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Chamber and committees

Plenary, 24 Jun 2004

Meeting date: Thursday, June 24, 2004


Contents


Efficient Government

The next item of business is a statement from Andy Kerr, on efficient government.

The Minister for Finance and Public Services (Mr Andy Kerr):

I wish to outline to the Parliament how the Government will drive forward our agenda for improvement and delivery, our work to get the best value from every public pound spent and our intention to invest in Scotland's future prosperity. The United Kingdom spending review will be announced shortly, and that UK announcement will set out the additional resources that Scotland will receive for the financial years 2006-07 and 2007-08.

Since devolution, there has been the longest and largest sustained rise in public spending in living memory. We have used that increase to invest in public services and to improve infrastructure across Scotland. The investment is making a difference: it is delivering and having an impact in all our communities. In our own spending review, we must lock in the investment that we need and ensure we are getting the best possible value for our money, through investment in skills and services, investment in infrastructure and investment in our most important asset—Scotland's people. We need to do so in a climate in which public spending is still rising in real terms, but less quickly than in recent years.

For the Government, it is

"imperative to seek continuous improvement in the efficiency of public expenditure".

Those words come from the Finance Committee report that was debated this morning. That principle already underpins every decision that we make.

My statement sets out the steps that we are taking to ensure that we lock in continuous improvement and real efficiency gains across the public sector: from the Scottish Government to local government, and from health boards to public bodies.

We will spend more on front-line services for the people of Scotland, on those who deliver the core business of government, and less on support services and back-office functions. We will spend more on delivery and less on administration and we will move resources from how we do business into the business that we do. We want better regional and local management of services, not more central control. We are realising the full potential of savings from more efficient procurement, making the most of the opportunities that technology brings to drive up efficiency, simplifying and standardising policies and processes and drawing on best practice from across the public sector.

Our record in Scotland is already strong. Our e-procurement system is one of the most comprehensive and successful e-government initiatives in the world. We are joining up back-office functions in our health boards to save £29 million a year, and local government has shown itself able to take a number of impressive strides in order to secure efficiency gains and deepen collaboration between councils.

However, we need to do more. Therefore, today I am announcing that, as part of our budget plans to be announced in September, we will set out a three-year plan to attack waste, bureaucracy and duplication in Scotland's public sector. We are building on the work that has already been done, but we are stepping up a gear and going much further, with more ambitious targets. We want to ensure that every pound has a positive impact.

Our immediate goal is to deliver efficiency savings of £500 million from the financial year 2007-08, rising to £1 billion by 2010. We will set targets for efficiency gains from each Government department, from health boards and from all public agencies. Those gains will free up resources that we will invest in front-line services and staff.

We will work with local government to build on the gains that it has already made, and I welcome local government's willingness to work with us on that challenge. The different parts of the public sector will need to look beyond their own organisations and boundaries and work together in order to achieve our objectives.

We want to invest time and effort today to bring security and strong foundations to our public services in the future, and to invest resources for that task. I have therefore set aside a total of £60 million for this year and next year to incentivise and fast-track change and service improvement.

Today, I will write to leaders throughout the public sector to invite them to work closely with us, play their full part and ensure that we succeed together. Their expertise and experience will be vital, as will that of front-line staff. In every public or private organisation, the staff on the ground who deliver the service day in, day out know how the service can be improved. Therefore, I ask every public service worker to join us in our efforts to improve the impact that they can make in their jobs and to end the time that they waste doing unnecessary work.

However, we need to get our own house in order first. The end-year flexibility process is part of our financial management process. Today, I have published a comprehensive paper that sets out details of the resources that have been carried forward from last year under end-year flexibility, and how that money will be used. Copies of that paper are available for members in the Scottish Parliament information centre.

Before summarising the numbers, I want to remind members why we go through the process each year. The process stems from the parliamentary principle of annuality. When Parliament approves the Executive's spending plans, it does so only for the financial year in which it gives its approval. If that spending does not take place, we are required to come back to Parliament to have those plans authorised again. Every business and every household carries forward money in such a way. No one expects businesses and households to rush out and spend the remaining money in their bank accounts at the end of the financial year; instead, they plan for the future and set aside the money that they need to pay the bills that they know are coming. That is sensible day-to-day budget planning and the Executive uses the same sensible, commonsense approach. That approach rests on the basic principles of EYF, which are a fundamental part of prudent financial management.

