Spending Review 2004
On a point of order, Presiding Officer. I indicated to you that I intended to raise a point of order. During the weekend, The Sunday Times and the Sunday Herald ran details of the Executive's spending review, which is the subject of the ministerial statement that is to follow. The papers reported that there would be an increase of £200 million in transport spending and £100 million in university building programmes. Both the Sunday Herald and The Sunday Times stated that they understood that there would be an above-inflation rise of 5 per cent for the bricks-and-mortar programme. It is an amazing coincidence that two journalists could understand the same thing at the same time. Of course, the more likely explanation is that they were briefed by the same person. On Monday, The Scotsman ran a similar story, but this time, a senior Executive spokesperson was quoted as saying that there will be an extra 10 per cent for capital investment.
Time has been set aside for a ministerial statement to announce to Parliament the details of the spending review, which is to be followed by a debate. If the Executive believes that the statement is important enough to set aside parliamentary time, it is not acceptable that details of the statement should be given to newspapers three days in advance of the announcement and, of course, three days before members of the Parliament have heard it.
This is not the first time that details of a finance minister's statement have been given to the media in advance of its being given to Parliament. On that occasion, the Presiding Officer ruled that, as the details were almost all in the public domain, the minister would not be allowed to read the statement to Parliament. The circumstances are similar today. The Executive has shown contempt for parliamentary procedures and discourtesy to you, Presiding Officer, and to members of all parties. We deserve an explanation and an apology from the minister. I do not think that, on this occasion, Parliament would be well served by the minister being prevented from making his statement, but I would be grateful if, on behalf of the Parliament, you would make your views known on the matter and if you would make it clear that you will not hesitate to take stronger action if such a discourtesy occurs in future.
I have considered carefully the press reports on the minister's announcement and the text of the announcement, which I received about an hour ago. As I have said to members in the past, I deprecate any discourtesy to the Parliament that is caused by advance notice being given to the press of matters that should properly be aired first in the Parliament. In this case, I have considered all the evidence that is available to me and my view is that there is nothing to suggest that the detail of the statement was put into the public domain in advance of today's proceedings. It appears that considerable parts of what was reported were already in the public domain and I understand that there is some dispute over the accuracy of the figures that were reported. I am therefore fully satisfied that the Parliament is entitled to hear from the minister.
That was a bit of grandstanding—or was it low standing?—before we start this important statement in which I will set out our budget plans for this and future generations. We aim to reignite Scotland's enterprise culture and to make us more competitive; to provide new and better opportunities for our young people to achieve their ambitions; and to promote good health and tackle ill health. By 2008, the budget will result in additional growth of more than 5 per cent a year in front-line services. This is a budget for enterprise, opportunity and fairness. It will lock in sound financial management in the longer term.
In our 2002 budget, we set out, step by step, what we wanted to achieve and how we would tackle the barriers that stood in our way to economic progress, educational achievement and involving everyone in realising their ambitions. We have made a difference: 150,000 Scottish children have been lifted out of poverty since 1999; we have reduced mortality rates for cancer by 4 per cent, for stroke by 14 per cent and for coronary heart disease by 21 per cent; we now have the highest clear-up rates for crime since world war two; educational attainment is rising, with 10 per cent more pupils now gaining five good standard grades or the equivalent; more than 50,000 older people have benefited from the introduction of free personal and nursing care; and nearly 100,000 more people are in work than in 1999. That is devolution working for Scotland.
However, we need to do more. We need to make better use of our resources and we need to drive harder and faster for economic growth, for achievement in education and science, for faster and better health care and for safer communities.
The level of extra investment that I am announcing today is made possible by the sound management of the United Kingdom economy by the UK Government. Our partnership with the United Kingdom guarantees Scotland a fair share of that economic success and the resources that it generates. In total, this budget will see our spending rise from £25 billion this year to £30 billion in 2007-08—an annual average increase of 3.6 per cent, after adjusting for inflation. In every speech that I have made as Minister for Finance and Public Services, I have said that the money that we spend is the people's money—money raised from hard-working families and from Scottish business. Just as they do every day, we too ensure that we get a pound's worth of value from every pound we spend, and because it is their money, we need to be fully accountable for the spending choices that we make.
In June, I said that we would set out a three-year plan to tackle waste and bureaucracy and increase productivity in Scotland's public sector. I promised that those plans would deliver savings of £500 million in the financial year 2007-08, rising to £1 billion by 2010. Some mocked our intention, called it bluff and spin and said that we would not deliver. I have to tell the chamber today that we have not found £500 million of savings; under the plan that I will publish shortly, we have in fact secured annual efficiency savings rising to at least £650 million by 2007-08—nearly a third higher than the target that I set in June. We have made those efficiency savings by doing the job better, quicker and smarter. They are savings made for a purpose: to channel directly into the front line, to the people, the places and the services that matter.
