Meeting date: Thursday, January 24, 2019
Meeting of the Parliament 24 January 2019
Agenda: General Question Time, First Minister’s Question Time, Remembering the Holocaust, Committees’ Pre-budget Scrutiny, Decision Time
- General Question Time
- First Minister’s Question Time
- Remembering the Holocaust
- Committees’ Pre-budget Scrutiny
- Decision Time
Committees’ Pre-budget Scrutiny
The next item of business is a debate on motion S5M-15421, in the name of Bruce Crawford, on committees’ pre-budget scrutiny. I call Bruce Crawford to speak to and move the motion on the Finance and Constitution Committee’s behalf.
As the convener of the Finance and Constitution Committee, it is my pleasure to open the debate by speaking about our pre-budget scrutiny. I thank our clerks for doing such a sterling job in pulling together our report and I thank my colleagues for the diligent and collective way in which we came to our conclusions. I very much look forward to hearing the contributions about other committees’ work.
We are making a bit of history today with the debate, as it is the first of its kind. Conveners will have the opportunity to speak about their committees’ pre-budget scrutiny and to hear the Cabinet Secretary for Finance, Economy and Fair Work’s response. The debate is an important aspect of the new budget scrutiny process, which is based on the excellent work that the budget process review group carried out.
I will provide a bit of context for the debate. The group noted that subject committees had previously had
“very little role within the ... budget process once they”
“reported to the Finance Committee on the draft budget.”
In particular, they had no specific role in plenary debates on the draft budget and the budget bill. Unfortunately, that often meant that the Parliament as a whole did not debate the subject committees’ findings on the budget.
As more time is now being devoted to scrutiny of the new financial powers, it was considered important not to dilute scrutiny of the existing expenditure powers. The group therefore recommended that a committee debate should take place before the stage 1 debate on the budget bill, which in this case is scheduled for next week.
It is worth repeating the four core objectives of the new budget process, which are:
“• To have a greater influence on the formulation of the Scottish Government’s budget proposals;
• To improve transparency and raise public understanding and awareness of the budget;
• To respond effectively to new fiscal and wider policy challenges; and
• To lead to better outputs and outcomes as measured against benchmarks and stated objectives.”
In May last year, Parliament agreed the new written agreement between the Finance and Constitution Committee and the Scottish Government, which sets out the new process. We are moving towards a more outcomes-based approach to the scrutiny of public expenditure. That builds on previous work that subject committees carried out as part of their budget scrutiny, and I look forward to hearing from colleagues how that work has progressed.
As I said when we debated the new written agreement, the biggest challenge that faces us as politicians in adopting the new process will be cultural. We are moving from judging success based on, for instance, the number of police on the streets to measuring the environmental, economic or social outcomes that public spending has achieved.
Having set out the context, which is important, I will move on to the pre-budget scrutiny that the Finance and Constitution Committee has carried out over the past few months. As more taxation and borrowing powers have been devolved, the committee has—rightly—focused increasingly on the revenue side of the budget. Our pre-budget report focused on four key documents: the Scottish Government’s five-year financial strategy; the fiscal framework outturn report; Scotland’s economic and fiscal forecasts for May 2018; and the forecast evaluation report. The first two documents are published annually by the Scottish Government following the recommendations of the budget process review group. The remaining two are published annually by the Scottish Fiscal Commission.
We welcomed the publication of all four documents as a significant step forward and a comprehensive basis for our pre-budget scrutiny. We focused particularly on the operation of the fiscal framework, which I can safely say is not an easy subject to get your head around. My colleagues on the committee will share that view.
We have previously emphasised that the budget is now subject to a much greater degree of volatility and uncertainty. In particular, the risk to the public finances from forecast error is very real. That risk can work both ways. It can positively or negatively increase the risk to the Scottish budget if there is a divergence in the extent of any forecast error between the SFC and the Office for Budget Responsibility. For example, if the SFC forecasts are overly optimistic and the OBR forecasts are pessimistic, that will have a negative impact on the budget. However, if the converse proves true, it would obviously have a positive impact on the scale of the budget that is available to the Scottish Government.
