres and the beating heart of our communities. To provide the competitive advantage that those small companies require, I am delighted to announce to Parliament today that, from April next year, 150,000 small businesses throughout Scotland will have their business rates reduced and, in due course, for many, removed by the SNP Government. [Applause.]
Order.
I am also delighted to announce that, as part of the historic agreement that we have reached with local authorities, I am putting in place the resources to deliver a freeze in the council tax, just as we promised.
I have taken the right decisions to release resources for key public services, and I have constructed a package that will create new opportunities for the people of this country. The budget represents the start of a new era in Scotland's Government. Today, we take a major step toward aligning the whole public sector in support of the Government's purpose and objectives.
We are fulfilling our promises to deliver shorter waiting times for health care, smaller class sizes in the early years, reduced rail journey times between our major cities, better support for drug rehabilitation, an ambitious programme to tackle climate change, and the reduction and then removal of business rates for many of our small businesses, and we have put in place the resources to freeze the council tax, as we promised.
This is a budget to set Scotland on the route to growth. It heralds a new era of optimism, opportunity and delivery for all of Scotland. With investment in our public services matched by lower and fairer tax, I believe that it meets the aspirations of the people. I commend the budget to Parliament. [Applause.]
Order. The cabinet secretary will now take questions on the issues raised in his statement. I intend to allow about 50 minutes for questions, after which we will move on to the next item of business.
I thank the cabinet secretary for his statement and for the advance copy of it.
On hearing today's statement, there is a real sense of "At last!" On at least 60 occasions in the chamber, ministers have been asked about their policy intentions and have told us that we must wait for the strategic spending review. That is what we have done. The implication was that, come that day, all would be revealed. It was not. In fairness to Mr Swinney, all budget statements produce more questions than answers.
For 18 months, the SNP told Scottish students that they would write off their debt immediately. This afternoon, it took Mr Swinney 18 seconds to ditch that pledge. Does he agree that he has let those students down?
On 5 September, the First Minister confirmed that class sizes in all primaries 1 to 3 would be 18 or fewer by 2011. Will Mr Swinney confirm that that pledge has been broken today?
Mr Swinney referred to the Government's economic strategy, launched yesterday, which rightly pointed to the importance of skills in building economic growth. How many new apprenticeships, how many more graduates, and how many more schools-based vocational courses will the budget fund to drive forward that economic growth?
If Iain Gray has had all those weeks and all those opportunities in which to prepare, I would have thought that we would have a little bit more than we got in that question.
I have come to Parliament on the issue of student debt, and I have completely answered the point about student debt. I have set out what the Government is doing. It is a bit rich for Labour members to lecture me about students, when—having said that they would never do so—they introduced tuition fees. I will take no lessons on that.
I thought that Iain Gray of all people would have welcomed the signing of a concordat between the Scottish Government and COSLA—it is an excellent document, which brings together national and local government to deliver a variety of strong policy commitments, including the reduction of class sizes to 18 for primaries 1, 2 and 3.
One of the strengths of this Administration's new way of governing is that it brings together all the areas of policy to support our economic growth agenda, which will deliver the increases and improvements in skills that are required. It is essential that the process of investment that the Government has set up will deliver on those ambitions and, most crucially when it comes to graduates, guarantee that there are decent economic opportunities for those young people to stay in Scotland, make their lives here, and make their contribution. The Government will be right behind them.
I have three straightforward questions. First, the concordat with COSLA sets out spending plans for three years. Will the cabinet secretary confirm whether the council tax freeze will last for three years? If so, what does that mean in relation to the local income tax?
Secondly, also on the concordat, there have been many discussions in the chamber over previous local government settlements. Councils always say they need more money and the Government always says that they have more than enough. No doubt the cabinet secretary is confident that he is supplying enough additional money in the spending plans to allow all local authorities to freeze the council tax without reducing their current level of spending. If he is confident of that, does he agree that an independent assessment of that, by an independent body, would be a useful contribution to public debate on the public finances?
Finally, on the three years in the spending review document, will the cabinet secretary set out how much it would cost if, in each year, we were to go above and beyond what the Cabinet Secretary for Justice outlined on Monday in relation to police numbers, and recruit 500 additional, new, extra police officers?
