Budget (Scotland) (No 2) Bill: Stage 1
The next item of business is a stage 1 debate on motion S1M-1574, in the name of Angus MacKay, on the Budget (Scotland) (No 2) Bill. I ask members who wish to speak in the debate to press their request-to-speak buttons now, and for members who are leaving the chamber to do so quickly and quietly.
You will understand, Presiding Officer, if I approach this speech with slight nervousness, considering recent events. I have read this morning's newspapers in full, however, and I am satisfied that no details of my speech have been reported in any of the newspaper articles around the resignation of Peter Mandelson.
This has been the first full year of the budget process as set out by the financial issues advisory group and adopted by the Parliament. I acknowledge that, in the first year, the budget process has had its complications. It was the first full year of a new process, so it was always likely that some difficulties would be experienced. Some were merely teething difficulties, and involved sorting out the best way to provide information, but some were more fundamental. For example, the timing of the budget process as described by FIAG did not sit well with the timing of the United Kingdom spending review. I have agreed to examine the difficulty caused by that.
It was an unusual year for other reasons. There was a major change in the accounting basis, with a shift from cash to accrual. There was also a spending review. Nevertheless, I think it fair to say that it has been a year of achievement. We implemented a consultative budget process which achieved a genuine degree of engagement with the wider public. That is not solely an Executive achievement—it directly reflects the very hard work of the Finance Committee. I wish to place on record my thanks to that committee for its effort and for the constructive attitude of its members.
The year has been extremely fruitful: the Chancellor of the Exchequer's excellent stewardship of the UK economy and prudent handling of public finances have greatly benefited Scotland and the UK. The Budget (Scotland) (No 2) Bill highlights those achievements and goes on to reflect the record level of public expenditure.
The spending review provided increased expenditure of £800 million in 2001-02, of £1.9 billion in 2002-03, and of £3 billion in 2003-04. That will substantially increase the resources available for core programmes in the period to 2003-04. Spending on health will increase by 15 per cent, on justice by 13 per cent, on transport by 45 per cent, on education, arts and sport by 17 per cent, and on communities by 20 per cent. Those significant increases will have a direct impact on the lives of everybody in Scotland.
I have no doubt that we will hear siren voices claiming that public expenditure has fallen as a proportion of this or that, and making other criticisms. The fact remains that the spending review provides for a record level of public spending in Scotland. That means that more money will be devoted to meeting the most pressing needs of the Scottish people. It means more spending on health care, further improvement in a variety of critical infrastructure, and more progress on the social justice agenda.
Those priorities are directly reflected in the Budget (Scotland) (No 2) Bill, which was introduced on 19 January. It reflects our commitment to using all the resources of the Scottish Executive to meet the needs of the Scottish people. Meeting the essential needs of the nation must be about far more than simply attempting to allocate sensibly the additional money that we received through the spending review. It must be about spending the entire Scottish Executive budget in a manner that meets more of the Scottish people's needs. Meeting more of those needs requires us to understand them better and to squeeze every last drop out of public expenditure.
We must continue the consultation process—seeking people's views and engaging them more fully in the budget process—and I am determined to build on the start we made last year. The Executive is also determined to ensure that every pound in the budget is spent efficiently and effectively. That is why, in his statement to Parliament on 20 September 1999, my predecessor announced our intention to establish best value in Scottish Executive spending. Next week, I will make available details of a new initiative that will focus on achieving better use of public expenditure by reviewing the output of public spending—what it delivers—and assessing whether that pattern of spending meets the key priorities of the Administration. Over time, that detailed scrutiny will assess all parts of all spending programmes.
I will announce a detailed implementation plan in due course. It is important that detailed scrutiny is built on a variety of factors. First, there must be inputs from internal expertise. We need access to existing sources of advice, such as published reports, and we must look beyond those sources for external assistance in scrutinising what we do and trying to achieve best value. Therefore, I intend to establish a high-level group, which will examine all spending programmes. It will provide the essential function of challenging how we deliver best value.
We must also review and improve our performance targets and reporting. We are under a duty to include targets in the budget. I accept that so far the targets in our documents have been of variable quality and have not been strong enough. They attracted criticism from the subject committees last year. That is a further area in which the Finance Committee can make a strong contribution. We must work together to improve our targets and their presentation.
We must also shift targets from measuring inputs, which has been the traditional and accepted method of assessing progress, to measuring outputs and outcomes. Although that might seem a relatively small change, it has massive implications for the budgeting process and for our ability to conduct meaningful scrutiny. I do not underestimate the difficulty that is involved in that change, but I believe that it will deliver lasting benefits for the budget process. I would gratefully welcome the Finance Committee's assistance on that.
Our initiatives on targets and on a budget review should be seen in the wider context of a programme to modernise government at every level. Last month, Susan Deacon launched the Scottish health plan, a key aim of which is to build efficient and effective decision making that is responsive to local need. Last week, I attempted to announce a wide-ranging review of public bodies sponsored by the Scottish Executive. That quasi-announced review will reach its conclusion in May. On 18 December, we announced a further round of modernising grants to support innovative projects aimed at improving service delivery across public services. Best value and those initiatives together highlight my determination and that of the Executive to make every pound of public expenditure work harder for every person in Scotland.
Will the minister give way?
I will not give way as I am about to finish.
I believe that the Budget (Scotland) (No 2) Bill reflects not only a record level of public expenditure, but the Executive's determination to make that expenditure genuinely work harder for all Scottish people. I commend the bill to the chamber.
I move,
That the Parliament agrees to the general principles of the Budget (Scotland) (No 2) Bill.
The SNP will not obstruct the course of the Budget (Scotland) (No 2) Bill at this stage. However, the debate comes at an opportune time and I hope that when he sums up the minister will use that opportunity to address some of the questions that we will raise.
I begin with a minor whinge: I did not have an opportunity to see the document "Scotland's Budget Documents 2001-02" until 1 o'clock today, despite the fact that the minister's letter to the convener of the Finance Committee said that it was distributed on Tuesday. A copy has yet to arrive on my desk and I was able to obtain a copy from the Scottish Parliament information centre only at lunch time, when it was delivered to SPICe. I make that point simply because it is not easy to read a 264-page document in an hour. Perhaps we could have had a more topical debate if we had been able to go through that document. For example, at page 100, we would have been able to find out about the 13 per cent cut in capital allocations for school buildings. It would have been helpful to debate wee things like that.
We have had a few more amusing and pretentious Executive briefings to gawp at in awe in the past week. We have heard that the Government is not the Executive and today we heard about an Administration. Then there was the ill-fated idea of projecting the head of the glorious leader on to a screen—we can thank our lucky stars that that idea never came to fruition.
I draw members' attention to an interesting article in The Sunday Times this week. I assume that those who brief the press on behalf of the minister gave the newspaper a front-page exclusive. The article said:
"A powerful new ministry modelled on Whitehall's Treasury is to be created in Edinburgh by Henry McLeish in a move that will reinforce the first minister's authority"—
that should have been followed by the word "sic" in brackets—
"over the Scottish Government.
The principle of a Scottish chancellery"—
no less—
"has already been discussed by the coalition cabinet. It will radically alter the shape of the devolved administration, placing an unprecedented degree of influence in the hands of Angus Mackay."
"Scottish chancellery", "powerful", "modelled on Whitehall's Treasury" and "unprecedented . . . influence"—just what is that all about? We can assume only that modelling such a ministry on the Treasury is more of a reflection on the furnishings and fittings in draughty Whitehall offices than on those in the modern Victoria Quay. We hope that the pool in Victoria Quay is not to be removed.
