Budget (Scotland) (No 3) Bill: Stage 1
Before we begin the debate, members will want to note that, under standing order 13.2.2, I have decided to take a ministerial statement on Euro 2008, as that is in the public and parliamentary interest. The statement will take place at half-past 4, which means that the debate on the Budget (Scotland) (No 3) Bill will be truncated. The Presiding Officer will look for drop-outs from the list of speakers. If there are none, I will have to drop speakers. Members may, if they are so minded, withdraw their requests to speak. There are no Parliamentary Bureau motions today.
On a point of order, Presiding Officer.
No afternoon would be complete without one.
I hope that the point of order will not always be from me.
I apologise for making a third point of order on the Government's manipulation and leaking of the widely discredited "Government Expenditure and Revenue in Scotland 1999-2000" report. I think that last week the whole chamber welcomed the measured letter from the Minister for Parliamentary Business to you, Sir David, in which she apologised for the Government's treatment of that report and regretted the fact that the Secretary of State for Scotland had leaked its contents on the Monday before Parliament received it.
However, it emerged in The Times and the Daily Record this week that the Minister for Parliamentary Business apologised to the Secretary of State for Scotland for that letter. Where does that leave protection of the Scottish Parliament? Is the Minister for Parliamentary Business withdrawing her letter to the Presiding Officer? Who is sorry now—Mrs Liddell or Mrs Ferguson? How can we protect the Parliament and its workings from ministers in London who can run roughshod over written agreements that they drafted and breach agreements between the Parliament and London? Will the minister in Edinburgh clarify which position she holds—that of her firm statement in defence of the Parliament last week, or that of her apology to her London colleague this week?
With great respect to the member, I say that this is the third time that he has raised a point of order on this matter and that he is in danger of flogging a dead horse. As far as the Parliament is concerned, the Minister for Parliamentary Business has acknowledged that something happened that should not have happened and has undertaken to do her best to see that it does not happen again. What happened in the Executive is a matter not for me or for the Parliament, but for the Executive. We will leave it at that. As far as I am concerned, the matter is closed.
It would help if opening speakers took less than their allotted time in the debate on the Budget (Scotland) (No 3) Bill, but that may be a triumph of hope over expectation.
The debate will not be poetry in motion. The minister who spoke to us at time for reflection mentioned poets, but the debate will be neither Burns nor McGonagall—it will be a lot worse. I saw the look of despair in members' eyes when they heard that the debate had been chopped by half an hour, but I will do my best to give due regard to the important issues that are part of the process.
The Budget (Scotland) (No 3) Bill is my first Budget Bill as a minister, the third for Scotland and the second to be the result of the full budget process. That process has bedded down quite successfully in the past two years, but we are not resting on our laurels. Only recently, we responded to the Finance Committee's report on stage 2 of the budget process. Other matters will be dealt with in due course.
I came to this year's process when it was rather advanced, although I was involved in the budget process in my previous life as a committee convener. I place on record my appreciation for those who worked hard before I picked up the bill process.
Coming to the process with a fresh eye, I am struck by the fact that we have implemented a truly consultative budget process that has achieved a degree of genuine engagement with the wider public. If the Parliament is to be truly successful, it must make progress on becoming relevant to ordinary Scots. One way of doing that must be to allow input into decision making on how we spend their money. It is critical that we extend engagement with the Scottish public and I look forward to delivering a series of budget roadshows later this year.
That is not to say that the budget process is perfect. I am sure that we all agree that consultation and engagement with the public could improve further. We will aim to do that. The process also has some repetition, which we may address in due course.
When has public consultation resulted in changes to this or previous budgets?
I will deal with that point and with our commitment to the convener of the Finance Committee to examine the process fairly soon.
The Budget (Scotland) (No 3) Bill is special and, because of the extensive consultation, it is subject to special procedures. The bill does several things. It provides Parliament's authorisation for the use of resources by the Scottish Administration or by any body or office-holder whose expenditure is paid out of the Scottish consolidated fund under any enactment. It also authorises payment of sums out of the Scottish consolidated fund and sums that are payable into the Scottish fund—income, to use non-technical language—to be applied for any purpose other than payment into the fund. It specifies the maximum amount of relevant expenditure for the purposes of section 94(5) of the Local Government (Scotland) Act 1973 and maximum amounts of borrowing by statutory bodies.
We should highlight two points about the bill. First, we are under an obligation to consult widely on it. That is an obligation that we accept gladly. The second point is the financial issues advisory group's requirement to ensure that the appropriate legislation that authorises budget payments is in place before the start of the financial year. Those points show a marked improvement on the pre-devolution processes.
This year, apart from the purposes of and figures for expenditure, we have made two other changes to the bill. We have amended it to bring the Executive into line with private sector accounting practice by providing powers to net account for VAT. In last year's bill, VAT was shown as an accruing resource—in other words, as income—with appropriate purposes against which it could be spent. However, in this year's bill, VAT is dealt with by the provision of a general power to accrue and spend it at sections 1(a), 1(b), 2(a) and 2(b).
We have also slightly extended the powers to amend the bill through budget revisions. That means that there is a power to amend the whole of schedule 5 rather than, as in previous years, only the amounts specified. That change is made to allow us to insert the appropriate entry when a body that is subject to borrowing limits is set up in the course of a financial year. That is likely to be the case when Parliament passes the Water Industry (Scotland) Bill.
The bill authorises expenditure through the departments of the Scottish Executive of resources that total just over £19 billion. In addition, it authorises local authority capital consent up to a further £632 million. The scale of the budget for 2002-03 reflects the highly successful outcome of the spending review process, SR2000. That process added nearly £1 billion to our original planned budget for 2001-02 and nearly £2 billion to the original planned budget that we are now considering; it will also add £3 billion to the budget for 2003-04. Increases in the amount of resources that are made available to spend are always welcome, but it is what we do with those resources—what we deliver—that really matters.
I talked earlier about involving the public in decisions about public spending. Many ordinary people are not interested in how many billions of pounds are in the budget. They would rather see Government doing something that improves their daily lives. The Executive has always recognised that.
As for innovation, we look to the new methodology that we are employing with regard to spending. We will revisit some of those issues. One of the innovations that was welcomed most widely was the commitment that we made to the Scottish public on the process that was set in train by the late Donald Dewar who, when he published "Making it work together: A programme for government" in September 1999, set out for ordinary Scots what we needed to do to make a difference to their lives.
That document identified 164 commitments that were to be achieved over this session of Parliament. The Executive revisited those commitments in January last year when we published "Working together for Scotland", which set out a further 163 commitments. Some of the commitments were aspirational and others simply spelled out the first steps in a long process of improvement. Many commitments had tight time scales; others acknowledged that delivery would take several years. All the commitments are about making real improvements to the lives of ordinary Scots.
We should consider our performance against those commitments in the context of a Budget Bill because the monitoring and assessment of our progress in delivery should be at the heart of any financial planning process. The most recent internal monitoring exercise showed that we have achieved, or expect to achieve, more than 90 per cent of our commitments.
That is a record of which the Executive can be proud. It demonstrates that we have delivered, or realistically expect to deliver, nearly all our commitments. It is a fine record of achievement that provides a solid foundation on which to progress as the Executive focuses on delivery this year. I will arrange for detailed analysis of progress against all commitments to be made available in the coming months.
I am determined to continue to shift our emphasis towards outcome measures, as those are the measures that are tangible and mean something to most people. As I said, most people are not really interested in how many billions of pounds are in the budget; they are interested in what we can do to improve their daily lives in terms of repairs to schools, better roads and better facilities at hospitals. Looking to outcomes will help us to focus on what we are delivering against the investment that we are making.
I would be the first to acknowledge that more money than ever before is going into the health service in Scotland. The minister mentioned outputs. Is he aware that, under the budget, the north-east of Scotland, which has 10 per cent of the population, has only 9 per cent of the facilities? If we are interested in outputs, we must have resources to deliver on that.
Those matters clearly need to be considered in relation to what we are achieving with the next spending review. However, the budget is based on the Arbuthnott review of the required resources. That review engaged widely with the whole of civic Scotland. The result in some areas was as Mr Rumbles describes it, but in other areas it has led to more effective spending. Those matters will always be subject to discussion, and Mr Rumbles raises them frequently in the chamber. What I want to do in this debate on the budget bill is to say what we are doing with taxpayers' money to make services more important and relevant to them and to deliver for them. That is the most important thing.
The minister mentioned moving to outcome budgeting. Does he intend to deliver, in parallel with next year's budget bill, an outcome paper that we could debate beforehand? How does he intend to scrutinise outcomes? Will he do that internally or will someone from outside do it? At his predecessor's roadshows last year, only invited audiences could come along and ask questions, which raises a question in my mind.
I understand that it is not the case that there was an invited audience. We will be laying out our strategy and plans for roadshows and I shall say more about that later in the debate. We are clearly focused on those areas.
We must reflect on the evolving budget process, which we want to develop in line with some of the recommendations that the Finance Committee and others have made. It is important that spending decisions are governed by clear and specifiable targets. Before we take any decisions, we must be clear about what the resources will buy and when they will buy them. We must examine how those resources will deliver the required output and the arrangements that we need to have in place with our partners to ensure delivery. We must clearly specify what benefits improved service delivery will bring and we must critically measure and assess those benefits. We must also establish key milestones to monitor and ensure that final delivery is achieved. I agree with Mr Davidson that those matters need to be fleshed out in due course. We are setting our objectives and targets, which will meet some of his requests.
Expenditure follows decisions and delivers the agreed output that I have asked officials to instigate in our system. That will allow us to track progress on key expenditure decisions at six-monthly intervals. Not only will that allow a lengthy process of analysis over a period of time, but it will ensure that, every six months, we monitor expenditure to ensure that key milestones are being reached.
