Budget Process 2003-04: Stage 2
Good morning. The first item of business is a debate on motion S1M-3708, in the name of Tom McCabe, on the Finance Committee's seventh report in 2002, entitled "Stage 2 of the 2003/04 Budget Process".
It is a pleasure to present the report on the budget, which—as members will know—contains excellent news for public services and private interests alike. The main thread that runs through the Executive's draft budget is very substantial increases in real-terms spending.
The Finance Committee met from September through to November to complete its report. The Parliament's subject committees also met to consider the spending plans of the various Executive departments. I take this opportunity to thank our clerking team and our adviser, Professor Arthur Midwinter, for their professionalism and steadfast advice and support.
Over past years, the Finance Committee has sought the views of communities throughout Scotland. This year it held consultative sessions in Orkney at stage 1 and the isle of Skye at stage 2. Four main concerns were expressed in the isle of Skye: the impact of Skye bridge tolls; the mismatch between the housing market and a growing population; the inadequacy of local and wider area infrastructure; and concern over the impact of the forthcoming Homelessness etc (Scotland) Bill.
The tolls on the Skye bridge are a matter of severe irritation. Even when the principal issue is laid aside, there seems to be considerable scope for improving the administration of the scheme. I hope that the Executive will take strong note of the concerns expressed by local people on the isle of Skye.
I will move on to the substantive matters surrounding the draft budget. First, it is fair to say that the process is being refined year on year and that the financial scrutiny review, which the Finance Committee is undertaking, will shed more light on possible improvements.
Next year the process will be slightly different, for obvious reasons. We have agreed that time constraints render the publication of the annual expenditure review meaningless. However, the draft budget report will be published in time for Parliament's return from the summer recess.
The results of the Scottish spending review were announced on 12 September 2002. For the first time, the document was published on a full resource-accounting basis, so direct comparisons with the annual expenditure review are not possible. The report shows a cash increase from £20.972 billion in 2002-03 to £25.857 billion in 2005-06. That is a 23 per cent increase over the period. In real terms, that is an increase of 4.6 per cent per annum, which is slightly more than the increase in the UK spending review. By any measure, the increases are substantial and, put to proper effect, they can make significant improvements in the quality of Scottish public services. I stress that the figures that I am quoting relate to departmental expenditure, not total managed expenditure.
The United Kingdom spending review has clearly had a major impact on the Scottish draft budget. In 2003-04, we have a real-terms increase of 6.3 per cent on the 2002-03 budget. That provides around £1 billion per annum for service development. The report highlights the important point that that is the highest sustained increase in the Scottish budget since 1975. The achievements are considerable, and the Finance Committee welcomes the significant growth.
We should be clear that the committee has acknowledged the successful nature of the budget. Therefore, it is a matter of regret that the Executive has chosen to adopt a cumulative approach to the year-on-year increases. We quote in our report the example of the further education budget, which is to expand by £3 million in year 1, £37 million in year 2 and £38 million in year 3. A £78 million increase in further education spending is welcome and worthy of praise, but the figures have been rolled together and announced as £120 million, in effect counting the £3 million three times and the £37 million twice. That practice misleads and it obstructs proper scrutiny. We strongly recommend that it should stop now.
On non-domestic rates, the Executive has given a clear and welcome commitment to freeze the rate poundage for 2003-04 and to cap it in line with inflation for the next two years. Despite that, we heard evidence from the Confederation of British Industry Scotland that Scottish competitiveness could be damaged by a higher rate poundage in Scotland than in the rest of the United Kingdom. The fact that non-domestic rate income is due to increase by 22 per cent—£340 million—over the next two years has no doubt heightened those fears.
During our evidence session in Skye, the Deputy Minister for Finance and Public Services explained some of the technical reasons for the increased income, some of which are signs of success and growth and are not reasons for concern. However, an unwelcome suspicion remains that we are in some way being disadvantaged in comparison with the rest of the United Kingdom. In order to assuage those concerns, we have recommended that—
Will Mr McCabe develop that point a little further? I do not follow the logic of the answer that the Deputy Minister for Finance and Public Services gave in the isle of Skye. I am sure that Mr McCabe is aware that Scottish economic growth has been lower than economic growth in the rest of the United Kingdom. If that trend is the case, how on earth can there not be further competitive disadvantage in delivering higher business rates in Scotland? I do not understand the relationship.
I said that some of the increased income was for good reasons. The explanation that the Deputy Minister for Finance and Public Services gave in Skye is that no single, overall comparison can be made of the figures. Clearly there have been developments in Scotland that generate additional non-domestic rate income, which provides additional money to the Executive. There are a variety of circumstances throughout Scotland. That is what the deputy minister attempted to explain when he gave evidence to us in Skye.
As I said, to assuage the concerns, we have recommended that the Executive should provide a simple assurance that non-domestic rate bills will increase on average by no more than the rate of inflation over the period.
The committee also tried to establish how the budget would impact on cross-cutting priorities. Although the inclusion of discrete sections in the draft budget on "Closing the Opportunity Gap" and "Sustainable Development" is welcome, we are convinced that each priority should be separately reported on if proper scrutiny is to take place. It is the committee's view that clarity of information in the budget document has improved year on year. However, we found that too many uncosted and unquantified entries remain. We hope for improvements in future years.
We also found that a poor relationship remains between spending, outputs and outcomes. That must improve. If it is to do so, we believe that the provision of unambiguous baseline performance data is essential for proper monitoring and scrutiny.
The Parliament's subject committees have a vital role to play in the scrutiny of the Scottish budget. They continue to express concerns about the difficulty that they face in examining block allocations such as those for health and local government. Given the size and importance of both blocks, those concerns are serious.
Other committees raised a variety of issues. We have asked the Executive to provide a corporate response to the matters raised by each committee.
The Equal Opportunities Committee continues to seek an agreed definition of equality proofing. We noted the continued absence of an agreed definition and welcomed the on-going work with the Executive to resolve the issue. In an attempt to ensure that we continue to make progress, we have recommended that a cross-cutting report on budget provisions to promote equal opportunity should accompany the budget document next year.
The Finance Committee received two proposals for spending amendments, the first of which came jointly from the two justice committees. In short, they were concerned that the justice portfolio, which is an expressed priority for the Executive, is receiving a reducing share of the budget. We have already noted that there is a considerable need for better definition in cross-cutting issues and the identification of priorities, but the Finance Committee does not believe that it can recommend the proposed change. However, we have noted the justice committees' concerns and have drawn the matter to the Executive's attention.
The second proposed amendment came from Nicola Sturgeon MSP. She proposed the transfer of £89 million from the capital budget to the health budget over a three-year period, which would be used to compensate people who have been infected with hepatitis C through receiving contaminated blood. The committee found that the case for the proposal was well presented and that funding sources had been identified. While there was a broad measure of sympathy for the proposal, we were aware when we considered the issue that the report of the expert group on financial and other assistance for NHS injury was in interim form and that the Health and Community Care Committee still had to consider the report formally.
Notwithstanding those points, we do not recommend the proposed change for three principal reasons. First, we have no information on how the proposal would affect individuals who are in receipt of benefits as a result of clawback. It would be unfortunate, to say the least, if payments resulted in the loss of long-term benefits. Secondly, we do not know the full implications for other outstanding concerns that might exist in the health service. Thirdly, we are concerned that the proposal might lead to a no-fault compensation approach being sought, not only in health matters, but across a number of other portfolio areas. Given that, the decision is principally one for the Executive as a whole and, as such, requires full consideration of the effect on the Scottish budget.
To clarify the Finance Committee's viewpoint, although Mr McCabe said correctly that the committee did not recommend the change, equally we did not recommend against the change. In fact, we were neutral on the matter.
I said that there was a broad measure of sympathy for the proposal in the Finance Committee. We were greatly influenced by the fact that the Health and Community Care Committee still had to consider fully the interim report. Mr Morgan is broadly correct to say that the Finance Committee decided as far as possible to stay neutral on the issue until other parliamentary committees had completed their work and other information had come to hand.
The Scottish Parliamentary Corporate Body submitted provisional funding figures in March of this year. The final figures show considerable increases, mainly as a result of the estimated costs of migration to the new complex. The future Finance Committee will have to bear that in mind when assessing future funding requirements. The corporate body requested funding of £161.9 million for next year, which is an increase of £12.4 million on the provisional requirement that was submitted earlier in the year. It was explained to us that much of the increase is a result of the operational requirement to run two complexes at the same time. How much of that money will be required next year remains to be seen, for reasons to which I will come in a moment.
I preface my remarks on the Holyrood project with a few words about the task that faces the Holyrood progress group and the Scottish Parliamentary Corporate Body. The Finance Committee recognises fully that they face an unenviable task and were presented with circumstances that were not of their making. In particular, they had no say over the type of construction contract that was used for the project. I suspect that if a genie were ever to pop from a bottle and ask the construction industry to make a wish, it would choose that form of contract.
In that context, I hope that the SPCB will understand if we feel the need to make robust comments. The Holyrood project is of major importance to Scotland and to the standing of the Parliament, but it is fair to say that it is a matter of continuing concern that consistency and clarity are not yet attached to the information on costs and completion dates. Shortly after we received the most recent quarterly report from the SPCB, the situation with regard to the costs and estimated completion dates changed considerably for the worse. The committee took more evidence on the project this week and expressed its concerns that, at this advanced stage, uncertainty still seems to outweigh certainty.
All members will be aware of the effect on the public's perception of the Parliament of the lack of clarity and the consistently moving targets on cost and completion. The good work that is done day in, day out for the people of Scotland is overshadowed by the constant drip of unreliable information and the lack of confidence in the latest estimates.
I do not disagree with much of what Mr McCabe says, but will he enlighten us as to whether he expressed similar concerns in his former role as Minister for Parliament?
Mr Ewing knows that, as Minister for Parliament, I had no direct responsibility for the construction of the Holyrood complex. The Executive has made it clear regularly that the project is a parliamentary one. As Mr Ewing has taken a considerable interest in the project, he should know that.
We made it clear at the recent Finance Committee meeting that, when we receive the next quarterly report from the SPCB, we expect consistent and sustainable information on cost and time scales. We also considered the funding request for the opening ceremony, which was in the region of £400,000. We take the firm view that £400,000 for an opening ceremony is wholly unjustified and we have recommended that the amount should be reduced significantly.
I commend to the Parliament the report on the 2003-04 budget process.
I move,
That the Parliament notes the 7th Report 2002 of the Finance Committee, Stage 2 of the 2003/04 Budget Process (SP Paper 709).
I believe that this is the first occasion on which an individual member of the Scottish Parliament has proposed a change to the Executive's budget. I do so for a good reason: I believe that Parliament has a moral obligation to deliver justice to people who contracted hepatitis C from the national health service and to do so quickly and decisively before many more of them fall seriously ill or die.
The Health and Community Care Committee shares that view, as does the independent group of experts whom the Minister for Health and Community Care asked to examine the issue. I pay tribute to the expert group, which considered financial support for hepatitis C sufferers and which is chaired by Lord Ross. I also praise the Health and Community Care Committee for its dogged pursuit of the issue in the past three years. The unanimity in the committee on the issue is testament to the strength of the hepatitis C sufferers' case. Only last week, the committee reiterated its commitment to the principle of justice for hepatitis C sufferers. I am proud of the committee's stance.
My amendment offers a way in which to turn the Health and Community Care Committee's hard work into practical support for those who need and deserve it.
Given that there is unanimity in the Health and Community Care Committee and given that we were working on what is a difficult inquiry before Nicola Sturgeon joined the committee, why did not she discuss her approach to the Finance Committee with the other members of the Health and Community Care Committee? Why has she broken ranks in a politically opportunistic way while we are considering the serious point of ex gratia payments for people with hepatitis C?
It is the responsibility of a responsible Opposition to propose constructive solutions to difficult issues, which is what I am doing today. My amendment is a way of turning the principle that the Health and Community Care Committee supports into practical action. I hope that, in the interests of hepatitis C sufferers, all members will consider my proposal on its merits and will avoid allowing the debate to be about politics.
It is useful to outline the recent history of the issue. On 6 November, the expert group published its report, which recommended that the Scottish Executive should establish and fund a discretionary trust to make ex gratia payments to all people who received blood or blood products from the NHS in Scotland and subsequently found that they had the hepatitis C virus. The group recommended that all sufferers should receive an initial lump sum of £10,000 to cover anxiety, stress and social disadvantage; that those who develop chronic hepatitis C should receive an additional £40,000; and that those who suffer a serious deterioration in their physical condition because of hepatitis C—for example, liver cancer or cirrhosis—should receive additional support that is calculated on the same basis as common-law damages.
The expert group has costed its recommendation at between £62 million and £89 million. We are here today because the Minister for Health and Community Care has said that he will not implement the expert group's recommendation in full. He has given three reasons for that, which I shall deal with briefly in turn.
First, the minister does not believe that everyone who has been infected with hepatitis C should receive a payment. Instead, he wants to target help at those who have suffered serious, long-term physical harm. There is disagreement on that point between the minister, on the one side, and the committee and the expert group, on the other side. The committee and the expert group have recommended payments for all those who have been infected because even those who are not suffering serious physical symptoms—at least, not yet—might be affected psychologically and practically. The very fact that someone has hepatitis C is devastating to them. The knowledge that there is a risk—however small—of sexual transmission affects their relationships. Hepatitis C also limits sufferers' ability to work and to hold down employment, and it makes getting a mortgage or life assurance virtually impossible. Those are the basic facts of life for everyone who suffers from hepatitis C, not just for those whose physical health has seriously deteriorated.
It is perfectly reasonable to expect that people who go on to develop liver cancer or cirrhosis should receive larger sums of money than those who do not, and the expert group's recommendation reflects that. However, as a fundamental principle, everyone who has been infected should receive a payment to cover the anxiety and stress that is inevitably suffered when they are told not just that they have hepatitis C, but that they have contracted it through routine medical treatment. To draw an arbitrary distinction between deserving and undeserving sufferers simply compounds the wrong that people have suffered. That is clearly the view of the expert group, and it was the minister who asked the group to consider the issue. He set the group up, picked its members and drew up its remit. Now that the group has come back with a recommendation that the Executive should pay up for everyone, the minister should accept that he has lost the argument.