The detailed paper that I have published shows that the Executive has carried forward less than 2 per cent of the total Scottish budget, which is a level of cash reserves that Government bodies have traditionally carried over at the end of the financial year. However, I am disappointed that this year's EYF of £403 million is more than last year's. Delays in spending are delays in improving public services and the figure for the past year demonstrates to me that, after five years of devolution, departments still have more to do to ensure sound financial management across the Executive.

I am therefore taking additional action to ensure that future spending comes in closer to budget. I have reached an agreement with the permanent secretary that will ensure that appropriate indicators on financial management are included in the personal performance targets of all senior civil servants with responsibility for budgets. I am also introducing a new approach to managing resources that are set aside for future commitments. Those resources will, in future, be managed centrally alongside the contingency fund, allowing more active management of the budget. As members will know, we made a start on that in last year's spring revision by bringing forward £85 million of spending in the health portfolio, and I can announce further steps today.

Last Monday, Ross Finnie announced the provision that has been carried forward by Scottish Water. He made it clear that, as with all our arm's-length bodies, we have given Scottish Water a guarantee that it will be able to carry forward its unused borrowing capacity until that is required. However, the £205 million that was carried forward by Scottish Water from last year will not be needed in this financial year. We have the option to leave that money on one side or to use it now in ways that will free up resources in future years by bringing forward spending from future plans. I have decided that it is right and prudent to bring forward into the current financial year £205 million of spending from our future plans.

First, in light of the pressures on the health service this year, I have agreed that the Health Department should be allowed to retain for a further year the loan of £85 million that was made in the spring revision. Secondly, I consider it prudent that, whenever we can, we take steps to reduce the debt burden that we leave for the future. By paying off debt now, we not only meet a commitment that would inevitably fall in years to come, but we free ourselves from the burden of annual interest payments. That not only brings forward spending; it frees up additional resources in every future year—resources that we can then allocate to the improvement of front-line public services.

I have, therefore, decided to pay off all the remaining debts that were carried over from Scottish Homes at a total cash cost of around £220 million. That will bring annual budget savings of more than £15 million a year: an annual return of more than 10 per cent on our investment in terms of departmental expenditure limits. That simple, prudent step will release resources for front-line services.

We have made economic growth our top priority. To achieve that, we must invest in skills, education and infrastructure. I will say more on that front in the spending review, but I am pleased to be able to make a start today. We are reversing decades of underinvestment in our higher and further education establishments. We have a world-class tertiary education system, and we need world-class facilities to match. We will bring forward into this year £20 million of capital investment in further and higher education institutions to allow them to take forward plans to modernise the teaching infrastructure and promote collaboration. I will set out further investment proposals for further and higher education in the forthcoming spending review.

In our schools, we aim to lead the world in online learning. Research shows that teachers and pupils are beginning to see real benefits from using online materials in the classroom, and we need to make the most of that opportunity. I am bringing forward £10 million to upgrade the technology that will allow our schools better access to the latest online learning material, including the digital curriculum that is being developed by the BBC.

All the spending decisions that I have detailed today would have had to be paid for in due course. By bringing them forward, we both bring forward the delivery of our programme and free up resources for the future.

We all know the impact that decades of underinvestment in our infrastructure has had in Scotland—the negative impact on transport, education and health and the debilitating impact on economic growth and innovation of underinvestment in the long years before devolution. However, we have made a strong start in repairing the damage and putting things right. We have begun to make the capital investment that our country needs in new schools, new hospitals and new transport infrastructure. That capital investment is modernising Scotland and supporting our investment in front-line services. It is essential to economic growth. However, there is still much to do and I am pleased to confirm that increasing capital investment will be a priority.

I am also setting a target to increase our net investment by at least 5 per cent per annum in real terms over the spending review period. That target will lock in for the longer term the improvement in infrastructure that we need to secure the growing economy and the first-class public services that Scotland deserves. Final decisions on the allocation of this additional investment will be taken in the spending review. However, I assure Parliament today that those decisions will ensure a maximum return from our increased investment. Moreover, in the autumn, I will publish a detailed capital investment strategy for Scotland that will set out our medium-term plans.

Presiding Officer, I have set out a long-term strategy to improve the efficiency of government that will release more than £1 billion each year for investment in front-line services; our strategy for prudent financial management; our decision to pay off debt; our practical commitment to bring forward investment in our schools and further and higher education institutions; and a commitment to annual increases in net investment, which will continue our reversal of the decades of decline in our basic infrastructure.