I will highlight some other key areas from our pre-budget scrutiny. First, the committee heard that there is strong evidence to suggest that there is a risk to the size of the Scottish budget arising from Scotland’s population ageing faster than that of the rest of the United Kingdom. In particular, there is a real risk from a higher old age dependency ratio in Scotland relative to the rest of the UK. That is because the size of the population aged between 16 and 64—I am just still in that bracket—which makes up most of the working age population, is important for the economy and the public finances. Because individuals in that age group are more likely to be economically active and working, they will generate most of the tax that the Parliament requires to raise. Those factors mean that two fundamental questions require to be asked. Does the Scottish Government have sufficient policy levers to address this risk, and does the fiscal framework sufficiently recognise demographic divergence? The committee believes that both those fundamental questions should be fully considered as part of the review of the fiscal framework that is due to take place in 2021.
Secondly, given the way in which the fiscal framework operates, there is a real risk to the size of the Scottish budget if there is a fall in the working-age population because of a disproportionate decline in immigration relative to the rest of the UK. Therefore, within the context of Brexit and a different demographic dynamic within Scotland relative to the rest of the UK, we recommended that the review of the fiscal framework should consider the impact of immigration policy following the UK’s departure from the EU if, of course, that actually transpires.
Finally, the Auditor General for Scotland was right when she said that in forecasting tax revenues there are inherent risks from the extent of underlying uncertainty about the economy; the availability of relevant and robust data; the robustness of the respective methodologies and judgments of the OBR and the SFC; and the differences between the methodologies and judgments of the SFC and the OBR. We understood that forecast error is inevitable—it is something that the Parliament will have to get used to—and that the SFC and the OBR have very challenging roles in preparing independent forecasts.
Because of the direct impact on the size of the Scottish budget and the need to minimise the risk, we have asked the SFC and the OBR to make it clear what their respective methodologies are and how they use outturn data differently. We need to understand how much of a factor that is in explaining the differences between their forecasts.
To summarise, the operation of the fiscal framework needs very close monitoring and risk management to address the potential volatility and uncertainty that is inherent in its operation. There are risks arising from forecast revisions, especially where there is a divergence in those revisions between the OBR and the SFC. Although those revisions might not have any immediate impact on the size of the budget, they might have an impact on the size of future budgets, and that needs to be closely monitored.
To conclude, the fiscal framework is complex and there needs to be greater transparency and a wider awareness of the risks involved. The committee will continue to try and shine a light on how the framework is working, beginning with our report on the budget, which will be published tomorrow. The first outturn figures from Her Majesty’s Revenue and Customs for Scottish income tax will be published in July 2019 and will have direct impact on the size of the Scottish budget. Those outturn figures for the financial year 2017-18 will be reconciled with the forecasts that were made in December 2016, and any divergence will be dealt with in the 2020-21 budget—I said that this was complicated. That will be an important moment, as it will be the first time that we will fully see the extent of the risk from forecast error. If there is a shortfall, that will have to be addressed by the budget in 2020-21. Equally, if the forecast error benefits the Scottish budget, the Government will be able to draw on that money in the 2020-21 budget to address its priorities.
I will finish by putting on record the committee’s appreciation of the constructive engagement that all committees have had with the new budget process. We are all learning, and throughout the next year we can build on the work that has been undertaken across the Parliament to improve budget scrutiny and increase our influence in the setting of the Scottish Government’s budget.
On behalf of the Finance and Constitution Committee, I move,
That the Parliament notes the pre-budget scrutiny undertaken by parliamentary committees.
I call Clare Adamson, the convener of the Education and Skills Committee—oh, I beg your pardon, I do not. I call Derek Mackay, the Cabinet Secretary for Finance, Economy and Fair Work, to speak for the Government. That must have frightened you, Ms Adamson.14:42
Can I say, Presiding Officer, that it would have been a great relief to me if I did not have to give the Government’s position?
I am actually more than happy to, because I agree with the Finance and Constitution Committee convener that this is an important step in the budget process and involves the engagement of the parliamentary committees in what should be a slightly less partisan way as we consider and reflect on the committee reports. That is exactly what the Scottish Government has done. Part of what we are doing concerns a continuous, year-round scrutiny of the budget, which means that there will probably be further inquiries from committees as matters progress.