As well as monitoring spending decisions and allocations, we need rigorous monitoring arrangements for priority areas such as our determination to tackle waiting times and delayed discharges in the health service. That monitoring will ensure that money is going to the right place, that we are hitting the right targets and that we have the right mechanisms in place to ensure delivery and to ensure that we are achieving the outcomes that we want.
I hope that all members will accept that we should not be under any illusions. The process is a difficult one and it will take time to harness it, but we are certainly heading in the right direction.
Let us consider some of the outputs for the Budget (Scotland) (No 3) Bill. The budget for transport in Scotland in 2002-03 is more than £1 billion, which represents an increase of £40 million on 2001-02. Those resources will deliver all the schemes that have previously been discussed by ministers, such as road improvement schemes, trunk road schemes and a target reduction in fatal and serious road casualties. All those matters are important to the people of Scotland.
I would like clarification on that point. The sum of £1 billion will not be spent on transport projects in Scotland. How much of that £1 billion budget figure is a resource accounting and budgeting manoeuvre and how much is actual spend on the ground?
Clearly, there are elements in that budget figure that do not go directly to the roads, such as loan charges. With this budget and with future spending reviews, we are moving towards ensuring that resources are targeted on priorities for the people of Scotland. What cannot be argued against is the fact that that budget figure represents real money going into real projects and delivering real roads and real infrastructure improvements. That is what the budget is all about.
I could go on to list the budget figures for other departments and important spending areas. There are more than half a million students in higher and further education. There are 16 million general practitioner consultations every year. Fresh fruit for infants is being delivered by every health board in Scotland. I could list other important aspects of the budget, but time is against me.
Will the minister tell Parliament what percentage of the budget would be needed to provide universal free and healthy meals for all children in primary and secondary schools?
To put it bluntly, I have not considered that question because I do not believe that that policy is correct. It proposes to give resources to those who do not require them rather than to those who do. I would prefer to target resources more effectively and not to adopt the broadbrush approach that Mr Sheridan advocates. However, I will ensure that an answer is given to the question.
The 2002 spending review is important for all of us and our funding principles will underpin our rigorous approach to the review, as I mentioned. We are now finalising our plans for next year's spending review. The key features of that review are that it will examine existing baseline budgets; we will develop an appropriate system of linking spend to policy through targets that reflect required outputs and outcomes; we will focus our priorities to ensure that we deliver the maximum benefit for the people of Scotland; and there will be full and regular analysis of what we achieve. That answers comments that members have made in the Finance Committee and elsewhere.
I am committed to developing targets that accurately reflect our spending priorities and to putting in place systems that effectively monitor the Executive's performance. That is not easy or straightforward, but it is where we are heading.
To improve our allocation process, I plan to develop a system of rigorous scrutiny that is based on developing and costing a range of priorities across portfolios. That will help colleagues with the rigorous examination of spending priorities that the spending review requires.
Through scrutinising our priorities, we will identify areas in which we can spend more wisely and areas in which additional spending will produce good results. That is a responsible approach and will deliver a budget in which resources are matched to priorities to provide outcomes that are required by the Scottish people.
We must make improvements in our system for monitoring what spend achieves. It is essential that, as well as clearly specifying what we want to achieve, we measure what is achieved and demonstrate what we have done. Rigour in the spending review will bring its own rewards and we must ensure that we reap those rewards by monitoring delivery.
I want to say something about fiscal responsibility. All Executive commitments are, correctly, scrutinised in enormous detail by the Parliament, the committees and the wider Scottish community. The Executive has not only delivered on key priorities in health, for teachers and in improvements for older people, but maintained fiscal responsibility. We have funded those crucial commitments from our existing budget. We are not only delivering change that ordinary Scots want; we are delivering it within our existing means. That is responsible financial management.
The Government puts people and first-class public services first and concentrates on people's priorities. It cares about real outcomes for real services, not just about processes. We will deliver on those priorities.
People in communities throughout Scotland care about problems on their doorsteps. The Executive is thinking nationally and globally and it is thinking and acting locally. I will pursue that approach in the coming months—big vision hand in hand with local vision.
I commend the bill to the chamber. It reflects record levels of public spending coupled with prudent financial management.
I move,
That the Parliament agrees to the general principles of the Budget (Scotland) (No.3) Bill.
I am grateful to the minister for taking less than his allotted time. If members want to speak, they must press their request-to-speak buttons so that we know who is still anxious to take part.
When, during time for reflection, the bishop talked about poetry, I thought that that would be the last we heard of it this afternoon. However, I then heard Mr Kerr allude to what the bishop said.
I thank the minister for the budget documents and the bill's accompanying documents. I do not know how many of the eager people who pursue the Parliament's activities on the internet noticed the advert for the accompanying documents and eagerly put in an order only to find that they had paid 65p for a sheet of A4 paper that does not say much, but we must make money somehow.
I have two points on administration. At about this stage last time, we spent an hour and a half discussing stage 1 of the Budget (Scotland) (No 2) Bill. I looked through the Official Report and did not see any complaints about the length of time that was allocated. This year, two and a half hours have been allocated, although that has been reduced to two hours because of the ministerial statement. By and large, the usual suspects who were at the debate in December are present. My point is not that the Scottish budget is not worth two and a half hours of discussion, but that, given that the debate follows hard on the heels of the debate on the Finance Committee report on stage 2 of the budget process, which largely covered the same area, we need to consider how we handle the budget. I think that the minister alluded to that. Members might prove me wrong, but I suspect that we will not have much more light shed on the subject than we did in December.
Will the member give way?
Light is always welcome.
The budget debate would be a bit more enlightening if the Scottish National Party was more forthcoming about its spending plans.
I suspect that the Presiding Officer might rule me out of order if I started talking about SNP policy when we are discussing stage 1 of a bill—that is not an invitation, Presiding Officer. Given that, less than a month ago, Mr McConnell said that the Executive had only 18 months to get things right, it is interesting that Bristow Muldoon wants to start the next election campaign. He wants me to tell him what will be in the SNP's election manifesto. He should get down to trying to deliver what Labour has patently failed to deliver in the past four years. Then he can start talking about manifestos for the next election.
Will the member give way?
Sit down, Mr Smith.
There is a case, when we review the budgetary procedures and timetables, for combining the debates. If, as we hope, the Government is eventually persuaded to change elements of the budget as a result of the committee reports, stage 2 of the bill process—not stage 1—will be the appropriate place for that.
My second administrative point is about the differences in layout between the draft budget document, which has a coloured cover, and the buff-coloured budget documents. There are significant differences in layout, which makes comparisons unnecessarily difficult, especially as members received the documents only on Monday. I realise that the draft budget is more expansive and has more comments because it does not have the same legal status as the budget, but more similarity of layout between the documents would be helpful.
Members are aware that flexibility in the budget is limited. We are limited by the amount that is paid into the Scottish consolidated fund, which in turn is determined in two ways. First, it is determined by history or by what was paid into it prior to Joel Barnett's involvement. That goes back to the days not of the Labour Government before the general election last year, but of the Labour Government of the 1970s. Whatever members think about that Government, it is open to question whether its allocation of expenditure then is what we need to justify allocation of expenditure in Scotland today.
The second way in which the Scottish consolidated fund is determined is by the Barnett formula. That means that it is determined by changes in departmental spending—by what the financial documents call UK Government departments. In terms of the expenditure that affects the Barnett formula, those departments act as English departments or English and Welsh departments. Their spending increases are, quite rightly, decided by English or Welsh priorities. That means that our total expenditure is determined by changes in those departments' priorities. We are free to reallocate the money wherever we want, but the total of our expenditure is constrained by decisions on priorities elsewhere.
Alasdair Morgan seems to be criticising a system that delivered 23 per cent more funds to Scotland than it did to England and Wales. I am confused.
I am making the point that a significant chunk of the fund, which has been built up since the Barnett formula was introduced, is determined not by priorities on which we decide, but by priorities south of the border.
Even when that sum is allocated to the Scottish consolidated fund, it is top-sliced by the Scotland Office to the tune, I think, of £7.3 million. The Scotland Office has three Government ministers—the Secretary of State for Scotland, the Minister of State and the Advocate General for Scotland—and 107 staff, who are not only there to get air tickets for the Secretary of State for Scotland. There is a parliamentary and constitutional division, a home and social division, an economy and industry division, a finance and administration division and an information services department. No one knows what the Advocate General for Scotland does, but do members know that, to help her do what no one knows she does, there is a solicitor to the Advocate General and two further divisions to give her legal advice?
As those people are busily working on our behalf, the Scottish Executive goes ahead and provides them with additional services relating to pay, personnel, information technology, procurement, financial systems and internal audit. The question that we have to ask about this budget must be: why is all that expenditure not subject to the Scottish Parliament's scrutiny, given that it affects the money available to us through the Scottish consolidated fund by £7.3 million?
Two years ago, John Reid, who was the Secretary of State for Scotland at the time, came before the Scottish Affairs Select Committee in Westminster to make his case for the increased budget. His arguments were scrutinised by a panel of Westminster MPs, because that is their job. What was the SNP's submission to that committee? From my memory of the transcript, it was not so extensive.
I can tell Ben Wallace one thing. It is interesting that he mentions Mr Reid's appearance before the Scottish Affairs Select Committee. Apparently, one of the Scotland Office's objectives is to
"promote links between the Scottish Parliament and the UK Parliament".
That is what we are paying £7.3 million for. The Scotland Office departmental report lists three things under the heading of progress in promoting those links: appearing before the Scottish Affairs Select Committee, which is a Westminster committee; going to debates of the Scottish Grand Committee, which is another Westminster committee; and providing written evidence to the Scottish Parliament's European Committee. It provided written evidence because its representatives refused to appear in person. How can the Scotland Office say that those actions promote links between the Parliaments when two of them do not involve people coming to Scotland at all and the third involves their refusing to come to Scotland?