Together, the proposals will deliver effective financial management and prudent long-term planning and will set our finances in good order as we move on to the spending review. They lock in permanent gains to the Scottish budget and for the people of Scotland, and I commend them to the chamber.

The minister will now take questions on the issues raised in his statement. I will allow around 20 minutes for questions.

Fergus Ewing (Inverness East, Nairn and Lochaber) (SNP):

I thank the minister for providing me with an advance copy of his statement, which is entitled "Statement on Efficient Government" and announces proposed savings of £500 million from the financial year 2007-08 which will rise to £1 billion by 2010. If, as the minister has therefore admitted, public money has been wasted in Scotland, why is this statement being made only on 24 June 2004, five years and 23 days after the Labour-Liberal Administration assumed power? Is that not proof positive that there has been financial mismanagement by the Executive? The statement announces a three-year plan to attack waste, bureaucracy and duplication in Scotland's public sector. If such a plan is required now, why was it not introduced four or five years ago?

As for the £205 million underspend by Scottish Water, that has been paid for by Scottish Water's domestic and business charge payers. Surely if that money is to be used to pay off debt, it should pay off Scottish Water debt. Instead, it has been diverted for other purposes that might be worthy but were not part of any reasons or explanations that people were given when they received their water bills.

Did the Scottish Executive consider using the £205 million underspend of Scottish Water resources from water rate payers to reduce Scottish Water debt or to refund more than 20 per cent of the water charges pro rata to domestic and business rate payers? I hope that the minister will give a straight answer to that question. If such matters were considered and rejected, will he kindly explain why?

Mr Kerr:

First of all, I said that we are embarking today on a step change in our efforts. I say to my colleagues in the chamber—and in the media—that many of the things that the Executive does very well do not get reported. I have searched our database of press releases on efficient government, on how the Executive is spending money and on our partners' efforts to reduce their burden on the taxpayer, increase productivity and deliver better-value services. Those press releases go back many years and, as members will see, I have brought a few of them along today.

If Fergus Ewing cares to listen, I will provide some examples of what we have done to date on this matter. One clear example of the work that the Executive has been carrying out is the facility management contract for its buildings. As a result, we have reduced the annual charge by £2.1 million and the number of employees involved by 45. Moreover, our novel e-procurement system has been copied throughout the world and is saving millions every year. Indeed, the fact that we are now paying half the amount for our nurses' tunics that we paid under the previous system is evidence of good work and good value.

The e-option for personal computers, which saved Scottish taxpayers £400,000, led to improvement not just in the specification but in value for money. I could—and I will—go on if I need to. However, the member will find that the Executive has, over the years, been looking after every pound of the public's money that has been spent. What we want to do—I am sure that the member will welcome this—is to increase that effort, to ratchet it up and to give it focus and political support, to ensure that we do better and that we do more in the great effort that we will be making in partnership. We are doing a lot more, and will do a lot more, on that front. Mr Ewing should not assume that, over the past five years and more, we have not been doing that work. We have been doing it, and we have tried to get the message out about that, although sometimes it has not been reported. When the place down the road—Westminster—launches a review, however, that becomes an issue in Scotland. We are far ahead of the work that has been carried out in the rest of the United Kingdom. We are leading the world in e-procurement and we are implementing systems that are saving taxpayers in Scotland a lot of money.

With regard to Scottish Water, the member should listen closely. The point is that money is still available to Scottish Water for a continuing and massive investment in public water infrastructure—a massive investment that has been supported by the Executive and channelled through Scottish Water. We have not taken the money off Scottish Water; I am simply using that money prudently and wisely in the interests of the taxpayer.

Mr Brian Monteith (Mid Scotland and Fife) (Con):

I join Fergus Ewing in thanking the minister for the very early copy of his statement. Members may be becoming tired of me saying that we on the Conservative benches represent the real Opposition. Let me change the record, Presiding Officer, and say that, following this week's political developments and yesterday's vote on proportional representation, we are the only Opposition.

I hear the minister talking of efficiency gains. Sacking 88 chorus members at Scottish Opera, and paying handsomely for it, is what he might call an efficiency gain. I do not share that view. He has told us that greater efficiency is needed, implying that there has been too much waste by the Executive in the past. Will he tell us how much money the Executive has wasted—even if he can give us only a ball-park figure or an estimate—in the past four years? He has told us that the underspend has gone up under his watch. Will he tell us how much money he will return, using existing powers, to hard-pressed council tax and business rate payers?