The minister's second reason for not implementing the recommendation in full is his concern that making payments to sufferers may simply result in benefits being withdrawn under Westminster social security legislation. Indeed, as Tom McCabe said, that concern was expressed by the Finance Committee when it considered the proposal. Clawback is a real possibility whether the expert group's recommendation is implemented in full or in part, and no matter where in the budget the money comes from. We know that from the experience of providing free personal care for the elderly. In that instance, the United Kingdom Government clawed back £23 million as a result of the Scottish Parliament's decision to do right by Scotland's pensioners. It would not be acceptable for payments that we give to hepatitis C sufferers with one hand to be taken away by Westminster with the other. There should be absolutely no difficulty in disregarding payments that are made to hepatitis C sufferers for the purposes of social security. Payments to HIV sufferers through the Macfarlane Trust are disregarded for those purposes. As a Parliament, we should make it clear that we will not tolerate attempts by Westminster to undermine and frustrate actions that we choose to take in devolved areas.
The minister's third reason for not implementing the expert group's recommendation is financial. That brings me to the amendment that I have lodged for today's debate. The minister has said that he cannot afford to make £89 million available from the health budget to compensate hepatitis C sufferers. I understand all too well the competing pressures on the health budget. That is why I have put forward a constructive proposal. SNP members are often unfairly accused of making demands on budgets without saying where the money will come from. Today, we are saying exactly where the money to compensate hepatitis C sufferers should come from, and I hope that my colleagues will consider the proposal on its merits.
I propose that we transfer from the departmental expenditure limit capital budget to the health budget £30 million, £30 million and £29 million in each of the next three years respectively, making available a total of £89 million. That is the maximum amount that the expert group estimates would be required to fund the payments to hepatitis C sufferers. In his evidence to the Health and Community Care Committee last week, Lord Ross said:
"we regard £89 million as the maximum figure and it would be allocated over a number of years."—[Official Report, Health and Community Care Committee, 11 December 2002; c 3529.]
Why do I think that that proposal is right? First, it would ensure that the burden would not be borne solely by the health budget. Making payments to those who have been infected by hepatitis C through the NHS is an obligation on society. It is right that we should all share the cost of that. Secondly, the capital budget could easily bear a reduction of that scale. The budgets will still rise over the next three years, but by 2 per cent less per year than is currently planned. Moreover, the underspend in the capital budget last year was £111 million. If it wanted to, the Scottish Executive could replace the money that would be taken from the DEL capital budget with money from next year's underspend. I considered arguing that payments for hepatitis C sufferers should simply be taken from the underspend in next year's budget. However, as decisions on that will not be made until later next year, I decided that that was not the right option. I believe that hepatitis C sufferers demand certainty of justice now, which is what my proposal will deliver for them.
As I have said, the Finance Committee has examined my proposal, and I thank the committee sincerely for the serious consideration that it gave it. The thorough way in which the committee went about the task was reflected in Tom McCabe's remarks this morning. For two main reasons, the committee felt unable to give the proposal its backing, although, as Alasdair Morgan rightly pointed out, it decided to remain neutral. The committee's first concern was the fear of Treasury clawback of benefits—an issue that I have already mentioned. The second concern was that, by agreeing to pay no-fault compensation to hepatitis C sufferers, we would in effect create a precedent for other groups who sustain injury through the NHS but who cannot prove negligence. On that point, I can do no better than to quote Lord Ross again. He said:
"The Macfarlane Trust provision was introduced in 1988 and it did not lead to a flood of claims from other people … We did not feel that a dangerous precedent would be set in this case any more than was the case with the Macfarlane Trust."—[Official Report, Health and Community Care Committee, 11 December 2002; c 3530.]
Although I understand the Finance Committee's concerns, I do not share them.
The Finance Committee has said that the proposal is
"well-grounded in terms of being properly costed".
The committee also took the view that
"the DEL capital budget would bear a reduction of 2% over the three years of the budget cycle."
The Finance Committee's comments reflect the fact that the proposal is serious, and I hope that Parliament will do the decent thing and consider it genuinely on its merits.
There are those who will say—and have said already—that putting forward the proposal today somehow conflicts with the work of the Health and Community Care Committee. Let me be clear: it does not. In trying to turn principle into practice, the proposal complements the good work that the committee has done and is doing. It offers the Minister for Health and Community Care a solution to what I acknowledge is a very difficult issue. Most important, it offers the best chance yet of justice for a group of people who have suffered and continue to suffer more than most of us can imagine.
I move amendment S1M-3708.1, to insert at end:
"but calls on the Scottish Executive to transfer from the DEL capital budget to the health and community care budget £30 million, £30 million and £29 million for 2003-04, 2004-05 and 2005-06 respectively to fund a discretionary trust that will make ex gratia payments to all people who can demonstrate, on the balance of probabilities, that they received blood, blood products or tissues from the NHS in Scotland and were subsequently found to be infected with the Hepatitis C virus."
At the risk of confusing members, I begin by addressing the work of the Finance Committee wearing my hat as the convener of the Health and Community Care Committee. I commend the Finance Committee for all its hard work on the budget and I thank the committee for the helpful advice that it has given to the subject committees on what is a daunting prospect for most of us. I welcome Mr McCabe to his new, onerous position as the convener of the Finance Committee.
As the Finance Committee's report notes, the Health and Community Care Committee continues to be concerned about the lack of distinction between baseline and additional expenditure, which we believe hinders scrutiny of the budget. We are also concerned about block allocations to health boards and the inherent difficulties in trying to follow the public pound through the process. I am pleased that the Finance Committee has agreed to pursue those matters with ministers.
We remain concerned that it is impossible to get figures for the amount that the Executive is spending on key priorities such as cancer, coronary heart disease and mental health. That makes it more than a little difficult to detect real increases in expenditure and to audit the effectiveness of the expenditure. Nonetheless, we all welcome the 14.4 per cent real-terms increase in the budget for 2005-06. I also welcome the fact that health continues to be the top financial priority alongside local government spending, both of which areas are of great importance to the Health and Community Care Committee.
I will now speak as the Liberal Democrat health spokesperson about my amendment to the amendment. The issue of financial support for people who have contracted hepatitis C from blood and blood products is of moral importance for the Parliament. The Parliament will be aware that the Health and Community Care Committee has for some time been dealing with two petitions that relate to hepatitis C. The committee conducted a short-term inquiry, which culminated in the publication of a unanimous committee report in October 2001.
Our main recommendations were that the Executive should give financial and other assistance to all those affected, whether to a lesser or a greater extent, on an ex gratia basis. Members should not underestimate the impact that a diagnosis has on those affected. It causes psychological damage, affects personal relationships and has an impact on their working lives and their ability to care for their families. We suggested that a trust be set up for those who were most seriously affected physically and that payments be awarded on an individual basis. We also suggested the setting up of an expert group to examine not only the hepatitis C issue, but the wider issue of no-fault compensation.
Members will be aware that, although the Minister for Health and Community Care did not accept our recommendations about financial assistance, he agreed to set up an expert group under Lord Ross. That group has published its interim report, which I am pleased to say echoes the unanimous position that the Health and Community Care Committee adopted. After last week's meeting, at which we took evidence from Malcolm Chisholm, Lord Ross and Philip Dolan from the Haemophilia Society, the committee reiterated its initial position and its support for the expert group's interim findings.
We welcomed the fact that, although the minister rejected the principle that all sufferers should be given financial assistance, he moved from his earlier position by agreeing to pay assistance to those who have experienced "serious, long-term harm". That is the first time that a UK minister has agreed to take such action.
I commend the work of my committee colleagues on the issue. Our work has been characterised by two real strengths of the Parliament's committee system—a dogged determination to hold the Executive to account and a belief that, as in so many other areas of life, unity is strength. That concept means that unanimous, cross-party decisions that are taken in committee give a moral authority to an argument or a cause that endorsement by any one political party, however well meaning, can never give.
I know why Nicola Sturgeon made her proposal to the Finance Committee and I know why she has lodged her amendment to the motion. As it is the Christmas season—the season of good will to all people—I will not dwell on that. Mary Scanlon has covered the issue very well.
I share the Finance Committee's view that proposed changes to the Executive's budget
"may have a better chance of success where they originate from subject committees and have cross-party support".
It is unfortunate that Nicola Sturgeon did not suggest her proposal as a possible addition to our budget report at any time, even though the expert group's interim report was published before we finalised our budget report and even though we have a track record of suggesting alternative budget proposals.
Every member of the Health and Community Care Committee wants justice for those who have campaigned on the issue for so long. Therefore, I was pleased that the minister said that he was impatient for further progress on the issue and I look forward to his next appearance before the committee in January, when we expect to hear about details of progress towards the setting up of a fair scheme.
Does Margaret Smith accept that my proposal represents a way—albeit only one way—of turning the principle that the Health and Community Care Committee has adhered to for three years into practical support for hepatitis C sufferers? For the remainder of her speech, I ask her to concentrate on the substance of the proposal in my amendment. Does she support it or not?
Hold your horses.
Although there has been unanimous endorsement of the expert group's interim findings, I do not think that any member of the Health and Community Care Committee or of the Parliament underestimates the difficulties that the minister faces. The minister says that he cannot afford the £89 million that the expert group set as the maximum amount that would be needed to make £10,000 payments to all those who contracted hepatitis C and £40,000 payments to those who suffer chronic pain. That sum would include provision for additional payments to those who suffer serious, long-term effects, such as liver cancer, and for payments to families of deceased sufferers. It was the committee's unanimous view that all those groups should be given financial payments of one sort or another.
We believe that, although there will have to be an element of front loading, scope exists for the likely investment to be spread across a number of years. We suggest that funding could come from end-year flexibility or from elsewhere in the budget. I strongly urge the minister to go beyond the position that he outlined to the committee last week.
The minister has a problem with the principle of universal payments and the impact that the suggested payment will have on the wider issue of no-fault compensation. To some extent, the Finance Committee echoed that concern. We would echo the view that Lord Ross expressed last week. He said that the establishment of the Macfarlane Trust for those affected by HIV did not open the floodgates and that it was unlikely that payments in relation to the unique hepatitis C case would do so either. The expert group's final report, which will deal with no-fault compensation as well as hepatitis C, is expected before the end of the year. On the wider question, we should wait for the final report's publication. However, on hepatitis C, Lord Ross admitted under questioning last week that there would no substantial differences between the interim report and the final report.
The minister rightly highlighted the problems that are associated with identifying our powers to act within the devolved settlement. Most important is the need to ensure in negotiations with Westminster that any payments that are made to sufferers will not result in an automatic clawback of benefits. We must not allow that to happen. It is crucial that the will of the Parliament should not be frustrated in that way.
In the on-going discussions among officials, it is not only technical issues that must be overcome. A political problem must be addressed, because the Executive has agreed to make some form of ex gratia payments to some people who have been affected, whereas Westminster has recently reiterated its intention not to do so. I am concerned that Westminster might not consider it to be in its interests if a scheme were set up whereby social security legislation or regulations were to be implemented on a non-UK basis; it might not be in Westminster's best interests to allow the Executive and the Parliament to deliver justice if Westminster has no intention of delivering justice.
I endorse the Finance Committee's view that it would be wrong to agree to Nicola Sturgeon's proposal while the talks continue. The conclusion of the talks will go a long way towards shaping not only the mechanism of the payment scheme, but the amounts involved. However, we note that the Finance Committee remains neutral on the substantive issue. It is important to note that my amendment contains nothing that would close off the pursuit of a fair, principled settlement that is in line with the Health and Community Care Committee's judgments.
I urge the Executive to do all that it can to find a speedy and fair solution to the issue. I welcome the Minister for Health and Community Care's statement that he wants to make progress between now and the end of the financial year and that, if no progress is made by the turn of the year,
"we will have to consider the different avenues that are open."—[Official Report, Health and Community Care Committee, 11 December 2002; c 3565.]
The Health and Community Care Committee does not underestimate the challenge, but we are keen for the matter to be resolved successfully for all concerned in this parliamentary session.
I ask the Parliament to support the Finance Committee's report and my amendment, which keeps the door open on the detail of what funding might be required in the light of the on-going discussions, while guaranteeing that the minister will report progress to the committee in January. If the Executive fails to listen to the voices of the Health and Community Care Committee, the expert group and the 80 MSPs who have signed motions on the issue, the Health and Community Care Committee will pursue the matter by seeking support for a fair settlement from across the Parliament. I ask Mr McCabe to keep his genie in its bottle for the time being, although we might need it in the new year, when we will continue to pursue justice for people who have campaigned for too long.
I move, as an amendment to amendment S1M-3708.1, amendment S1M-3708.1.1, to leave out from "but calls" to end and insert:
"and, in so doing, commends the Health and Community Care Committee for its work in addressing the position of those who have contracted hepatitis C from blood products; endorses the importance of finding ways to help and support these people; further notes that discussions are in progress between Scottish Executive health ministers and colleagues in Her Majesty's Government on the potential implications arising from the advice of the Expert Group on Financial and Other Support, and stresses the need for the Minister for Health and Community Care to return to the Health and Community Care Committee in January 2003 to report on progress."
I begin by welcoming Tom McCabe to his new role. It is somewhat unnerving when a former gamekeeper colleague turns poacher. He knows too many of the secrets—I was going to say the black arts, but the fact that he comes from Lanarkshire means that he knows nothing of black arts.
I note that the great public interest in debates on the budget process continues. I do not think that there is one person in the public gallery. In recent years, we have been accustomed to children being brought to listen to deliberations on the Finance Committee's work as an end-of-term treat. It appears that listening to and observing the Finance Committee's debates on the budget has been struck from the curriculum. I am tempted to call for a public inquiry on that.
"No elected representatives in the UK have ever before had the chance to participate in a process of budget development as pioneering as that which we are undertaking."—[Official Report, 19 December 2001; c 4944.]
Those are not my words; they are the words of Des McNulty, the former convener of the Finance Committee. I thank Des McNulty for his work in that role, in which he made a significant contribution, and I wish him well in his new role. Earlier this week, he was subjected to the ordeal of giving evidence to the Finance Committee for the first time. I gather that he is now regretting the extra rigour that he brought to bear in the committee's work.