Alistair Carmichael, the Liberal Democrat MP for Orkney and Shetland, has said that the role of the Secretary of State for Scotland is now redundant and cannot be justified, which is a judgment that presumably applies to the 107 civil servants as well. [Applause.] I am glad that his Liberal Democrat colleagues have indicated that they agree with me. No doubt George Lyon will tell us what they plan to do with the £7.3 million.
Alasdair Morgan was concerned that the Presiding Officer might rule him out of order if he suggested any positive proposals on behalf of the SNP. When will he talk about the matters at hand? He has barely mentioned the powers or the budget document.
As the budget is about the distribution of money from the Scottish consolidated fund, I thought it reasonable to highlight what is happening to the £7.3 million that we have already lost from it.
I have mentioned two determinants of the money that is paid into the Scottish consolidated fund. There is a third, which is the balancing mechanisms between the various decisions that we make and their consequences for the UK Treasury. For example, on council tax, the guidance on the balancing mechanisms says that
"if, due to decisions made by the Scottish Executive … the costs of Council Tax Benefit subsidy paid to local authorities changes at a disproportionate rate (both higher and lower), relative to changes in England, then appropriate balancing adjustments are made to the relevant devolved adminstration's Departmental Expenditure Limit."
In other words, if we were to reduce council tax and therefore save the Treasury money on council tax benefit, our departmental expenditure limits—that is, the block grant—would go up to keep Government expenditure in balance. Why is there no analogous rule for social security payments? If a decision on health made by the Scottish Parliament saves the Department for Work and Pensions £23 million on attendance allowances, why do our departmental expenditure limits not go up to reflect that? Is it because that contingency was not considered when the Treasury's funding policy document "Funding the Scottish Parliament, National Assembly for Wales and Northern Ireland Assembly—A Statement of Funding Policy" was drawn up and because some people in Whitehall are now determined to keep this Parliament in check?
The whole issue of the block grant, the Barnett formula and the conflicts between us would not arise if we had the normal powers of a normal Parliament. In the debate on the Finance Committee report on stage 2 of the budget process, I said that we were considering "only half a budget". However, that was not true; the fraction is much less. Vast swathes of Government expenditure are not included in the budget and nearly all the income has been omitted. We should be having a debate about tax—not just about business rates, council tax and the Parliament's tax-varying powers, but about the balance between direct and indirect taxation, the relative level of regression or progression and the possibilities of incentivising business that should be available to this Parliament.
I could talk about the need to set targets—I am glad that the minister wants to make progress on that issue—but I am conscious of the urgings of the Presiding Officer not to take up too much time. The SNP will not oppose the bill at stage 1. However, I sincerely think that the budget represents—as do all budgets passed under the current devolution settlement—a missed opportunity for Scotland.
Well, here we are again. This is the third budget stage 1 debate with the third finance minister. First, we had Jack "Magic Circle" McConnell; then we had Angus "Smoke and Mirrors" MacKay; now we have Andy Kerr, the latest graduate of the Hogwarts school of economics. We may have a new Executive team, but what we have heard from the minister sounds like a rerun of the usual spin and overstatement.
It would be of great interest to the Parliament, the people and the press if we could be told clearly what the difference is between the team McConnell budget and the one from team McLeish that we are still struggling through—and I note the presence of Mr McLeish in the chamber. I also ask the minister what changes his Liberal Democrat partners succeeded in obtaining in the budget, assuming that they tried to make changes following Charles Kennedy's recent declaration of independence from Labour.
Perhaps Mr Peacock, in his winding-up speech, could clarify which parts of the team McLeish budget have been ditched and which parts have been adopted. For example, is the proposed cut in rail support to proceed or not? If parts have been accepted and progressed, why have the ministers who helped to formulate those parts been fired?
Mr Davidson has mentioned the budget and various people. Are we going to get something different from the Conservatives? Is he going to explain to us what cuts they would impose on the budget?
I will come to that.
We have again heard the wild Labour claims of delivering new hospitals, although that was nothing more than the finishing off of prior Conservative programmes. It is a shame that other Conservative programmes, such as infrastructure renewal, have not been continued. The Scottish economy is in trouble. That is not talking down Scotland, but an attempt to impress on the Executive that it should not just apply a sticking-plaster after a fall, but ensure, where possible, that the accident does not happen. Budgets are not just about vision; they are about delivery. I got a glimmer of hope from the minister when he talked about that. That is a welcome move and the first that we have had from the Executive in three years.
The Executive's administration budget will rise over the next three years, but there will be a real-terms reduction in the administration budgets for VisitScotland, Scottish Enterprise and Highlands and Islands Enterprise. We welcome the trimming of their overheads and the increased application to delivery rather than process. However, if the business support organisations can operate with greater efficiency, where is the leadership by example from the Executive? Once again, it is asking us to do as it says, not as it does.
Although I acknowledge the fact that the Conservatives did not want devolution, does the member agree that we require a properly resourced civil service to answer the scrutiny of the Parliament and that we should not criticise it all the time, but recognise the pressures that exist?
I would have thought it even better for us to focus on what we need to do to drive forward the economy. Merely putting civil servants in place to answer some of the spurious questions that come from the SNP—which have no sense in them—is an absolute waste of public money.
Tourism is at its lowest ebb after four years of downturn and a lack of action from Labour, coupled with the consequences of the terrible events of September 11 and the foot-and-mouth disease outbreak. Where is the support in the budget for the marketing of Scotland? The foot-and-mouth disease outbreak has devastated most aspects of the rural economy. Jobs in the manufacturing industry are beginning to vanish like snow off a dyke, quicker than new technology businesses can absorb the work force. The Executive's policies do nothing to stimulate the enterprise economy that I thought all members were signed up to.
There has also been a distinct lack of effort to build the infrastructure that our economy needs for the future, be it road, rail or air links or even broadband connectivity. What Scotland needs most is a budget for enterprise and wealth creation, and this budget is far from that. As usual, it is a tax-and-spend budget but, worse than that, it demonstrates the fact that the Executive cannot see the wood for the trees.
The SNP makes spending promises that it cannot afford, never mind deliver. Despite Labour's claims, it is guilty of the same thing. In his speech on his priorities, which were limitless, the First Minister called for a realisation that everything has a price and that we have a finite budget. Today we heard the minister talk about that, which is another move forward but makes me wonder how long he will last in the Executive.
Where is the evidence of Mr McConnell's claims of a few weeks ago that that realisation has been portrayed in the budget documents? It is hard to find. Where are the necessary investments in education delivery, by which I mean proper support for the McCrone settlement for rural authorities? The situation is similar to the situation with the Arbuthnott formula, which my colleague from the north-east, Mr Rumbles, mentioned earlier and which results in uneven support for health across Scotland.
When will the Scottish budget address the structural problems in further education and the growing trend of university deficit increases? When will the Minister for Enterprise, Transport and Lifelong Learning fight for a change in funding for essential apprenticeship schemes delivered by employers? Money follows day-release students to college but it does not assist employers to set up modern apprenticeship laboratories and workshops. Investment in education and training should be a part of a budget for enterprise, but today we heard nothing new.
Can the minister put his hand on his heart and claim that this budget will deliver not only wealth creation, but safe communities, and will foster the confidence that the Scottish people need to have that their money is being spent in a way that delivers focused public service on time and in an accessible manner? I would like to hold the minister to his promise that he will deliver output and outcome documentation for the Parliament. I would like that documentation to go to the Finance Committee at the beginning of the next budget round.
Why has there been a postponement of free personal care delivery? One minister says that the reason is financial; another that it is technical. It would be helpful if the minister could give us an answer.
It is easy to do so. The First Minister and I believe in listening to those on the front line who deliver services and they told us that we should delay the implementation of free personal care.
I take it from that that the Executive foresees no resource problems with the implementation of free personal care. That is useful information.
The Parliament building in Holyrood seems to be taking a lot out of front-line services. I noticed that Alasdair Morgan had a go at the office of the Secretary of State for Scotland and I point out in passing that our policy is to have a Secretary of State for Scotland in the UK Cabinet to ensure that Scotland's interests in matters that are considered by Westminster are taken into account. Has the minister made any attempt to intervene to ensure that the money that is spent on Holyrood is not over the top and is not being taken away from the front-line services that he was talking about? We do not want to hear the usual platitudes about reserves, which is the Labour version of the SNP's oil well. The Pontius Pilate approach to this huge problem is not good enough.
The underspends over the past two years were £435 million and £718 million. What is the estimated underspend for this year? At a time of underspend, why does the Executive continue to apply extra taxation? One might ask whether planned underspending might replace the reserve.
I can only repeat what I said in a previous debate: underspend relates, on the whole, to large capital projects whose timetables have slipped. It is good government to say that that money should be carried forward through end-year flexibility rather than, as in the previous model, spent in a rush at the end of the financial year on equipment, resources and capital projects that are not required. I would rather have a system in which resource allocation is based on need.
I accept the point that you make. However, the point about the reserve is important. The first finance minister, Mr McConnell, denied that there was a reserve and that there was a need for one, but the second finance minister introduced a reserve as a budget line. It would be nice to know whether Mr Kerr intends to follow the procedure of the first or the second finance minister.
Despite statements that the tartan tax will not be invoked—with the open exception of the Minister for Tourism, Culture and Sport—two unfair taxes continue to be levied: the graduate tax that burdens young Scots graduates at a critical stage in their career and the increased business rates that disadvantage Scottish businesses that are already under strain.
Given that Alasdair Morgan started off complaining that today's debate was all about process and not about content, I was a little perturbed when his speech was about process. I could not see how his argument could be sustained. The situation is clear. As usual, Labour taxes then spends, whereas the SNP spends then taxes. At least, that seems to be what we are told in the chamber.