Of course, that article was absolute nonsense—it was not true. If Mr MacKay was to become first lord of a Scottish chancellery and control a Scottish treasury, he would be the only chancellor who ran a treasury with no power. Only half of the taxes that are raised in Scotland are spent by the Parliament. We have no power to alter the nation's taxes except marginally, no power to borrow and no power to do anything beyond dividing by 10 whatever Gordon Brown announces on spending.
Will the member give way?
I will give way to the chancellor.
I want to provide Mr Wilson with some assistance. The Sunday Times article to which he refers specifically quoted a statement from Mr McLeish which said that we would not be setting up a Scottish treasury. I invite Mr Wilson to move on to the next part of his speech.
It is no news to the chamber—not even this afternoon—that Mr McLeish would brief the press and then deny it. A reasonable point to make is that one cannot brand one's way into effective government without substance. I will quote directly a senior source, who said:
"Mr MacKay will mirror the role of Gordon Brown by judging financial arguments advanced by each spending department."
How innovative is that? Whatever will the Minister for Finance and Local Government think of next? What has the Executive been doing since 1999? It is evident that that new approach will reinforce the First Minister's grip on ministers' spending—I assume that it is the same grip that lost the First Minister the arguments over Sutherland in the Cabinet. However, there will be no splits, as the same senior source—I assume that Angus MacKay knows who that source is—said:
"Colleagues have signed up to the general principle of better use of money."
What absolutely terrific news—that is certainly a principle on which we can all move forward. Was there a Cabinet battle over the general principle of the better use of money? Who within the Cabinet was arguing for the worst use of money? Let us have names named, and see who are the villains of the piece.
I realise that most of that is flim-flam—[Members: "Surely not."] I have good reason. Give me time. The substance of the briefing related to the need to find money for Sutherland. I would like the minister to tell me not just the implications of yesterday's announcements, but what he can do—I will give him some suggestions—to pay for full implementation, in the event of Parliament voting the way that it intends later this afternoon.
The minister has shown what can only be described as changing and unusual views on the question of a reserve. That finds its way into the Executive document, including an annual reserve allocated out of expenditure, as opposed to stock. Will he confirm that the £53 million that it is planned to allocate to the reserve in 2002 is enough to pay more than twice for the full implementation of Sutherland? Will he confirm that the underspend of one fifth in the health budget would be enough to pay for Sutherland?
Andrew Wilson today, and one of his colleagues yesterday, suggested not only that we should implement in full Sutherland's proposals on free personal care, but that we should fund it from the reserve. As he knows, the reserve is not a recurring line in the budget. What he is saying is that we should provide a bit of personal care, when we can afford it, year on year—almost as though we should use any spare change in our pockets. The reserve is not recurring.
That is a remarkable thing to say, and it brings us to the substance of the debate. The minister, given that he is a minister, should know about such things, but he is absolutely wrong in that statement. I will quote from the Finance Committee meeting on 20 November in Aberdeen. I asked Dr Collings, the minister's chief adviser, whether the reserve was a stock or a flow. The minister's previous statement implies that it is a stock, and not an annual flow of expenditure. Dr Collings said:
"The reserve is the difference between the departmental expenditure limit . . . and the total departmental expenditure limits for each programme . . . In that sense, the reserve is a flow".—[Official Report, Finance Committee, 20 November 2000; c 896.]
Pages 6 and 7 of the budget plan that the minister outlined in the autumn show that, each year, he allocates total expenditure. Within total expenditure—not as a running total, but within actual allocated total expenditure—we find £53 million after £53 million, building up the total stock of the reserve. In the event of the minister's advisers arriving to advise him, he should nip up to the back of the chamber and find out whether he is as wrong as he sounds.
In reality, and this is my point, enough money is set aside in the budget to pay for the full implementation of Sutherland. Therefore, the idea that paying for it would put a financial restraint on the budget is absolutely absurd. As I say, one seventeenth of the entire underspend of last year's budget alone would be enough to pay for full implementation of Sutherland—one seventeenth of what the Government found in the budget but was unable to allocate would be enough.
We must nail a myth. A supposition is growing that Sutherland is infallible. I have great respect for him and his report, but when he says that only £25 million has to be found, he is wrong. Substantially more will be required. For Mr Wilson to refer—rather glibly, if I may say so—to the reserve being used is inappropriate.
I appreciate the member's point, but prior to this year there was no reserve. Then, all of a sudden, out of nowhere, and despite what the previous Minister for Finance was quoted as saying, we have a reserve, which is allocated annually and not, as Mr MacKay implies, as a one-off. It is allocated annually within the budget statement. All I am saying is that there is great scope in public finances—within that reserve alone—to allocate £25 million, or up to £50 million if that was the cost. The point is that the money is there. There is no financial constraint, only a policy or political constraint. That is the germane point.
I look forward with great expectation to hearing more about the points that Angus MacKay made on squeezing best value out of the Government's budget. We brought those proposals to the debate with varying degrees of success before the Scottish election. If I were allowed to offer Angus MacKay the SNP's advice on the budget process, I would be delighted to do so, through the Finance Committee or more privately.
There is an interesting debate to be had in the next stages of the budget bill, once we have had the chance to look at the details—and my colleagues will be considering things in detail. However, a budget without the ability to raise and allocate taxation revenues is no budget at all. That is why Scottish budgets are reported with all the excitement of the shipping forecast—look at the press gallery now.
The Parliament has fewer financial powers than any other Parliament on earth. That is the reality of devolution under Labour. We have record cash spending, but less of the nation's wealth has been allocated to public spending even than under the Tories. The outcomes of that are that NHS waiting lists are higher, homelessness is at record levels and there are fewer police on the streets under Labour than under the Conservatives. Those are the outcomes that the Minister for Finance and Local Government will have to examine in the coming months—that is what the budgets of Labour Administrations have delivered. If we are to make progress—and I hope we do—we must get into the detail of what Scotland can achieve, which is far, far more than the limited budgets we have at present.
The minister will be relieved to know that, like the SNP, we will not obstruct the budget at this stage. I appreciate the title, Minister for Finance and Local Government. At least it is honest. The Executive's method of financing local councils has been to take over how councils spend their money: ring fencing is a take-over by any other name. New Labour has not changed its spots—central control is alive and well, despite the demise of Mr Mandelson. Perhaps Mr MacKay should recall his days as finance convener of Edinburgh's council and remember the freedom he enjoyed to serve the citizens of Edinburgh. Why is he denying that privilege to Scottish councils of all varieties? By the time councils deal with the ring fencing that is coming through the Executive's budget process, they are left with very little room for manoeuvre. Roads maintenance, cleansing, litter control and leisure and recreation are the only areas left for manoeuvre, unless there is direct extra funding from the Executive. I would like Mr Peacock to respond to that point because councils are screaming about their inability to meet local need.
I was recently informed about a long-worked-for community swimming pool in Mintlaw, in Aberdeenshire. The council indicated that it was going to provide deficit funding and has now had to withdraw that. That is in leisure and recreation, an area in which councils have some room for manoeuvre. I ask the Minister for Finance and Local Government to consider how he will deal with that problem. We all know about the riots about roads. I will not go into the farce that is going on in Aberdeen.