I have given COSLA a three-year financial agreement. Every local authority sets its council tax annually—each authority must make that decision. I accept that each authority has the right to make that decision annually. The arrangement that I have put in place provides adequate funding to freeze council tax for three financial years, but each council must take its own decision. I stress what I said in my statement: the package that I have offered and to which COSLA has agreed is conditional on a local authority's accepting all its elements.
On the local government settlement, Mr Brownlee might have heard COSLA's president say on the radio this morning:
"I would not do a deal with any government that left local government short".
We have reached a point of agreement at which local authorities are adequately funded.
Mr Brownlee's final point was about police numbers. The Government has set out its commitments on police numbers, which are contingent on putting 1,000 more police officers on Scotland's streets. That is what we said that we would do. If other parties or voices come together with alternative proposals to those that the Government has made in its balanced package, it is up to them to advance those proposals in the parliamentary process. As I have told the Finance Committee, I will seriously consider propositions from that committee on the budget. However, I remind Mr Brownlee and the whole Parliament that if any provisions in the Government's budget are to be changed to allocate more money to one priority, that money must come from somewhere else.
John Swinney should have used his statement to admit what we all know: that the SNP's sums simply do not add up. That would have been difficult, but it would at least have been honest. Instead, he presents a budget of sham promises and shifty auditing—a budget of deception, spin and half-truths.
On public services, which people care about most, the budget deceives the most. On class sizes, police officers and nursery schools, the SNP has failed to fund its commitments. The SNP promised everything to everyone and now it cannot deliver.
On the environment, housing and free personal care, the SNP's promises are unravelling. Student debt remains the ultimate SNP sum that never added up. Our students have been betrayed and, according to the figures, our universities and colleges have been betrayed, too.
We know that they know. It is shocking that SNP members now do not care. They have spent the past three weeks telling journalists that they will be forgiven for all their broken promises if they can freeze the council tax.
Question.
A question please, Mr Stephen.
Today, the SNP has not even delivered that freeze. So to ask—[Interruption.]
Order.
How many councils throughout Scotland have given John Swinney a commitment to freeze council tax? Answer? How many councils throughout Scotland have given a commitment to deliver class sizes of 18? How many councils have promised to deliver 1,000 new police officers in Scotland?
Each?
Order. Questions to the minister, please.
Look at the fiasco of Monday's announcement on the police. The SNP started the day with the promise of 1,000. By lunch time, the figure was down to 500. By the end of "Newsnight Scotland" it was possibly zero, although it was hard to say precisely because, said the bold MacAskill, officers are sometimes away on training courses and can be hard to count. The SNP was crystal clear in opposition, but now its promise unravels.
John Swinney, the question is: deal or no deal? Is there a deal with councils so that, by 2011, not a single young child will be in a class of more than 18, or has that been dropped? Is there a deal to deliver 1,000 extra police, or has that been dropped? Will John Swinney take responsibility if council tax rises by a single penny anywhere in Scotland in the next three years? Deal or no deal?
If anyone needs to go on a training course, it is Nicol Stephen. I am all for ensuring that we have more police officers on the streets of Scotland, but even I accept that having 1,000 new police officers in every council area would result in our streets getting a bit congested. [Interruption.]
Order.
I think that Nicol Stephen's contribution left a little bit to be desired.
Over the summer, the Government has engaged in a process with local authorities that, based on their record in Government, Labour and the Liberal Democrats would not recognise. With local authorities, we have recognised that many issues such as nursery provision, class sizes and police numbers require local authorities and national Government to co-operate and work together. That is what I worked to create over the summer, so I am absolutely delighted that the concordat has been agreed and signed not just by the president of COSLA, but by its vice-presidents: Councillor Neil Fletcher, who is a Liberal Democrat; Councillor Alex MacDonald, who is an independent; Councillor Corrie McChord, who is from the Labour Party; and Councillor Rob Murray of the Scottish National Party. The concordat was signed on the Government's behalf by the Cabinet Secretary for Education and Lifelong Learning and myself.
The concordat is evidence of local authorities coming together to share objectives and purpose with the Government. [Interruption.]
Order.
It is important that we ensure that the priorities that we have agreed under the concordat are taken forward to deliver the important investments in public services that all of us—in national Government and local government—want to see happen.
