Chamber and committees

I make the point because, to go back to the convener’s question about transparency, the situation becomes increasingly difficult if things are done at the last minute. As you said, if that happens, it is difficult to expand on the implications that a policy change might have for the labour market, inflation or whatever. Therefore, we run the risk of having less accurate forecasting, which concerns us. That is on top of the fact that the SFC and the OBR produce forecasts at different times—the convener mentioned that lag—which compounds the issue.

We have been taking evidence on the Organisation for Economic Co-operation and Development’s review of how effectively the Scottish Fiscal Commission operates. The SFC was generally given a very clean bill of health. However, an interesting issue was raised about the SFC’s groundbreaking approach of giving a very long-term projection for the Scottish economy—it goes all the way up to the year 2070. On one level, that is very helpful, but there is the argument, which was part of some discussion and debate just last weekend, that those very long-term projections slightly take the focus away from short-term policy making to address serious issues in the economy.

I know that you cannot comment on the policy, but are you concerned that, if we go too far into the future, we will have issues with short-term policy making?

Thank you for that helpful answer about the committee set-up.

What can the Parliament do better? I think that there was cross-party frustration—it is nothing to do with party politics—at the time of the budget that we had a budget debate that was a bit dead in the water. Each of the committees is asked to make a presentation in the budget debate, which is made by the committee convener and, therefore, must be objective. The limited scope for MSPs to debate in that forum is not very helpful and the debate is also constrained by time.

Some of us around the table have been arguing for a finance bill in order to enhance scrutiny, but I wonder whether a structural change in the Parliament, as opposed to committees, could make it easier for there to be good quality scrutiny and whether it could heighten the general interest of MSPs in the budget process. It would be quite easy for an MSP to avoid getting involved in the budget, yet it is one of the most important things that we do—some would say that it is the most important. Do you have any suggestions about how we could change the structure of the Parliament to improve scrutiny?

Thank you for your evidence so far. I want to ask about a specific issue. Although you are obviously not responsible for policy making, you have to respond to it. In recent times, at the UK and Scottish levels, we have seen some very late adjustments. At the time of the spring budget statement in the UK, the OBR stated that the welfare reforms would not deliver as much money as the Government had previously estimated, and so last-minute adjustments had to be made.

In Scotland, the Scottish Government was very late in announcing its mitigation of the two-child cap, and it did not provide enough information in time for the SFC to build that into a forecast. To what extent do such adjustments present a problem with forecasting? I know that you cannot set the policy in any sense, but does it create considerable difficulties when Governments make changes to their policy proposals that are a bit late for forecasting?

Is it your view that we are getting better at forecasting over the short, medium and longer terms?

Thank you for the excellent evidence that you have provided for us. I will concentrate on scrutiny by Parliament. Professor Bell, I noticed your interesting comment about the role of committees and why the committee system might not lead to the most effective scrutiny. Professor Spowage has made clear some of the issues with Parliament itself.

If we wanted to improve parliamentary scrutiny, would we need to make structural changes to the scrutiny process during the next session of Parliament, or is it a question of improving the culture within Government and the relationship between Government and Parliament regarding how scrutiny takes place?

What would be the difference between what we have, which, I would agree, is not particularly cutting edge, and something like the arrangement that Finland has? You mentioned that it has a discreet body that has been set up to do that work. What is different about those two options that makes Finland a bit better?

Would it help the pursuit of getting the right evidence? It would increase the scrutiny.

Paragraph 1.2 of the OECD report is titled “The SFC has strengthened relationships with key stakeholders”, and you mentioned some of those stakeholders. Why do you think that your relationships have improved? Is it because your personal contacts are very strong, or is it because you have a greater understanding of those stakeholders and more data on what they are doing?

Those are policy choices—they are not for you but for politicians. We cannot make effective, evidence-based decisions about public spending priorities until we know what the good-quality data is and what the effects of decisions are. That is basically what we are after. It has been a past concern of the Auditor General, as well as yourself, that we need to do more on that basis.

We have discussed twice before the possibility of having a finance bill, which I think could help us, but you are not going to answer that question. However, do you feel that a fiscal framework between central Government and local government could help that process?

The Parliament is in need of processes that make it easier to understand where we have spent money well and where we have had issues. That is the crux of the matter.

I will come back to other matters later.