Mr Kerr:

The member does not understand the point and, like Mr Ewing, does not appreciate the work on efficiency that has been on-going in the partnership Executive over the years. We have been involved in projects in procurement and facilities management, in productivity in the Crown Office, in purchasing in the health service and in efficiency measures and utility costs in the Executive, where we produced a 35 per cent reduction in the Executive's utility bills. Mr Monteith suggests that we have not been taking an interest in Scottish taxpayers' pounds and pennies; we have. We want to step up our efforts to ensure that such an approach works throughout the public sector.

Many organisations are working away in isolation, doing their best to ensure that they procure correctly, that they manage their utilities correctly and that they use their properties correctly. I am saying that we should take that a step further. Let us ratchet it up; let us work throughout the public sector; let us learn from one another; let us co-operate together; and let us save money for the taxpayer. Collaborative contracts on e-tendering, such as those for energy, have reduced public sector bills at more than 600 sites in Scotland. Our human resources system is saving £28 million a year in the health service, and £2.9 million a year is being saved through efficient processing of common agricultural policy forms for farmers' grants. Littered throughout the public sector in Scotland is the Executive's effort to ensure that we are getting value for money.

I will take lectures from no one about efficiency. At the heart of what the Conservatives seek to say is, "Let's just reduce taxation and public services." What we are about is investing the resource that we save from back-office functions and from reducing inefficiency; we are about getting that money to the front line and delivering more public services. To Mr Monteith, efficiency means fewer public services and less spending in those areas where citizens and communities want money to be spent. The Tories always talk about giving the money back. They did not talk about giving the money back in their leaked memo of a year ago; they were thinking about hundreds of ploys that they could undertake for short-term political gain, none of which was reflected in the statement Mr Monteith has just made.

To get back to the heart of the matter, on end-year flexibility, the hospital nurse who needed to be trained last financial year still needs to be trained this financial year, and the Executive still wants to train that nurse. The road that we wanted to build last year but which was delayed by bad weather, planning or whatever still needs to be built, and we still want to build it. That is the purpose of EYF. We could make a one-off saving and a political gesture that lasts 12 months but only if we cancel the road, the training or the investment. We want to deliver on the contract that we have agreed with the Scottish public, and with EYF we manage our funds much more effectively. That is why I have made it a performance criterion for senior civil servants in the Executive.

Mr Monteith's comment on EYF is wrong, and no sane person—no householder and no businessperson—would understand what he is saying. We get to the end of the year with money left over but we still have a project to do. Should we spend the money on something else so that the project does not get done? That idea is daft and silly and I am surprised that Mr Monteith raised it.

Jeremy Purvis (Tweeddale, Ettrick and Lauderdale) (LD):

I warmly welcome the minister's statement. He was a welcome guest in the Borders last Monday, when he met the new ways partners—the police, the tourist board, the council, the college, the enterprise company and housing associations—which have almost £40 million of joint commissioning. That is exactly the model that we should roll out throughout Scotland.

I am particularly pleased that the minister will ensure that this initiative will involve every agency and individual in public service, from senior officials and their personal performance targets to front-line staff. Does he agree that one of the best ways to bring about early efficiencies in local government is to remove the cost—almost £50 million per year—of assessing, valuing, administering, collecting and enforcing the council tax by replacing it with a local income tax? That would bring both efficiencies and fairness.

Mr Kerr:

On the final point, I will leave it to others to go through the review process and come back to the Parliament. There are costs involved in collecting any form of taxation.

On the substantive point, the new ways initiative involves exactly the processes and partnership working that the Executive wants. When public services get together, the added value in the process and the gain for the taxpayer are immense. I have seen that throughout Scotland; there are great examples of public sector organisations working together with a single approach to clients—whether they are elderly members of the community or young people in our schools—so that public services deliver a better service to the customer and better value for money. I agree with Jeremy Purvis's earlier sentiments but I leave his other point for others to deal with in a later debate.

Des McNulty (Clydebank and Milngavie) (Lab):

The minister announced a substantial commitment in relation to paying off the Scottish Homes debt of £220 million. Will he explain a wee bit more about how that can be funded, given that we have £205 million from Scottish Water and that some of that money is going to other worthwhile projects, including the £85 million that will be retained by the health service? Also, in the context of the welcome statement that he made about the year-on-year increase in capital investment, will consideration be given to supporting Scottish Water to tackle some of the necessary work that needs to be done to deal with development constraints in Scotland, particularly in the east end of Glasgow, where there is a blockage that affects economic growth and infrastructure investment? Work on that blockage would be greatly welcomed by people in that great city.