We come to questions from back benchers. Understandably, an enormous number of members want to ask questions, so I will appreciate it if questions can be kept as brief as possible.
I remind the Cabinet Secretary for Finance and Sustainable Growth of the old election song, "Things Can Only Get Better." Let me say that they just have. Things have just got much better for Scotland.
Will the cabinet secretary join me in congratulating Pat Watters and his colleagues on signing an agreement that freezes council tax while bringing about a 13 per cent increase in the capital spend of local authorities?
Finally, given that oil is now up to $100 a barrel, will the Scottish Government go back to Westminster to demand the rest of our oil money so that we can spend even more on not only meeting but exceeding our promises to the Scottish people?
Obviously, I am pleased that we have reached an agreement with COSLA and look forward to its being agreed with local authorities in the days and weeks to come.
On the oil question, Mr Neil will have heard me point out how our situation contrasts with that of Norway, where a very different budget picture is emerging despite our complementary positions as regards oil. Of course I share Mr Neil's aspirations and look forward to their being realised in the period ahead.
Just a few moments ago, the cabinet secretary said that he recognises the democratic legitimacy of local government and will devolve authority to it to ensure that decisions reflect local needs. However, he then says, "If you don't do the deal, you don't get the money." There is no democratic accountability in that process, Mr Swinney—[Interruption.]
Order.
I can tell members how the cabinet secretary made the deal: he sold out on every one of his manifesto pledges—on class sizes, nursery access and all the rest—that were to be delivered through local government.
In its economy booklet—which was, I must say, a fairly slim volume—the SNP indicated that it would allocate £955 million to freeze council tax and introduce a local income tax. The budget that is before us today indicates an increase of around £480 million in real terms. First, is the SNP backtracking on when a local income tax will be introduced? Secondly, does that backtracking change the calculations that the SNP put before the people of Scotland about how much hard-working families would have to pay as a result of the local income tax?
A consultation document on the local income tax legislation will be issued before the turn of the year. Mr Kerr will have an opportunity to contribute to that consultation. As always, I look forward to reading what he has to say. I have been reading a lot of what Mr Kerr has been saying—I will come back to that point in a moment. We must consult and legislate in Parliament on the local income tax proposal. It is no secret that there is division in Parliament on the subject. Our plans will be set out as Parliament takes decisions on the legislation, as is proper and correct.
I return to what Mr Kerr has been writing in the past few days. My Sunday afternoon was interrupted by this bold statement from Mr Kerr, in a press release from the Labour Party. He stated:
"It's now clear what is happening. The SNP are prepared to drop all their manifesto pledges".
Mr Kerr should listen to my statement, see the manifesto pledges delivered and compliment us on our achievements for Scotland.
I thank in advance the Cabinet Secretary for Finance and Sustainable Growth, the Cabinet Secretary for Justice and the Cabinet Secretary for Health and Wellbeing for agreeing to appear at a joint meeting of the Health and Sport Committee, the Justice Committee and the Local Government and Communities Committee to answer detailed questions on their budget lines for alcohol and drugs issues, which cost the Scottish taxpayer several billion pounds per annum.
I welcome the additional investment for children at risk, better support for drugs rehabilitation and funding to tackle alcohol abuse. Will the cabinet secretary focus specifically on the 70,000 or so children who, as the Health and Sport Committee learned today, are living in households with substantial drug and alcohol problems? Without intervention, those children may well become fourth-generation addicts.
I thank the convener of the Health and Sport Committee for her question. I am pleased that the three cabinet secretaries will appear before the three committees to explain the Government's position on the drugs and alcohol issue. That is a great innovation from the committees, and I look forward to the discussion.
Christine Grahame heard the points that I made in my statement about children at risk and how we will take action, in concert with local authorities, to tackle the issue. An element of parliamentary activity is required in that respect. I hear what she says about the 70,000 children who are living in households with severe drug and alcohol issues. The Government is determined to tackle that enormous problem and to work as effectively as possible on it. I hope that the discussions that we will have in committee, which I am sure will be constructive, will help us to find more of the answers, as we all accept that that is difficult. The contribution and perspective that different shades of opinion provide will be welcome in that discussion.