We are moving into a world where, far from giving us the transparency and openness that we were promised, the budget bill—purely because of its layout—reduces the ability of Parliament to test the promises that are made. I agree with Alasdair Morgan on that point. On the prospects for delivery of those promises, I again hold the minister to what he promised members this afternoon.
As was evidenced in the debate on the budget process, committees find it almost impossible to obtain the information that they require. I have called previously for the budget process to be reviewed radically. I hope that, after last year's budget process report, we might get to that before we get into the next round of the budget. I hope that the new convener of the Finance Committee will take that on board.
There is nothing in the budget to deliver enterprise Scotland. There is nothing to remedy the problems in education. There is nothing that will give confidence to the thousands of patients who are waiting for health care. There is nothing to build the rural economy. There is nothing to give Scotland an infrastructure fit for the 21st century. Despite Mr Kerr's sniggers, he has not added anything different. He has merely swallowed and regurgitated what was delivered in the past.
So far, Mr Davidson has said nothing about what changes he would make to the budget and what money he would transfer from one part of the budget to fund all the extra work that he claims needs to be done for enterprise. Could he please explain, before his time runs out, how the Conservatives would do the budget differently?
The debate is not about what others would do. It is about getting to the truth of what Scottish Labour seeks to deliver through the bill. It is not, as the minister said, about how much is spent; it is about what we get for the money. A budget is a management tool. It is not an end in itself and it is not a substitute for clarity.
The Parliament needs no more vague and empty promises but a programme for delivery of sustainable economic growth, a programme that delivers an effective and accessible national health service, safer communities and better transport, and especially a programme to give the Scottish people confidence in their future. If Mr Smith is listening, the Scottish Conservatives will do exactly that in our manifesto budget for 2003.
I am happy to speak on behalf of the Liberal Democrats, to say that we fully support the budget—it would be a surprise if it were otherwise. The budget is a good attempt to use the money at our disposal. It reflects the priorities of the Liberal Democrats and the Labour party. In answer to David Davidson, those priorities are thrashed out in the Cabinet. The Liberal Democrats pull their weight and make a significant contribution to deciding the priorities of the coalition.
Considerable money is going into education. The McCrone settlement, which is jealously regarded by the English, is a good example of how the Scottish Parliament and the Executive can do things better than Westminster can. More money is going into health.
Will Mr Gorrie explain why rural councils complain that, because of the relationship between the numbers of teachers, children and schools, they do not have enough money from the McCrone settlement?
That is a fair point, which is being addressed. However, the basic settlement is favourable to the teachers and is paid for in the budget. That shows good management.
We are putting more money into health, police and transport to fit the priorities of the Parliament. There is no point in going through all those priorities. The minister has efficiently summarised what the budget is being spent on.
I pay tribute to Jack McConnell and Angus MacKay, the two previous finance ministers. I am sure that the present one will be a worthy successor. The two previous ministers made an honest attempt to improve on the way that budgets are dealt with at Westminster and tried to make the process more transparent and democratic. Despite their efforts, we have not made much progress in that direction, but I pay tribute to them for working it out as well as they could.
The first problem is the Scotland Act 1998. That act was composed in part by people in London who assumed that the members of the Scottish Parliament would be incompetent, extravagant people who could not manage a budget properly. Therefore, the rules governing the way that we deal with the budget are very prescriptive. They do not allow amendment of the budget and they inhibit proper discussion. When people get around to amending the Scotland Act 1998, that issue should be seriously considered.
Alasdair Morgan raised the issue of the cost of the Scotland Office. As he well knows, the Scotland Office is a Westminster affair—Westminster can decide how much money is spent. That is taken off our budget, whether we want it or not. I fully believe that we would get on much better without the Scotland Office, but that is a Liberal Democrat policy, not a coalition policy.
I thank Donald Gorrie for letting me intervene. Does he agree that while we are governed under the existing regime, it would make much more sense for the consolidated fund allocation for Scotland to come to the Scottish Parliament? That would mean that we could allocate the funds that we think the unnecessary Scotland Office needs, rather than the Scotland Office taking the top slice off our budget and putting it into its bureaucracy instead of into our health service.
Personally, I agree entirely with that and I think that the Scottish Liberal Democrats do too. Although it is not within our control to achieve that, it is legitimate to hold the Scotland Office in London to account for what it does or does not do, as some of my colleagues are busy doing.
One good thing about the budget is the effort to have three-year plans. That is helpful to local government and to other organisations. The difficulty is that the timetable of the comprehensive spending review, which is a UK matter, distorts our budget processes. We do not yet have an answer to that. We should continue to have three-year plans—to plan ahead and to allow other organisations to plan ahead.
As a Parliament, we must pursue the provision of good funding for the national health service by the Executive. We all vote for that, but what does it achieve? There are many criticisms of the NHS and all sorts of problems such as bedblocking. Some problems are perhaps exaggerated. My recent experience of the health service—I spent Christmas and the new year in hospital—was extremely good. However, the NHS still has problems and we must pursue the money that we put into it to find out about service delivery, outputs and outcomes. The Finance Committee is doing good work on that.
We must chase the money through. At the moment the budget document only indicates that such-and-such a health board gets so much money; it does not say how much we spend in total on cancer as opposed to heart treatments, for example, or on children's or elderly people's problems. We need much more clarity. The health boards must give up the information to us. It is no use ministers saying that the information is not held centrally. We jolly well have to get it held centrally, so that we can ensure that the health boards deliver.
Similarly, more money has been given to local government, but we still receive many complaints from councils and citizens that council services in many fields have been getting steadily worse. Although there is more money for education and other particular services, the overall improvement that we think should occur does not occur. We must examine carefully the use of our money. Is the problem that we are not giving enough money to councils or that they are not using the money well? Funding is a big problem, which the Local Government Committee has pursued. We need more information about it.
The public needs more information. The suggestion of sending a leaflet to every house is a good one that should be pursued. That would provide people with a simple summary of how our money is spent and would remove a lot of misconceptions.
The Parliament does not have major fundraising powers, but let us consider the powers that we do have. It would be a modest but useful help if councils, particularly those in rural areas, were able to charge full council tax on second homes. The whole question of the taxation of small businesses, which the Finance Committee and the Local Government Committee are examining, is important if we are to gauge how fairly business can contribute through the tax system while still helping small businesses.
I pay tribute to the people who have contributed to the improvements that we have made to the budget process, but there is still is a great deal of work for the Parliament to do. I look forward to contributing to that progress.
We now move to open debate. Because of the statement that is to be made at 4.30, I doubt whether all members who intend to speak will be called. More members will be called if members keep their remarks to four minutes.
Although there is a certain ritual element to budget debates, it is surprising that David Davidson has delivered more or less exactly the same speech as he did last year. Perhaps not so surprisingly, Alasdair Morgan gave us a fairly lengthy speech that paid very little attention to how the £20 billion budget is to be spent. If he were to discuss SNP policies, he would only reveal that the cupboard is bare, so perhaps he is justified in not talking about that.
It is important to highlight the fact that the Scottish budget contains a forecast of £20 billion of expenditure—a very considerable amount of money. The allocation of funds reflects the priorities that were outlined by the First Minister a couple of weeks ago, namely, education, health, transport, crime and jobs. It is not just a question of the amounts of money, as Donald Gorrie was saying, but of how we try to ensure that the entire Scottish Executive budget is spent in a way that delivers outcomes that meet the needs of the people of Scotland.
On the point about the First Minister's priorities, as the budget is largely unchanged from the way it was before the election of the current First Minister, is the member saying that the First Minister's priorities are largely the same as those of the Executive before his election?
The spending review highlights the way in which the First Minister is moving and targeting resources, and the First Minister has strongly emphasised delivery and ensuring that the money actually delivers outcomes.
Consultation, as the Minister for Finance and Local Government has pointed out, is very important; so is transparency. We need to know what people's needs are if we are to meet them more effectively. A key theme of reports that the Finance Committee has undertaken is a desire for greater transparency and clarity in the budget process. The Finance Committee and the Parliament must work with the Executive to improve the consultation process and the consideration of budgetary options. In my new role as convener of the Finance Committee, I am determined to engage in that work fully.
As I pointed out in the earlier budget process debate, and as the reports of the Finance Committee and the other committees indicate, there is considerable room for improvement in the budgetary process. The Finance Committee will soon be reviewing the implementation of the FIAG principles and the extent to which the budget matches the aspirations that FIAG set out.
I wish to record my gratitude and that of the committee for the fact that the minister has taken up a number of the committee's recommendations made at stage 2 of the budget process.
I am always reluctant to interrupt one of Des McNulty's perorations. Yesterday a report was published on child poverty in Scotland. It showed that, after five years of a Labour Government, one third of the children in Scotland are still living in poverty. The Executive's objective is to reduce the number of children living in poverty by 50 per cent by 2010. Where does the budget make provision for ensuring that that happens?
I will indicate the change in the budget in the five priority areas that have been identified. The budget for health and community care has grown from £5.5 billion in 2000-01 to £6.5 billion in 2002-03—an increase of 20 per cent. There has been roughly the same percentage increase in the budget for education. Those are two of the key areas that impact particularly on child poverty. Much of the extra expenditure is targeted on children. In transport, the budget is growing from £782 million in 2000-01 to more than £1 billion in 2002-03—an increase of one third.
Will Des McNulty take an intervention?
The member is in his last minute.
Substantially increased amounts of money are being made available. From listening to Opposition spokespersons, one would think that that money is set to one side—that it is not really being made available. However, I assure David Davidson, Alex Neil and others that substantial change is taking place in the budgetary allocations that are being made and that the change is delivering results, although perhaps not as fast as we would like. It is up to members of the Parliament, as well as the Executive, to consider what should be done and how money should be spent, and to ensure that we deliver results and outcomes. That is a very important task for us. I hope that members of all parties will participate in that process.