With regard to what has been published, I agree with Bruce Crawford that everyone has engaged in the process in a positive and constructive manner. As Bruce Crawford has outlined, the changes to budget scrutiny were recommended by the budget process review group. The principle of year-round scrutiny of the budget is important, and I again thank all the committees for their consideration and engagement. I will now turn to specific committee reports and reflect on their valued contributions.
Regarding the Culture, Tourism, Europe and External Affairs Committee’s report, the Scottish Government has committed to spending £331 million on culture, tourism and major events, including the continued investment of a further £10 million in the screen sector, which I know that the committee was interested in. In 2019-20, the Scottish Government will spend around £24 million on supporting its international relations activity, including the funding of Scottish Government operations overseas. At a time of such uncertainty across the EU, it is vital that the Scottish Government continues to build on its strong reputation overseas.
The Economy, Energy and Fair Work Committee’s report focused on promoting employment and encouraging fair work, including the newly devolved employability programmes and our enterprise agencies. Tackling barriers to work, supporting training and promoting fair work is essential to improving Scotland’s economy and improving opportunities for all. I can confirm that the Scottish Government will provide almost £57 million for employability and training. More widely, the budget will support Scottish Enterprise with around £253 million. I fully support the committee’s interest in employability programmes, which will be considered as part of our review of employability support services. I will also boost the economy by providing over £5 billion of capital investment to grow and modernise Scotland’s infrastructure. I acknowledge concerns on the progress of the Scottish growth scheme and, as I committed to do, the Government will provide the committee with an update in April on Scottish Enterprise’s use of financial transactions.
Education is this Government’s defining mission, and we remain determined to improve the life chances of the children and young people of Scotland and to change lives for the better. I recognise that the Education and Skills Committee has raised important issues. Within a challenging financial environment, the Scottish Government is firm in its resolve to deliver a world-class education system.
Will the member take an intervention?
I will in one moment.
That is why the education portfolio will receive a real-terms increase in investment in 2019-20.
Mr Mackay mentioned a challenging financial environment and, as a backdrop to that, it is important to make the most of the financial levers that he has at his disposal. I ask him, in a non-partisan way, whether he supports the principle of fair taxation and whether he believes that it is fair that in this budget Scottish National Party ministers will pay less tax than they did in the last tax year.
Ministers of the SNP Government have taken a pay freeze since 2008, and that is the right thing to do. Regarding our income tax position, in not following the Tories on their tax proposition, we are not passing on the tax cut for the highest earners in society, so I believe that our tax system is fair and progressive. If parties wish to bring a full proposition to me, I will look at that. To be fair, the Greens have engaged constructively with the budget, and I look forward to Labour’s engagement.
Returning to education, the budget commits to £180 million to raise attainment in schools. This Parliament is aware that the Scottish Government is investing record sums in funding for early learning and childcare. The partnership arrangement with the Convention of Scottish Local Authorities will be supported by £210 million in the Scottish budget, with capital funding of £476 million to be provided to local authorities over four years. We are protecting our investment in higher and further education, and increasing Skills Development Scotland’s budget by £22 million, to support the continued growth and expansion of apprenticeships in Scotland.
The Environment, Climate Change and Land Reform Committee has rightly considered a range of issues, including the wider benefits of environmental spend. The transition to a low-carbon economy lies at the heart of our economic strategy, and the steps that we are taking through this budget ensure that we will have a globally competitive, entrepreneurial, inclusive and sustainable economy. That is why the Scottish budget includes commitments to: fund around £59 million of forestry priorities to support and stimulate woodland creation as part of achieving the targets in the climate change plan; provide over £20 million for Zero Waste Scotland to support the transition towards a more resource-efficient, circular economy; make over £145 million available as part of a £500 million investment in energy efficiency, fuel poverty and heat decarbonisation; invest over £50 million in low-carbon measures including the expansion of electric vehicle charging infrastructure; and to invest £80 million in active travel. All those low carbon activities contribute to our ambitious approach to leading the way on tackling climate change.