Mr Kerr:

I will try to explain the point about the Scottish Homes debt so that we all understand it. There is a total cash cost of about £220 million—I say "about" because interest rates will fluctuate between now and the date when the transaction takes place. In budgeting classification terms, only £120 million of that hits the DEL budget in the Scottish Executive. As I indicated, paying off the debt will save, or return to public services, £15 million per year. Some £90 million from the resources that I talked about will go towards the £120 million debt that is left and the rest will be acquired by taking back from the department the money that it would have spent on interest charges—that would have led to a double gain for the department, and I am not in favour of double gains. We will also save some money by writing off that debt. Although the top-line figure is £220 million, the actual hit for the public purse is £90 million. I thank the member for the opportunity to clarify the matter—I hope that my explanation did that. If not, I will send him a letter about it.

On capital expenditure, I fully take the point about the pressures that exist, which will be a clear driver in the spending review process, when the matter will be discussed. Regeneration remains a critical focus for the Executive. The requirement to meet European standards in relation to water and waste water remains a clear priority. We understand that development is lagging—that is happening in my constituency, too. Pressures exist in the system and progress cannot be made. I will need to wait until we have the outcome of the spending review before I can give the member further detail on that.

Patrick Harvie (Glasgow) (Green):

I am sure that many members welcome the aspirations of preventing cuts to front-line services and of putting more money into those services. However, I draw the minister's attention to NHS Greater Glasgow, which is making many cuts. I mention the centre for integrative care at the Glasgow homeopathic hospital, in support of which more than half the Parliament's members have signed motions in the past few weeks, but which faces cuts that will close its in-patient service. Does the minister agree that closing a service that could make long-term savings in the NHS's drugs bill is an example of misguided thinking? Will he tell us what will be done in the short term to prevent cuts that are in the pipeline from materialising before the efficiency savings to which he refers can be made?

Mr Kerr:

I will give the member some detail about the methods that the Executive has employed. I mentioned the utilities cost reduction of 33 per cent through improvement of our energy use and, it is fair to say, through our procurement methodology. The energy that we use and that is used at 600 sites throughout Scotland is now renewable energy, which we also procure effectively.

As for the member's substantial point, in the chamber it is easy to second-guess professionals and to give such views. I am not willing to do that. Those who are closer to the front line are better placed to make such decisions. They will follow the normal process of accountability, which involves the Parliament. I will put that in context. I do not want to dictate from Edinburgh to local health boards, local authorities or anybody else how they should make their decisions, because they are closer to the issues.

The member talked about cuts, yet our health service budget is increasing dramatically. It is clear that choices are being made in Glasgow. We have made choices to improve the pay and conditions of our work force and to invest in new hospitals and facilities. Sometimes, choices mean that difficult decisions must be made—that is what being in government is all about.

The agenda to which the member referred involves massive investment in Glasgow's health and the health board is taking decisions. That investment is taking place to the benefit of the people of Glasgow and beyond. We must make difficult choices. It is clear that those choices are up to the health board, which is closer to the issues and the problems. I will not second-guess it.

Tommy Sheridan (Glasgow) (SSP):

Does the minister agree that Scottish Water is guilty of negligent management of its accounts, in that more than 90 per cent of its £350 million investment has been drawn from customer charges and only a small proportion has been drawn from borrowing? The result is a significant increase in water prices for customers, small businesses and, of course, non-profit organisations such as credit unions. Would it not have been better for Scottish Water to have drawn down more borrowing for its investment, to allow it to keep its prices down?

In his statement, the minister said that he wanted to

"spend more on front-line services for the people of Scotland, on those who deliver the core business of government"

but

"less on support services and back-office functions."

Will he please elaborate? Does he mean the medical secretaries who provide back-office support for doctors and consultants? Does he mean the clerical support for social workers that allows them to deal with their heavy case loads? Does he mean the civilian and administrative staff in the police and the judicial system who are back-office support but provide an essential service? To whom is he referring? Does the statement really represent a massive cuts budget in disguise?

Mr Kerr:

It took us until Mr Sheridan to hear about a cuts budget. The Executive's budget has risen to £16 billion and will rise to £26 billion—what a massive cut that is in our public services. Local authorities throughout Scotland have received above-inflation funding increases and massive investment has been made in our health service and in our public infrastructure. Mr Sheridan goes far wrong when he talks about a cuts agenda.

One billion pounds.

Mr Kerr:

That £1 billion relates to bureaucracy and back-office functions and to productivity improvement. It will be spent on public services on which the people of Scotland want us to spend.