The SNP Government said that it believed in building safer communities and tackling antisocial behaviour. Where exactly will we find that commitment in the budget? Can the cabinet secretary point us to the evidence? Can he explain why the safer communities budget appears to have been halved from £71 million to £32 million?
The First Minister and the Cabinet Secretary for Justice have said that they believe in increasing the number of community wardens. Does the Government intend to do that, and where are the resources in the budget to meet the commitment?
Finally, what has happened to the community justice services budget—a key budget that covers the roll-out of drug treatment and testing orders, drugs courts and so on? The plan was for £103 million to be available in 2007-08. There may be smoke and mirrors here—I would like to know whether there are—but the budget for community justice services now appears to be £21 million. Where has the missing money gone? Can the cabinet secretary assure me that central Government still believes that it should have a direct policy bearing on the commitment to community sentencing, or is this just smoke and mirrors?
There is a fundamental point about the budget that members will have to take into account in relation to strategic decisions that the Government has taken on the ring fencing of budgets. The Government does not believe that we should have the degree of ring fencing of budgets that has existed historically. We believe that those resources are better deployed and controlled by local decision making in local authorities. That might sit uncomfortably with members who used to sit in this Parliament micromanaging the work of local authorities throughout the country, but it does not sit uncomfortably with this Government. We believe that local authorities should be able to break out of the constraints of ring fencing and to deploy resources as they think fit.
On Pauline McNeill's specific point regarding that particular budget line, I undertake to write to her as quickly as I can, as I cannot give her a definitive answer now. I will write to her in early course.
The First Minister and the cabinet secretary have set out the priority of tackling climate change and introducing a greener Scotland culture. Will the cabinet secretary elaborate on those aims that are represented in the budget and say which specific measures will be taken to promote sustainability in Scotland? Does he agree that a sustainable environment goes hand in hand with sustainable rural communities and, in so doing, does he agree that communities in the Western Isles, long weary of politicians merely talking vaguely about a road equivalent tariff, will be delighted with today's announcement that such a tariff is on its way and will transform those islands' economies?
A number of measures to tackle climate change will be encompassed in the bill that we will introduce as a mechanism for applying statutory targets for reducing emissions. I have announced a tripling of the funding for community renewables and microregeneration. Many elements of the £1.6 billion rural development programme will structure many of the Government's interventions in the rural economy and environment, which will help the sustainability of the rural and island communities that Dr Allan represents.
In addition, I welcome the member's comments on the road equivalent tariff. That work is under way in the Government today.
Governments come and Governments go, but sometimes the same old mistakes are repeated. Will the minister give me a guarantee that he is not making the same mistake that at least two of his Liberal Democrat predecessors were keen on—mistaking public sector growth for broader economic growth? The two are very much not the same.
Will the minister give a specific undertaking that he will take every action possible to accelerate the delivery of business rates reduction for small businesses to ensure that no small businesses are left waiting another year to have their business rates cut?
Mr Johnstone was looking at the document so closely when he spoke about repeating mistakes that I thought we had made a typing mistake. That would depress those of us who have been looking at the document for a long time.
Mr Johnstone's point about public sector growth is very interesting. If we were to take the view that the public sector has nothing to contribute to economic growth, we would be missing a trick. Tremendous collaboration is going on at the Edinburgh royal infirmary at Little France between the University of Edinburgh, NHS Lothian and Scottish Enterprise in drawing together a variety of medical research activities that are resulting in formidable pharmaceuticals and health research in Scotland. [Interruption.] Mr Kerr mutters from the side, as always, but I am perfectly prepared to pay tribute to the previous Government for some of the steps that it took to draw together such work.
The First Minister and I discussed with the international advisory board of Scottish Enterprise a week past Thursday using the public sector, and particularly the health research that it carries out, for many more commercial applications. Let us not take the view that public sector activity somehow does not contribute to economic growth, because that misses the point entirely.
Mr Johnstone's second point was about small businesses. I set out in the document that the small business scheme will be implemented fully by April 2010, but I have included the caveat that if there is any increase in resources—particularly through the medium of non-domestic rate income—that means I can accelerate the implementation of those business rates cuts, I will do so and report to Parliament in due course.