I appreciate the Finance and Constitution Committee’s focus on the fiscal framework. The financial risks to the Scottish budget have been laid out by Bruce Crawford and were discussed in the committee. I recognise the challenge that that presents. The budget process is complex, particularly in its reliance on accurate forecasting and the increased uncertainty that comes from managing increasing demand-led budgets, such as our new social security programme. I look forward to working closely with the Finance and Constitution Committee as our experience under the fiscal framework grows and we reach that review point.
The Scottish budget will increase spending on health and care services by almost £730 million. The Scottish Government continues to deliver on its manifesto commitment to pass on health resource consequentials in full, despite being short-changed by the UK Government. In its pre-budget consideration, the Health and Sport Committee highlighted the importance of shifting the balance of care to community health services. The Scottish budget delivers on that key priority area. In 2019-20, more than £700 million will be invested in social care and integration. We are investing £941 million in primary care, and our investment in mental health will reach £1.1 billion. Those are significant priorities for the Scottish Government, and the budget reflects ministers’ recognition of that.
I recognise the vital role that our justice services provide in supporting all parts of Scotland. The budget confirms investment across justice system priorities, including the transformation of our police and fire services. The police resource budget continues to receive real-terms protection, and the Crown Office and Procurator Fiscal Service and the Scottish Courts and Tribunals Service will both receive an increased resource budget. The significant increase over recent years in funding for community justice, support for victims and third sector organisations is maintained—indeed, it is further increased.
The Scottish Government values its partnership and close working with local government. We work together to support the delivery of essential services for Scotland’s communities across the country. The budget will provide local government with a real-terms increase in revenue and capital funding. The budget will provide £11.1 billion for local government.
The Local Government and Communities Committee’s pre-budget scrutiny report focused on local government workforce planning and the housing needs of older and disabled people. The budget takes account of the views that the committee expressed. We have been able to protect the funding that is available to assist registered social landlords in delivering adaptations for older and disabled tenants; we are maintaining funding at £10 million. There are wider issues to do with integration in that regard.
In its report, the Rural Economy and Connectivity Committee took a close interest in Scotland’s ferry services. Those are lifeline services that are vital to supporting connections across our rural communities. The budget continues to provide the £10.5 million that was secured last year to support local authority ferry services.
I have considered carefully the Social Security Committee’s interest in the Scottish welfare fund. The Scottish Government works closely with local authority partners in delivering the fund and will continue to provide £38 million in 2019-20 to local authorities for that purpose, despite the pressures that come from the UK Government’s welfare reforms. The figure is made up of £33 million for payments and £5 million to help our 32 local authorities to administer the fund at a local level.
We are doing the right thing in building a social security system that is based on dignity, fairness and respect. Our new agency is operational and will continue to grow and develop as further social security benefits are devolved to Scotland. We are working on the delivery of the second wave of devolved benefits, and our early success is something of which the Government can be rightly proud.
I welcome the Scottish Parliament’s new approach of year-round scrutiny of the budget, which is a progressive way of scrutinising spend and the delivery of improved outcomes in Scotland. I genuinely appreciate the constructive approach that committees have taken, and I look forward to that constructive approach continuing on the part of all parties as the budget proceeds, to deliver the stability, stimulus and sustainability that we are looking to deliver for all the people of Scotland.
I look forward to the rest of this afternoon’s debate.14:53
I welcome this opportunity to speak on behalf of the Education and Skills Committee and pay tribute to my clerks and fellow committee members for their support. I hope that I can do justice to their commitment and diligence.
The committee has integrated the scrutiny of budget lines and associated outcomes into its inquiries throughout the financial year. The issues that we have covered range from attainment and achievement of school-age children who are experiencing poverty to developing the young workforce and musical instrument tuition. Today, I have written to the Scottish Government, seeking detail on the budget lines supporting the implementation of Scottish national standardised assessments.
The committee also undertook scrutiny of the draft budget this month, taking evidence from the Cabinet Secretary for Education and Skills, John Swinney. For clarity, any reference to a cabinet secretary in my speech will be a reference to the Cabinet Secretary for Education and Skills, not the Cabinet Secretary for Finance, Economy and Fair Work, who has just spoken in the debate.