Last September, the previous Minister for Finance, Jack McConnell, said twice in his speech that
"devolution gives us the right to decide our own budget". —[Official Report, 20 September 2000; Vol 8, c 459.]
Why is it that the Executive thinks that devolution is only for it? What about local democracy and decision making? I thought that prescriptive activity died with communism.
That seems a bizarrely appropriate point at which to intervene. The member has not recognised that the Executive has abolished guidelines for local authorities and that they are now deciding how much they want to spend and how much they raise through council tax. That is central to the debate about local autonomy. In my time as a finance convener I would have welcomed that. That is utterly at odds with what is being suggested about centralising control.
Thank you, minister, for clarifying a point I was going to make. What is really being said to councils is, "It is not our fault—go and take it from the council tax payer." Council tax payers are only around 28 per cent of the population, so skewed figures will result from council tax rises. When the Minister for Finance and Local Government was in Aberdeen, I asked him—although he deflected the question—whether there were going to be any sanctions or controls other than the guidance given to local authorities. They would like to hear clearly what is expected of them. The taxpayer in Scotland wants to know that.
We all agree that this year's budget process was a bit of a disaster. The Parliament's committees were unable to address the impact of the budget fully because they did not have the information. I am not blaming the minister for all of that, but we must work much harder to ensure transparency. Mr Wilson commented on the reserve, which did not exist under Mr MacKay's predecessor. At least Mr MacKay is honest enough to say that it exists. It is important that there is clarity and transparency about how money gets into the reserve and where it goes. The same applies to end-year flexibility.
As far as policies are concerned, we believe that the Executive has failed on several counts. I will not go into the Whitehall Treasury model, but I ask the minister not to go down that route. It would be a disaster, because we would be inundated with requests for fiscal autonomy and Scotland would be dragged out of the UK one way or another. That would not be good for Scotland and I ask the minister to resist it.
Will the member give way?
If it is a brief intervention.
I love the emotive language, but might David Davidson be willing to concede that Scotland might willingly leave the UK? Would he allow the possibility that Scotland might not have to be dragged?
We have returned to a subject that shows the frivolous nature of the SNP's approach to the budget process.
Our spending priorities differ from Labour's. We have mentioned roads infrastructure and roads spending. We would like a restoration of the 1997 capital spending position. Law and order is a great concern, as is the health service. Despite the moneys for the health service that have been talked about this afternoon, we must ask why every trust in Scotland comes to us day after day because they cannot resource the demands on the health service. It is about not what they are currently doing, but the new demands that are coming through. I hope that that will be addressed thoroughly as we go through the budget process.
We have not heard much about policies from the minister, so there is not much point in going too far into that. However, I would like to say that the Conservatives believe that, as a matter of urgency, the committees must have the right information in order to be able to consider the budget process accurately, subject by subject. If they do not, the debate becomes farcical. At least today the minister has adopted a fairly gracious approach and not rammed the budget at us. The details are not clear enough for us to make decisions.
The minister's visit to the Finance Committee when it met in Aberdeen was most welcome. Following that, he has set himself a great challenge as to how open he will be. I hope that he will come back to the committee and tell us about his new approach to the budget process.
I am grateful to the member for giving way. I would like to apologise to members on the point made by Andrew Wilson earlier about the bill. My understanding is that there was a problem in the post room, which caused the bill to arrive late. Mr Davidson called that to my mind when he raised the issue of information for members. I apologise for the delay in members receiving the bill.
Thank you, minister. Please wind up, Mr Davidson.
The minister mentioned progress towards value for money. We have had much talk about reviews and so on. It is vital that the people of Scotland know not what the outputs are, but what the outcomes will be. There is far too much talk about outputs and inputs. People want service on the ground. I ask the minister to clarify that for us in his closing speech.
I feel rather like an actor in a classical Greek tragedy. As a well-educated man, Presiding Officer, you will remember that in all Greek tragedies, the real action takes place off-stage.
And everybody dies.
Quite a few do—but they die at great length.
On behalf of the Liberal Democrats, I welcome the increased funding that is encapsulated in the budget. I am particularly happy about it because, ever since the last general election, my colleagues at Westminster have been pressing Gordon Brown to give out more money instead of sitting on it. We regret the two years during which the Westminster Labour Government stuck to the Tory spending plan. However, we welcome the change in policy and the increased money that is now available. We welcome the priorities of the coalition Administration in areas such as local government—which had a very raw deal in the previous settlement—the elderly, who we have been debating at some length, the McCrone recommendations, health and so on. We welcome what the budget stands for.
We welcome the minister's aim to begin to measure outcomes and outputs, rather than inputs. As a veteran councillor, I remember that, about 20-something years ago, an English professor lectured me on the subject at a Lothian Regional Council performance review committee. I failed to make much progress then, but I am happy to support the minister in trying to make progress now. He is also trying to improve things through the introduction of resource accounting and budgeting which—according to the information that we have been given in the Finance Committee—is a more controversial way of doing things but is, at least, a serious reform of the way in which our financing is done. That is welcome.
In response to David Davidson, I say that I am sure that the Executive, and certainly the Liberal Democrat part of it, is keen to decentralise control to, not suck power away from, local government. We will be working towards giving local government as much scope as possible. Again, agreed outputs will be set for local government which, in its own way, must make an attempt at achieving them. That is the way that things should be done.
We should also encourage the Executive to abandon the practice of almost all Governments and councils of going for project funding for all sorts of activities because it is sexy, photo opportunity-worthy and attractive to the media, rather than giving them core funding, which is far more important.
We must fund existing programmes and work by voluntary organisations, rather than going for nice new projects. Once we have properly funded the core activities, we can move on to nice new projects. However, there is a serious problem with the funding of many of our basic programmes.
A difficulty with the bill and its associated documents becomes apparent when we try to track where expenditure is and what it means. If, like me, members share an enthusiasm for youth work, they will search in vain for any mention of it in the documents. If I have missed it, I will be happy for somebody to correct me. There is information about children, and a bit about sport, but we are not told much and there is nothing about youth work. I am sure that we spend money on youth work, so that should appear in the documents and we should be able to follow it through.
I hope that Angus MacKay's excellent efforts will lead to an improvement in that respect, because in Scotland we lack, to a great extent, information and statistics. That must improve. My colleague at Westminster, Edward Davey, who is expert in such matters, has written a good pamphlet about how Westminster could improve its scrutiny of financial affairs—some of his ideas are applicable here. I look forward to co-operating with the Minister for Finance and Local Government—who has a genuine reforming zeal—to reform the system that we use here, because at the UK level it has been abysmal for years.
We move now to the open debate. We have until 16:39, which at this stage would mean speeches of up to five minutes.
It is nice to follow Donald Gorrie and to hear that the partnership parties, at least sometimes, speak with the same voice. I hope that that will continue for the rest of the afternoon, although I am not holding my breath.
This afternoon's debate has been strange. We heard Andrew Wilson's single transferable speech, which we get on every budget occasion, and which talks about everything other than the budget itself, although it was enjoyable, none the less. We also heard David Davidson's speech. He was quite circumspect—perhaps he is deferring to his colleague Annabel Goldie, who will wind up for the Conservatives—and he said little about the spending commitments.
Perhaps that is because it is becoming more and more obvious as we get closer to the general election that the Tory party is hamstrung by Michael Portillo's comments that they would cut something like £16 billion of public expenditure if—in the horror scenario—they were elected. Scotland's share of that would be almost £2 billion. I cannot offer David Davidson the opportunity to respond at the moment, but it would be helpful if Annabel Goldie turned her attention to that issue when she sums up.