The cabinet secretary said in his statement that he was making a record investment in Scotland's future. However, what we have seen today is a budget of broken promises on, for example, student debt and class sizes. Will he confirm that the Government has today scrapped the national priorities action fund of £250 million, which ensured that funding was spent on, among other things, additional support for learning, discipline, new technology, support for parents and additional support staff?
Parents and teachers who look at this budget will see that there is a real-terms cut of around 5 per cent in the schools budget and of almost 20 per cent in the children and young people budget. Will the cabinet secretary confirm whether there is such a cut in the schools budget—yes or no? Is there a 20 per cent cut in the children and young people budget—yes or no?
I think that Rhona Brankin asked two questions that required a yes or no answer—and the answer to both is no.
In response to Pauline McNeill, I said that we have changed the way in which the budget document is developed. We have removed ring fencing from a variety of funds and passed those funds to local authorities for their consideration. With regard to the national priorities action fund and the schools fund that Rhona Brankin highlighted, my question to her is: who does she think was spending the money in the first place? It was being spent by local authorities. We are simply giving them opportunities to decide their own local priorities.
The other thing that amazes me about Rhona Brankin's question is that Iain Gray and others have been telling me for weeks that I would have much more money at my disposal than Donald Dewar ever had. Well, I have—and I have spent it wisely. I would have thought that Rhona Brankin would have given me a few plaudits for that.
In that case, I will begin by giving the cabinet secretary a few plaudits. I welcome his comments on fire and rescue services, drug misuse and tougher community sentences. However, there the plaudits end.
Having ditched your manifesto commitment to provide 1,000 more police officers for Scotland, will you please explain how you intend to deliver the watered-down plan for 500 recruits and 500 redeployed or retained officers that you have replaced it with? In response to questions at yesterday's meeting of the Justice Committee, the Cabinet Secretary for Justice admitted that this year there would be only 726 new recruits, which is the smallest number in any of the years since devolution. Moreover, although he said that the present scheme to retain retiring officers was not working and that a new scheme would be needed, he crucially could not give us any detail about that scheme or a timetable for when it would start having an impact on the numbers retiring. Moreover, the Scottish Police Federation has said that, given the significant work done by the previous Administration in this area, it thinks that the scope for further redeployment is minimal. Given all that, can you please explain how you intend to deliver on your watered-down commitment on police numbers?
I cannot, but I am sure that the cabinet secretary can.
I am sure that you would relish the opportunity to be where I am today, Presiding Officer.
Let me say ever so delicately to Margaret Smith that, as far as police numbers are concerned, the Cabinet Secretary for Justice inherited the recruitment plan from the previous Government. I am rather surprised to find her savaging the previous Government's record in Parliament today.
The Cabinet Secretary for Justice has explained very clearly how the Government intends to proceed on this issue. Through a combination of recruitment, retention and redeployment, we will put 1,000 more police officers on to the streets of Scotland. That is what we said we would do and I am sure that that will be welcomed in the communities of Scotland, which will benefit from the presence of those officers.
With the announcement of an agreement between local government and the national Government, the Cabinet Secretary for Finance and Sustainable Growth has delivered an historic budget for Scotland. I am sure that parties on all sides will recognise the need for such a constructive relationship. In agreeing the concordat and funding arrangements for local government, will the cabinet secretary detail what specific areas the partnership approach will deliver on and how it will deliver across all departments?
Mr Adam will forgive me if I do not read out the whole concordat, which stretches to quite a number of pages, but it sets out clearly the nature of the relationship that will exist between local and national Government and the priorities that will be focused on. There are clear mechanisms in the concordat for extensive dialogue between the leadership of COSLA and ministers. The Cabinet Secretary for Education and Lifelong Learning and I will see the COSLA presidential team on a bimonthly basis, and the Cabinet will meet the presidential team of COSLA annually to discuss issues of mutual interest.
The concordat sets out the various policy commitments that local authorities will work with Government to deliver under the arrangements that we have put in place. It also sets out the way in which we will develop outcome agreements, so that we focus on what is achieved and delivered, and what needs to be delivered, in specific areas for the benefit of local communities.