Additional support for learning in school education is a significant priority for the committee. The committee published its inquiry report, which included a focus on mainstreaming, in May 2017. The importance of sufficiently resourcing the policy and the marked rise in the number of pupils who are recognised as having an additional support need in some areas were underlying themes of the inquiry report. Specific recommendations include a financial review of local authorities’ spend, improvements to the baseline data that effective scrutiny of policy implementation needs to be based on, and qualitative research into the experiences of young people with additional support needs to assess the implementation of the policy in reality.
The committee welcomed the movement from the Government in response to some of its recommendations, particularly its agreement to commission qualitative research. However, scrutiny of the provision of ASN remains a priority for the committee going forward. In November 2018, we held a session with Government statisticians and policy officials on the collation of data in the staff census on school support staff who work specifically with children with additional support needs. Changes in reporting reflected inconsistency in data collection across local authorities. Therefore, the committee seeks an accurate number of support staff who are working in ASN, which was previously—and is currently—not available.
The committee has also looked at funding allocations. The Scottish Children’s Services Coalition suggested to the committee that there could be ring-fenced budgets to support those with additional support needs, and the committee invited the Government’s perspective on that idea. The committee appreciates the arguments that were made, including by COSLA during evidence taking for the committee’s music tuition inquiry, about the need to guard against an overreliance on targeted or ring-fenced funding as opposed to policy being funded through core local authority budget allocations. However, our report also highlighted the success of the youth music initiative, which is a Government-led initiative that is delivered by COSLA and local authorities, and which is thoroughly welcomed by all those who took part in it.
The committee pursued an inquiry into the attainment and achievement of school-age children experiencing poverty, which included a focus on the cost of the school day. The committee received evidence, including from the Child Poverty Action Group, that suggested that charging for elements of the curriculum is relatively commonplace. Our music tuition report, which was published on Tuesday, highlights the need to ensure that no charges are attached to any activity that is required for a Scottish Qualifications Authority exam. In general, we seek clarity about what, within the curriculum, can and cannot be charged for, and we state that more information is required on the extent of such practices in local authorities.
In addition, the committee has been concerned about the lack of a consistent approach across local authorities, which continues to be a theme in all our inquiries, although we welcome certain moves to ensure minimum levels of support for children and their families. In particular, towards the end of the poverty and attainment inquiry, the Scottish Government announced that it had agreed with local authorities that a minimum grant of £100 a year for school clothing should be implemented and reviewed regularly, which was a welcome step.
The poverty and attainment inquiry also looked at pupil equity funding and attainment challenge funding, the provision for which stands at £180 million in the draft budget. The inquiry considered the extent to which indicators of deprivation can be relied on as the basis for targeted funding allocations—for example, we discussed the limitations of using free school meals uptake as a criterion for the allocation of pupil equity funding—and the committee welcomed the Scottish Government’s acceptance of its recommendations in that area. The cabinet secretary made it clear in evidence that he is amenable to finding a better approach. The committee was pleased to hear from the cabinet secretary last week that the intention is to have the work on a new deprivation indicator completed in time for the next financial year, although we recognise that the implementation of such an indicator will take longer.
The cabinet secretary also confirmed last week that teachers who are employed under PEF are employed using the principle of additionality, which is being used for a new purpose aimed at reducing the poverty-related attainment gap. However, the committee highlighted the need for in-depth evaluation of PEF projects. The committee looked at the underspends of PEF in local authorities this year and noted variation in the levels of underspend. Importantly, the cabinet secretary confirmed that the underspends can be carried over, to be spent by schools in the next financial year. This time next year, the committee will return to the issue of underspend to assess whether the underspend has reduced from the reported level for 2017-18 of 40 per cent on average across all local authorities.
Further and higher education is a significant priority for the Government. We explored with the cabinet secretary the real-terms increase in revenue funding for colleges of about 1.3 per cent to £600 million and the intention for that increase to be used to cover the cost of national bargaining and harmonisation. In relation to higher education, we raised with the cabinet secretary the valued status of Scotland’s universities and the importance of protecting funding. Although Government funding for universities is more than £1 billion, there is a real-terms drop of 1.79 per cent. The universities have requested that consideration be given to allocating to Scottish universities the £18 million of Barnett consequentials resulting from increased research spending in the UK. An assurance was also sought that Scottish Government funds that are currently used to support EU students will remain in the university sector should we exit the EU, particularly in a no-deal Brexit situation.