I am not one of the usual suspects in this debate. I feel like a bit of an interloper. I say to Des McNulty that, when changing how we scrutinise budgets, we should consider impact assessments, rather than whether we believe the promises that are made in Government policy.
I would like to focus my remarks on section 3 of the bill, which relates to the Scottish consolidated fund, and to develop some of the points that Alasdair Morgan made. I will also make a vain attempt to make this issue relevant to people's lives, by relating the sorry saga of the sinks and pans of West Lothian.
Last Tuesday, Labour-controlled West Lothian Council voted to hike up rents by £5 a week. That means that rents have increased by 81 per cent since Labour took power in West Lothian in 1996. The latest increase comes on the back of a kitchen and bathroom scheme and a questionable consultation. The scheme is not voluntary. Those on housing benefit do not have to pay the increase, but if tenants have already installed a new kitchen and bathroom they must still pay an extra fiver a week—for a bathroom that they do not need and a kitchen that they will not get.
How does that relate to the consolidated fund and national policy? Labour councils all over Scotland are eyeing up the West Lothian deal with interest. Such deals would allow councils to hike up rents and get housing benefit from the London Treasury to fund rent increases. Good work if you can get it. That was the practice of councils during the Thatcher years—driving up rents, but digging the poverty trap.
Anorak that I am, I have read the Treasury document "Funding the Scottish Parliament, National Assembly for Wales and Northern Ireland Assembly—A Statement of Funding Policy" and I am aware that, if the housing benefit bill in Scotland increases disproportionately to that of our English counterparts, the Scottish consolidated fund will be cut accordingly. Sections 4 and 5.3.iii of the statement, to which Alasdair Morgan referred, make that clear. I contacted Angus MacKay, who at the time was Minister for Finance and Local Government, about the matter. In his reply, Iain Gray said that if other councils took up the West Lothian scheme and the housing benefit bill in Scotland increased, the Scottish consolidated fund would be cut.
Diligent parliamentarian that I am and fearing that the consolidated fund might be affected by what was happening in West Lothian, I decided to check the figures. Scotland spends more than £1 billion on housing benefit; England spends £9.6 billion.
Will the member take an intervention?
I would like to develop my point first.
In the past three years, the differential in housing benefit spent in England and Scotland has been getting bigger. However, the increase has taken place not in the Scottish bill, as I originally feared, but in the English bill, which has risen disproportionately by £192 million since 1999. Does the minister know how much Scotland is due back from that £192 million? Has the Liberal-Labour coalition asked for an increase in the Scottish consolidated fund? If so, what has happened to that? I suspect that, because the coalition does not know what the answers are, it has not asked those questions. We have not received our due. If we had done, I am sure that the story would have been all over the papers.
I relate that point to Alasdair Morgan's comments about the attendance allowance and free personal care. Is it not the case that the financial arrangement that we have with Westminster is a one-way track? When Scotland delivers free personal care, Westminster takes away our attendance allowances. As the First Minister said last week, it is for the Parliament to take the decision to be prepared to pay the extra fee. However, I dispute that that means that we should rob the savings that are made.
How does that point relate to housing benefit and the consolidated fund? When England takes, by charging a higher benefit bill, Scotland does not get its fair share. Does the minister agree that when Scotland delivers, Westminster takes away? Does he agree that Scotland should have control over state benefits, so that we can develop proper policies on tax, council tax and housing? As Alasdair Morgan said, that would allow us to have a budget that is not determined by English departmental policy decisions.
I am coming to a positive conclusion. We could use control over housing benefit to determine affordable rents for Scotland, which would help to move people out of the poverty trap. That practical, positive SNP policy would help the Parliament to take the argument over the consolidated fund into the kitchens and bathrooms of Scotland.
During the debate on the general principles of the bill, it is important that members examine closely spending on health and community care, which takes up the biggest part of Government spending in Scotland. We must also examine the current input of funds to the NHS system, the way in which those funds are spent and whether the objectives that are set out on page 149 of the budget documents are being achieved. In short, have the taxes of the Scottish people been spent correctly to achieve the Government's extensive—although somewhat woolly—promises on health? After all, back in 1997, members of the Labour Government promised that they were the only people who could save the NHS.
The Scottish Conservatives allow that health funding has been increased in the budget. That increase is not surprising, given that in the past four years the Chancellor of the Exchequer has increased the tax burden, and that the economy—which has continued to grow—has delivered more funds into his coffers. We would have expected any Government to put funds behind its commitments. However, this is the year of delivery for the Labour party and, I suspect, the 18 months of delivery for the Scottish Executive. As the Minister for Health and Community Care and his colleagues have said on many occasions, what counts in delivery is not just the amounts of money that are involved—what also counts is how the NHS delivers.
The amounts of money that are involved—as a percentage of gross domestic product under this Government—pretty much continue in the same upward trend that started under the Tories, but many people forget that. We may talk about billions but, as Andy Kerr realises, billions bamboozle, whereas people latch on quickly to increases when we talk about percentages.
During the UK general election, Michael Portillo advocated cuts of £8 billion in his proposed UK budget. Scotland's share of those cuts would be about £400 million a year. In which public services would Ben Wallace reduce spending by £400 million?
The Conservatives are committed to ensuring that spending would not grow faster than the economy. That was our pledge. Will Des McNulty guarantee that the Labour party will continue to increase spending faster than the rate of growth of the economy? If so, the Labour party will simply send the country further into debt.
I will refer to moneys in the budget that could be better used in service delivery. I will also refer to outcomes, because the Executive has failed significantly to meet its health outcomes. Part of the debate is about how we can get the money in the budget to the front line. We must ensure that the budget is matched with appropriate safeguards and efficient mechanisms. For example, Scottish Conservatives fear that funds will not reach the right places unless there is more ring fencing, and that the elderly and those who provide care services will not receive the funds that are desperately needed to resolve the community care crisis.
The Auditor General's report of December 2001 took an overview of the NHS in Scotland and identified some worrying trends including—most important—that of the ever-increasing number of hospital trusts that are going into deficit. The deficit has increased from £5.18 million in March 1998 to £52 million last year. No one can be satisfied because the deficit is now 10 times greater than it was three years ago.
I would give way, but I am in my last minute.
The benefits of cost-effectiveness that were brought about by competition within the NHS have been disregarded since we left power in 1997. I ask the Executive to re-examine the role that was played by commissioning. We should remember that, when fundholding started in 1995, the 25 per cent of GP practices in the UK that were fundholding practices managed to save £125 million, which was re-invested in front-line services. Although problems arose with the increased administration that resulted from contracting, the saving was greater than the contracting costs. The reintroduction of an element of fundholding would perhaps bring back some of those savings.
We welcome the Executive's attempts to streamline provision of negligence claims and the belated beginning of better monitoring of practitioner services. However, we need to look at the outcomes which—to be honest—have been pretty appalling. Labour's claim is that the Executive has started to build new hospitals as part of its hospital building plan. Of course, seven of those eight hospitals were started under the Conservatives. The Executive's aim to deliver six of those projects by last year is way behind schedule. The pharmacy plan, which was included in last year's targets, has still not appeared. NHS 24, which was first pledged in March 1999, is a year and a half behind its equivalent in England and Wales.
The problem is that, for all the money that the Executive has given, it has not achieved its outcomes. The solution is that the Executive must question its policy and the mechanisms for getting money to the patients and to those who are in need. The Executive has failed on the NHS; its outcomes will not be achieved. We shall not oppose the budget bill, but we shall monitor the outcomes.
Over the past three years, the budget has been growing at about £1 billion a year. That has resulted in this year's budget of £21.1 billion. That extra funding has led to substantial growth in public services in many vital areas such as education, health, fighting crime, transport and jobs.
I want to talk about what that increase in the budget means for local front-line services. For example in Aberdeen, greater resources for the police have resulted in a sustained drop in crime, especially housebreaking. Drugs misuse is a major problem throughout Scotland, but particularly in Aberdeen—
Will the member take an intervention?
No thanks. In Aberdeen, we are increasingly seeing the drugs services—
Will the member give way?
I have just started my speech and am not even out of my first minute.
The services on the ground are beginning to provide, for example, community rehabilitation and advice. That is because of the sustained growth in funding and the £100 million that has been allocated for tackling drugs. Recently, Aberdeen started using drugs treatment and testing orders, which took a long time to get off the ground because of the shortage of trained drugs workers. The extra funding has provided for growth in the provision of drugs services, which is now resulting in a shortage of trained workers in that field.
Will the member give way?
No thanks. I have other things to say.
Health is another area in which—as members have said—extra funding worth £1 billion is going into the provision of better services. That will, for example, help to cut waiting times. The specialist emergency and accident nurses who now provide services in Aberdeen have cut waiting times for patients. That is just part of the modernisation that is going on.
Because Elaine Thomson mentioned the national health service, I want to highlight an issue in which all north-east MSPs should be interested. Elaine Thomson acknowledged the fact that more money is being given to the NHS, but does she acknowledge that, although the NHS in Grampian provides 10 per cent of the outputs of the NHS, the Arbuthnott formula provides it with only 9 per cent of the income? That is £50 million a year that is being siphoned away from the north-east. Will Elaine Thomson comment on that?
The Arbuthnott formula—which was put together by an esteemed group of people from throughout Scotland—has been widely accepted and is starting to address some health issues. An extra £20 million has gone into health services in the north-east. We are seeing better services in the area, such as the specialist nurses to whom I referred.
Other issues might need to be addressed. We must consider where to put resources and how best to spend them. For example, we might consider the number of hospitals in the north-east.
Another area in which we see sustained growth and investment is education.
Will the member give way?
No.
McCrone has acknowledged the professionalism and dedication of teachers. More funding has gone into school maintenance, books and equipment. In Aberdeen, I was pleased recently to see more money going into new community schools. We will double the number of community schools throughout Scotland, which will allow the development of better educational opportunities for some of our most disadvantaged youngsters in various communities.