I would like to ask the cabinet secretary about his comments this afternoon on ring fencing, to which I paid great attention. I note that there does not seem to be an increase in the budget for services for mental health, despite the great resources that he claims to have at his disposal, and it would appear that the mental health specific grant is being abolished. In its manifesto, however, the SNP promised:
"An SNP government will support the development of mental health … services … in each community health partnership … backed with ring-fenced funding".
Perhaps he could explain that inconsistency of approach.
Further, in relation to waiting times, I would like to ask why he said in his statement this afternoon that
"nobody will wait longer than 18 weeks from general practitioner referral to treatment for routine conditions."
Why does he use the word routine? Surely his promise applies to all patients.
The Government recognises that mental health issues can often be a factor in getting back into employment and I made the point that we are taking steps to ensure that more people are able to do that. We are serious about supporting individuals with mental health issues. Removing the ring fencing from the mental health specific grant means that a fund that is currently delivered through local authorities will be delivered in the same fashion, with control devolved to the localities. I cannot understand why the Labour Party seems to be so resistant to giving local people control and accountability.
Margaret Curran also asked about the health point that I made in my statement. That reference used the current terminology for waiting time arrangements, which we inherited from the previous Government, so if she is surprised by that I suggest that she checks some of her old papers.
I commend the cabinet secretary for his statement and, in the context of the limited powers of this Parliament, for having done so much with such a poor settlement from Westminster. He mentioned the third sector, including the voluntary and community organisations that play a vital role in delivering services and caring for many of Scotland's vulnerable communities. Can he confirm that he has announced that hugely increased resources, including £93 million for investment and development, will go to that sector, and that the many organisations that have been concerned about their future, given the scaremongering predictions of some members of the Parliament that organisations would lose funding, can be assured that the third sector has the whole-hearted and tangible support of the Scottish Government?
The third sector is close to my heart. I greatly enjoyed the work that I undertook with the third sector over the summer, when I visited a number of fascinating projects. Indeed, I believe that I will be visiting a third-sector project in Keith Brown's constituency in the next few weeks, and I very much look forward to that.
There is an increase in the third-sector development budget, and a new Scottish investment fund is being created to make available, by 2010-11, £16 million of resources for investment in business development and skills in the social enterprise sector, which will be welcome. I want to make it clear that the Government has the strongest regard for the work undertaken by the third sector and that we will do everything in our power to work with third-sector organisations to realise their ambitions.
When the cabinet secretary referred to tough choices, did he mean choices about investment in flood prevention and coastal protection? How can he justify leaving 100,000 households at risk of flooding without the guarantee of investment? Will he confirm that investment in flood schemes will no longer be ring fenced but will, in every local authority in Scotland, compete against schools, roads and a host of other vital services? How much does he expect to be spent by local authorities on flooding in each of the next three years? Will it include the extra £20 million that should come from the Barnett formula? Will the sum take into account specific needs, which vary substantially across urban and rural Scotland?
The Government has transferred to local government the responsibility for the flood prevention budget. That is part of ensuring that local authorities are better able to take forward the issues that they are concerned about in relation to flood risk and flood management. I point out that in the past there has not been a terribly good record in the deployment of funds on projects to meet the expenditure that has been allocated to deal with flooding. We want local authorities to be involved in taking the work forward and the budget provides the flexibility for them to do that.
The cabinet secretary said in his statement:
"The annual average real-terms increase for Scotland over the next three years is only 1.4 per cent."
Can he confirm that that means, in plain English, that this Government has more money at its disposal to finance devolved services in Scotland than any previous Government in the history of our country, before or since the establishment of this Parliament? It is about time that this Government took responsibility for its decisions and actions, rather than always trying to blame somebody else.
I am very surprised at Mr McLetchie asking such a question—that does not seem like the Mr McLetchie that I listen to all the time.
I thought that I had answered that question in my statement. There is a real-terms increase in the budget: more money, above inflation, has come to the Scottish Government. I point out to Mr McLetchie that the spending profile is not an even 1.4 per cent in each of the three years; it is 0.5 per cent, 1.6 per cent and 2.3 per cent, so spending is weighted towards the latter part of the session.
It is more than ever before.
I have no idea, Presiding Officer, whether Mr Rumbles is trying to catch your eye to ask a question, but he is terribly exercised about the whole thing.