The committee questioned why Education Scotland’s starting budget at the beginning of the financial year will be substantially lower than what is required. The cabinet secretary set out the logic for in-year transfers and highlighted that the budgeting approach is not specific to Education Scotland but also applies to Skills Development Scotland. However, the committee recognises that Education Scotland should have as much certainty as possible on funding levels during a time of organisational change and increased responsibilities.
I am running out of time, but there are other areas that I would like to highlight. The budget provides scope to deliver £10 million in compensation for survivors of abuse, and £500 million is being committed to the expansion of early years education and childcare. That issue—especially the use of private providers—is of extreme interest to us and we will watch the development of the policy with interest. There is also funding to support the achievement of positive destinations for care-experienced young people.
The committee welcomes the opportunity for whole-year in-line scrutiny of the budget. Unfortunately, I have not been able to mention everything, but I shall leave it there.15:02
A first encounter with the budget process can be confusing for anyone—confounding, even—and I am not necessarily speaking about Bruce Crawford’s explanation of it today. I have been told that it is not really about the figures. They count, of course, it has been explained to me, and they might even add up—one would hope so, at least—but the focus is more on policy direction. How can that be? I ask that in all innocence on the basis of the reasoning advanced by the philosopher Gottfried Leibniz that
“All is for the best in the best of all possible worlds.”
I appreciate that these are the early days of a new budget process that we hope will encourage better scrutiny of numbers and policy and more meaningful input from committees, but is it the best of all possible worlds? We shall see.
I want to cover three areas from an economy and fair work perspective. The Economy, Energy and Fair Work Committee is not ignoring energy spend, as we will return to that during what I believe is called full-year scrutiny.
I will start with employment support for those who are furthest from the labour market, which was a reserved matter until the most recent Scotland act. The fair start Scotland programme, which supports many disabled people and others who are at risk of long-term unemployment, is delivered by private, third sector and local authority organisations. In our pre-budget scrutiny report, we anticipated a spend on the programme of around £32 million, which would be a rise of about 5 per cent, but the actual figures show the budget falling by 11 per cent between this financial year and next.
We were told that that reflected efficiencies and the removal of transition costs. The Minister for Business, Fair Work and Skills assured us that front-line services would not be affected. When pressed on the possibility of further reductions, he said, “probably not”. However, the Official Report shows that the cabinet secretary then weighed in with, “Never say never.” As they say, Presiding Officer, he who holds the purse strings—
We also heard from the Scottish Trades Union Congress, the Scottish Council for Voluntary Organisations and Citizens Advice Scotland, among others. The key message was that the causes of long-term unemployment can be complex, ranging across childhood experience, mental health, housing, education, drugs and alcohol and social exclusion. The resources needed to help an individual navigate such challenges should not be underestimated, but their affordability within the given budget is questionable.
We questioned the minister on the matter of one-year contracts that are awarded under the employability fund. We recommended extending those contracts to three years—the same as for fair start Scotland—and he told us that we are
“moving into a new world”.—[Official Report, Economy, Energy and Fair Work Committee, 8 January 2019; c 30.]
He did not clarify whether it is the best of all possible worlds, although I am sure that is what he would wish for everyone. He did, however, indicate that the matter is under review.
The second area that I will cover is the spend on the enterprise agencies. In response to our report, the Scottish Government appeared to agree with Scottish Enterprise’s own assessment of its impact, which is that every £1 that the agency spends adds between £6 and £9 of value to the economy. It is curious, therefore, that Scottish Enterprise’s budget has shrunk by 27 per cent over the past decade while Highlands and Islands Enterprise’s budget has shrunk by 9 per cent. If the agencies have been effective in driving economic growth, why take that money away? Both agencies will see their allocations cut by a further 3 per cent or so in the next year. We are told that that will be achieved through running-cost efficiencies. Really? After a decade of reduced funding? The committee raised a collective eyebrow.