As a Government, we have set ourselves the challenge of leading the way. Today I can announce that the amount that we spend on running the Scottish Executive will be held flat in cash terms over the period to 2008 by spending less on administration and more on delivering the services that people want. In this budget, I can confirm that we will continue to support the achievements of the past five years. We have gone further, though, by building on achievement and investing for the future.
We know that economic growth is central to achieving the ambitions for Scotland. Scotland's universities and colleges are world renowned: in science and research, in new technologies and in innovation. However, we compete in a fast-changing and competitive marketplace—a marketplace that dictates that to succeed, we have to keep investing in the future, innovating and growing.
Investing in our higher and further education sector is one of the foundations on which can we build for the next generation. In this budget, we have prioritised the next generation's needs, and we will deliver a fourfold increase in capital investment in our colleges and universities. We will invest in better facilities, new equipment and the benefits brought by new technology. We will invest to retain, attract and reward the best university staff; we will improve the transfer of new knowledge between academia and business; and we will invest in research excellence. That step change will take our support to more than £1 billion for the first time ever. That is not just money for bricks and mortar; it is investment in the talents and abilities of our young people to produce the next generation of Scottish entrepreneurs, scientists, engineers and inventors.
Tourism is vital to our economy, and marketing is central to making Scotland an attractive tourist destination. We announced record investment in Scottish tourism earlier this year, and today I can announce that we will extend that commitment by maintaining our increased investment in tourism marketing—taking our investment in marketing Scotland to twice that spent on promoting England. We need to have investment to compete successfully for visitors, but we also need investment in the tourism product. We will support the year of Highland culture in 2007 and bring benefits to the Highlands and to Scottish tourism for years to come.
Our support for the air route development fund has increased the number of direct flights to Europe, the middle east and north America. Today I can announce that we will capitalise on that success. In this budget, we will double our investment in air route development, bringing the world closer to Scotland and strengthening Scotland as a key player in tourism and business location.
The Government's job is to set the right climate for business. That is partly about keeping the costs on businesses to a minimum, so I am pleased to confirm that we will continue to fulfil our commitment to increase non-domestic rates by no more than the rate of inflation. We will invest in knowledge and ideas, research and development, but our businesses need to do that too, so we will ask business for its views on the options to use business rates further to incentivise company-driven growth and productivity.
Since devolution, businesses have consistently told us that the most important challenge for encouraging economic growth in Scotland is to improve our transport infrastructure. We have delivered more than 500 separate public transport measures—new trains, new stations, new rail links and new ferries—and next year, for the first time, we will be spending more than £1 billion on transport. However, now is the time to go further. In this budget, we will increase our investment to £1.4 billion by 2007-08, which will allow us to take the next significant step in delivering our 10-year transport plan. That will mean new rail links for Glasgow and Edinburgh airports, rail lines for Larkhall and Milngavie and for Stirling, Alloa and Kincardine and much more, representing the implementation of the biggest transport investment programme in Scotland for a generation. That is devolution making a difference.
Over the five years since devolution, we have, step by step, started to put right the damage done by decades of underinvestment by building new schools, hospitals, health centres and homes, but there is much more to do. Our horizons are longer than the electoral cycle and our commitment to building Scotland's future is for the long term. That is why, in June, I announced a new net investment rule: a golden rule to increase net capital investment by at least 5 per cent per annum. I am pleased to say that, as a result of our decisions, net investment will increase from £2.3 billion now to £3.2 billion by 2007-08, going beyond the requirements of the net investment rule in each and every year. That is an increase of almost 40 per cent over the life of the budget.
We are investing in schools, homes and hospitals for the next generation, but we will not build a more prosperous and more productive Scotland unless everyone can take full advantage of the opportunities that are available and play their full part. Therefore, the budget is one for Scotland's children, too, and invests in the potential of each and every child, which means investing in our nation's future.
Today, Scotland's three and four-year-olds enjoy universal access to early-years education to get the foundations of their learning right. Scotland's children have access to vastly expanded child care, and parents have opportunities to work, knowing that their children are well looked after. Scotland's children have more support for their learning: they have extra teachers and classroom assistants, who make a difference for individual children. Scotland's children are achieving more at school: attainment is rising across the board, and the Scottish children who are most in need are getting help through the family centres and the services that we fund.
Although we have done a great deal, our ambition for Scotland's children is to do even more. As a result of the budget, we will ensure that they are even better supported next year and each year thereafter. Scotland's children of tomorrow will benefit from even lower class sizes and from better rewarded and better trained teachers. There will be 53,000 teachers—one for every 18 Scots between the ages of three and 18. There will be teachers for primary 1, for maths and English at secondary 1 and secondary 2, for physical education, for music and drama and to support those with additional needs. Those teachers will enrich school life and remove barriers to learning. Over the next three years, 150,000 more Scottish pupils will learn in brand-new or substantially refurbished schools, which will make a difference to their learning. It is now time for the new resources to reach further down the age range and provide extra support for those who need it most.