Over the parliamentary session, we have made considerable progress in establishing a budget process that is more open and transparent than any other of which I am aware. The Finance Committee and the subject committees have played an important part in that through their reports and through the changes that we have made to the process in response to their detailed and specific recommendations.
We have also brought the process much closer to the people of Scotland. Over the parliamentary session, the Finance Committee has held meetings in Orkney, Hamilton and Skye. My ministerial colleagues and I have held budget roadshows in places as far apart as Stornoway, Stirling, Hamilton, Galashiels, Dundee, Inverness, Kilmarnock, Fort William, Dumfries, Aberdeen and Greenock. Those meetings offered an important route for people to find out what the Government is planning and gave the public the opportunity to make comments on those proposals. They have played a part in shaping the allocations proposed in the various draft budgets.
In that context, I highlight in particular the quality-of-life initiatives that have been proposed—£95 million from end-year flexibility in the current year and £180 million over the coming three-year period. The proposals were fashioned by what we heard at meetings and from council leaders throughout the country.
The meetings have also been very useful in confirming the priorities and direction of travel of the Scottish Executive. People believe that we were right to give education the highest priority when we came to office in 1999. They believe that we are right to give increased priority to health and reducing crime. They believe that we are right to give growing attention to transport in the coming budget period.
That is how it should be. The Scottish Executive should reflect the wishes of the Scottish people in determining the Scottish budget. It is clear that the Executive's priorities are the people's priorities. The people want to see us working together across Scotland's public services to improve those services. They want to see us working together with colleagues in the United Kingdom. They do not want to see us wasting time and resources on constitutional wrangling and the costs of divorcing our UK partner. The success of the devolution settlement is that we receive a fair share of extra spending generated by the strong economic management of the UK.
We get that fair share through the Barnett formula. The Barnett formula serves us well; it is stable, simple and fair and it is delivering for Scotland. It supports significantly higher spending per head in Scotland than in England and Wales. Crucially, we decide how our receipts are spent to match Scottish priorities.
As Tom McCabe set out, the draft budget that we are discussing today shows the Scottish budget rising to £25 billion by 2005-06. That unprecedented growth presents an unprecedented opportunity to improve life for all Scots. It will help to reduce crime, improve health, develop education, support jobs and growth in the economy and invest in our transport infrastructure. We will be able to do that in sustainable ways. We will always be seeking to close the opportunity gaps that exist between communities and individuals across Scotland. Over the first six years of devolution, resources for Scotland will have grown by more than 25 per cent.
In "Building a Better Scotland" and the draft budget document, we have set out in detail what we propose to deliver with those resources and how they should be spent. In January, we will bring forward the 2003 Budget Bill, seeking parliamentary approval for the first year of our plans.
Much of the committee's report is not so much on the details of the budget as on the process by which the budget is decided. Although I would not claim that the budget process is perfect, we have made significant improvements over the parliamentary session. I agree with the Finance Committee that we can do better still in the next session; indeed, we will seek to do so. In that light, I welcome the further suggestions made in the Finance Committee's report. The Executive will keep working with the committee in a co-operative spirit.
As Tom McCabe indicated, with the election coming in May, the process of consideration of next year's budget will inevitably be rather compressed in comparison with past experience. The process would normally start with the Executive publishing an annual expenditure report in March. Given the timing of the election, we have agreed with the Finance Committee that that would make little sense. We will instead bring forward to August the publication of the draft budget—the usual second stage of the process—to give committees longer to scrutinise our plans at that point. I hope that members will agree that that is a constructive solution.
We will write to the Finance Committee more fully in due course to respond to the various recommendations in its report, but I shall deal with some of them now.
The report refers to the Skye bridge. That project has brought huge benefits to Skye. It has reduced congestion and the queueing that used to happen at Kyle and Kyleakin, particularly during the summer. It has speeded up communications and access to services. Since 1999, the UK Government and the Scottish Executive have taken decisive action to act on tolls on the Skye bridge, first halving and then freezing tolls for frequent users so that, over time, the tolls will wither on the vine of inflation and bring a decent deal to local people.
Does the minister welcome the reply that I received to a parliamentary question this week saying that the Skye bridge is likely to be paid off as early as 2009, after which people will be able to travel across to Skye for free? That is something that they would never have been able to do on the ferry.
I very much welcome the fact that we hope to see the bridge paid off at the earliest possible opportunity. As Mary Scanlon says, travelling to Skye today—let alone in the future, when the bridge is paid off—is significantly cheaper that it was on the ferry. People also have all the convenience that the bridge brings.
Having said all that, we understand that there are concerns about the administration of the tolls. I made that point when I was in Skye giving evidence to the Finance Committee and I have spoken to my transport colleagues about the issue. The Executive is also in contact with Highland Council about the recent report to which Tom McCabe referred, which was brought to the Finance Committee's attention when it was meeting in Skye.
The committee's second recommendation concerns the presentation of information about end-year flexibility. I am glad that the committee welcomes the improvements that we have made this year. We have made significant efforts to categorise and filter out the individual elements of EYF, such as money that is kept aside for future capital spending, money that is within a contingency fund, money that is controlled by other arm's-length bodies and fluctuations on demand-led budgets.
EYF is not just the result of underspending; it is also about prudent management. The benefits of EYF in previous years are obvious to people who are accustomed to dealing with public expenditure in Scotland. We have seen an end to the end-year surge of spending in the public sector in order to get the money out of the door for fear of losing it. That money can now be carried forward and targeted on continuing priorities. That is a significant step forward in public expenditure management. However, as with other recommendations in the report, we will look again at the presentation of our EYF figures to see whether we can do more to provide the committee with the information that it has sought.
I whole-heartedly agree that we have to ensure that we get value for money from our spending. What matters is what we deliver in terms of better public services and improvements to people's lives. The size of an individual budget does not matter; what matters is what is done with the money to bring about improvements in the lives of people across Scotland. On several occasions, we have set out the steps that we are taking to drive up efficiency and increase value for money. The concept of best value is well established throughout the public sector because of the Local Government in Scotland Bill and through ministers' commitments to pursue best value in all that we do. Some of those measures will be touched on in response to other recommendations, so I will not run through the list now.
One consequence of moving to three-year budgeting is that it opens the way for showing the value of increased spending over that three-year period. We already publish the actual cash numbers and the real-terms numbers and we will continue to do so in our budget documents. We want people to see the totals and the year-on-year increases in the budgets. The totals that we put into the cash columns in the budget documents make clear exactly what we will be spending in each year. I believe that that process is fully transparent.
We will need to think carefully about whether the committee's proposal in that respect would increase transparency. By one view, it could make matters less clear. However, as always, we will do the committee the courtesy of fully reflecting on its concerns.
I have some sympathy with the committee's difficulties with the timing of information being made available to it during the budget round. This year in particular, those difficulties resulted from the rub between the Westminster parliamentary process and ours. In years when there is a Whitehall spending review, the size of the assigned budget for the following year will not be clear until June of that year. Given our commitment to bringing a draft budget to Parliament by 20 September, that inevitably means that we cannot provide fully detailed information in that document in spending review years. However, we are committed to providing that information as quickly as possible. I would be happy to discuss with the committee whether we can make further improvements to the process in future spending review years, although I believe that we made some progress on that this year.
On non-domestic rates, we can confirm to businesses that—revaluations aside—their rates bills will rise no faster than inflation. Every business will benefit from our decision to freeze rates for next year.
I welcome the Finance Committee's emphasis on the importance of cross-cutting issues in setting and examining spending proposals. I have been discussing those matters with the committee over the past fortnight and I look forward to seeing its report in due course. The committee has an important contribution to make to the question of how the Executive addresses cross-cutting issues. Members have been sent copies of published reports that set out how our two key cross-cutting themes for the spending review—closing the opportunity gap and sustainable development—were taken into account in the process. That was a new approach for us. We are looking to go further in future, but I hope that members will recognise that the progress that we have made so far has been real and has brought improvements.
I welcome the Finance Committee's endorsement of our moves to be clearer about what we will deliver in return for the resources that are committed in the spending review and in the Scottish budget that follows the review. We have set out 105 detailed targets along with, for the first time, detailed technical notes that set out how those targets are defined and how and by whom progress will be measured over time. That is a major development for the Executive. We will publish regular information on progress on those targets—in future budget documents, for example.
I agree with the Finance Committee that we are not quite there yet in relation to how we measure, draft, set and monitor targets. There is more that we can do to link spending to outcomes and outputs. I look forward to working with the Finance Committee in taking that forward. I am grateful to the committee for acknowledging that there have been significant improvements in that aspect of our planning over the past year.
I am not sure that I entirely understand the Finance Committee's concept of "new spending". I share the committee's aim of increasing transparency and I look forward to discussing its recommendation with committee members in the months ahead.
We agree with both the Finance Committee's recommendations on equal opportunities. We are trying to make progress on defining equal opportunities and I gather that further reports on the issue will be given to the Finance Committee in due course.
I also note what the committee says about Nicola Sturgeon's proposal, which is the subject of her amendment today. I believe that the Finance Committee report strikes the right note; it does not recommend that the matter be taken forward at this time. The committee rightly pointed out that Nicola Sturgeon did not raise the proposal in the Health and Community Care Committee, of which she is a member, when it discussed the budget—Margaret Smith referred to that, as did Mary Scanlon. Nicola Sturgeon should properly have done so if she really wanted to garner support for her proposal.
Of course, Nicola Sturgeon knows that the Health and Community Care Committee is still considering the matter and that, as the Finance Committee points out, her proposal could set a precedent whose consequences cannot be fully established at this time. Furthermore, as the Finance Committee points out, the interaction between the proposal and entitlement to benefits for those who are affected is not clear. All in all, the Finance Committee has taken the correct approach to the issue. The Executive is still in discussions with the Health and Community Care Committee over the matter, as the amendment to the amendment in Margaret Smith's name highlights.
Of course, what is really interesting in budget-process terms is that, although the SNP has at last recognised that it can propose amendments to the budget proposals, it has done so in respect of only one matter. That raises the question: what should we read into the SNP's approach? I suspect that the only conclusion that we can come to is that in every other respect the SNP regards the Executive's budget to be exactly right in terms of priorities and expenditure. Moreover, where does the fact that no other amendments have been lodged leave the spending pledges that the SNP has been littering the country with over recent weeks? It leaves the SNP precisely nowhere, with just empty gestures of the sort that we have become so accustomed to over recent times. I will return to those points in much more detail when I sum up at the end of the debate.
As I hope I have demonstrated, the Executive broadly welcomes the Finance Committee's report, which recommends a number of changes that no doubt other members will want to address during the debate. I agree with the report's aims of full transparency and a budget process that allows everyone to have their proper say. I look forward to working with the Finance Committee and others in Parliament and outside to make sure that those aims are achieved. The Executive is happy to support the substantive motion and we believe that Margaret Smith has lodged an appropriate amendment to Nicola Sturgeon's amendment.
Here we are again. The fourth year round and I am amazed to find that we have three hours to deal with this year's budget process, when this afternoon we have only an hour and a half to discuss land reform. I appreciate that that is not the fault of the Presiding Officer, but I question where the business managers were coming from, given that difference in the length of the debates.
I begin by congratulating the clerks on all the work that they have done for the Finance Committee over the year, particularly on pulling together this report for us. I also congratulate my committee members on being so diligent, on following through, and on the unanimity under which we tend to operate—members of the committee tend not to hold excessive points of view. I also welcome Tom McCabe to the post of Finance Committee convener. He is the third convener that we have had, and I wish him every success; of course, we do not know what will happen next year.
Paragraph 16 of the report
"welcomes this significant growth in the Scottish Budget but recognises the need for the Executive to pursue value for money in its use."
The only reason why there has been an increase in the allocation of money is that Gordon Brown and the Labour party have already taken it from the taxpayer, especially through the 53 stealth taxes that we have suffered. In the Conservative party, we believe that the Scottish Government's spending priorities are totally wrong. Taxpayers' money is not being used effectively. Rather than throw money at pet projects and meaningless initiatives and strategies, the Government should invest in infrastructure and reformed public services.
I think that I heard David Davidson correctly when he said that the Scottish Executive's budget is totally wrong, but there is no amendment from the Conservatives that sets out how they would do things differently.
The debate is about the budget process; it is not an appropriate time to discuss other matters, but we are happy to outline where we might be going.
On education, why are our children leaving school with so little skill in the three Rs? Why is health care not accessible to all, regardless of the postcode area in which people live? On infrastructure, there are major problems with the railways. We need to invest in the railways—not just in rolling stock, but in reopening stations in places such as Laurencekirk, and in implementing the Aberdeen crossrail project. The roads budget is essential if we are to get our economy running, so why did the Government in Scotland abandon the Conservative road building plan that it inherited? What about broadband connectivity? We hear little about that now, but many people still ask for it.
I am always keen to talk about Aberdeen transport issues. David Davidson said that the Aberdeen crossrail project would be a good thing. Do the Tories recognise that it is one project, among many, that the Scottish Executive has got absolutely right?
The Scottish Executive has failed so far to tell us whether it will pay for the Aberdeen bypass out of the public purse or whether we are to pay for Aberdeen crossrail in some other manner, and road tolls have yet to be ruled out. How those projects are to be paid for is still a big secret, yet every other major city in Scotland got its bypass from the public purse. An Aberdeen bypass is an essential requirement, and I would like the Labour party to tell us today how it is to be paid for.
On the sustainable economy and jobs, everybody recognises that there is a problem with the Scottish economy, yet Peter Peacock did not seem to address it in his speech. There is a huge skills gap, but he did not appear to say anything about that, either.
The public perception is that our communities are not safer. Only yesterday, Archbishop Conti mentioned during his lunchtime chat with a group of MSPs that people in the west of Scotland tell him regularly that they do not feel safe to go out at night. Where are safe communities being delivered by the budget? There is a potential standstill in the justice budget, which I am sure that my colleague Lord James Douglas-Hamilton will get round to.
If we are to get value for money in public services, we need reform that meets the needs and expectations of the Scottish people in the 21st century. At issue is the quality of services, not who delivers them. We need to have a more open mind about how we address that.