Our report also covered how financial transactions money has boosted Scottish Enterprise’s funding in recent years. However, such moneys have been limited to equity and loan funding, and Scottish Enterprise has struggled to commit some of those funds. We found that, from a pot of £10 million, just £0.5 million of funding has been invested so far. We know that financial transactions make up 30 per cent of Scottish Enterprise’s budget. However, we were not confident that it will succeed in committing this year’s allocation, never mind next year’s increase.
The cabinet secretary has committed to updating us on the bigger picture—the overall £500 million growth scheme—by April. He has also sought to reassure us on the Scottish European growth co-investment programme, stating that the £10 million pot will not be lost from Scotland’s public spending.
Over the past 10 years, the enterprise agencies have consistently met or surpassed their own targets while the country as a whole has underperformed against a range of Scottish Government targets. However, the committee was concerned that the agencies not only set but seem to mark their own homework. We therefore welcomed the greater transparency suggested by the role of the strategic board. The board’s chair, Nora Senior, said that the agencies’ plans will be reviewed by the board and that a performance framework is being developed by the analytical unit. She told us:
“The big challenge for the agencies is to reach people who are not yet engaged in the system, because that is where the greatest growth could be.”—[Official Report, Economy, Energy and Fair Work Committee, 8 January 2019; c 38.]
My third and final area is fair work. It was Joe Biden who said:
“Don’t tell me what you value. Show me your budget and I’ll tell you what you value.”
I am not sure that that quote makes any more sense than my understanding of Bruce Crawford’s explanation but, in any event, there it is.
The additional money that has been allocated to the fair work budget line is just under £7 million, which, given the Scottish Government’s emphasis on the inclusive growth agenda, might seem a modest sum. Patricia Findlay, an adviser to the fair work convention, has stated:
“The value of adopting fair work is recognised and accepted but not mainstreamed.”
Nora Senior has recommended to ministers that fair work become a condition of any support from the enterprise agencies, and the cabinet secretary himself told us that “fair work comes first”.
Alas, not everyone is as steeped in these principles as we would wish. We quizzed the cabinet secretary, the minister and Scottish Enterprise on the Kaiam closure. We examined the sequence of events leading to the Livingston-based company entering administration on 22 December and workers being told they were being made redundant on Christmas eve. We addressed the history of the business, how much funding it received, due diligence and clawback. Most important, we looked at the support available for those who have lost their livelihoods. There seem to remain more questions than answers. We will consider the merits of a wider piece of work that would look at regional selective assistance.
Scottish Enterprise might be working in the risk business, but its business is to manage and mitigate that risk. There is some measure of hope in the situation, with a number of potential buyers for Kaiam said to be in the frame. Will it turn out to be the best of all possible worlds? We hope so, but we shall have to see. According to Orson Welles,
“If you want a happy ending, that depends, of course, on where you stop your story.”
I shall stop mine there.
I was rather enjoying your range of quotations.15:11
I start by thanking our clerks, our researchers and my fellow committee members for all the work that they have done over the budget process.
This debate is a new development in the Parliament’s budget scrutiny process, arising—as we have heard—from the implementation of recommendations made by the budget process review group.
The 2019-20 budget marks the first year of the operation of the new process, which is designed to take account of the new revenue-raising powers that have been devolved to this Parliament. Although the revenue-raising powers are important, it is also important that the expenditure proposals in the budget are fully scrutinised. I welcome the opportunity to provide the perspective of the Culture, Tourism, Europe and External Affairs Committee on the spending proposals that fall within our remit. I recognise that this is the first year of a new process and that it will take time to bed down. In future years, this debate should provide an opportunity to consider how well the new process is functioning in practice.
Debates on the budget naturally tend to focus on changes in the numerical allocations. Gordon Lindhurst quoted a Democratic Vice President, Joe Biden. I am going to quote a Republican President, George W Bush, who is not someone I would normally quote. He once remarked:
“It’s clearly a budget. It’s got a lot of numbers in it.”