Even some BBC people have said that the figure of £16 billion is fiction. How can a figure that does not exist be cut? We would not, and never will, cut public expenditure. We will increase it in real terms.
Never.
Never is a long time in politics.
Kenneth Gibson ought to get his facts right and examine the numbers, which our party has never said would be £16 billion of the Labour party's notional spending over the years for which Gordon Brown has planned.
I hope that the Presiding Officer will be tolerant and allow me to answer that point, although it does not relate directly to today's debate—but why should I break the afternoon's trend? I will quote to David Davidson what his mentor Michael Portillo said about Labour's spending commitments. He said that Labour's
"extra spending, over and above what the economy can afford"—
in his opinion—
"is equivalent to £600 for every taxpayer."
Taken across 28 million taxpayers, that equates to £16 billion that Labour is committed to spending and that a Conservative Government would not spend. I accept that the cut is notional but so, at best, is any Conservative prospect of victory. The matter must be put in the context of the Conservatives' response to the budget. If it came to pass that the Conservatives won the election, we would have about £2 billion less than the encouraging figures in this year's budget.
I suspect that that is why the Opposition has so few options for criticising the Budget (Scotland) (No 2) Bill. Naturally, I welcome that. As Andrew Wilson said, Scotland's budget documents run to 264 pages this year. Last year's equivalent was only 18 pages long. That reflects the fact that we are in the first full year of the process.
Now we have the level III figures, which were not available earlier. Maybe I should adopt the role of the Opposition in commenting on what the minister said. I restate that members and committees need to have the level III figures as early as possible to enable meaningful scrutiny of the proposals at stage 2 of the budget process. We will have the figures this year when the new year's budget comes into being, but we must work—as I am sure that we will—to ensure that the figures are available to us, even in years when a comprehensive spending review or some other review takes place. Whether members received Scotland's budget documents today or—as I did—yesterday, they will not have had enough time to digest all the information. That would be impossible.
I welcomed the minister's comments about some of the changes that he outlined in the letter he wrote to me in my capacity as convener of the Finance Committee. He mentioned a table that shows private finance initiative payments, the real- terms numbers for each department—which the committee asked for—and the fact that the capital charges are shown when they apply for departmental expenditure.
I must take issue with the minister on one point. I am sure that he had no involvement in the matter, but he explained in his letter to me that £111 million has been transferred this year from the Department of the Environment, Transport and the Regions to the Scottish Executive for grants for providing rail services.
The Finance Committee has consistently raised performance targets. I will provide a little light relief, because Annabel Goldie told me that I was being too serious in a stage 2 debate. I wish that I could be a bit more light-hearted, but there may be something for her and other members in what I will say. The performance target for that expenditure—set out on page 54 of Scotland's budget documents—is:
"To deliver rail services . . . under . . . the ScotRail franchise."
Some people would say that that performance target was pretty ambitious, given recent and current events. I say to the minister that I think that it is pretty vague and not much of a target. It certainly cannot easily be measured, unless a straw poll of commuters is taken at stations such as those that serve the line from Glasgow to Edinburgh—which I use—or the Fife circle. That might provide a hostile response. I raise that point to make it clear that performance targets must be more measurable than that one, which is general.
I have not had the opportunity to read the documents in sufficient detail. We welcome clear performance targets, but if we are to scrutinise meaningfully by moving from outcomes to outputs, as the minister suggested, we must have more specific targets.
Never is a long time in politics, so I will try not to take an eternity with my speech. I am relieved that Angus MacKay was able to make his statement today. Over the next few days, I hope that he will give me the answers to the questions that I asked previously, but which he could not answer.
On today's consideration of Scotland's budget documents, it is not all peaches and cream, as the minister professed it to be. Like other members, I did not have time to absorb the whole tome, but I noted some interesting parts of it. In summing up, perhaps Mr Peacock can inform us why local authority grants for transport will fall by £7.344 million next year and why housing support grants will fall from £12.414 million to a new low of £9.565 million. He might even explain the decline in moneys that will be allocated to community ownership, which will nosedive from £76.483 million to £47.824 million next year, with further decreases in 2002-04.
Andrew Wilson touched on indirect expenditure on schools—I must say that I pointed that out to him over lunch. It is an issue that has been raised in the chamber in recent months by Gil Paterson, Tricia Marwick, Andrew Wilson and others, and it is of great concern to pupils, parents and staff throughout Scotland. We see that there will be a cut from £41.195 million to £34.929 million next year, with further cuts in subsequent years.
Throughout the document there are more cuts, for example, in funding for careers guidance, for further education colleges and for business support. As Gordon Brown continues to display largesse south of the border, Scotland receives a declining share of United Kingdom expenditure. In a normal Parliament, the budget debate would be a wide-ranging assessment of how money is raised, as well as how it is allocated; of what is a fair and efficient way to tax people and what are the optimum choices for expenditure—but not here. This budget takes the funding that is allocated from the Westminster budget and divides it roughly by 11. There is little to which we can take an independent approach. Indeed, as we saw this morning in respect of the Sutherland report, quite the reverse is true. While devolution has created a divergence in policy demand, we have in the Barnett formula a financial system that is designed to produce convergence.
In the main, our criticisms are not levelled at the Government's budget choices, but at the lack of ambition about the tools that are at its disposal. Unfortunately, the Parliament has fewer financial powers than any other legislative Parliament on earth, bar none. I was amazed that David Davidson talked about the constraints on local government, when he knows fine well that we have even less control over the size of our budget than any local authority in Scotland.
Is Mr Gibson satisfied with the local government settlement and the way that money is continually ring-fenced? He has obviously had a chance to look at the booklet, so will he tell me whether there is a line in there that tells us how we will get Scottish universities out of deficit?
I am sorry that I have not memorised the 260-odd pages of the document in two hours—that is beyond even my incredible powers. Members will be aware that, for example, more than £1 billion in local government finance was raised through the council tax. That is a higher proportion of council expenditure than the Parliament could raise if it used the 3 per cent tax-varying power.
It is not enough for ministers to boast that most budget areas will spend record levels on public services. Every year tends to be a record year for spending. Even under the Tories, more was spent each year than in previous years—it is called inflation. In fact, the only year in recent times in which a record amount was not spent was Labour's first year in power when, for the first time since the national health service was established, expenditure on it was cut.
The outcome is there for all to see, in crumbling transport infrastructure, poor hospital buildings and gross underinvestment in housing. More than £1 billion requires to be spent on school buildings alone. We should not have to watch as spending rises more quickly in the rest of the UK than it does here. We have great potential for wealth in Scotland, which is one of the world's largest oil producers. We are a rich country, but we do not yet have the powers to turn ourselves into a rich society. On any analysis of the coming financial period, Scotland is sending more in taxes to London than it receives. As for oil—that is like winning the lottery and handing the money to the next-door neighbour.
Even on the most conservative of estimates, our surplus will total £7.7 billion this year and next—that is £1,500 for every person in Scotland. Yes, we may have higher expenditure than down south but, despite Scotland's greater need, the margins are closing. Our expenditure is dwarfed by our tax contribution, which amounts to 20 per cent more tax per person from Scotland next year than the average for the rest of the UK.
What is the solution to Scotland's economic and social plight? There is only one—independence.