The fact that business rates are higher than they need to be has already been touched on. A key issue that has not been addressed is the fact that high business rates disadvantage Scotland. Merely freezing them for a year is insufficient. The minister has not explained away the extra £300 million or more a year that Scottish businesses will have to pay in non-domestic rates. The issue dates back to the current First Minister's decision to abandon the uniform business rate, which we want to bring back.
There is no doubt that the Holyrood project is a Government scheme that has been subcontracted to the Scottish Parliamentary Corporate Body. We have seen blank-cheque budgeting at its extreme and the project is out of control. We use the word "uncertainty" in the committee report, which is a euphemism for "shambles". The project is indeed a shambles, and the fact that it is being dragged out is not doing the Parliament any good. We need clarity about when it will be finished and what it will actually cost. I am pleased that the Finance Committee agreed that the Parliament would be throwing money aside if it spent the proposed £400,000 on an opening ceremony. That would not do the public perception of the Parliament any good.
What has changed in the few years during which we have undertaken the budget process? In 1999, the big issue for the Finance Committee was insufficient information for the subject committees and poor outcome information—if such information was given at all. In its report of 2000, the committee expressed dissatisfaction with the level of information and said that level 3 figures needed to be provided earlier. It also noted that continued funding for some voluntary organisations did not appear to be planned. That approach has altered and three-year funding programmes have now been adopted—we hope.
From the committee's cross-cutting work—Brian Adam and I are involved in the voluntary sector review—it is patent that nobody can trace how money reaches places, what is done with it and what is produced for it. That is a problem for the Executive, which must understand the meaning of transparency and deliver it in the budget process. For example, the voluntary sector has no clue where money comes from or goes to. There appear to be 13 Executive funding sources for one area and no one minister appears to be responsible for them—the left hand is not operating with the right hand. The committee would like the Executive to take such matters on board.
In 2001, we talked about priority-based budgeting. We asked that the source of money that is available for reallocation should accompany any announcement of reallocation, and a bit of work remains to be done on that. The Scottish Administration's costs should be broken down further. That problem has still not been addressed.
The co-ordination of responses to subject committees' stage 1 reports is a continuing problem. Year after year, the committees claim that they do not know what the information means. I am glad that the minister said that the subject committees will have more time to consider the budget, but time is not the only factor—they need the detail.
The Finance Committee welcomes the improvements in dealing with EYF, but we are looking for more progress. This year's stage 2 report talks about value for money in the use of additional resources, but the committee condemns the Executive for the dishonest and misleading practice of cumulative accounting of budget increases. When we met in Skye, the Deputy Minister for Finance and Public Services gave the committee a robust defence of that—he closed his ears and talked the issue out. We need the Executive to declare that it will stop that practice. If an increase has been made, the Executive should be honest about that; we will admit that an increase has been made. However, it is misleading for the Executive to try to double and treble account an increase through the budgets. That lifts people's expectations of delivery to levels that cannot be met.
Does the member accept that the minister skirted round the issue again today? He avoided mentioning complaints about cumulative accounting and gave no commitment to accept the committee's recommendation, which has been made not once, but several times.
I think that Mr Adam would agree that we did not expect the minister to do anything other than what he did: he closed his eyes to the issue and acted as if the recommendation had not been made. If the minister is allowed to speak again, perhaps we might get some honesty from him.
Oh, come, come.
Steady on.
I appreciate that I was asking for too much, but this is the Christmas season.
The committees have made a great call for baseline spending to be distinguished from new spending. We must do more work on that issue. I admit that the Finance Committee has a role to play in that.
I mention that the justice budget is set to decrease in relative terms.
I will deal with the committee's response to Nicola Sturgeon's request for no-fault compensation. Nicola Sturgeon spoke well, as she usually does on the subject, and Margaret Smith's response to her speech was good. However, as I said at the Finance Committee's meeting, I question why that request was not made as a cross-party committee exercise. The best way to change the budget is not through a single person going for something, but through cross-party recognition of, and work on, a piece of continuing work.
The Parliament is in its fourth year. In its relatively short existence, we have seen three First Ministers but, more important to the debate, we have seen three finance ministers: Jack McConnell, Angus MacKay and Andy Kerr—at least I think that he is the finance minister, although only Peter Peacock is present for the debate. Each finance minister has had the benefit of Peter Peacock playing the faithful Tonto to the Scottish Government fiscal Lone Ranger. He has done that diligently. He reminds me of a cricketer with whom I used to play in England. We often put that guy in, because he would never get out. He never scored any runs, but he batted and batted. I am sure that Peter Peacock has a similar skill.
The debate is supposed to be part of the transparent budget development process and to allow the Parliament, the committees, and most important, the public, to participate in that process. The process is better than that at Westminster, but it has a long way to go. In four years, we could have gone a bit further than we have managed.
Mist surrounds the multiple accounting practices. That probably starts with the performances down south of the member of Parliament for Dunfermline East. That school of accounting should not be used in Scotland. Its aim is to deceive the public and fool them into thinking that things are wonderful. It might fool some people some of the time, but it will never—despite the Executive's crossed fingers—fool all the people all the time.
Time and again, the Finance Committee has asked for greater clarity. I understand that ministers are keen to give themselves awards in their school report this year. If a school report is to be written, perhaps ministers should let members write it, because progress has been remarkably and painfully slow.
We come to the open debate. There is reasonable time in hand this morning. Members can aim for speeches of six minutes, plus time for interventions.
I apologise to my colleague Tom McCabe for missing the beginning of his speech. That was because of delays on the ScotRail system: frozen points in the Rutherglen area led to frozen toes in the Livingston area.
I will concentrate on transport expenditure. To clarify the situation for the more pedantic SNP members, I speak as a Labour member and not as the Transport and the Environment Committee's convener. Mr Russell is not in the chamber, but sometimes he has difficulty with that concept.
I was musing on Bristow Muldoon's transport difficulties. Frozen points in winter are not a new phenomenon. What rate of investment would be required to unfreeze our points, given that we have known about the problem for 150 years or so?
The current rate of investment in the railways is unprecedented. I am sure that we will see rapid improvements in the transport system. Only time will tell whether that will eradicate the problem of frozen points.
In considering the Finance Committee's report, I will concentrate on transport issues and on some of the recommendations in the Transport and the Environment Committee's report. Transport expenditure will rise strongly during the spending review period. The Transport and the Environment Committee observed that some of that increase was from money that moved from one budget line to another. That attracted press criticism, some of which misunderstood the situation, because some transfers were expenditure increases.
For the railway industry, which we just talked about, one budget transfer was of £31 million from UK Government expenditure to the Scottish Executive to sustain the level of ScotRail-operated services. If that transfer had not been made, ScotRail might have had to reduce its service level, which would ultimately have damaged the Executive's ability to deliver on its transport aims.
I welcome the rail funding initiative that Iain Gray announced this week of investment plans to increase the amount of available rolling stock, which will improve services throughout Scotland, such as the Glasgow to Edinburgh line, services in Fife and West Lothian, and services to Aberdeen and Inverness. That will contribute to achieving the Executive's stated aim of reducing overcrowding on rail services in the spending review period. The integrated transport fund, which was announced by the Executive recently, includes investment to establish new railway lines and to investigate, through exploratory engineering work, the reopening of the Bathgate to Airdrie railway line.
Mr Davidson's contribution on the subject of roads was long on complaints about the way in which money is spent but contained no clear explanation about the cuts that would be required in the Scottish Executive's budget if Conservative plans to slash public expenditure ever came to fruition.
Would the member like to start by cutting the £10 million that was spent on advertising and promotion? That figure, which relates to the Executive's administration budget, would be a good place to start.
The sum of £10 million would not go very far towards achieving the Conservatives' stated aim at the last general election of making cuts of between £8 billion and £16 billion. Little gestures such as the one Mr Davidson suggested would go nowhere near re-establishing the Scottish public's belief in the Conservative party's faith in public services.
The member suggests that the Conservatives have no faith in public services. Will he tell the chamber why I am content to send my children to state schools?
I welcome that. I can only conclude that Mr Monteith recognises the fact that parents' wise decision to choose the comprehensive education system is made in light of the excellent education that that system provides. I welcome the fact that he has faith in the comprehensive education system. I look forward to his support for it in future.
The Transport and the Environment Committee recognised that more investment is needed in the quality of roads, particularly local roads. I believe that Mr Morgan identified that area as one that requires additional expenditure. I welcome the way in which the Executive used its underspend last year to allocate money to local authorities for local road improvements.
The investment that has taken place in public services, particularly in transport, did not happen by accident: it happened because of decisions that were taken by Labour in government at Westminster and Labour in coalition with our Liberal Democrat partners in the Scottish Executive. All those plans would be put in jeopardy by the uncosted plans of the Scottish National Party if ever it came to power—however unlikely that might be.
I commend the budget to the chamber and welcome the Finance Committee's report.
I believe that Nicola Sturgeon set out a formidable case for the hepatitis C victims to receive fair and proper compensation. They were infected by contaminated blood supplies through no fault of their own and Nicola Sturgeon should be commended for setting out the case in her usual eloquent and articulate fashion and for saying exactly how the maximum cost of £89 million could be funded. That issue should be taken more seriously by some members.
I will focus on an issue that I believe people outside the chamber talk most about. It is the issue that has dominated the short life of the Scottish Parliament so far—I am talking about the Holyrood project. Many members of the public simply do not understand what has happened; they are angry about the rising costs and fail to comprehend how the project has not been taken a grip of. From conversations with my constituents, I know that many of them are absolutely furious about the issue. I have held my view of the matter for some considerable time and have taken an active interest in the project since the establishment of the Parliament, although I have taken a particular interest in it since about spring last year.
This morning, I will talk about one aspect of the whole sorry business, which I will call the Flour City fiasco. It relates to an estimated £3.8 million, which is money that can, should and will be recovered for the taxpayer; I have made it my business to campaign to that end. In spring last year, I was contacted by members of the Scottish Timber Trade Association who expressed concern that an unknown company called Flour City Architectural Metals (UK) had been awarded a £7 million contract. Those Scottish businesses, some of which had previously spent a great deal of time trying to secure the contract that was awarded to Flour City, had never heard of that company.
I began to make inquiries. I obtained a copy of the company's file and found out that Flour City UK had no assets other than a £2 share capital and that it had no UK directors. The two directors listed in the company file were a Mr John Tang and Mr Edward Boyle. The company had no trading pattern and, according to the only accounts that it posted in the UK, no income. I asked myself how a shell company with no assets, no UK directors and no trading history could have been awarded a £7 million contract. Would any member present in the chamber contemplate doing such a thing? I made further and more detailed inquiries and, in January this year, made lengthy submissions to the Auditor General for Scotland. The Auditor General took some time to prepare a report, but a report was finally made to me in a letter of 5 September.
In the interests of accuracy, I start by saying that the Auditor General's conclusion is that the contract "was not improperly made", but I am not sure what that means. If it means that there was a lack of evidence of impropriety, I accept that that is the case. Contrary to what Mr John Home Robertson said, I have never suggested that evidence of impropriety has come into the public domain.
The Auditor General concludes:
"there were deficiencies in the selection, award and management procedures for the award which exposed the SPCB to avoidable and possibly significant risk."
I reiterate—members should bear it in mind—that those deficiencies
"exposed the SPCB to avoidable and possibly significant risk."
I argue that that risk became loss.
The Auditor General went on to itemise particular deficiencies and said that insufficient financial information was obtained about Flour City and that a detailed financial appraisal of the company was lacking.
I have with me the pre-qualification questionnaire, which all prospective tenderers should have completed before they were accepted as eligible to tender. Did Flour City complete and submit such a document? If so, what information was given in response to the question that asks prospective tenderers to state what previous contracts they have obtained. I have been informed that no references were obtained from Flour City suppliers, customers or bankers. I believe that that is tantamount to negligence.
I discovered that in September 2000 a bad debt judgment for £1,017 had been found against Flour City in a Basildon court. I got that information by paying £4.50. Subsequently, in a letter of 12 July 2002 from the registry of county court judgments, I found that the information on Flour City's bad debt was available in September 2000. Given that the contract was not awarded to Flour City until the end of January 2001 and that the bad-debt information was available at that time, why did not the Holyrood construction managers get that information before deciding to award the contract?
Concerns about the parent company—Flour City International—were not explored, but company accounts dated 31 October 1999 show that the parent company had gone from being in profit to making a loss. Those accounts also show an unexplained share transaction in which the company paid out $1.5 million to some shareholders. It is unusual for shareholders to get money from a company when, according to its accounts, it is undergoing serious financial difficulties.
I do not have time to tell the rest of the story today. However, it is important that we recover every pound that we can, because £3.8 million is a lot of money. It could, should and—if I have anything to do with it—will be recovered for the Scottish taxpayer so that perhaps, at last, people will be able to see that something concrete is being done to deal with the fiasco of the Holyrood project.
I want to make a quick point about Nicola Sturgeon's amendment. I have said this already, but the amendment is more about political opportunism than political judgment. When we have a cross-party committee that has worked rigorously over three years to examine the problems of hepatitis C sufferers, it is discourteous for one member to break ranks and hijack the issue. That is especially the case when she knows perfectly well that if her amendment was agreed to, the payments could be clawed back through social security.
Will the member give way?
No, I will not. I have heard enough from the SNP today.
There must be concern that although health spending in Scotland has been 25 per cent greater than in England for the past 25 years, waiting lists and times in the past five years have increased and fewer people are being treated. However, instead of measuring outcomes, the Scottish Government still measures our health by the amount of money that is spent on it. The budget debate should be not only about headline figures, but about placing more emphasis on best value for taxpayers' money and on the effectiveness of spending.
As a member of the Health and Community Care Committee, I assisted with the passage of the Community Care and Health (Scotland) Act 2002. The committee recommended a single budget for care in the community and it recommended, in particular, free personal care. I lodged amendments at the appropriate times whose purpose was to avoid buck-passing between the NHS and local councils, but the amendments were defeated. Their basis was the Sutherland commission's findings that £750 million that had been earmarked for care of the elderly throughout the United Kingdom had gone into a black hole at local council level and had been diverted to other budgets. Malcolm Chisholm's own care development group discovered that £63 million that had been earmarked for care of the elderly was also diverted to other council budgets. Six months into the implementation of free personal care, there is neither the means nor the intention to monitor local government spending on free personal and nursing care, which would ensure that those who are assessed as eligible for such care get it.