In Aberdeen, because of the extra funding for social inclusion initiatives, we will be able to develop bases for special educational needs in all Aberdeen schools and not just in a select few. That is because of extra money from the Scottish budget.
The Presiding Officer is indicating that I should finish, but I did take rather a long intervention from Mr Rumbles.
Transport has also had more investment—more than £1 billion. That is of key importance to Aberdeen and the north-east. It is vital to the underpinning of our continued economic success. There has been movement towards the development of better transport in Aberdeen. I would like to see a modern transport system being developed and being given the support that it needs. I ask the minister to consider the importance of that for Aberdeen and the north-east.
There has been sustained investment in public services throughout Scotland and not only in Aberdeen. There is more to do, but those services are the priorities of the people of Scotland.
I would like to say what a great pleasure it is to take part in this debate but, of course, that would be a lie.
The content of the budget documents that members have before them is worthy of consideration. When the minister talks about thousands of millions of pounds being spent on transport, it is important that he is open and honest. He should consider the point that I made in an intervention. There is £1 billion in the overall budget for transport, but half of that—one half—is a notional capital charge. It is not an interest charge, as the minister stated, but a notional capital charge. It will not be spent anywhere. It does the public no good to be misled by the minister's suggesting that a massive increase in funding is taking place, when what we actually have is a simple accounting change and a notional payment.
If we boil the budget down, we can see why—after two and a half years of public spending growth, and two and a half years of lengthy and tortuous debates on the budget—the Government is simply not delivering on core public services. The dogs in the street know that the health service is in crisis. Anyone who travels anywhere in Scotland knows that the transport system is in deep, deep trouble. The core of all of those problems is the worst economic growth rate in western Europe. It is therefore vital that we look behind the robbing-Peter-to-pay-Paul debates to find out how we can use Scotland's resources to transform the lives of people in Scotland.
Will the member give way?
Duncan, it will be a significant pleasure.
The member spoke about robbing Peter to pay Paul. Will he confirm that he supports the policy—being promoted by some members of his party—to reallocate moneys from the budget to better-off areas at the expense of poorer areas?
I do not acknowledge that allegation. Money should be put where it is needed most. That seems self-evident. Does Duncan McNeil regard the taking of money from the Scottish budget in order for Whitehall to pay for bloated Scotland Office administration as good allocation of Scottish funds? There is a core constraint at the heart of the Scottish budget, and if the empty vessel would make less noise we might be able to get somewhere.
Constitutionally, the Scotland Office is able to take money directly out of the NHS in Scotland, directly out of schools in Scotland, and directly out of housing in Scotland. It has done so and it has doubled its budget in four years. How can a budget be doubled in four years for that office? It is an office that the Liberals do not want; that we do not want; that the Tories did not want, but now do for some reason—although I never do follow Conservative policy—and which half the Labour members in Westminster do not want? It is absurd that £28 million will be spent on an office to which a minister apologises one week after attacking it, and on a woman—the Secretary of State for Scotland—who is out of control. That money could be invested in Scottish public services. That highlights the core problem: we cannot take adult, mature decisions to grow our own revenue base and to allocate our own resources without interference from—to be frank—troubling ministers in London.
As Fiona Hyslop and Alasdair Morgan asked, why do we meet Whitehall departments' increased costs that result from decisions that we make, but get no benefit if we take decisions that make savings for UK departments? That does not create a productive system in Scotland. There is no incentive in the current structure to increase growth and to increase our tax base to drive forward a reform agenda within the Government sector. That is a massive weakness in the devolution project.
At 4.30, we will hear an announcement from the First Minister on Euro 2008. That will probably involve significant cash allocations from our budget, which I will support. However, the revenues that hosting Euro 2008 would generate from tax revenues from growth would all be lost to the Scottish budget. A perverse incentive is built into the system.
Rubbish.
The Minister for Finance and Public Services has left the Chamber, but his deputy has decided to holler from the sidelines.
If what I suggested is not true, I will be over the moon to find out the truth—I will wait to hear it.
Likewise, at least £120 million of the £300 million that is being spent on the Scottish Parliament will be recycled in tax. In a normal country, our exchequer would feel the benefits, but in Scotland those benefits are lost to the public purse and go elsewhere. That is remarkable. We must build up the powers of the Parliament. I understand why Andy Kerr does not trust himself with more power, but I would trust the people of Scotland with the powers to deliver.
I never know how to follow Andrew Wilson's obscure economics speeches. I am glad that he is not the economics minister in Scotland. That would be a disaster, because he seems to think that the system could operate to allow us all the benefits of spending, but none of the disadvantages of taxation. That would be a strange system.
The debate should be about the priorities for Scotland and the Scottish Parliament, because budgets are about delivering on priorities. There is never enough money; we could always spend more. For example, next year £600 million extra in real terms is going into local government—which I know a great deal about—from the Scottish Executive; however, local government will always ask for more. More can always be done to improve local government, which still suffers from the savage cuts that the Conservatives made to its budget following reorganisation. Those cuts decimated services throughout Scotland and the situation was not helped by the first two years of the Blair Labour Government in Westminster, which continued with those savage cuts.
Significant improvements have been made since the Liberal Democrat-Labour partnership Executive came to power in 1999, but more needs to be done. Local government wants to spend more money in order to improve services that have suffered, such as community and leisure facilities and roads and transport. Those services have not received the required funding, so we must do more.
Does Iain Smith agree that a substantial investment of money on non-trunk roads is required at local government level?
Absolutely. That is precisely the point that I am making. Some services, such as community facilities and roads maintenance, have not received the money that they require in order to ensure delivery of the level of service that the public demands.
However, it is not just about the amount of money that goes in. Although the health budget has received significant additional funding, the health service has significant structural problems, which need to be addressed. Doctors and nurses do not grow on trees. We cannot suddenly create more doctors, nurses, radiographers and other specialists by putting more money into the budget. Some of the fundamental problems in the health service exist because for many years we did not train enough doctors, nurses and providers of specialist services because of budget cuts.
I am disappointed that, despite this being a debate that should be about priorities, we have still not heard from the SNP or the Conservatives what their priorities would be for the budget. Two weeks ago, we had a debate about the priorities for the Scottish Parliament; that debate was led by the First Minister. Did we get any information about what the Conservatives and the SNP would do differently? No. What do we get in the budget debate? Alasdair Morgan spent four minutes of his allocated time talking about £7.3 million from the consolidated fund—money that is not even in the budget document. He said nothing about how the SNP would spend the £21 billion that this Parliament does determine how we spend. Today's debate should be about how we spend that money.
David Davidson, who has left the Chamber, answered my challenge to him by saying that the Conservatives will not tell us this year how they would present the budget, but will tell us next year what they will do with the budget.
Iain Smith obviously did not listen to my speech, in which I made several suggestions about how to use that money. Could the Liberal Democrats make it clear what differences they would like to make in the budget, or are they happy to go along with the Labour party?
I am glad that the member mentioned that. I will talk about it in a moment.
I was in local government for 17 years and, as an opposition party, the Liberal Democrats produced alternative budgets every year, because we feel that opposition parties should tell the people what they would do differently.
David Davidson asked what difference the Liberal Democrats have made to the budget, and Ben Wallace asked the same question. It is a coalition budget and the Liberal Democrats and Labour worked together to produce it. However, if members want examples of Liberal Democrat priorities that are funded in the budget, I will mention some: the abolition of tuition fees; the introduction of grants; free personal care for the elderly; £25 million more for the fishing industry; extra money for local government; record numbers of police; concessionary travel for pensioners; investment in health; investment in education, including the McCrone settlement; the health promotion fund; and £150 million extra for farmers. Liberal Democrats have said that all those matters are priorities and have ensured that they are in the budget.
The budget is good for Scotland. Members should support it.
I call Tom McCabe. We will see how we get on for timing after him.
I thank the Presiding Officer for that—I am sure that we will get on fine.
During stages 1 and 2 of the budget process, we focused on the process. Despite some of the more outlandish claims that have been made in the chamber today, we passed through stages 1 and 2 with a fair measure of consensus. Our budget process is undoubtedly evolving, but I am forced to agree with Alasdair Morgan that there is room for improvement. One might have been hard pushed to work out what has been said today that is different from statements that were made in December 2001, but it is fair to say that the budget figures have received appropriate scrutiny.
At stage 3, it is more appropriate to consider how the inputs will be applied to the priorities of not only the Executive, but the Parliament. In the critical areas of education, health, transport, fighting crime and—which is important—the encouragement of enterprise, increased resources are being applied and benefits are being felt. As has been said, crime is down. However, we must ensure that the fear of crime reduces in equal measure.
Our transport system has substantial investment, yet we must all concede that room remains for significant improvement. More young people than ever are studying in our universities and more young people than ever are benefiting from pre-school provision at an earlier age than previously. We should not forget that Scotland has a record level of employment.
Through the proper application of resources in Scotland and a proper partnership between the UK Government and the Scottish Executive, more Scots are enjoying the dignity of work and the economic choices that work provides. The nation must do better in a range of important matters and must continue to reassess its priorities in an ever-changing world, but I contend that the Labour and Liberal Democrat Executive, through the budget, is sticking to its promises.
The Executive is establishing the right priorities. Those priorities are right because education, health, fighting crime and employment are the priorities of the people of Scotland, and because we must work ever harder to compete with and surpass the efforts of our competitors throughout the world.
Considerable additional resources—about £4 billion—have come our way since the Parliament was established and we have a duty to ensure that those resources are used to best effect. The partnership between the UK Government and the Scottish Executive—not the ill-considered economics of Mr Sheridan or the ill-considered procession of spending promises from the SNP that we hear week in, week out—has produced sound economic conditions that have created budget growth in Scotland.