I am happy to confirm, for the benefit of Mr Rumbles, as he seems to want to hear it directly, that there is more money in the budget—above inflation—this year, next year and the year after. All I say is that it is a bit odd that, within the precious United Kingdom, which I know is so important to Mr McLetchie and Mr Rumbles, the increase is 0.5 per cent in the next financial year, when in independent Norway it is 10 times that rate.
Why is it that the figure for residential accommodation for children, which appears on page 127 of the cabinet secretary's budget document, shows no increase? There is not an increase of 0.5 per cent, 1.4 per cent or 1.6 per cent—there is no increase over the budget period.
In Parliament on 13 September, Maureen Watt confirmed to my colleague Robert Brown that the education ministers had made a funding bid to the Cabinet Secretary for Finance and Sustainable Growth to deliver in full the commitment to reduce class sizes in P1, P2 and P3. What is the figure that they bid for and will he publish it? How much has local government been told that that commitment will cost?
Finally, with reference to figures in annex B of the budget document, why is it that under this Government the proportion of the Scottish budget for education and lifelong learning will fall from 7.89 per cent this year to 7.56 per cent in 2011? Why has the proportion of the budget for education and lifelong learning been decreased?
On residential accommodation, an enormous number of budget pressures have to be wrestled with—
You froze it.
I am sure that the member's colleagues who were Government ministers know that there are an enormous number of competing demands. There are all sorts of issues to do with demography and the needs of individuals that have to be met, and the Government tries its best to achieve a balance.
In a variety of areas, we have tried to make the resources at our disposal go much further and achieve much more, by ensuring that we give the people who, in the Government's opinion, are very good at delivering services locally through local authorities the freedom to deliver those services. That is exactly the route that we are taking to reduce class sizes: to deliver that reduction in partnership with local authorities.
The member's point about the education and lifelong learning budget is explained by the fact that in a host of areas there will be transfers of resources out of particular budgets into the local authority block. That reflects differences and changes in the budget.
We just might get through everyone who wants to ask a question if members would please stick to one question per person from now on.
During recent months the Cabinet Secretary for Education and Lifelong Learning has made clear her commitment to delivering better education and care in the early years of a child's life. The next generation is the most important place to start work to deliver the Scotland that we all want. That is not just about class sizes; it is about nursery provision—
Question, please.
What steps will the Cabinet Secretary for Finance and Sustainable Growth take to ensure that the SNP Government will provide the best nursery provision for all Scotland's children?
In my statement I said that the Government is well on the way to achieving our targeted increase in nursery provision. We will be close to achieving our target by 2010 and on current projections we will achieve the target during this parliamentary session.
Given that significant, sustained and real-terms increases in the culture budget during the past few years meant that the culture budget was rising inexorably towards 1 per cent of the Scottish budget, why has culture's percentage share fallen back significantly this year, as a result of a minimal cash increase? What does that mean for outstanding initiatives of the previous Administration, such as cultural co-ordinators in schools and the youth music initiative? What does it mean for expanding access to cultural opportunities and for the proper support of our great performing companies? If we also consider the axing last week of the local authority sections in the draft culture bill, what kind of commitment to culture is being shown by a Scottish Government that talks big but—again—fails to deliver?
Strong support has been given to the national companies in the budget settlement. The Government has already made more money available for the development of festivals in Edinburgh. A range of significant cultural contributions will be realised by investment in such activity.
If Mr Chisholm thinks that the spending of nearly £190 million on culture is somehow insignificant, it is clear why the previous Administration was frittering money through its fingers. This Government will not do that.
I declare an interest in asking this question. I welcome the cabinet secretary's commitment in the "Scottish Budget Spending Review 2007" to
"continue our work on addressing violence against women and tackling domestic abuse."
Will Mr Swinney assure me that the voluntary sector will continue to flourish, given the changes that will take place?
Gil Paterson raises an important and sensitive aspect of the delivery of policy. Support to women who are in a violent situation at home or in any circumstances is important and the Government attaches a high priority to the issue. In my response to Keith Brown I made clear the Government's support for voluntary organisations. As part of my general message to the public sector in Scotland, I say that there is every requirement to use more voluntary sector organisations to deliver important services, because in many respects the voluntary sector does that with tremendous skill and effectiveness, to the benefit of the people whom it serves.