I want to draw Parliament's attention to three written answers that I received last week from Frank McAveety. The first one confirms that
"Anyone assessed as needing personal or nursing care will receive it."
My second question was about measuring unmet need for home care, and the answer was:
"The Executive does not measure unmet need."
My third question was to ask about the waiting lists for home and residential care, to which Frank McAveety answered:
"The information requested is not held centrally."—[Official Report, Written Answers, 9 December 2002; p 2477.]
It is hardly surprising that 2,920 beds are still blocked in the NHS or that waiting lists are rising. We are currently debating the Mental Health (Scotland) Bill, which has two separate sections for NHS services and local government services. That represents total demarcation, and it is already clear that the commitment to supporting in the community people who have mental illnesses will not be achieved unless councils become accountable for their spending of the community care pound.
I raise those two issues because, last week alone, three people came separately to my surgeries to discuss them. One stated that their elderly parent was on a waiting list for free personal care, while another's parent had been assessed months ago for free personal care but was still in Raigmore hospital. The third case was a lady who had found a place for her mother in a private care home in Nairn, but was told by the social work department that her mother's personal care would not be funded because she had taken her mother out of hospital and had jumped the list. On top of that is Highland Council's proposal to rewrite our act of Parliament by changing the eligibility criteria for personal care. I am thankful that the council's social work convener was voted down by many decent-minded councillors, so the proposal was not proceeded with.
I mention those cases because successful implementation of acts that are passed by Parliament depends on the co-operation and commitment of local councils, but we have no means of openly and transparently holding them to account for their spending. However, when people complain that they cannot access free personal care or mental health services in the community, it will be Parliament and the Government who are blamed, not local authorities.
If we want successful implementation of policies and acts of Parliament, ministers need to ensure that local councils accept responsibility and accountability for spending and that they are open and transparent, as members of the Parliament and, increasingly, the civil service have accepted they must be. We can pass any act of Parliament and be as well-meaning as we like, but unless we can hold councils accountable for care in the community, we will not succeed with free personal care and mental health services.
I welcome the opportunity to take part in today's debate. Mary Scanlon intervened on the minister to suggest that we should get rid of Skye bridge tolls by 2009. We are more optimistic than that; I assure her that we will attempt to get rid of the tolls long before 2009.
I was pleased to see that the Finance Committee had the good sense to visit the island of Skye recently. I know that the committee was royally entertained and had informal discussions with many people in the community. The committee took evidence from many local groups, which highlighted their concerns and gave their views about national spending priorities and their effect on the economic viability of island communities such as Skye. The comments were wide ranging.
I was pleased to see that workshops were organised to give organisations an opportunity to give evidence. Almost all sections of commerce and business activity on the island were represented, including education, health services and the fishing, crofting and voluntary sectors. As members will understand, all those sectors make tremendous contributions to the economic well-being of any rural community.
I do not think that any member will be surprised to hear that one of the main topics of the evidence sessions was the high tolls on the Skye bridge, which—as was made clear at the meeting—are having a detrimental effect on the local economy. The tolls impinge on every aspect of island life, as well as on the neighbouring mainland community. Highland Council previously commissioned a study on the effect of the tolls on the community; its report determined that the tolls extract between £2.5 million and £3 million per annum from the local economy. If that money was invested or retained in Skye and Lochalsh, it would have the potential to create about 250 to 300 local jobs, which would be a very welcome boost to the local economy.
Will the member give way?
I will. I am not like the member's colleague Mary Scanlon, who said that she would not.
Will the member give the Parliament an indication of the cost of the ferry compared with the cost of bridge tolls?
It was always the case that the ferry was a local service that had to be paid for by the people who used it. The same concept was never applied to the bridge. The people who protested against the bridge tolls argued that, because the bridge is part of the highway, it should be free to the travelling public. However, the Government of the day decreed that that was not to be so and, instead of imposing a reasonable toll as most people expected it would, it imposed a toll that was—and still is—extortionate to say the least.
On tolls, we have heard only today that VAT is to be charged on existing road, bridge and tunnel tolls. I am not yet sure whether the level will be 5 per cent or 17.5 per cent; however, it represents an added charge. I am glad to say that the Executive has announced this morning that the travelling public will not have to pay VAT; that is good news indeed. I understand that, because the Parliament took the welcome decision of freezing the Skye bridge tolls, the Treasury will absorb that VAT charge. However, an interesting question for Chancellor of the Exchequer Gordon Brown is whether the VAT that will be extracted from Scotland and which will go to the Westminster Treasury will be put back into the Scottish economy.
The decision to impose VAT on tolls also raises an interesting legal question about the protesters who have been given criminal convictions for refusing to pay what was considered at the time to be a tax. Now that the bridge tolls are deemed to be payment for a service, rather than a tax, they are subject to VAT. What will happen to the poor protesters who were given criminal convictions? I have no doubt that they will be lining up at the toll-gates today as they travel to Dingwall to make representations to the procurator fiscal. It will be interesting to find out who will compensate those poor individuals.
I welcome much of the budget process and commend the Finance Committee for its commitment to the Scottish economy. However, I have always been concerned that our rural communities receive very limited resources, so I ask that more consideration be given to ensuring that initiatives in those communities get a bigger or more appropriate slice of the cake.
I take this opportunity to thank the members and the clerking staff of the Local Government Committee for their hard work. I also thank Ken McKay, who acted as our adviser on the budget process. I should also thank the Finance Committee and welcome Tom McCabe to his new post.
The Local Government Committee's stage 1 report on the budget process recommended that the Scottish Executive should address the implications for councils of the increase in employers' national insurance contributions. The Executive listened to the committee and, after consultation with the Convention of Scottish Local Authorities and before the committee's second report was published, the matter was resolved satisfactorily by the Executive's funding of the full amount. We also recommended that, when distributing additional health resources that would be accrued from the increase, the Executive should have regard to the contribution that local authorities make to the health of the nation.
The Local Government Committee welcomed the flexibility that the proposed prudential framework for capital investment will give councils. However, we were clear that the new arrangements had to be matched by adequate levels of revenue funding in order to make inroads into the backlog of capital investment.
The local government organisations felt that there was a need for a more open and constructive relationship between the Scottish Executive and local government in relation to the determination of councils' spending and funding needs. Other members have raised the same point this morning. On the other hand, ministers assured the Local Government Committee that the Executive shares a common agenda with local government. As a result, it appears that we need more transparent joint planning at an early stage.
The committee was very concerned that even after three years members were unable to scrutinise the local government budget in any meaningful way—the same applies to the Parliament's ability to do so. A number of steps need to be taken if we are to make the budget process more effective. For a start, there is no sense in considering proposed levels of funding in a vacuum, with one large figure for revenue and another large figure for capital. The committee invited the Executive to produce, perhaps in its annual expenditure report, information not only on funding but on spending levels and, if possible, outcomes. Moreover, we feel that the Finance Committee should review the whole process with a view to linking parliamentary scrutiny to spending reviews instead of annual budgets.
During questioning, the minister said that he believes that he had a constructive relationship with COSLA. Although Councillor Pentland, who is COSLA's finance spokesperson, agreed that such a relationship existed, he wanted COSLA and the Executive to have a partnership. The Local Government Committee is clear that it has no wish to undermine the principle that councils should be given as much discretion as possible to determine their spending priorities—which brings us to the question of ring fencing. I agree with most of Mary Scanlon's comments on ring fencing and, although I am not sure that we should go down the road of ring fencing, we should perhaps consider outcomes. Mary is absolutely right to say that there is no point in agreeing to good policies or legislation if they are not implemented as they should be.
Until we have more information that allows us to put funding levels in some context, our task will be well nigh impossible. The committee and the Parliament must be given much fuller information about the Executive assumptions that underlie the budget figures.
On revenue funding, the Local Government Committee again received conflicting evidence from the Executive and COSLA. For example, the minister totally rejected COSLA's claim that there would be underfunding by £440 million over the full three years of the settlement. Faced with those arguments and lacking the information with which to make its own assessment, the committee was not in a position to propose any change in the level of aggregate external finance—a decision that was honest, but disappointing. We share the minister's hope, which was expressed to me in a letter dated 4 November, that in future years the factors and assumptions that underlie the proposed local government budget will be made clear when the budget is first presented to Parliament.
As far as capital funding is concerned, the Local Government Committee was very supportive of the proposed prudential framework. There will be a significant increase in capital investment through the use of public-private partnerships, although I am pleased by the fact that PPP is not the only game in town and by Andy Kerr's statements on a two-tier work force. However, we remain concerned about the backlog of investment in other local authority services. For example, if Sylvia Jackson were here, she would highlight the issue of roads and bridges; indeed, Bristow Muldoon has already raised that matter.
The Local Government Committee has several continuing concerns. First, we are concerned about the degree to which local government organisations and the Executive disagree over the adequacy of the local government budget. That disagreement has been apparent since the first day. Secondly, we are concerned that attention has focused on year-on-year increases rather than on baseline provision. For example, debate has centred on the £586 million increase in budget instead of on what we are doing with the remaining £6.751 billion. Furthermore, lack of information about the budget from the Executive has made it impossible to express a view on the merits or otherwise of the case. It is to be hoped that the Executive will listen to and act on those constructive criticisms and that parliamentary scrutiny of the block allocations to local government and health will be significantly improved.
I echo the remarks that have been made by Trish Godman and Margaret Smith about their difficulties in being able to propose detailed, constructive amendments that reflect their committees' views. Perhaps members of the governing parties will reflect on those remarks before they indulge in their standard annual criticism of the Opposition's approach to the debate. It is difficult to come up with detailed alternative proposals and, as a consequence, Nicola Sturgeon's proposal is worthy of praise and support. She has come up with a specific proposal within the rather narrow strictures of the Public Finance and Accountability (Scotland) Act 2000 and the zero-sum base of the budget.
The Deputy Minister for Finance and Public Services has adopted an interesting position. He seems to be deputy minister for all Administrations and all seasons. I am delighted that at least one member of the Government has managed to survive all the reshuffles so far. His presence today is most welcome, in the absence of the Cabinet minister with responsibility for finance. This is the second major financial debate that the Minister for Finance and Public Services has dodged. I do not know why, but perhaps he is incapable of answering questions or he does not think the debate important enough for him to grace the chamber with his presence. Perhaps he has such confidence in Mr Peacock that he is more than willing to allow him to deal with the debate.
Mr Peacock dodged the question about cumulative accounting, having attempted to defend it in Skye. He failed to make any commitment to put the matter to one side and never to use cumulative accounting again. He will have yet another opportunity to make that commitment when he sums up on behalf of the Executive. I invite him so to do, otherwise the successor Finance Committee is likely to say the same thing to whoever occupies the minister's post after the election.
The Parliament gave the Finance Committee the responsibility of scrutinising the Holyrood project and it has been a difficult job. We receive quarterly reports from the Scottish Parliamentary Corporate Body and the Parliament, in its wisdom, set up the Holyrood progress group to try to make things work. However, the fundamental problem was that the method by which the building work was procured was never going to allow successful scrutiny by a public body at such a great distance.
Between now and the next time that we hear from the SPCB, I hope that the Finance Committee will invite the management agents of the body to give an account of the appointment of a company with rather dubious financial antecedents—according to the information that was provided to us—and to explain why that company was allowed to proceed. It would be most useful to ask the management company directly why we cannot get any closer to a firm price and a timetable for completion of the project. It is interesting that we were advised, in responses to questions to the SPCB earlier this week, that the Treasury, which gives advice on such matters, no longer recommends the procurement method in question. I hope that it will give the same advice on private finance initiatives and public-private partnerships in the near future, because those methods also have somewhat dubious value.
The general public will find it as difficult as MSPs find it to get at the detail of the budget. The public have significant interest in the ever-increasing cost of the new Parliament building and in the fact that we do not appear to be able to give a firm deadline for its completion. I look forward to having the opportunity to hold to account the company that manages the project on our behalf.
I suggest that the remarks that were made by Mr McCabe—the former Minister for Parliament—about ministers' responsibility for the new building were inappropriate. We have failed to hold the Executive to account for its responsibilities, as the Executive must find the money for the project. I hope that we will resolve that matter soon.
I apologise for not being present to hear the convener's opening speech, which I am sure was robust. I look forward to Mr McCabe's convenership of such an important committee.
The regional disparities in the education budget must be examined in the future, particularly the difference in Executive moneys for schools. The Association of Head Teachers in Scotland commented on the differences in levels of administration and bureaucracy between councils:
"In a national system of state education, it may be imagined, and even expected, that pupils are provided for in an equal way, but this is clearly not the case. Pupils straddling the ‘county line' would be better off turning right in the morning, rather than left (or perhaps vice versa).
The fact that such inequality of funding exists is clear to school managers across Scotland and is a source of on-going frustration. The sincerest principles and best founded practices of Devolved School Management are being increasingly compromised by the uncertainties and inequities of provision".
For example, Bannerman High School in Glasgow, with a school roll of 1,399, has spending per pupil of £2,720. Kirkcaldy High School, with a roll of 1,401—only two more pupils—has spending per pupil of £3,330, which is some £610 more per pupil. Rural areas are similarly affected. Balfron High School, with a roll of 881 pupils, has spending per head of £3,966, while Kinross High School, with a roll of 880, has spending per head of £3,267, which is some £699 less than Balfron High School.
In a study by the Association of Head Teachers in Scotland, it was found that because of the differing policies of council education directors, the budgets for similarly sized schools can vary by as much as £340,000. The effect of that variation can be found in numbers of teachers. Different staffing levels per 1,000 pupils can result in some schools having 12 or 13 more teachers.