Angus MacKay's contribution said more about the Labour party than it did about finance. For a start, Labour, or the Lib-Lab pact, is not spending more on education, health, housing or law and order—the hard-working taxpayers are picking up the bill. Every time taxpayers visit a petrol station or shop, or have the temerity to turn up to work, they pay more. Their taxes pay for the Executive's policies; it is time that the Executive admitted that.
Under Labour, the tax burden has risen from 35.2 per cent of the national income to 37.3 per cent, as stealth taxation has given the Treasury a surplus of around £11 billion. What has happened to our taxes? Where have they gone? They have been wasted by a party that is obsessed with spin and which is bereft of substance. An example is the escalating cost of the Parliament building. It was originally going to cost £25 million, but will now cost some £200 million. More than £6 million per annum is being spent on spin and glossy brochures. The Scottish Qualifications Authority fiasco was costly.
More is being spent on health, but waiting lists are up and there is a public perception that the health service is deteriorating. Some health boards are struggling to meet substantial budget deficits, with a consequent impact on service delivery. More is being spent on education, but so much of that money is ring-fenced that, to meet the Executive's priorities, councils have to increase council tax well above the rate of inflation and cut services at the same time. The services that are cut are those that really matter to the public, such as litter collection, road and pavement repairs, leisure and recreation, libraries and many others. Without question, under Labour, people pay more and get less.
Labour politicians have thrown cash at the new deal, but most of the people whom they claim to have helped would have been helped anyway. After nearly four years in office, Labour's report card is appalling. Police numbers are down and crime is up. Standards in education are down and waiting lists are up. Roads are crumbling and bridges are falling.
Some businesses trusted Labour four years ago when it said that there would be no increase in taxation, yet Scots businesses now suffer from an Executive that is determined to squeeze every penny from their hard-working enterprise. That is why business rates have gone up and that is why the Conservatives will bring them down, because we believe in business and in Scotland. That is why we believe in a low-tax economy that puts the needs of the individual before the needs of Government. We believe in an economy that helps businesses—
Mr Harding, I have been remarkably relaxed during the debate, but let us not have too much of a PPB, please.
Not too much of a what?
A party political broadcast.
With respect, Presiding Officer, I thought that we were politicians.
The Conservatives believe in helping people to help themselves. That is why we mean it when we say that we will abolish tuition fees and be tough on crime. We want people to help themselves, but we also want to help those who cannot do that. That is why we will implement the Sutherland recommendation for free personal care for the elderly and protect those who were prudent enough to save for a better life. It is time that the Executive delivered instead of congratulating itself at every opportunity.
I welcome the opportunity to support the Executive in this afternoon's debate. It is rather ironic that there will not be a vote on this motion.
Let us look at the highlights of the Scottish budget. We see a record level of £5 billion over three years for education spending. For health, record levels of spending are confirmed, with an extra £400 million a year. For transport, there is also a record level of spending, with £170 million more cash by year 3 and a rise of 45 per cent. There are also record levels of spending for local services, with a £1.2 billion increase for local government by year 3 and a 57 per cent increase in allocation for the capital programmes.
That has to be good news, and it contrasts quite distinctly with the years of cuts by the Conservatives, continued, unfortunately, during the first two years of the UK Labour Administration.
I thought that, as a member of one of the coalition parties, Mr Lyon would know that the experts on cuts are in the Executive. As I understand it, my party, which he accuses of cutting, increased police numbers in Scotland, and the coalition Executive has managed to reduce police numbers in Scotland.
In addition to the Scottish Executive police grant of £57 million in 2001-02, there will be a further £70 million in 2002-03 and an extra £70 million in 2003-04. That turnaround is substantial.
Will the member give way?
I do not have a lot of time.
You have five minutes, Mr Lyon.
Okay.
Carry on, Duncan Hamilton. No, sorry—Andrew Wilson.
I did not realise that I had deteriorated to that extent over the recent months.
The germane point remains that, under the Lib-Lab coalition, there are fewer police on the streets of Scotland today than when the Conservatives left office. That is the reality that the electorate faces at the general election. Why is it that the Liberal Democrats will have to defend that?
The future increase in funding will, of course, allow a substantial rise in police numbers to record levels, as Andrew Wilson well knows.
The local government settlement was the Scottish Liberal Democrats' No 1 priority. We have seen removal of the budgetary guidelines and, with three-year budgets in place, we now have stability.
There are record increases in the settlement for local government over the next three years. That will allow local authorities time to plan. A three-year budget is now in place. Indeed, my constituency, Argyll and Bute, is seeing a 15.9 per cent increase in its budget over the next three years. That is compared with 5 per cent in the previous three years. That will not solve all the problems or change the world overnight, but it is a step change in the level of funding for local government.
I welcome also the increases for education. At a recent meeting with the local school board, many teachers were represented. They too gave a warm welcome to the McCrone deal and were enthusiastic that it would transform the teaching profession if it is implemented. Extra resources are also needed to tackle the huge problems with our school buildings. I do not minimise the challenge—investment of £1 billion is needed to get our school buildings up to scratch—but at least we have turned the corner. We will see an increase in spending over the next year or two.
Is Scotland's share of UK expenditure increasing or decreasing?
As the member well knows, we started off with a record spending level, which is 20 per cent higher than in England and Wales.
Not any more.
Per capita spending is 20 per cent higher than in England and Wales. I am happy with that level of spending.
I want to make progress. The extra funding for health is already beginning to make its mark at constituency level. Mid-Argyll hospital in my constituency has been promised the funding for 10 years. The likelihood is that it will now be delivered within the next two years. On care for the elderly, there is the package that has been announced, as well as the extra bit that I hope will come if the right vote is cast tonight.
I want to highlight another issue: the money spent on abolishing tuition fees, which was a long-held objective of the Scottish Liberal Democrat party. Tuition fees are now fully funded for this year and for the future.
I want to wind up by saying that this is a new beginning in public sector investment. It is a break with the Tories' agenda of cut after cut. For the next three years, we will see that investment begin to make a real difference for the people of Scotland.
I call Duncan Hamilton.
I thank you, Presiding Officer, if you are sure that it is me you mean to call. I must register in the strongest possible terms a complaint about the fact that Andrew Wilson was addressed as Duncan Hamilton. As you know, he has been on a cabbage soup diet, but I do not think that he has quite reached the stage of being in that ball park.
It is worth returning to the point made by Donald Gorrie at the beginning of the debate about the presentation of the document. Like everyone else, I must concede that I have not read the document, because I did not have it. Donald Gorrie's point, however, is worth emphasising. He took the example of youth work. The way in which the figures are presented means that, if we wanted to pull out the figures on the Executive's policy initiatives in that field, we could not do so. By contrast, if I were to open the document randomly at page 220, I would be informed that the National Archives of Scotland has a performance target to issue replies to 60 per cent of correspondence within 15 days and to 90 per cent of correspondence within 25 days. I can honestly say, hand on heart, that not a single constituent in any of the constituencies that I represent has ever even raised that issue. We maybe want to think again about the information that we put in this document. We want accountability and transparency, but we must get the balance right.
I will also pick up on a comment that Lord Watson made. His lordship said that the departmental aims needed to be revisited. The point is made on page 220 that the aim is to enable the National Archives for Scotland to deliver its business as effectively and efficiently as possible. I do not think that anyone in Scotland would have the audacity to challenge that visionary goal. Let us suggest that the presentation should be considered again.