Will the member give way?
The member may intervene, but that will kill the member's speaking time.
I will be very quick. Does Tom McCabe regard the worst growth record in Europe as evidence of sound economic conditions?
The people of Scotland will regard a £4 billion increase since 1999 in the budget that is available to the Executive as a considerable investment in the services that they want and consider important.
Throughout that budget growth, priorities have been established. Establishing priorities is always easier when budgets increase. The continuation of a Labour Government in the UK, working in conjunction with our coalition Executive in Scotland, provides the best chance of avoiding the need to prioritise when budgets are being squeezed, rather than when they are growing.
I will turn briefly to the question of underspends.
Very briefly.
Opposition parties enjoy portraying underspends as some form of incompetence. Too often they forget to tell people that a level of planned underspend is contained in budget figures for issues such as Glasgow's housing stock transfer, the McCrone settlement and health board flexibility. Like Iain Smith, I spent a considerable amount of time in local government. Year in and year out, I resisted the inappropriate rush towards spending for the sake of it before a certain date.
All too often, that is what happens in too many parts of the public sector. The Scottish Parliament should have a higher commitment to spending wisely rather than simply to spending for political expediency. We all want to see resources applied to best effect at the earliest possible date. However, when required, it is better to weigh and consider matters than to spend for the sake of spending.
My thanks go to the two members who dropped out and I apologise to Mr Neil and Mr Stevenson, whom I am unable to call.
On a point of order. Once again, speeches from back-bench members have been curtailed, when we have heard well over an hour of speeches from front-bench members—we have more yet to hear from them. It seems that, again, the balance between the front and the back benches is way out of kilter. I suggest that, when a debate is curtailed because of events such as an emergency statement, standing orders should allow back benchers more time. That would give front benchers less time, but back benchers are not getting a fair deal in the Scottish Parliament.
The Presiding Officer began proceedings by asking front benchers to save time in their speeches. We got through the front-bench speeches in less time than was allocated. I accept Alex Neil's point but, at the end of the open part of the debate, I have four SNP bids, three from the Labour party and one each from the Conservatives and the Liberal Democrats. The SNP might have tried to pour a little too much into the time that was available, but that is a matter for that party.
The Deputy Presiding Officer's information is somewhat out of date. I, for one, have been trying to speak in the debate. That is a point that the chair has not acknowledged.
The Presiding Officers are given advance notice of members who wish to speak. Naturally, when we select members to speak, the Presiding Officers tend to look more favourably on members who expressed a prior interest. That said, it is perfectly true that additional members have pressed their request-to-speak buttons during the course of the debate.
I want to move on to the closing speeches, as we are running behind time. I call Mr Lyon and advise him that he has a maximum of five minutes to close for the Liberal Democrats.
That is quite wrong.
Dearie me.
I will endeavour to stick to five minutes, Presiding Officer.
For the second year in succession, the budget shows real growth. Every party should welcome that. In 2001-02, the budget figure was £18 billion. That has risen to some £21 billion. In cash terms, that is a substantial rise; in real terms, it shows growth of 45 per cent. In anyone's judgment, that is a substantial improvement. Every party should welcome the figure and recognise that it is a significant improvement on the pre-devolution settlement and on the figure that was overseen by the Tory Administration.
The budget reflects the Lib Dem-Labour coalition priorities. For the third year in succession, we have brought a budget to the Parliament for debate. Although I welcome the rise in expenditure, I have a number of questions for the minister. I am glad that Andy Kerr recognised, in his opening speech, the questions about delivery. It is all very well for us to sit in the chamber and congratulate ourselves on putting in extra money at the top, but our constituents and many MSPs are asking the clear question of what that means at the bottom. They are asking what are we delivering in terms of better public services.
The NHS is a classic example. We recognise the substantial increases that have gone into the service over the past two years, but questions need to be asked about whether that money is delivering real and tangible benefits. As I said, I welcome the minister's commitment to developing a system to measure outcomes for the money that is going into the NHS and other public services. That is important if we are to justify what the money is delivering. Over the lifetime of the Parliament, we will all seek to improve our public services.
I want to go back to one or two specific points. How many beds did the £10 million that was allocated last year to address bedblocking actually unblock? Do we have a figure? Can the minister tell us? The great disappointment was that, despite that money being allocated last year, the number of blocked beds appears to have risen year on year. We need answers about where the money went. Did the local authorities spend it on unblocking beds, or was it moved to other areas? We need to be told.
I hope that the finance ministers will track the £20 million that is being allocated this year to help unblock beds and that they will be able to report back to Parliament in three or four months' time on what that money delivered in terms of the number of hospital beds that it cleared. Without such information, we are debating the issue in a vacuum.
Another serious issue, which concerns many of my constituents, is tackling waiting times and reducing waiting lists. My constituency postbag seems to reflect a general concern about specific issues such as bedblocking, but there are few complaints about the health service in general. The most serious complaints seem to be about waiting lists and waiting times.
If we are to tackle that problem and succeed in reducing waiting lists and waiting times, we must ask some fundamental questions and have some basic information to hand. For example, we must know whether the NHS in Scotland has the capacity to perform extra operations to tackle waiting lists and times, or whether we are constrained by current capacity. Is there capacity in the private sector and can it be bought in, if we decide that that is the appropriate way to go? Is a lack of skills the problem in performing extra operations? Or is it the case, as I heard from senior health officers on Friday, that a lack of flexibility in consultants' contracts prevents us from switching them from the hospitals where they are employed to other hospitals where there might be capacity to undertake extra operations?
We need answers to those questions if we are to solve that fundamental problem. I hope that the Executive will concentrate on gathering that information so that we can have a real debate and that, if we allocate money, it will actually solve the problem.
During the debate, we once again waited and waited for the SNP to state its priorities and its budget for backing those priorities. Once again, we are still waiting. Despite speaking for nearly 10 minutes, Alasdair Morgan did not devote even one minute to telling us what he might do and what the SNP's priorities are. Even in a council, the opposition would at least be able to put a budget on the table to show its priorities and to give the people of Scotland a choice.
I think that it was Des McNulty who complained that this debate was simply following the pattern of previous debates, but it took Mr Rumbles to surprise us all by walking out. Like many members, I am disappointed not to have been able to hear why every other health board in Scotland should have its budget cut so that extra money could be given to Grampian Health Board. That would probably have been the summary of Mr Rumbles's speech.
I was interested to note that Alasdair Morgan, in his opening speech, pointed out that the piece of paper containing the bill's accompanying documents costs 65p. He will find that the volume entitled "Scotland's Budget Documents 2002-03", rather like the new Scottish Parliament, is unpriced. However, what Mr Morgan said concerns one of the legitimate aspirations of the budget process: that it should attempt to be accessible to the public and to us as parliamentarians. One of the difficulties that we still face is that a volume such as "Scotland's Budget Documents 2002-03" is not accessible, nor is it readily comprehensible where the money is going. We all accept that there is still a long way to go before we can see the direct allocation of resources relative to the stated priorities and then assessed relative to outcomes. Tom McCabe said that there is an evolving process, but it is clear that there is a long way to go in that process.
David Davidson and other members touched on consultation with the public. If consultation takes place, one must listen and take on board what people say, otherwise they will not want to engage in the process. People must see changes being made as a result of the consultation.
Alasdair Morgan came to Kirkcudbright with the Finance Committee. An interesting issue that emerged from the meeting was the remoteness from the process that is felt by many organisations that are the target of Scottish Executive priorities. Those organisations also feel that they are unable to influence matters. That must be taken on board.
There must be a move to outcome measures. That is not an easy task, but, as David Davidson and others said, we must be able to understand whether the money that is allocated to VisitScotland, for example, results in any more people coming to Scotland. We must be able to see that the money that is spent by Scottish Enterprise and Highlands and Islands Enterprise, for example, and the interventions of those organisations, have a discernible and positive outcome. Ben Wallace spoke about the health service and how simply throwing money at something does not automatically result in improvement. Despite suggestions to the contrary, we get caught in the spin that more money means better services, but it does not mean that if the money is not targeted or if outcomes from expenditure are not measured.
I hope that debate will help the evolution of the process. It might be a surprise that I do not agree with George Lyon. David Davidson made it clear that the Conservatives and possibly the SNP—it might surprise us—will set out their priorities and budgets for the people of Scotland at an election. We will do that and I am sure that our budget will commend itself to the people of Scotland.
I think that Mr Rumbles was concerned that, although he was not on my script, his name appeared on the screen. He merely wished that the same apology that I offered to Mr Neil and Mr Stevenson should be extended to him. I should have done so.
Perhaps the Presiding Officer received so many requests from the SNP because of SNP members' greater interest in Scotland's future and in how money is spent here. Members of the Executive parties might not agree with that, but perhaps that reflects their ignorance of what is going on. Some of them said that opposition groups in councils—of which they have experience—propose alternative budgets. Despite Tony Blair's remarks before the establishment of the Parliament, the Scottish Parliament is not a council. Some members have experience of councils and that experience shows that there is much wider access to detailed budgets, opportunities to discuss alternatives to budgets with officials and opportunities to propose alternatives. Today, we are at the third stage in debating the budget, but at stage 1 in considering the bill. Had an amendment been lodged and an alternative been offered, perhaps there would have been a procedural outcry.
Just a moment.
For the information and, I hope, the education of at least some members of the Executive parties, only the minister can lodge amendments to the bill at stage 2. Therefore, the nonsense that we have heard throughout today's debate, and in December's debate, exposes the ignorance—the Liberal members' ignorance in particular—of the process in which we are engaged.
I was intrigued by Mr Kerr's remarks in his introduction. He seemed to distance himself from the bill to some extent because he was not its author. I accept that, because of his late arrival in office, the minister cannot be held wholly accountable for that which took place previously—
No, thank you.