The total spending on schools can be calculated by adding local authority and Executive spending on education and stripping out the non-school expenditure. That figure has increased from £2.95 billion to £3.32 billion—an increase of 8 per cent. For Bristow Muldoon's purposes, I tell him that I support that increase. However, if we examine the primary and secondary budgeted school running costs, which were posted on the Executive's website—although the figures from last year have only just been updated—we find that those figures have increased by 6 per cent. There is a 2 per cent difference between the money that was being given and the money that was actually being spent in schools. Despite the increase in spending, there was therefore a fall in the budgets for schools. Not only are the disparities between schools real and damaging, but the amount of money that is being retained by local authorities is actually growing. I hope that that is of concern to the Executive and to members of all parties. After all, if education spending is to increase, I am sure that we want the money to reach the classroom.
The way round that difficulty is for a greater proportion of funding to go directly to schools. The chancellor thinks that that method of funding is good enough for English schools, but our ministers have so far not applied it in Scotland. As the situation is getting worse, I ask the minister and the Finance Committee to examine those problems in the coming year and to establish whether the problem is the formula used by councils, the formula used by the Executive or both, so that we can remove that injustice from our schools.
Having been involved in the budget process for a number of years, I think that the information that we are receiving is getting better, but it is still not good enough. It certainly does not allow for sufficient meaningful scrutiny by committees, and I concur with the points that were made by my colleagues Trish Godman and Margaret Smith. If the process is to be meaningful and worth while, we need to adjust the timetable to allow level 3 figures to be available to the committees. Without those figures, we cannot have the detailed scrutiny that the committees would like to take part in. We would clearly be able to gauge what was happening by looking more closely at those figures.
I agree with some of Brian Monteith's points. We need greater transparency in the budget process, not just in the Executive but in local government and in the health service, so that we can monitor where the finances that are being committed by the Executive and by this Parliament are going and how they are being spent. There is an expectation, particularly when announcements are made in the chamber, that the money will be spent on what it was announced for. When that does not appear to happen back in the constituencies, people begin to ask questions of us. If we do not have the transparency that is required to monitor the process, we cannot give people the answers that they are looking for. We must continue to look at that.
I want to mention a couple of points that the Education, Culture and Sport Committee made in its contribution to the budget process. The first point relates to the budgets for agencies such as Historic Scotland. We must consider how we continue to monitor those budgets, because the underspends that have occurred in the grants budget in the past year, and which are forecast for this year, give the committee some concern. I hope that the Executive will ensure that that situation is kept under review.
Secondly, the Minister for Tourism, Culture and Sport is aware of the committee's concern about baseline funding of the arts. Although the minister has indicated that there are still on-going issues, it is the committee's view that there is a need for a fundamental review of arts funding in Scotland—how that funding takes place, where the money goes and how the arts are supported in a meaningful way. I hope that, through his offices and with the minister responsible for the arts, the Deputy Minister for Finance and Public Services will continue to hold discussions with all the agencies, so that we can move forward positively and productively for the arts in Scotland.
Thirdly, the committee very much welcomes the additional funding that has been given to sure start, because it has been recognised that early years intervention has positive consequences for children in the later years of their schooling.
My final point is on McCrone funding. Some local authorities have expressed concern that their funding package for McCrone has not been sufficient to meet their needs, while others have said that they can meet the McCrone provisions and have some money left over. I return again to the issue of transparency. The Minister for Education and Young People is aware of those concerns and discussions are continuing. I thought that it would be useful to raise those points in the chamber, but I do not intend to say more on that.
We welcome the opportunity to take part in the budget process, but I reiterate my point that, if our involvement is to be meaningful, we must have level 3 figures before we start the process.
The Finance Committee paid a visit to Skye, which was extremely well received. The number of people who came to meet, listen to and engage with the committee was very gratifying indeed. We heard the widest range of evidence. None of us was surprised to hear John Farquhar Munro talking about the Skye bridge tolls, but many other issues were covered. I want to flag up two of those issues in particular, which were of great concern at grass-roots level in Skye and which also apply to the north of Scotland in general.
The first of those issues, which has been touched on already, is roads. There is no doubt in my mind, and in the mind of every other right-thinking Highlander, that the condition of the non-trunk roads in the Highlands is gradually deteriorating. That could well be in spite of the best intentions of the Scottish Executive in channelling funds into grant-aided expenditure. I shall return to that point in a minute or two.
The second issue is one that I have raised before in the Parliament, and I make no apology for doing so again; it is the issue of less favoured areas. Despite the Scottish Executive upping the amount of money that is put into that form of agricultural subsidy, there is unfortunately a statistic that dictates that the crofters in some of the most marginal parts of the Highlands, such as Assynt in my part of the world, actually receive less grant than they did in the past.
Does Jamie Stone agree that we need to look not only at LFAs but at the rural stewardship scheme to examine the balance that has been achieved between spending in lowland Scotland and spending in upland Scotland, where most of the LFA areas lie? Does he share my view that, in that way, we can start to make a real difference?
I do not contradict anything that Bruce Crawford says. I have to be quite honest and say that I have concentrated on LFAs because that is of particular interest in my constituency.
In striking the balance, it is important to get things right. Some of the most marginal crofts are losing up to £1,000 per croft. Where there is no other form of livelihood, I am afraid that that will discourage people from that way of life, which will fundamentally undermine a particularly fragile part of Scotland. That is happening despite the fact that more money is going in.
Peter Peacock, Alasdair Morgan, Tom McCabe and I have been meeting to discuss the matter. The deputy minister put it rather nicely when he said that, although there is cross-cutting and joined-up thinking at the level of the First Minister and the Minister for Finance and Public Services, when the cash is fired down the tubes—the silos, as Peter Peacock called them—outcomes are not always what we might wish. That has been referred to by members all round the chamber.
In responding to the Finance Committee, Peter Peacock was beginning to explore the possibility of going in for community planning as a way of measuring outcomes. Quite how one would do that for 32 local authority areas, I do not think any of us knows yet. However, as a mechanism for the Executive to see whether we are achieving our objectives, it may be possible. The minister might care to comment further at this stage. If so, that is well and good. If not, because more consideration must be given to the proposal, I will understand that.
The one way out of the problem in my part of the world—on the roads front and on the LFA front—is to get back into European funding. The past is the past in terms of what happened to objective 1 funding for the Highlands, but in the years to come there will be other opportunities to get in there again. I urge and exhort the Executive and all right-thinking people to make the best possible case that we can for the Highlands, so that we get as much money as we can. I tell members from other parts of Scotland that that will also help budgets and increase the overall total, taking less money from their areas and giving more money to my crofters.
I commend Nicola Sturgeon for her well-thought-out proposal for a solution to one of the greatest injustices that the Parliament will ever be faced with—people infected, through no fault of their own, with hepatitis C contracted from contaminated blood and blood products received through the health service.
Nicola Sturgeon has had a long-term interest in that issue and feels strongly about it. I say to Mary Scanlon and Margaret Smith that it does not matter who brings forward a good idea or how an idea is brought about; whether an idea is good or not is more important. The proposal is good for hepatitis C sufferers. Yesterday, I spoke on the phone to a hepatitis C sufferer who thought that a debate would be good, as it would provide another opportunity to raise the issue and possibly find a solution.
I do not think that any member is questioning any other member's commitment to any cause, least of all hepatitis C. However, the point that has been made is that it is discourteous to other members of the Health and Community Care Committee to take the matter to another committee without first discussing that with members of the Health and Community Care Committee.
What is best for hepatitis C sufferers is more important and must come first and foremost, before any perception of what parliamentary protocol is. A result for hepatitis C sufferers is far more important than the member's or anyone else's perception of what parliamentary protocol is.
Is the amendment not sheer opportunism by Nicola Sturgeon? Committee members have made that point many times this morning.
If the member went out and spoke to hepatitis C sufferers, which I assume that he has not done—[Interruption.]
Order.
I hear the member interrupting—there should be one singer, one song. If the member spoke to hepatitis C sufferers, they would tell him that it is good that today's debate is happening, as it gives another opportunity to raise the issue and find a possible solution. If hepatitis C sufferers think that that is the case, that it is more important than what the member or anybody else thinks about parliamentary protocol or procedure. We should all bear that in mind.
I pay tribute to the expert group under Lord Ross. Its sterling work has provided the Health and Community Care Committee with a huge opportunity to reach a solution in respect of hepatitis C sufferers. It has provided a cast-iron case. Despite the fact that the group was appointed and given its remit by the Minister for Health and Community Care, its recommendation is clear. It is a little disappointing and somewhat disturbing that its judgment has been ignored by the minister. Experts who know about the subject have been asked for advice. Given that the Health and Community Care Committee has given a clear view on financial assistance and that the expert group has said that such assistance should be given, can the committee and the expert group be wrong and the minister right? I do not think so.
I welcome the SNP's conversion to accepting expert groups' recommendations. Is the member saying that whenever the Parliament sets up an expert group and that group makes recommendations, the SNP will always support those recommendations?
In the main, I would support such recommendations and, in the main, the SNP has done so. I wonder whether the member has an example of our not doing so.
For example, unlike the Liberal Democrats, we supported the Cubie recommendations. The Liberal Democrats should have supported that expert group's recommendations. I want to move on, as I am already over my time.
Nicola Sturgeon's amendment is a practical and workable solution. It has been pointed out that, last year, the capital budget underspend was £111 million and it is possible to release those resources without any adverse effect on capital or revenue spend.
Some problems that have been identified are problems only if they are made into problems. The benefit clawback, for example, is a problem only if Westminster ministers decide to make it a problem. Of course, the precedent exists in the Macfarlane Trust for benefits to be disregarded. It would be a travesty of justice if Westminster ministers stood in the way of hepatitis C sufferers in Scotland getting financial assistance should the Scottish Parliament support such assistance.
Similarly, the issue of no-fault compensation does not arise. Lord Ross clearly said that giving financial assistance to hepatitis C sufferers sets no more of a dangerous precedent than that established under the Macfarlane Trust.
There are no insurmountable problems. Where there is a will, there is a way. Today, I hope that the Parliament will have the political will to find a way of giving the vital assistance that is required by hepatitis C sufferers. That can be done if members support Nicola Sturgeon's amendment.
I regret that I did not hear what the convener of the Finance Committee said, as I had meetings earlier this morning. However, I will concentrate on the provision for justice. We want the strongest possible priority to be given to law and order, the rule of law and the interests of justice. In practice, that will mean increased support for the justice budget.
I say that for good reasons. In "Building a Better Scotland", crime is identified as one of the five priorities for action. However, the justice budget is set to decrease as a share of the Executive's total managed expenditure from 3.54 per cent in 2002-03 to 3.32 per cent in 2005-06.
I draw the minister's attention to the recommendations of the justice committees at stage 1. They pointed out that justice should be given a larger share of the available spending, which would be consistent with crime being one of the Executive's five priority areas for action. The two committees also recommended increased provision for the prison service for 2004-05 and 2005-06 to assist with modernisation and for all secure accommodation to be brought under the justice department and to be overseen by it.
Police numbers may be marginally higher than in 1997 but, according to "Narrowing the Gap: Police visibility and public reassurance—Managing public expectation and demand", at any one time only 138 police officers are walking Scotland's streets. Although the Executive has piled extra responsibilities on to the police, there is no indication that it has any genuine intention to provide the necessary increases in strength. Indeed, according to "Building a Better Scotland", Labour and the Liberals intend to focus resources only on
"maintaining the capacity of the police".
We want to do a great deal better than that.
I want to turn to funding for the courts, the administration of which is so overloaded that it has given rise to Lord Bonomy's review of the High Court system. He made the controversial recommendation that the 110-day rule should be amended. The Crown Office should be given the resources to make certain that deadlines are not missed. If the prosecution and the court service had been given the necessary resources, calls for the abolition of the 110-day rule might never have been made. Through more appropriate provision, every effort should be made to remove the backlog of cases that are before the High Court and sheriff courts.
To coincide with the BBC's crime day in September, a survey was taken of the attitudes of more than 600 adults to crime and the police. The top choice that would make people feel safer was more police on the streets. More closed-circuit television cameras came second on the list.
The blunt reality is that the number of recorded crimes soared between 1997 and 2001. Drug-related crimes increased by 23 per cent, non-sexual crimes of violence increased by 24 per cent and fire raising and vandalism increased by 17 per cent.
We need more police officers to be visible within communities and they should be backed up by a court system with sufficient resources to bring cases to justice within a reasonable time scale. There must also be enough resources to ensure that the courts dispose of criminals appropriately, that the prison service rehabilitates them, and that the youth justice system provides outcomes that will discourage and prevent young offenders from re-offending. In short, we want more police and fiscals, and more resources for the courts and our justice system. We will go on campaigning for a better deal for people until we get it. I emphasise to the minister that those recommendations come not only from me, but from the justice committees. We call for strong policies on crime. Our purpose is to reclaim the streets for the law-abiding majority by tackling all ends of the justice system.
We come now to closing speeches. The normal running order has been disrupted slightly by the impact of the amendment and counter-amendment. I call first Keith Harding, who has six minutes.
The debate has been interesting and informative. However, I want to concentrate on and highlight the concerns of the Local Government Committee when it considered stage 2 of the 2003-04 budget process. Like Trish Godman, the convener of the Local Government Committee, I am pleased that the Executive took on board the committee's recommendation that, when the Executive determined the settlement for local government, it should address the implication for councils of the increase in employers' national insurance contributions. That increase was fully funded. The move to a prudential framework for capital investment will give councils more flexibility, but the framework will enable councils to make significant inroads into the backlog of capital investment only if it is matched by adequate levels of revenue funding. I ask the minister to address that issue in summing up.
One area of great concern to councils that has not been addressed is how the Executive presents the local government settlement. The minister proudly announced a £586 million—or 8.68 per cent—increase in aggregate external finance over the 2002-03 figures and stated that, in his view, it was a "fair but challenging settlement." Then councils had to raise council tax by more than double the rate of inflation and make cuts in front-line services. That does not add up or make sense for the electorate as they struggle to pay more in council tax while getting less in return.
The Executive must be more honest and transparent and break down the increase to show what new additional moneys are being allocated, rather than the mainstream Executive priorities from previous years and the funding for new burdens imposed from the centre. COSLA believes that once that so-called non-discretionary expenditure is stripped away, the year-on-year increase is only 2.5 per cent and core services are being underfunded by £440 million over the full three years of the 2002 spending review. The minister rejected that view, but it appears to be borne out by councils' actions. Why do councils have to cut services and increase council tax, if the settlement is as generous as claimed?