The minister did not say a great deal in his statement, which is why this debate has become slightly redundant. However, he took the opportunity to remind us that we have record investment. As Kenny Gibson said, that is hardly a surprise as every year produces record investment, with the one noticeable exception of the first year under Labour. The Executive would not wish to dwell on that. The minister also failed to mention that, as a percentage of national wealth, public spending on public services is going down and is below the level that it was under the Tories. That suggests that, as some Conservative members have pointed out, this is not the time for self-congratulation.
We are told—this is germane to the debate that we have been having today—that it is a top priority to put more money into the health budget and that a long-term priority is that the cost of personal care for the elderly will be met. If that is being treated as a top priority, I would hate to be reliant on one of the Executive's lower priorities. It does not suggest that it would be taken very seriously.
The exchange between Andrew Wilson and various Labour members was instructive, because it was pointed out that a fifth of the underspend in health and a seventeenth of the total underspend would cover the cost. We can go into the argument about flows, stocks and reserves as a separate issue. What we can say, at the very least, is that it is entirely indicative of the level of investment that would be needed. I have not heard a single member from the Executive parties contend that if the Parliament decides that it wants to do that as a priority we could not afford to do so, although Dr Simpson looks poised to break that duck.
Andrew Wilson made a point about using reserves for other purposes. Duncan Hamilton is now making a point about using the NHS underspend at the end of each year. There has been an underspend every year since 1948; it is in the nature of the way in which the money is spent. However, it is not totally predictable. To predicate care of the elderly on the basis of expenditure which we cannot be certain of in future years seems to be the height of foolishness. Is that now SNP policy?
No. It will not surprise Dr Simpson to know that I would not accept that what we are describing is the height of foolishness.
The point of the exchange at the Finance Committee—which Dr Simpson attended and I did not, but at least I had the benefit of being able to read it—is that when there was a question about the reserves it was described as a flow. Therefore, the argument that it can be relied upon is much more sustainable according to the expert evidence that the Finance Committee took than anything that we have heard from Labour members.
It is also interesting to note that the figure of £25 million has been disputed only by Labour. No mention has been made of the fact that when that figure was presented to the Sutherland commission, it had a debate on that figure and Lord Lipsey's attempt to mislead people on the figures was rejected.
I was trying to go through today without disagreeing with George Lyon. I was doing terribly well this morning, but I must pick up on one or two points that he made in his speech. He gave some indicative examples on council spending that are worth picking up. He mentioned Argyll and Bute Council, which is of course in—shall I say?—our constituency. He did not mention that the increase is below average. He did not mention the fact that there is still a major strain on resources in that council. It ill behoves a local member for that constituency to talk down the prospects of further finance. Surely it is the job of a local member to talk up those prospects.
George Lyon also referred to the fact that he was comfortable that on a per capita basis Scotland gets 20 per cent more on health. The point is, where is the momentum? Is it increasing or decreasing? If George Lyon thinks that 20 per cent is justifiable now, why is it not justifiable in the next five or 10 years? Why is a member arguing for a reduction in the Scottish block? I find that incomprehensible—talking of which, I will take Iain Smith's point.
On the issue of the NHS, Andrew Wilson, of all people, asked a written question that was answered on 30 November. He asked
"what the difference was in per capita health spending between Scotland and England in 1997-98"
and the projections for such spending in 2003-04. Susan Deacon replied that
"health expenditure per head in 1997-98 was £147 more than in England. Planned expenditure for 2003-04 is £194 more than in England."—[Official Report, Written Answers, 30 November 2000; Vol 9, p 160.]
How is that reducing the gap?
That is interesting. On that basis, the Liberal Democrats are presumably declining the concept of the Barnett squeeze—I am not entirely sure that they want to put that on the record. It is the role of parties in this Parliament—[Interruption.] Well, now we have a whole host of parties declining the prospect of the Barnett squeeze. It is an economic fact. The role of the Parliament is to try to increase the total budget for Scotland and its services, not to give it away at the first opportunity.
Before I conclude, I suggest that this debate has probably missed the mark. We in Scotland need to think a bit beyond our current confines. There is something nonsensical about our Parliament and its budgets. For example, why should the Parliament be charged with economic development when it has no role in the wider economy? We have to wonder why, if the Parliament is going to argue over the division of the cake, it cannot play its full part in increasing the size of that cake through having its own economic direction based on Scottish needs. That central tenet of this debate has never been answered; this debate has been about good housekeeping, not about vision or the best way forward for Scotland. We should take that route if we want to make real progress.
I am pleased to be able to take part in this afternoon's debate, which I consider to be one of Parliament's more important debates, as it concerns the expenditure of the best part of £20 billion. That is a lot of money in anyone's book. We are now in the third and final part of the budget process as developed by FIAG. Although this is the second budget bill to be considered, it is the first time that the full budget process has been used. Later, we will reflect on any improvements that can be made to the process.
I am glad to hear that the Opposition parties are not obstructing the bill's progress—the chamber will be pleased to hear that the Labour back benchers are not obstructing it either—particularly as the spending review 2000 has meant that this year there have been unprecedented increases in public expenditure. As George Lyon said earlier, health spending has increased by 15 per cent to £5.5 billion, with transport spending up by 45 per cent.
This year's spending review, which covers the financial period up to 2003, represents the biggest sustained investment in Scotland's public services. Investment from the spending review 2000 and its predecessor, the comprehensive spending review, coupled with the financial stability that three-year budgeting is bringing public services, will make an enormous difference to the levels of service provision. By the end of the first term of the Parliament, there will be an extra £2 billion of spending in Scotland, which represents an extra £600 for every man, woman and child.
In education alone, spending by 2003-04 will be more than £5 billion. That will be crucial to the future of Scotland, as it will mean that it will continue to have a sound economy and be able to compete and win within the developing global economy where knowledge and skills are what matter.
However, I want to make it clear that this expansionary budget results from sound management of the Scottish and UK economies. Members should not take my word for that. The Royal Bank of Scotland has said:
"The UK economy has continued to perform well. There have been 33 quarters of positive growth."
Furthermore, the bank looks forward to
"buoyant economic activity and low inflation over the next two years".
Unemployment is at its lowest level for decades—indeed, there are increasing concerns about labour and skill shortages—which is a positive reflection of the sound economic management by Labour in the UK Government and Scottish Executive. That sound management is funding the current investment in public spending. After years of Tory mismanagement, sound Labour policies are delivering—
The member will remember my remarks about PPBs.
I do.
Sound Labour policies are now delivering for the people of Scotland through today's budget bill. It is important that the Scottish Parliament develops effective scrutiny of the budget and that we ensure that the best use is being made of public money in the delivery of public services. It is also important that the whole process, which was set up to be open, accessible and accountable both to the Parliament and to the people of Scotland, continues to be so and is developed.
As part of the process, the Minister for Finance and Local Government has held public meetings around Scotland, the Finance Committee has met in Aberdeen and the parliamentary committees have been able to input into the budget and discuss the spending priorities in the budget with the relevant minister. I am sure that the process will develop in future years. I was disappointed with some of Duncan Hamilton's remarks. As he is not a member of the Finance Committee, perhaps he is not sure about some of the work that we have been doing in examining the presentation of the budget and the way in which that can be improved.
I was pleased that the minister mentioned the modernising government initiative. Modernising government is extremely important. I am pleased that Aberdeen City Council recently received the highest award from the modernising government fund—some £2 million—which, at the level of local government, will transform the interface between the council and the citizens. I would like that interface at the level of central Government as well, which is part of what the Finance Committee has been discussing in the context of improving the presentation of the budgetary documentation.