There are many people in Scotland who, day after day, give their time and energy to caring for others. Among them, there is one special group of people who care for our young people as foster parents. Many of them care for young people in their teens—a time that can be difficult for any young person—and they deserve our support too. Therefore, recognising the hard work that they do for all of us in society, we will increase the allowances for foster carers who look after young people over 15 years old.
Taken together, all those measures represent a major investment in our children. The Minister for Education and Young People will announce his plans, and the targets that he will meet, in the coming weeks.
We are succeeding in the fight against crime. Since 1999, the crime rate has fallen by 5 per cent, but we need to drive it down further. We will maintain record numbers of police officers, returning more of them to the front line, and step up our focus on serious and organised crime by detecting, catching and prosecuting criminals. However, we recognise that that is not enough if we do not stop them reoffending time after time. This budget will provide the resources to tackle Scotland's unacceptably high level of reoffending and will deliver a stronger, safer Scotland for all.
Local authorities are vital partners in Scotland's public sector. They are our partners in delivering public services and in increasing productivity. They asked us to ensure that we fully fund any new commitments that we want them to deliver in this budget, and I can confirm that we have done so. They asked us to make an allowance in their budgets for pay and price inflation, and I can confirm that we have made such an allowance. They asked us to confirm that all our existing initiatives are fully funded in their baseline budgets and, again, I can confirm that we have done so.
We will be increasing total revenue support to local authorities by 9.7 per cent by 2008. In addition, we will continue to fund the highly popular quality of life initiative, which has made a great deal of difference in communities across Scotland, and the cities growth fund, which is contributing to the transformation of our cities.
This Government is ambitious for Scotland. Across the world, Scotland is viewed with warmth and respect. However, too much of that is respect for our past. It is time for us to lead the way in promoting Scotland as she is today: a modern, vibrant country with world-class universities, exciting cities and a quality of life second to none. We will promote Scotland as a country to visit, work in and do business with and as a great place to live. We will welcome fresh talent to our shores. However, our fresh talent initiative is about much more than population. It is about our ambitions for our future and our pride in our country. That is why we will invest £4 million each year to work alongside the public and private sectors in promoting Scotland internationally. We will open our new relocation advisory service to give practical help to those who want to come and live here and, to capitalise on the reputation for excellence in Scottish universities, we will set up a prestigious new scholarship scheme that will attract the brightest and the best to our shores.
The third pillar of this budget is fairness. In housing, fairness means that everyone has access to a proper home. Over the next three years, we will invest more than £1 billion in providing more and better affordable housing. We will invest more in the regeneration of our communities, improving Scotland's most deprived areas and helping individuals and families to escape poverty, renewing our communities and unlocking their economic potential.
More than 1 million older people and those with disabilities have already enjoyed the benefits of our current concessionary fares scheme. Now is the time to do more. Today, I can announce that we will make the investment that is required to turn the current local concessionary travel scheme into a nationwide one. We will have a nationwide scheme for older people, for those with disabilities and—for the first time in Scotland—for our young people.
I have already said that our investment is for the long term. Sustainability runs through every decision we are making, such as our decision to make record levels of investment in the water industry to meet European standards, our commitment to invest 70 per cent of our transport spending in public transport, our commitment to ensure that more waste is composted or recycled by local authorities by 2008 and our decision to protect more than 4,200 more homes from flood risk.
Health spending already accounts for more than a third of our total spending. We have increased that proportion in every budget. There are those who claim that that investment is not working and that there has been no return for our money. However, I ask them to tell that to the 80 per cent of our people who use primary care services each year, to the people who have benefited from the 67 new or modernised hospitals and 104 local health centres that have been renewed or modernised since 1999, to the people who have been helped by the 8.5 per cent increase in the number of nurses and the 15 per cent increase in the number of ambulance staff or to the families whose loved ones are still with them today because of the improvements made in health treatment and care. However, we need to do more. That is why, by 2008, spending on the national health service in Scotland will be more than £10 billion a year.
Of course, our challenge is not just to improve health care but to promote a healthier Scotland. Promoting good health is the step that we must take. There can be no better legacy for the next generation than to ensure that it grows up healthier and fitter than the previous one. To do that, we must tackle poor diet and smoking and increase the amount of exercise that people take. We must offer practical help to everyone in making the right choices to prolong their life. In this budget, we take two additional steps to help our children to grow up making the right choices: we will invest to ensure that pupils in every school in Scotland have access to fresh chilled water and we will invest to make healthy eating choices in schools even more attractive.