Trish Godman described the Local Government Committee's inability, because of a lack of information from the Executive, to come to any conclusion on the funding level. Karen Gillon, the convener of the Education, Culture and Sport Committee, supported that view. Karen Gillon has reacted to mention of her name, but I inform her that it is all right—I was not being rude to her. Tom McCabe, whom I welcome to his new post, expressed concerns regarding the education budget and triple accounting. Margaret Smith, the convener of the Health and Community Care Committee, also pointed out the difficulties in identifying true new moneys in the health budget. I am pleased that the Finance Committee will pursue the issue of the lack of information with the Executive. David Davidson and others also raised that issue, but the minister did not mention the issue in his opening address. It would be interesting if he gave his views, instead of continuing to skirt around a serious concern that is continually raised but consistently ignored.
I commend the Finance Committee for its comprehensive report and I look forward to the Executive responding positively to its recommendations, particularly in relation to cumulative accounting and the provision of better level 3 spending details at an early time in the budget process.
I must disagree with David Davidson's comment that three hours is too long for the debate, because the debate is about £23 billion of public spending of taxpayers' money on public services. Surely the Parliament should be giving that matter proper attention. The debate seems too long to the Opposition because it never proposes any alternative ideas for the budget. The debate is not about the budget process, but about the draft budget—that is what we are dealing with.
I will not give way on that particular point.
It is disappointing that this last opportunity before the last budget bill prior to the election—
The Finance Committee report refers to the "Budget Process".
No, it refers not to the budget process, but to stage 2 of the budget process, which, I think Mr Harding will find, is the draft budget. We are debating the last draft budget before the election, but the Opposition parties will still not tell the Scottish Parliament or, more important, the Scottish electorate what they would do differently. That is a disgrace.
I wonder whether we will now hear from Mr Smith the layout of the Liberal Democrats' policy, because they apparently consider themselves a separate party from Labour.
We are part of the Executive that is proposing this budget. We will, of course, be standing in the election as a separate party. If our manifesto has different policies that require budgeting, we will explain those changes at that time. The Opposition has not proposed a single alternative budget proposal—apart from Nicola Sturgeon's one—for the past three and a half years. That is appalling, and if the electorate will bear that in mind—
I am sorry, but I need to make some progress.
The Conservative's basic policy, of course, is to spend more money on roads but at the same time cut money on taxes. They will not say where they would find the money to spend on roads or where they would cut public services, such as schools and hospitals, in order to fund their proposed tax cuts. I will return to the SNP later, when summing up on the amendments.
On the Finance Committee report, I cannot add much to what Trish Godman said in relation to the local government budget. The Finance Committee's report perhaps slightly misinterpreted the points that the Local Government Committee was trying to make. Paragraph 33 of the report states:
"The Executive's assumption of how much should be spent on key services should be set out in the budget".
What we are looking for is a clear definition of how the Executive builds up its priorities and how it determines its budgets. We want to know the Executive's assumptions about the expected outputs of local government and the health service from those budgets. It is not for the Executive to determine how that money is spent, but for local government to say transparently, "We have been given money for this service, but we think that the local priorities"—which Brian Monteith seems to think are not important—"are actually something slightly different and we will spend the money differently." If we had more information from the Executive, then at least the public, the Local Government Committee and the Parliament would be able to judge whether the Executive or local government was right. It is important that we get that sorted out in future.
I will now consider the SNP. Brian Adam said that is was difficult to come up with amendments. Well, it certainly appears to be difficult for the SNP to come up with amendments, because it never does so. However, it does seem perfectly capable of coming up with spending commitment after spending commitment without once telling us how it will pay for them. In the past month alone there have been about eight or nine new SNP spending commitments. I will not talk about the millions that the SNP has committed over the years. For example, on 12 December, the SNP commitment was to additional social workers; on 11 December, it was to more pay for nurses; on 10 December, it was to more money for Inverness airport; and on 9 December, it was to more police. That was an expensive time because there was also a commitment to smaller class sizes and more money for children's hearings on 9 December. On 3 December, the commitment was to more pay for dentists. However, not once has the SNP indicated how it would pay for any of those commitments.
I apologise because I cannot remember the exact date, but I seem to recall that a couple of months ago the Liberal Democrats published a pre-manifesto document. Can Iain Smith tell us what was in that document and whether anything in it would require a change in the Executive's budget plans? If so, why are there no Liberal Democrat amendments to the motion that we are debating?
I would love to read the Liberal Democrats' priorities for government on to the record during the debate, but I do not think that the Presiding Officer will give me the time to do so. I will be happy to do so at some future date, if the Presiding Officer will give me a commitment that I can do so.
If you can do it in a minute and a half, I do not mind.
It takes a bit longer.
The SNP, rather than telling us how it would pay for its commitments, is promising more tax cuts, which is rather strange. The SNP's budgets do not add up.
I was interested in Shona Robison's comments about expert groups. I seem to recollect that the Cubie committee wanted a £3,500 graduate endowment. We said that that was far too much and that the figure should be cut to £2,000. I presume that the SNP still supports the Cubie proposal of £3,500.
I also do not recollect the SNP ever supporting the recommendations of the expert group called the Advisory Committee on Releases to the Environment. In fact, it criticised that group at all times. It seems that expert groups are acceptable only when they do what the SNP wants them to do, not when they come up with something that the SNP does not like. We are the politicians and we make decisions based on the advice of the expert groups. Running the country is the job of politicians, not expert groups.
It is typical of the SNP that it has focused on only a small part of the budget. The party has ignored 99.99 per cent of the budget, choosing to examine £30 million out of £23 billion. As usual, the party is jumping on various bandwagons, looking for cheap headlines. Shona Robison's claim that the only people who matter are sufferers of hepatitis C is a nonsense. This budget is about everybody in this country—it is about our hospitals, the police, the fire service and other services.
The SNP says that it has given details of how its proposals would be paid for but, in fact, it has said that it will make cuts in one budget line without saying what the implications of that reduction would be. It would mean that there was £20 million less to invest in capital in our hospitals. Which hospital will bear the brunt of that cut? I hope that it is not the one in St Andrews. There would be £25 million less for our local authorities to spend on capital projects. Which schools would not be modernised? There would be £6 million less to spend on our transport infrastructure. Which road improvements would not be carried out? The ones on the Mallaig road, which the SNP has called for? Which rail projects would not be undertaken? The Borders rail link and the Glasgow and Edinburgh airport links, which the SNP has also called for? The SNP does not tell us that, nor does it tell us what would be hit worst by the £30 million that would be cut from the water investment plans. Which water treatment plant outside Glasgow might have to be closed? Nor does the SNP talk about the £2 million cuts in the police service budget, the £1.5 million cuts in the fire service budget, the £2 million cuts in the prison service budget or the £2 million cuts in the further education colleges budget. The SNP only makes promise after promise without telling us how they will be paid for.
The Finance Committee debate always occurs at the climactic parliamentary meeting of the year. On this occasion—rather unexpectedly, otherwise we would have a higher attendance rate—we have the bonus of two speeches from Peter Peacock. Earlier, Peter Peacock referred to the total lack of visitors in the gallery, but I see that since then, in mathematical terms at least, the number has infinitely increased to two.
Unusually, the nation's press was interested in the Finance Committee's report. It was interesting to see the spins that were put on the report by various newspapers. Predictably, The Scotsman went with the cumulative accounting story and gave its story the headline:
"Ministers told to end budget figures spin".
The Daily Mail managed to get another spin on that story, focusing on the fact that Tom McCabe is the convener of the committee and giving its story the headline:
"Sacked minister attacks Executive".
That was a good headline, I thought.
I will now deal with some of the committee's recommendations. Although the visit to Skye was not quite the junket that John Farquhar Munro made it out to be, we were struck by the fact, to which the report alludes, that there has been only an 8 per cent growth in traffic over the bridge since it opened. Most of us thought that such a huge improvement in the transport infrastructure of the area would have brought with it a much greater growth in traffic. That needs to be investigated. Regardless of that, however, the bridge remains the biggest single issue among businesses and people whom we talked to on the island.
On the recommendations that the committee makes with regard to the Holyrood project, I hope that when that building is ready—and I hope that it is a building of which generations of Scots can be proud—we will open it with a simple and dignified ceremony. We do not need what would be portrayed by the media as a junket.
The committee was concerned about the building itself. At our meeting earlier this week, several members expressed the view that, while most projects seem to get more certain with regard to time and cost as they near their end, the exact opposite situation is developing in relation to Holyrood. It is no wonder that there is significant disenchantment among the public, to the detriment of the Scottish Parliament rather than those who landed us with this project.
The recommendation that the Executive assure businesses that their rates bills will not rise above inflation was made because of the projections in the budget that non-domestic rates income would increase substantially over the three-year period of the budget. The minister gave us a complex explanation about how, as all appeals were turned down, more money would come in as the back payments were made. However, there was also the usual ministerial explanation about why Scottish businesses were not being disadvantaged by the fact that our uniform business rate is higher. The explanation that we are given, of course, is that our rateable values are lower than English ones, so the outcome is the same. That assumes, however, that the basis of valuation is the same north and south of the border, but there are certain cases where that is not so. For example, in relation to pubs, petrol stations and so on, turnover, not assessed rental, is the basis for rateable value. Given that the turnover of comparable businesses will be the same on both sides of the border—or higher in Scotland, in the case of petrol stations, as the price of petrol is often higher in some parts of Scotland—rate payments will be higher north of the border. I would also point out that, because of the different basis of valuation, one or two-star hotels that are too highly valued to benefit from the Government discount to those with a small rateable value will have to pay higher rates than similar establishments in England. Tony McRitchie, who is a caterer and hotel keeper and a spokesman for the Royal Institute of Chartered Surveyors, says:
"Currently, it is my estimate that such hotels, as a result of the separate Scottish valuation scheme, produce values 10% to 15% higher than for equivalent hotels in England and Wales."
Such hotels are paying much more than equivalent businesses south of the border because they have a higher rateable value and a higher uniform business rate. The minister must examine those discrepancies and say what he is going to do about the problem.
On the matter of cumulative accounting, the minister may well be mathematically correct—in fact, I am sure that he is—but those figures are used for one purpose alone: to make the Executive appear better. They are mathematically correct but presentationally dishonest. It is the unanimous view of the committee that cumulative accounting should stop. It is not a party-political matter. The minister should at last do the decent thing and give way on the matter.
On the increases in expenditure, the committee has welcomed the growth in the Scottish budget. However, we stress that we need value for money. In that context, it is what we get out of the budget and whether the targets that are set are met that is important, rather than the total amount of money. It is disappointing, therefore, that quite a few of the targets in the budget are vague and unquantifiable. For example, the first target under objective 1 of the transport section is to
"Reduce the time taken to undertake trunk road journeys on congested/heavily trafficked sections of the network by 2006."
What does that mean? By how much will the times be reduced? I lodged a question to ask what statistics would form the basis for an assessment of whether that target was being met, but the reply informed me that no statistics that directly cover journey times are available and that data collection will commence in the spring or summer of 2003. That means that we have a target, but no statistics to measure it with and that, when we decide what the statistics should be, we will not start collecting them until the summer of next year. In future, those statistics might give us a good basis on which to set a target, but we should not now set targets that cannot be validated.
Jamie Stone mentioned less favoured areas, so I will give another example. Target 8 for the environment and rural affairs department is to
"Encourage more sustainable agricultural activity on 13,500 farm businesses in Scotland's remote hills by 2006."
Again, I lodged a question with a view to finding out what that means and how it would be decided that the target of encouraging more sustainable agricultural activity had been met. Effectively, the answer says, "Well, we are paying support to 13,500 farms. That must be encouraging activity." That is to confuse the means with the end. The Executive cannot prove that that target is being met either. We have many unmeasurable targets. The budget is getting better, but we still need much more definition on some of the targets.
I welcome Nicola Sturgeon's amendment. It is important that we establish the principle that we are engaged in a budget process in which individual members, not acting on party advantage, can try to amend the budget constructively. If that develops in future years, that will be good.
To call the process a budget process is a misnomer. As Mr Peacock knows, it is not even half a budget process. We deal with virtually none of Scotland's income, except for non-domestic rates, and only a proportion of its expenditure. We deal with nothing that has to do with social security, for example. Until we have all the levers of Scotland's budget in our hands, we will never realise Scotland's potential.
I now call on Peter Peacock to resume his innings on behalf of the Executive.
I will make no comment about the number of runs that I have scored in my career as a cricketer.
They have all been no-balls and wides.
Thanks, umpire.
I will pick up on various points that were made during the debate. Trish Godman, Mary Scanlon, Tom McCabe, Karen Gillon and other members made a number of points about the nature of the block allocations that we make to the health service and to local government. At the heart of that matter is something that we have yet to reconcile as a new set of democratic institutions in Scotland: the relationship between the centre, which is the Scottish Government, and our local delivery agents—democratically elected local authorities and the health service.
We constantly try to illuminate the funding that goes to those sectors. We have undertaken to give the Local Government Committee more information about the assumptions that underlie the budgetary decisions in the way that Iain Smith described. In turn, we will give that information to the Finance Committee.
Because of the concerns that some people have expressed and because of our concerns about the issues that have been raised, we are also moving to construct better outcome agreements with our partners to ensure that we work towards shared targets. That is why we are increasing the Accounts Commission of Scotland's powers on local government, why we are doing better auditing throughout the system and why inspection systems are more robust than in the past on local authority works and certain aspects of local authority work.
However, we must reconcile that with the fact, which we must continue to recognise, that we must give local discretion to allow decisions to be exercised in tune with the needs of those communities. We must continue to work at those relationships over time. Nonetheless, I hope that we are making progress on that.
Trish Godman also raised points on local government input into the budget process. I am glad to say that, this year, we have substantially revised the way in which we involve local government in the spending review. A series of meetings between local government representatives and ministers took place to help inform our discussions of how the spending review could move forward. We plan to continue and strengthen that partnership over time.
Lord James Douglas-Hamilton made some points about the justice budget. There is a point of principle in what he said with which I cannot agree. He said that, unless, each year, we increase the budget for any part of the Executive's activity by more than the average, we are not regarding that part of our activity as a priority. That cannot be correct in principle.