However, when members of the Executive were asked several times why it was necessary to ditch so many ministers at the reshuffle and what the effect would be on the budget, no answer was forthcoming. When I asked Mr Kerr what specific changes had been made to the budget as a result of the public consultation, he told me that he would give me an answer later in his speech. I hope that I listened carefully, but I did not hear the answer. If the minister wants to give me the answer now, I would be more than happy to hear it. I am concerned that the consultation process that we have is just so much window dressing.
We had the usual long lexicon of new Labour words to explain what the Executive is doing. Mr Kerr's speech mentioned objectives, targets, key milestones—that was a relatively new one—commitments and priorities. We had all sorts of discussion around those terms, then there was talk about measuring things. The Executive is going to measure, monitor, and assess.
I would be delighted to hear what Mr Peacock is going to do with the six-monthly monitoring reports and whether he will put them timeously to the Parliament's committees, especially the Finance Committee, so that Parliament might have the opportunity to monitor the Executive's activities. I hope that the reports will not be solely an Executive management tool, but will help to inform the debate. Lack of information is, unfortunately, a principal reason why, as part of this rather long and repetitive process—to use Mr Kerr's words—individual parliamentary committees have not lodged detailed amendments to offer alternatives to the budget.
We need to look at how we deal with the budget in Scotland and at the real opportunities to drill down into the detail. The minister, in his reply to the Finance Committee's comments, acknowledged that there is a need to have those opportunities, but I hope that they can be provided a little quicker than his letter indicated. However, I acknowledge the minister's willingness to let that happen.
The convener of the Finance Committee is anxious that we review the whole process. I know that we should not concentrate just on the process, but unless we get the process right we will never have the opportunity to have an informed debate and to discuss alternatives around the detail of the bill. I look forward to having that opportunity in the near future.
My colleagues Alasdair Morgan and Fiona Hyslop detailed a couple of areas in which we need to seek considerable clarification of how our budgetary process works. We have not one budget, but a series of budgets and budget announcements. We are concerned about funds not appearing to be openly and transparently balanced. I hope that the Executive will consider seriously the SNP speakers' points about that matter, and that we get answers about how the process can be monitored.
From Elaine Thomson, we heard a range of comments that sounded almost like Executive press releases. Elaine Thomson said how wonderful the additional money would be for Aberdeen, but the good people of Aberdeen will not recognise the public services that she talked about. On crime, we have the poorest clear-up rates in Scotland; on health, we have an underfunded health trust that is really struggling; and as for schools, although there might well be some additional funding for community schools, schools in the Aberdeen area are facing all sorts of pressures. Throughout all the public services, there is no comparison between what is happening on the ground and the picture that Elaine Thomson painted.
We will agree to stage 1 of the budget bill today, but we need to examine carefully the way that we deal with the process in the future. The Liberal Democrats are giving me knowing smiles and shaking their heads, but that simply exposes their ignorance of what is going on in the Parliament.
Like other members, I have had a certain sense of déjà vu this afternoon. It was particularly strong during David Davidson's speech, but then Des McNulty explained that we had heard the same speech exactly a year ago.
The debate has been very full, despite the fact that we have had to curtail it by half an hour. Indeed, moments of it have been quite interesting, even though it was not universally so. The debate is part of a more open, if repetitive, Scottish budget process, which allows more scrutiny of and access to decisions that are made by the Parliament and the Executive.
I will respond to a number of points that members have raised. As usual, the SNP substantially lowered the tone of the debate with its litany of moans, groans, girning and greeting, almost none of which is true. Although the SNP moans about a whole range of issues, its front-bench members and its back benchers have an endless list of promises that they make every week. If they are not moaning or making unachievable promises, they are expressing extraordinary conspiracy theories about events that are happening south of the border having an impact north of the border. Again, I am happy to debunk those arguments.
It actually took Alasdair Morgan eight minutes—not four—to get through a discussion about £7 million related to expenditure in Scotland. That was a clear diversionary tactic to take our attention away from the £21 billion-worth of expenditure that is providing a range of services to client groups throughout Scotland. Of course, the SNP is the party that wants to deprive Scotland of any say in the UK Cabinet at a critical time when Scotland's voice requires to be heard.
The SNP is notorious for making promise after promise. It would support every road scheme in Scotland, no matter how it appears and without any sense of priority—
Will the minister give way?
I will give way shortly.
The SNP would accede to every pay demand. It would give funding to external bodies on the basis of their first demand and before the negotiations had even started. This week—or was it last week—Christine Grahame said that £100 million of public expenditure was just pocket money. If SNP back benchers think that £100 million is simply pocket money to play with, I shudder to think what the SNP front bench believes.
The SNP is noted for its endless list of promises. The reality of government is that there is no bottomless pit of resources to meet those promises. However, the SNP knows absolutely nothing about governing, because the Scottish people do not trust it.
The minister's comments are reminiscent of the Labour brief that we have in our possession, which suggests that Labour members should repeat with us the tactics that the Tories used on them during the 1980s. The minister can do that for as long as he likes, but no one will be any the wiser about the issues.
I wonder whether the minister will answer the key question. Is it sensible that none of the tax revenues that would be generated by the money that we are about to spend on a Euro 2008 bid would come to the Scottish budget?
I will deal with that myth in a moment.
The SNP's endless promises display how reckless and irresponsible the party would be with Scotland's finances. [Interruption.] If Andrew Wilson waits a moment, he will not be disappointed. As many members have pointed out, the SNP does not have a costed programme or a budget. Instead, its members simply list promises day after day. That is in stark contrast to today's balanced, prudent and progressive budget, which is delivering a range of services.
Brian Adam asserted that the SNP has no opportunity to lodge amendments to the budget, but that is not true. Although at this stage—the third phase of the budget process—we are at stage 1 of the budget bill, it is possible for the SNP, in trying to influence at stage 2 the committee report that comes before the Parliament for debate, to set out its clear proposals for the Scottish people to judge. SNP members will not do that because they know that they would be rumbled. They would rather pretend that they can offer simple solutions to complex problems in the hope that the Scottish people will buy that. The public have not bought it so far, and I am confident that they will not buy it in the future.
Andrew Wilson made a point about Euro 2008. I do not know what is going to be said on that subject in a few minutes' time, although Mr Wilson thinks that he knows. He also thinks that, if there was greater economic activity in Scotland, all that resource would flow south of the border. That is not true. The most recent "Government Expenditure and Revenue in Scotland"—a credible and well-respected report that few academics are capable of criticising—makes it clear that, rather than money flowing south from Scotland to England and Wales, the opposite is true. It shows a £4 billion structural deficit that the SNP has never been able to fill and Scotland benefiting sizeably from the Barnett formula.
I remind the minister that, on pages 2, 3 and 4, the GERS report states that none of the figures that it contains are reliable.
Alex Neil ought to know that any economic appraisal depends on a range of assumptions—but not on nearly so many assumptions as the SNP's pet group of consultants, the one group that SNP members occasionally quote. The reality is a £4 billion deficit that the SNP has no way of filling.
Will the minister, in his final three minutes, talk at all about the Executive's budget, which we are meant to be agreeing to?
I have already indicated that the bill enables a £21 billion budget that will help to address all the priorities that the First Minister has outlined over recent weeks.
It was interesting to hear that the SNP has apparently ditched its policy on financial independence; in due course, I would like to know what its new policy is. I understand why the SNP has ditched that policy, of which there have been five versions. The first was fiscal autonomy, but nobody would buy that, so it was changed to full fiscal autonomy. Nobody would buy that either, so it was changed to fiscal freedom. There were still no purchasers, so it was changed to full fiscal freedom. The policy is now called financial independence, but it appears that even that policy is being ditched. Perhaps there has been slow recognition of the fact that following the route of financial independence and pretending to Scots that there can be full financial independence under a devolution settlement would lead to the £4 billion deficit that I have talked about.
I ask the minister to return to the motion for debate. Can he tell us how he will benchmark the success of the budget? If, for example, the performance targets that are set out in the chapter on health are not achieved, will he say that the budget is a failure because it did not achieve last year's targets?
Of course the budget is not a failure. As Alasdair Morgan kindly said, the budget is part of the process of our building for success at the next election, when we will continue—through the spending review that we are about to embark on—to make plans for the next period of coalition Government, unless the Labour party wins a majority, as one hopes will be the case.
Fiona Hyslop made great play of the balancing adjustments in the budget. I am sorry to disappoint her, but we are about to conclude arrangements with the Treasury on that matter. She will be disappointed because that will be good news for Scotland and that usually brings glum faces from the SNP. Fiona Hyslop did not mention the fact that we already receive benefits from the Treasury because the rate of increase in our council tax is slower than the rate of increase in council tax in England and Wales. We benefit directly as a consequence of that money flowing north of the border from south of the border, in exactly the opposite way to that which Fiona Hyslop described.
David Davidson accused us of not having the resources available in the budget to provide free personal care. Let me nail that absolutely. The resources are there to fund our commitment to provide free personal care and we will start to deliver on that commitment as soon as the promised progress is made, by July.
Des McNulty, rightly, pointed out that the priorities that the First Minister has alluded to are contained in the budget and we have the capacity to further tweak, prioritise and focus our resources to bear down on crime and to address the issues of health, transport, education and jobs. That can be done using the current totals but, as we move into the spending review, we plan to examine what else can be done to target resources in those directions.
This budget provides record levels of spending for Scottish services and allows the Scottish Executive to serve Scotland's people and address their priorities. The Executive ensured, through consultation, that its proposals reflected people's priorities. The funding will make lives better across Scotland through better education for our young people, better health care for everyone, improved transport connections, job opportunities and the dignity that work brings, and communities that are safer from crime. The Budget (Scotland) (No 3) Bill makes provision for those priorities and much more. I commend it to the Parliament.