Aberdeen City Council is talking about all sorts of exciting things such as electronic accord cards, for use on public transport or for school kids to get their meals, and electronic fault reporting. Some of the schemes are so innovative that other councils want to contract Aberdeen City Council to set them up. The modernising government fund, which is financed by the budget, should be pushed forward. We have a sound budget, and I look forward to its continuation.
If Mr Adam, the SNP's tail-end Charlie, wants a couple of minutes, he can have them.
Thank you for that kind remark, Presiding Officer. It is not every day that I am called a tail-end Charlie.
There have been one or two interesting misuses of language this afternoon, which we should not be surprised at from the Executive parties. I am not sure what a step change is. George Lyon used that term. I had an idea that a step change was a quantum leap rather than a sort of shuffle forward. A shuffle forward is certainly better than we have had before, but I hardly think that what has been presented to us today qualifies as a step change—whatever that is.
George Lyon mentioned some changes that have taken place, in regard to the financing of students. He assured us that tuition fees had been abolished. Fees is an interesting word: they could be regarded as a tax or a charge. But how will fees be replaced? They will be replaced by an endowment—a gift. What kind of gift will we get? The opportunity to pay another charge, fee or tax. The only reason why we are not allowed to call it a tax is that the Scotland Act 1998 does not allow the Parliament to levy any new taxes. However, an endowment—in new Labour or new coalition speak—is okay.
Mr Adam will understand that the endowment is to the next lot of students, who will receive the benefit of it.
That is an extremely interesting concept. The endowment is almost hypothecated taxes—a case of, "I'll take the money from you and give it to him."
The bill lays out the situation a little more clearly, and I concede that there have been advances in the way in which it is laid out. I would like a description of the change—not just in the Government's programme, as laid out in its manifesto, but in a percentage figure. That would enhance the quality of the material in the bill. I would also like to see an explanation as to how the money is to be expended, on the basis not just of the total amount expended but perhaps of whether expenditure is made on a needs basis and how those needs are assessed.
There are some significant assessment differences and the Government tends to use a wide variety of assessment methods, some of which are not transparent. In the area that I represent, there are some considerable concerns that needs assessments often seem to benefit a particular part of the country and that, when a proper needs assessment might be made, it never benefits the north-east.
This is rather a strange debate to sum up because there does not seem to be much to sum up. I took part in council budget debates for 17 years. At that time, the parties came to a budget debate with different proposals. The administration would produce its plans and the opposition parties would say what they wanted to change.
In today's debate, however, we have heard little about what the Opposition parties would change in the budget. We have heard an awful lot about the ways in which they think that the process is all wrong and about the fact that the Parliament should have more powers. Although the SNP constantly calls for the Parliament to have more powers, it will not even tell us what it would do with the powers that we already have.
Will the member give way?
In a moment.
Would the SNP use the tax-varying power? It has not said whether it would. If it would not, how would it fund the additional spending commitments that it keeps coming up with and how would it address the alleged cuts that appear in the budget document?
Alleged cuts? The member should read the document.
If the SNP is to address the cuts that it claims there are, it will have to remove something from the budget to do so, unless it uses the tax-varying power. Not once has the SNP told us what it would cut in order to fund the changes that it wants.
How do the Liberal Democrats propose that we pay for Sutherland if not by cuts?
We want there to be a commitment to the principle of Sutherland, but we do not expect the recommendations to be implemented overnight. They will be implemented as and when the resources are identified.
The budget includes a number of the priorities that we were elected to the Scottish Parliament to deliver. We wanted there to be more money for schools, health, the police and local government. All of that has been achieved in the budget, and that is important for Liberal Democrats. Also of great importance to us is the fact that the budget provides the money for the abolition of tuition fees. I am sorry, but what Brian Adam said was absolute nonsense: the endowment is to fund grant support for students from low-income backgrounds. If the SNP does not want that grant support to go to those students, its members should feel free to vote against the endowment. The endowment is not to fund tuition fees; tuition fees are being funded already.
David Davidson wanted to know where the line was on support for our hard-pressed universities. On page 143 of the document, he will see that there is a real-terms increase in direct support for current funding for higher education institutions of £35 million.
Will the member give way?
I have only a minute left and have much to say.
As I said, for 17 years in Fife, I took part in budget debates. Each year, I talked about the dreadful situation that we were in because of the cuts that were being imposed on local government by the Conservative Government. [Interruption.] I spoke about cuts that were imposed by Conservative Governments, never by a Liberal Democrat administration. There were guidelines, caps, clawbacks and, in the last three years alone of Conservative rule, the Government managed to claw back a cut of £500 million from local authorities in Scotland. Yet the Conservatives have the nerve to say today that the Executive—with record increases in its spending for local government—is putting the squeeze on local government. That is nonsense.
I must ask Mr Smith to wind up.
This Government is addressing the years of underfunding of local government, and I am proud to be a part of the partnership Government that is delivering that.
The budget document hardly leaves one flushed with excitement. Mr Smith's speech was the most stimulating to my fluttering heart that I have heard all afternoon—I have never listened to such unadulterated hogwash in my life. If Mr Smith has the brass neck to accuse the Conservatives of cuts, he should explain to the coalition partners and the rest of the Scottish Parliament why less is being spent on education now than was being spent under the Conservatives three years ago.
Budgets boil down to three components: what have we got, what do we decide to spend it on and do we get value for the spend? Straddling those three premises is the budget process.
One of the virtues of the Parliament is its committee structure. Today, I will quote not Greek tragedy, Mr Gorrie, but the words of Robert Burns:
"Humid seal of soft affection,
Tenderest pledge of future bliss,
Dearest tie of young connexion
Love's first snow-drop, virgin kiss!"
The minister should not take this personally, but the virgin kiss that the committees are seeking from him is disaggregation—that would indeed be virgin. Will the Deputy Minister for Finance and Local Government confirm whether more detailed figures are to be disclosed before stage 2? Without that information, the budget process is defective.
To turn to the question of what to spend the money on, there are concerns. Quite simply, they are that waiting times for the ill are up; the number of police officers is down since 1997; the level of crime is up; prisons have been closed; students are worse off; and there is no provision for the modest spend that is necessary to implement Sutherland's recommendation for universal personal care. There has to be a strong suspicion that those concerns are not being robustly addressed in the budget.
On value for money, £18 billion is a very great deal, particularly when it is produced by the public and the taxpayer. David Davidson was absolutely right: the Executive can jaw away about inputs and outputs, but it is outcome, performance and efficiency that have to be the determinants of value for money. While Mr Davidson has affirmed the position of the Conservative group—that we shall not vote against the budget—that should not be construed as complacency at or pleasure in what it has to offer.
We on the SNP benches offer no opposition to the general principles of the Budget (Scotland) (No 2) Bill. However, we would wish the Executive to lodge amendments at stage 3 to take account of the Parliament's will to fund free personal care for the elderly, as demonstrated in the debate this morning and, we hope, in the forthcoming vote.
As Angus MacKay indicated, this is the first budget bill to have emerged from the budget process as envisaged by FIAG. As the pre-Christmas debate on the Finance Committee's report on the draft bill revealed, there is still a considerable way to go before the process can be described as entirely satisfactory in terms of allowing full scrutiny by and input from the parliamentary committees. I welcome the Executive's commitment to work with the Finance Committee to make the necessary improvements to that process, and I am sure that the committee members who spoke in the debate, including David Davidson and Donald Gorrie—not to mention Mike Watson and Elaine Thomson—will hold the Executive to that.