I will take the police service as an example. As Lord James indicated when he spoke, we have record numbers of police in Scotland. The fact that we maintain those record numbers of police and try to make progress will create a statistical effect that means that, in percentage terms, that budget will not rise as high as other parts of the budget, such as health, in which we are crying out to grow the budget. That does not mean that policing is any less of a priority. We are securing that priority into the future. Also in the justice service, we have substantially increased the resources that are going into the Crown Office to address the problems that have been identified for us.
David Davidson made some spurious points about broadband and a number of other points about the budget report. I wonder whether he has read the budget. Apart from other initiatives that we are taking, only two weeks ago Iain Gray announced significant new investment in broadband infrastructure in Scotland to try to stimulate that marketplace. The pathfinder projects in the Highlands and Islands—and in the south of Scotland—are also trying to make progress on broadband.
On the Skye bridge, I am glad that John Farquhar Munro acknowledged that the Executive will ensure that Skye bridge users will not have to pay higher tolls as a result of the European judgment on the application of value-added tax to tolls. Alasdair Morgan and others mentioned growth. Skye is one of the most successful communities in the Highlands and Islands. The population of Skye has grown for, I think, the fourth decade in a row. The bridge has not been an impediment to the economy of Skye. Skye has prospered while other parts of the Highlands and Islands have struggled.
I have some sympathy with Alasdair Morgan's points on targets. I am glad that he acknowledged that we have made substantial progress on that. We have made very significant progress in defining targets. However, in some areas—Alasdair Morgan touched on a number of them in his astute analysis—we must go still further in trying to establish better targets and better monitoring. That is in the Executive's interest as much as it is in the Parliament's interest. We plan to make progress on that.
I still do not get the feeling that the minister will do something positive to monitor and audit local authority spending, particularly on free personal care and mental health services. The Executive has allocated £79 million to tackle delayed discharge over four years. However, in a parliamentary answer, Frank McAveety says:
"It is not possible to extract from total discharge numbers those discharges funded directly"
from the £79 million. The Executive is not making an effort to hold local government accountable for implementation and spending.
We are trying seriously to work and move forward with local government. That is why I referred to agreeing joint outcome statements about what we are trying to achieve with local government, but leaving the methods of achieving those outcomes much more freely available to local authorities to make choices to suit their local circumstances.
We must remember that local councillors are democratically elected and are accountable for their actions at that local level. We must find a balance between the rights of the centre—the Parliament and the Executive—to expect certain things and the local flexibilities that are required. We still have work to do on that, but we are trying to work our way through it.
Jamie Stone raised questions about European funding for the Highlands and Islands and in Scotland more widely. He can be assured that, as we move forward in a greatly changed landscape in Europe, we will continue to fight hard Scotland's corner on funding and that, within Scotland, we will also fight the Highlands and lslands' corner.
I accept and welcome what the minister has just said. Would that include co-ordinating work with the Highland Council, other relevant local authorities and the Scottish Enterprise network?
Absolutely. In fact, I had meetings with those organisations in the past week about those issues.
I was intrigued that Alasdair Morgan invited us from the Scottish National Party front bench to follow English valuation practices. That is a helpful precedent for the SNP to follow. A huge effort goes into harmonising valuation north and south of the border and has done for many years. That continues to progress and helps to find a level playing field.
I agree. However, the more that the Executive tries to harmonise valuation north and south of the border, the sillier it is to have a different uniform business rate north of the border.
I do not agree with that. The point is that we seek harmonisation in valuation practices north and south of the border. Alasdair Morgan himself described why rates north and south of the border cost the same when we multiply the poundage by the valuation. That is the critical point.
Nicola Sturgeon, Fergus Ewing, Mary Scanlon, Shona Robison, Janis Hughes and others made points on hepatitis C. The Finance Committee considered the issues carefully and rejected Nicola Sturgeon's suggestion for good reasons. Those reasons have not changed during the past two weeks.
There is no painless way of finding additional funding for the scheme. Nicola Sturgeon suggested reducing the departmental expenditure limits capital budget by 2 per cent in the three years from 2003-04 to 2005-06 to find an additional £89 million. There is no single DEL capital budget from which we can take that money. Instead, there are capital budgets for transport, health, education and all the other portfolios in the Executive.
I will not give way; I must make progress.
To reduce all those capital budgets would mean spending less on hospitals, roads, schools and other projects. We have capital budgets for a reason. We must accept that reducing those budgets by 2 per cent would affect the improvements that we want to make to our schools, hospitals and roads. Nowhere does Nicola Sturgeon set out which of those budgets should be cut.
Which are the planned roads, hospitals and schools that will be removed from the programme? In which constituencies and communities will that happen? Nicola Sturgeon has tried to make a virtue of the fact that she does not seek to take the money from the health budget; it therefore has to come from somewhere else. Will it mean less spending on secure accommodation, on which her colleague Roseanna Cunningham asked a few weeks ago that more money be spent? Will it come from recycling, for which her colleague Bruce Crawford asked for more money last week? Will it come from flood prevention, for which Margaret Ewing asked for more money? Those are the real choices of Government. Nowhere is there an indication of where those moneys will come from.
If the minister does not think that my proposal is supportable, can he tell us from where in the budget he would suggest taking the money, bearing it in mind that although his colleague the Minister for Health and Community Care does not accept in full the recommendations of the expert group, he has said that he will compensate some sufferers? From where will the Executive take the money?
Nicola Sturgeon will get the answer to the generality of that point as I move forward in what I have to say.
It is not only a question of the cash. Other issues surround the creation of any ex gratia compensation scheme. We want to avoid a position where we provide financial support that leads to social security payments—as members have commented on—being withdrawn or reduced. There is no point in sufferers receiving more money from the Executive if they simultaneously receive less money in benefits as a result of our changes. In addition, as the Finance Committee acknowledges, the recent report on hepatitis C raises issues of no-fault compensation; those need to be resolved. We hope to make progress on those issues so that we can get on with the task of helping the people who need support the most. That aim is shared by all members of the Parliament.
I am over time, Presiding Officer, so I will conclude.
The minister has taken a lot of interventions, so if he has more to say, he can continue.
I am more than happy to keep going because I would like to say a few things.
We have a couple of minutes in hand.
In that case I will turn my attention—
Will Peter Peacock give way?
No. I will not take any more interventions.
I will now discuss the rest of what the SNP has not said on this occasion. It has taken a remarkable period of time for the SNP to discover that it can move changes to the Scottish budget, yet it has chosen to do so in only one case. What happened to all the other matters that we have been hearing promises about over recent weeks? The report that we are discussing deals with not only the coming financial year, but a three-year time horizon—almost the whole life of the coming Parliament—yet there is not a single proposal to deal with all the SNP's budget promises. Where is the amendment from the SNP to provide the cash to meet John Swinney's £450 million commitment to dual the A9? It is not here. Where is the amendment to give local government the £411 million that Tricia Marwick promised two weeks ago? It is not here. Where is the amendment to provide the extra cash that Mike Russell wants to go into the McCrone settlement? It is not here. Where is the amendment to provide the extra money for roads that Alasdair Morgan called for on 4 March? It is not here. Where is the amendment to provide the extra road bypasses that Margaret Ewing asked for a few weeks ago? It is not here.
Will Peter Peacock give way?
No. I will not give way.
Where is the amendment to give the extra money to universities that Andrew Wilson called for in January past? It is not here either. Where is the amendment to give nurses even more money, which Nicola Sturgeon asked for in August? It is not here either.
There are no proposals to back up the empty promises that the SNP distribute all over Scotland week in and week out. There is no substance to support the SNP's rhetoric. Those are the actions of an irresponsible and reckless Opposition, which is prepared to promise anything to buy a few votes in the coming election, but is unprepared to use the powers, practices and processes that this Parliament has to make the practical changes that it claims that it wants.
Will Peter Peacock give way?
No.
It is no wonder that the Scottish people do not trust the SNP and it is no wonder that they will not trust the SNP in future.
The debate brings us to the end of stage 2 of this year's budget process. It has been an interesting morning. Thoughtful contributions have been made by many members—even those who were out late last night.
This is the third full year of the complete budget cycle. The cycle continues to grow and develop for the benefit of the people of Scotland. Although further progress is required on some aspects of the budget process, we should not lose sight of the significant difference in both the quality and quantity of financial data that are now available in Scotland. An increasing range of people, both inside and outside the Parliament, are taking part in the budget process. The minister referred to what the Scottish Executive is doing in respect of public consultations and discussions with COSLA. Each individual committee and the Finance Committee also speak to many more people. All those who have taken part in stage 2 of the budget process should be commended.
I welcome Tom McCabe to his post as the new Finance Committee convener and I wish Des McNulty, who oversaw the earlier part of this year's budget process, success in his new ministerial role. The adviser to the Finance Committee, Professor Arthur Midwinter, has continued to help and advise us effectively, for which we are grateful. I thank the clerks to the Finance Committee and members of the Scottish Parliament information centre, who are crucial to the success of the budget process.
As members have mentioned, the committee went to Skye this year. I am pleased to hear from John Farquhar Munro and Jamie Stone that the workshops at which we spoke to local people about important issues and the visit generally were well received by the people of Skye. Such visits continue to be a positive move. It is clear that the Skye bridge is a major issue, so I am pleased to hear the minister's comments on freezing tolls and on the success of Skye's economy.
This year, we had the welcome addition of funds from the 2002 spending review, which has resulted in unprecedented growth in the Scottish budget. The draft budget shows that, by 2005-06, the budget will have increased by 14.4 per cent in real terms, which will allow around £1 billion of extra expenditure in each year of the three-year plan. I reiterate the statement in the Finance Committee's report that that measure will result in the highest sustained real growth in the Scottish budget since 1975. The report recognises and welcomes the significant growth in the coming three-year period.
Various members mentioned what that growth will mean for individual areas. Bristow Muldoon mentioned the extra investment in transport—22 new trains were announced this week—and Karen Gillon referred to the extra funding for the sure start programme, which will give Scottish children a better start in life. The committee is concerned that the extra resources should be used effectively and that value for money should be sought. I welcome the minister's assurance that best value will always be sought in spending decisions.
Members have mentioned the Executive's cumulative accounting in the presentation of the budget increases, which, the committee feels, can be misleading. However, the committee welcomes the progress that has been made on the presentation of the budget documents. As the Finance Committee and the subject committees have recognised, that significant improvement helps to facilitate scrutiny. I note Karen Gillon's comments on timetabling issues and the level of detail that is available at different stages. Other members have mentioned the fact that we require further development on inputs and outputs and relating objectives.
The minister mentioned the technical notes, which have been made available for the first time and which broaden and deepen the available information. When, as in this year, there is lots of new spending, the committee would like to be able to distinguish between baseline spending and new spending. I welcome the minister's commitment to work closely with the committee to develop that process.
Cross-cutting issues are increasingly important. The budget is laid out on a departmental basis, but as various members have mentioned, a cross-cutting approach might provide more information. Jamie Stone made that point in relation to rural issues. The point has been recognised and, for the first time, the Executive has published cross-cutting reports, such as "Closing the Opportunity Gap: Scottish Budget for 2003-2006". We look forward to that approach being developed in future.
This year, around £175 million has been distributed through EYF: £78 million has gone to the Scottish Executive's key priorities of health, education, crime, transport and jobs; and a further £95 million has gone to local authorities for developments in the local environment and for children. The committee welcomes the improvements in EYF presentation, but we would like more clarity about which moneys are available for reallocation. It should be possible to see clearly money that has been allocated for projects which is not being used immediately but which will be used later, and money that is completely available because the expenditure that was originally planned is no longer required.
The Equal Opportunities Committee continues to experience frustration with the budget process. There is a clear desire among all members to see progress on equal opportunities. It is suggested that further discussions between the Equal Opportunities Committee and the Scottish Executive should take place so that a working definition of gender-based analysis can be agreed and can be used by the Finance Committee and others. It would also be useful if a report was produced on equal opportunities, which would perhaps be similar to some of the cross-cutting reports.
Recommendations have been made by committees and individuals, and the Finance Committee has welcomed the first proposal for budget reallocation from an individual MSP. However, the committee has made it clear that we cannot progress Nicola Sturgeon's proposal. I am glad that Ms Sturgeon recognises the Finance Committee's concerns about her proposal, and I note the comments of the Health and Community Care Committee and the work that it is carrying out.
The justice committees felt some unhappiness about their share of the budget, given the fact that tackling crime is one of the Executive's priorities. I note the minister's comments on that area and the fact that extra resources are now going to the police and the Crown Office.
Margaret Smith and Trish Godman raised issues of concern to the Health and Community Care Committee and the Local Government Committee. Both committees are scrutinising the budgets of large organisations that get block grants, and there are still difficulties in understanding what happens to the money. Further discussions need to go ahead to make the process a bit more transparent. Nonetheless, Trish Godman highlighted one of the successes of the current budget process: the Local Government Committee raised concerns about the increase in the level of national insurance for local government and the matter was dealt with positively by the Executive. I note the minister's comments on that issue and look forward to hearing what the committees have to say on that in future years.
Several members have discussed the issues surrounding the Holyrood building and the SPCB budget. Members of the SPCB appeared before the Finance Committee again earlier this week, as we were not happy with some of their remarks at an earlier appearance before the committee. The committee is unhappy with the degree of uncertainty that continues to exist around the cost and the completion date of the Parliament building, and we look forward to receiving more up-to-date information from the SPCB in January.
I wonder whether the member shares the disappointment of the rest of the Finance Committee that the minister has failed to give us an assurance about cumulative accounting. That is the one aspect of the report that she seems to have skipped over. Does she share our concerns?
I think that I touched on cumulative accounting earlier, and the matter has been discussed fully this morning. I am sure that we will continue to discuss the best methods of presenting financial figures over time.
Despite having reservations in certain areas, the Finance Committee recognises and welcomes the fact that the budget represents sustained growth in public services, which will impact positively on lives throughout Scotland. We also welcome the fact that the opportunities to scrutinise the Scottish budget will continue to grow, to the benefit of democracy and good governance.
I commend the report to Parliament.