Mr Sheridan suggests that this exercise is all about a head count of people. In fact, it is all about improving the efficiency of delivery of public services. It is about our public servants working together to provide better services. Believe it or not, we can do that much more efficiently and effectively and give public servants more time with clients and more time on the job by providing them with the equipment and management that they require. When I visit the projects on which health services and local government are working together, I find that there are not fewer people, but better and more motivated people. That is the case because they are not wasting the public's time and money.

No public servant gets out of their bed in the morning to go to work saying, "I'm going to be inefficient today. I'm not going to work in partnership with other public sector colleagues." Rather, they get out of their bed because they want to do a good job. I want to support them in doing that job. This exercise is about reinvesting in our public services and taking advantage of procurement, technology and sharing of back-office functions to deliver better public services. I share that agenda with colleagues in the Executive. I am surprised that Mr Sheridan does not share it.

Susan Deacon (Edinburgh East and Musselburgh) (Lab):

I welcome the minister's statement and note and applaud the Executive's continued and consistent commitment to public services in Scotland.

Does the minister agree that ensuring that public services in Scotland are of the highest possible standard, that efficiency and effectiveness are achieved and that the public reap the maximum benefits from the record investment that is being made in public services requires the highest possible quality of management across the public sector and the best possible modern organisational practice? What steps are being taken to build that capacity across Scotland's public sector? In particular, what steps are being taken to ensure that the civil service in Scotland is equipped to carry out the task and to perform the functions of a modern, 21st century, post-devolution provider of support to ministers and the Parliament?

Mr Kerr:

One of our biggest challenges is to build in the Executive and in public services throughout Scotland the capacity to which Susan Deacon refers. There are some very good examples of good work that is being done, but we need to share them. The improvement service for local government and the NHS improvement team should help us to do that.

Building capacity and skills in the public sector is an important issue. By stepping up our drive for efficient government, I want to ensure that the public sector brings in people who have a proven track record and the skills to do the job. I have spoken to a number of public service managers and private sector managers about the skills that they can bring to bear on this issue. For example, the e-procurement programme is a model that we have developed in the public sector in partnership with the private sector and which is now leading the world. Good things are being done, but we need to train, manage and build capacity to ensure that we make the efficiency savings that we want to make. It is a bit about technology, but not much. It is a bit about investment, but not much. It is more about culture and management skills. We want to ensure that there is a drive for efficiency throughout the public sector.

When I worked in Glasgow City Council, there was innovation in every part of the organisation, from the front line through to the management team. We want to tap into that skill and share it across organisations. We can do that. Susan Deacon raises a serious issue that I have been considering. Increasing efficiency is one of the key tasks of the improvement service for local government that we set up recently and to which we have appointed a chief executive.

Jim Mather (Highlands and Islands) (SNP):

I am interested in the measures that have been announced today. In particular, I was interested to hear the minister state again that growing the Scottish economy is the Executive's top priority. I was equally interested to hear him use the word "strategy" in that connection yet again. With a strategy, I look for top-level targets, but in this case there is a complete absence of such targets. He has not put a tangible number on what the Scottish economy can achieve and he has not addressed other issues. Much of the money comes from Westminster, with which the minister is in a joint venture. When I asked him about macro targets in the Finance Committee, he told me that he did not have control of the relevant levers and outputs. Given that he is in a joint venture with the UK Government and has taken the money, why does he not have top-level targets? Why does he not produce such targets with the UK Government?

Mr Kerr:

I am pleased to be in a joint venture with a UK Government that has been very successful on delivery and under which the Scottish budget and investment in the public sector have grown massively. That joint venture is one that I wish to retain.

I said this at committee and I will say it again: I am willing to set targets and I have done so for those matters over which I have direct control. Jim Mather might be disconcerted to know how well the Scottish economy is growing—figures over the past six months demonstrate improvement in the economy, including in manufacturing. He forgets about all the good news that the joint venture is delivering—a strong, stable economy and the lowest inflation, interest rates and unemployment for decades. All those statistics point in the right direction.

I set targets today of £500 million rising to £1 billion. Why can I set those targets? It is because I have control over the process and I influence it; I do not set controls and targets for areas over which I have no control. I would never set a target for votes for the Scottish National Party because that would be impossible for me to manage. Likewise, the SNP should not set targets for me.

My regrets to the five members who are still waiting to speak, but because we are behind the clock, I must now pass on to the next item of business.