The total budget available to the Parliament to secure the objectives of prosperity and social justice is £18.4 billion. That is less than half the £41.5 billion of tax revenues that were extracted from Scotland by Her Majesty's Treasury in London.
The SNP will continue to champion the case—as Kenny Gibson and Duncan Hamilton did so eloquently this afternoon—that Scotland would be significantly better served if this Parliament assumed the responsibility not only for the distribution of all tax revenues raised in Scotland but for fiscal policy in its entirety. That would allow for a programme not just for the modernisation of government, but for the establishment of a real Government for Scotland. It would allow for much more meaningful budget debates than the one we have—unfortunately—had this afternoon.
I call Peter Peacock to respond to the debate on behalf of the Scottish Executive. The minister has until 5 o'clock if he so wishes.
On a point of order, Presiding Officer. Apparently, the press have been informed that there is to be an Executive statement after 5 o'clock, on the long-term care of the elderly. Why do the press know that there is to be such a statement, but members have not been informed? Is it in order for me to move that the Executive statement be made before rather than after decision time?
I have no knowledge whatever of the point that the member raises, as I have been in the chair since half-past 3. I will have inquiries made, but at this point the appropriate course of action is to ask the minister to continue with his winding-up speech.
Some important points have been made in this short debate, as well as the usual passages of fantasy from the SNP and disguise from our Conservative friends.
The Budget (Scotland) (No 2) Bill highlights the achievements of the Scottish Government over the past year. It reflects record levels of public expenditure, which have been made possible by the sound stewardship of a Labour Government with a Scottish chancellor in Westminster. They are delivered through the continuing success of the Barnett formula in securing a fair share of the UK's wealth for Scotland, without recourse to an annual round of detailed and damaging negotiations, which is what the SNP seeks by attacking the Barnett formula.
The spending review has provided an increase to the Scottish budget of expenditure of £800 million in 2001-02. The details of the bill provide for that money to be spent on the programmes of the Scottish Executive. There will be increases of £1.9 billion in 2002-03, and £3 billion in 2003-04.
Does the minister accept that even after those record increases in spending, at the end of the Labour Administration, just as at the beginning, the Executive will devote less of the nation's wealth to valued public services than when the Conservatives left office?
One cannot spend percentages or proportions, but one can spend real money. Substantial additional real money will come to Scotland. There will be increases of £800 million in 2001-02, £1.9 billion in 2002-03, and £3 billion in the year after that. Those are record levels of resources for key Government programmes.
I will respond to as many of the points that have been raised in the debate as possible. First, I apologise that the detailed budget documents were not available to Andrew Wilson. I recommend that he go on one of the rapid reading courses that the Administration arranges, which would improve his ability to read those documents. I understand that if one goes on two rapid reading courses, one can read four times as quickly, so I recommend that as a future tactic.
Andrew Wilson reverted to his usual whingeing and moaning, girning and greeting, about the Scottish position. He focused entirely on what we cannot do in Scotland rather than on what we can do: we can do an immense amount with the current budget.
Several members, such as David Davidson and Mike Watson, talked about the importance of including level III figures in the budget document. We accept that point, and want to include such figures. There is no difficulty about doing so in a normal year, but it is difficult to do so in a comprehensive spending review year, such as the past year has been. We cannot promise that level III figures can be provided in the required time scale on every occasion, as we are not in control of the time scale according to which spending reviews are conducted south of the border. [Interruption.]
Order. There are far too many private conversations going on in the chamber. If members wish to conduct private conversations, they should do so outside the chamber.
David Davidson complained that there was no detail, but he had obviously not seen the budget document when he said that. Mike Watson properly pointed out that the document is several times larger than previous documents. That fact reveals that much more information is being given. Several members, including Mike Watson and Duncan Hamilton, referred to performance targets and asked whether we were meeting our outcomes and targets. We are very serious about pursuing that issue with the Finance Committee. As Annabel Goldie made clear, we need to examine the outcomes of our expenditure as well as the outputs. We want to work with the committee to ensure that we are more focused on outcomes than on inputs.
I was not complaining about what was in the document to which the minister referred. I was complaining that the document did not contain the detail that the committees need, so that they can see how policies translate into action on the ground.
As we have said, Angus MacKay and I are more than happy to examine the matter in considerable detail. We want to move the debate on.
One does not advertise Mars bars on the basis of how many people are employed to make them—one advertises them on the basis of how good they are and what their consumption will mean to people. We must move to that approach in relation to public services—we must examine the outputs and outcomes of our spending, not just the inputs.
The deputy minister said that we should focus on outcomes rather than on inputs when it comes to the budget. Are the deputy minister and the Government satisfied that, after the Labour Administration has been in power for three years, homelessness is at a record level, NHS waiting lists are higher than they were when Labour came to power and there are fewer police officers on the streets than there were when Labour came to power? George Lyon made a point about the extra spending, but even after extra spending on the police, at the end of the next Labour Administration there will be less than half a police officer more than when the Conservatives left office.
As George Lyon indicated, the purpose of the bill is to release much more resource into the system this year, even more resource the year after that and yet more the year after that, to address and tackle the points that Andrew Wilson raised.
We are not seeking to hide from the reality of performance measures and performance targets. We want them to be put into the system for the purposes of discipline, to ensure that we are getting best value for expenditure.
Other members referred to the creation of a reserve in the budget. A small reserve is being created—not by deliberate underspending but through a line that has been inserted this year. We have not decided that the reserve will continue in future years. Richard Simpson and other members made a number of points on the difficulty of attaching long-term spending to a short-term budget decision, as that would be quite inappropriate and would lead to trouble.
At this late hour, we finally have clarity on the reserve. Mr MacKay said that the reserve was a one-off and would not recur. However, the deputy minister has just said that an allocation to the reserve will be made in each of the next four years. That point is also made in the budget document. Can that reserve be accessed or not? [Interruption.]
Before the deputy minister resumes his speech, I ask members to keep down the level of background conversation.
I indicated that there is a line for the reserve in this year's budget. However, no definite decision has been reached about the years to come. That is why we cannot build basic expenditure around the reserve. Andrew Wilson's point reveals just how inadequate is the SNP's financial management. The SNP cannot even manage its own budget—its new London leader has taken it to the brink of bankruptcy. It is having to flog off its office and move to the margins of Edinburgh, and having to borrow money to pay off its debts, rather than borrowing to invest. It is no wonder that no one trusts the SNP with government in any part of Scotland.
The creation of a treasury was referred to. I detected a small frisson of excitement about that, but no one should get too excited. The finance function of the Executive will develop over time—it is developing already. Angus MacKay referred to the best-value function, to a strengthening of the budget process over time and to the Executive performing a more corporate role in relation to setting and monitoring standards and outcomes for expenditure. All those factors will be added into the equation of how the finance function develops. However, it will not become a treasury function in the way that some members attempted to indicate.
This is a record budget which delivers record levels of services, not vague promises on the never-never. It delivers extra spending of £800 million next year, £1.9 billion in 2002-03 and £3 billion in 2003-04. On top of that extra spending, we have demonstrated our commitment to getting more out of existing funding.
I commend those achievements and the bill that will deliver on them to the Parliament.