Access to health care for everyone in Scotland has always been important to us. The investment that I announce today will support a further seven major hospital developments and new equipment and technology across the national health service in Scotland and increased action to tackle infection control and hospital cleanliness. Today, I announce investment to allow the Golden Jubilee hospital, which we brought back into our national health service, to reach full capacity. That investment will improve lives and save lives. In the coming weeks, the Minister for Health and Community Care will announce full details of the new plans and targets that are made possible by this massive investment, including improvements to waiting times, the speeding up of diagnostic services and the bringing of quality health care to those who need it.
Today, I announce one significant additional step: by the end of 2007, no one will wait more than 16 weeks from specialist referral to treatment for cardiac intervention of any kind. That will bring the current target down by two and a half months. More lives will be saved and more families will be kept together for longer.
This is a budget that takes Scotland forward. It is a budget for a more enterprising Scotland, a Scotland of opportunity and a fairer Scotland where no one is left behind and no one is held back. It is a budget for the long term, for the next generation and for the future of Scotland, and I commend it to the chamber.
We will shortly move to a debate on the statement, to be opened by Mr Morgan. Any questions at this stage should therefore be brief and for clarification.
I will be brief and simply seek clarification. The minister mentioned several rail transport projects. Will he tell me the target completion dates for the Glasgow and Edinburgh airport rail links? Will he tell me when the national concessionary fares scheme will be introduced? Will he tell me by how much the allowances for foster parents will go up? He quoted the figure for revenue support to local authorities and said that it will increase by 9.7 per cent by 2008, but will he tell me whether that includes the allowance that he will make for pay and price inflation? If so, what is the increase in real terms? Finally, will he confirm that he will not do anything to help businesses whose valuation basis is the same as that of equivalent businesses south of the border but which pay more because they are on a higher uniform business rate?
Of course, many of those matters relate to the announcements that individual ministers will make in the chamber in due course. However, I can say that the Executive is committed to a concessionary travel scheme and that it will be introduced before 2007-08. On air links, the investment that we make through the route development fund will be immediate in terms of the negotiations and discussions that take place around that. With regard to local authorities, there will be a 9.7 per cent increase in real terms. I am trying to recall the other question that the member raised. I will advise the member of the increase in the allowance for foster parents.
Last year, the minister announced with some pride that there was a cut in business rates because the increase was lower than the inflation rate. We found out later that the inflation rate that the minister used was different from the Government's preferred rate—he measured the business rate increase against a higher rate that is not the preferred rate. He said in his statement that business rates will match inflation, but will he clarify that he will choose the lower of the two rates every year?
I understand that the member wants to retain as much synergy as possible with the rest of the UK on such matters. By statutory provision, the UK Government uses the retail prices index and we will continue to use that as our indicator.
I warmly welcome the announcement of investment in our roads and infrastructure in Scotland and the biggest capital investment programme in the life of the Parliament. What mechanisms will be in place to ensure that that programme is delivered, given that many aspects are the responsibility of local authorities?
Individual organisations such as the transport agency, our local authority partners, the health service and others will of course be responsible for delivering the capital investment programme.
I look forward to the publication of the Scottish Executive's capital investment plan, which will show all of Scotland and beyond our intention to increase infrastructure support massively. That plan will be available to all members to allow them to scrutinise our intentions for the next 10 years, which shows that the Government is thinking beyond the electoral cycle. Individual organisations will be accountable for delivering their own capital programmes.
I will ask the minister four quick questions. How many children in Scotland remain in poverty? Will time restrictions apply to the national concessionary fares scheme that he mentioned, and what is the definition of young people? How many new homes does he estimate will be built for the social rented sector, given the Chartered Institute of Housing in Scotland's demand for 20,000 homes a year? How much has been set aside in the spending review to address the scandalous 29 per cent equal pay gap between the wages of men and women, particularly in the public sector?
Mr Sheridan asked about children in poverty. Too many children still live in poverty, which is why I announced actions to reduce that number. However, that is not good enough, and we will continue to work hard on that.
I will leave it to the Minister for Communities to talk about new homes that will be built. She will make a statement on such matters to Parliament in due course.
As for the pay gap, the Executive runs forward-looking pay policies to ensure that it preserves its reputation as an employer and recognises equal-pay difficulties. Our policies are designed to ensure that a pay gap does not occur.
I thank the minister for his comments about additional spending on transport. Will the additional money for projects allow the Airdrie to Bathgate railway line to be reopened?
I am happy to confirm that that is the case.
Oh!
Order.
It is obvious that some members do not like the idea that we are opening railway stations, providing new rolling stock and using the freight facilities grant all around Scotland. I confirm the situation. The Executive coalition has massively increased its spend on public transport and will continue to do so.
That is enough clarification.