I understand that the cabinet secretary enjoys dismissing the comments of Labour members. However, will he ignore the comments of Shelter Scotland, the Chartered Institute of Housing in Scotland, the Scottish Council for Single Homeless, Scottish Churches Housing Action, and local authority chief housing officers when they say that next year's budget for new affordable homes has been cut by 6 per cent in real terms and that the new Scottish Government's budget figures will fail spectacularly to provide the 30,000 affordable rented homes that Scotland needs by 2011? Are they wrong, cabinet secretary?
The pattern of expenditure over the next few years will see significant increases in the affordable housing budget in the portfolio. Over the period that lies ahead, formidable increases in the budget will come forward. The Government is already consulting on the work that we are taking forward to deliver a significant increase in housebuilding in Scotland. In my opinion, as a result of the decisions that the Deputy First Minister has taken, the social rented sector has the tremendous prospect of being able to achieve a greater contribution. I am sure that Parliament will give further consideration to the issues in due course.
Does the cabinet secretary recall that the SNP promised in its manifesto to introduce a first-time buyers grant of £2,000? Many housing professionals and commentators criticised the measure on the ground that it would fuel house price inflation. I was unable to study the minister's statement in detail and I found no evidence of provision for the £2,000 grant, so will he tell me whether the grant will be introduced in year one, year two, or year three? Or did a big boy do it and run away with that promise, too?
I am not sure whether Mr McMahon was in the chamber for the housing statement by the Deputy First Minister and Cabinet Secretary for Health and Wellbeing. If he had been, he would have heard her clear explanation that the Government is consulting on the first-time buyers grant, along with a variety of issues in this policy area. Obviously, financial decisions will be taken in light of the consultation.
In his statement, the cabinet secretary made much of strategic thinking. My question is on health care. I direct him to the strategic thinking that his Government colleagues have expressed in the chamber on the shift from acute care to care in the community. Although the announcement of £37 million for primary health care in the most deprived areas, and £350 million of new money for health improvement is much to be welcomed, they are to be welcomed, nevertheless, in the context of a budget with a £10 billion heading. In the document, I am at a loss to find any significant commitment to that essential strategic shift in health care. I can find nothing that backs up the strategic thinking shift that I think the Deputy First Minister and Cabinet Secretary for Health and Wellbeing, who is sitting next to him, appeared to make.
I recognise the significance of the point. The budget contains specific measures under which we have allocated resources to support the shift to primary care. I am sure that Mr Finnie will acknowledge that many of the costs in the existing health care provision are very much tied up in staff costs. Obviously, if we are to change the way in which services are delivered, we will do that by changing the way in which staff deliver those services.
I hope that Mr Finnie has not somehow taken from my budget statement that there is inflexibility in changing the way in which the health service is delivered. I have seen a number of examples of how a change in staff responsibility and activity in the health service can lead to a fundamentally different service—one that involves earlier intervention before problems become acute. That can be done not by changing big swathes of the budget, but by asking different people to do different things. I will leave that thought with him in respect of our ideas and priorities for the budget for health.
I can take a brief final question from Richard Baker.
Will the cabinet secretary tell the chamber where in the budget the funding can be found to match, brick for brick, Labour's policy on building new schools? On universities, I understand that the revenue increase is just 2.9 per cent over the next two years, which is well below what was asked for. Will he confirm that that is the case, or is the increase anywhere nearer to the 18 per cent additional increase that was made in the last spending review?
Richard Baker must compare apples with apples. The funding settlement that we have for the next three years is of a fundamentally different character and profile from the settlement for the previous four years. That is the reality of a much tighter financial envelope.
We have made clear in the presentation of the budget how much importance we attach to the university sector's role in the Government's wider enterprise and economic agenda. I assure him that the announcement that the Cabinet Secretary for Education and Lifelong Learning made a few weeks ago of an extra £100 million investment in the university and college estate was warmly welcomed by the university and further education sectors and contributes to dealing with the fact that we have fewer resources at our disposal in this spending review.
On the school building programme, if Mr Baker looks closely, he will see that there has been a pretty generous allocation for local government expenditure on school buildings, which I am sure that he will welcome enthusiastically.