President Bush is remembered for many things, but perhaps not his love of financial detail. However, the purpose of this debate is to dig down into the detail of the finances. The 2019-20 budget that covers culture, tourism, Europe and external affairs is essentially a standstill budget. I therefore wish to consider some of the broader policy themes within the committee’s remit that the budget seeks to support.
On culture, the new budget process places a significant emphasis on scrutiny of outcomes. The national performance framework contains an outcome on culture, which is welcome. However, how outcomes are directly attributable to culture portfolio spend is at best opaque.
The Cabinet Secretary for Culture, Tourism and External Affairs, Ms Hyslop, said:
“the Scottish Government plans to undertake work to understand how the activities that are directly attributable to the Culture portfolio budget contribute towards”
the national outcome on culture. The committee considers it imperative that work on this issue is concluded rapidly if the committee is to be able to scrutinise the budget from an outcomes perspective.
Ms Hyslop also said that the work on outcomes
“will be aligned with the forthcoming culture strategy”.
The committee has noted that the culture strategy was due for publication last year and as yet, there is still no timescale for its publication. The culture strategy will provide a key means via which to assess the Scottish Government’s cultural priorities and how the budget will support those priorities. Therefore, the committee would welcome a timescale for the publication of the culture strategy.
Scottish Government support for the screen sector in Scotland has been a key area of scrutiny by my committee in 2018, as the finance secretary alluded to in his remarks. We welcome the £20 million of support for the sector that is maintained in the 2019-20 budget.
My committee has undertaken considerable scrutiny of the Scottish Government’s screen sector policy. We consider that the sector has significant growth potential and that it is ideally placed to be a key business sector in Scotland. Currently, Scottish Government financial support for the screen sector is provided by Creative Scotland and Scottish Enterprise. A key recommendation in our screen sector report was that those budgets should be brought together under the sole control of the screen unit within Creative Scotland, in order to maximise the impact of Scottish Government support.
Of course, the committee continues to argue that the screen unit should eventually become a stand-alone agency. At the very least, there is a significant need for Scottish Enterprise support to be seen to be more effective in meeting the needs of the sector. I would welcome the finance secretary’s view on that issue.
The committee recognises the considerable financial pressures that local authorities face when it comes to supporting cultural provision in their localities. The committee recognises that Ms Hyslop is keen to reconvene meetings with the group that brings together local authority culture conveners under the auspices of COSLA. The committee shares that objective as a means to encourage strategic dialogue on how best to support cultural provision at a local level.
The finance secretary has clearly set out that the Brexit process could have significant implications for the 2019-20 budget. The committee recognises that position and, over the coming year, we will continue to scrutinise the implications of Brexit for areas of the budget within our remit. As part of its response to the challenges that Brexit presents, the Scottish Government proposes to increase the external affairs budget from £17.2 million in 2018-19 to £24 million. However, Ms Hyslop has confirmed to the committee that that increase is a consequence of total operating costs being included in the budget. Therefore, the committee would welcome the details of the exact amount of operating costs that are contained in the external affairs budget.
The budget contains details of funding levels for the international hub offices that are supported through the external affairs portfolio. Importantly, the budget includes an increase in the budget for the Brussels office, which reflects the impact of the Brexit process. Funding for the hub offices in China, Canada, Paris and the United States are also contained in the level 4 figures for the portfolio budget. However, the hub offices in Dublin and London and the new hub office in Berlin are funded through the finance, economy and fair work portfolio. The committee has explored with Ms Hyslop the rationale for that dual portfolio approach to the funding of hub offices, but it remains an area that the committee wishes to scrutinise further in the coming months.
More generally, the committee wishes to explore further the rationale for the choice of location for hub offices. How the Scottish Government evaluates the performance of those offices is an area that the committee has returned to regularly. Ms Hyslop highlighted to the committee that the Scottish Government is in the process of developing business plans for each of the Scottish Government offices. In evidence to the committee, she emphasised that evaluating the work of the offices in monetary terms would be problematic, because much of the offices’ work is on building relationships and influence. Specifically, she said:
“When we look at the business plans, we will consider how we evaluate the power of influence and relationships, which is not necessarily done in monetary terms.”—[Official Report, Culture, Tourism, Europe and External Affairs Committee, 10 January 2019; c 11.]
The committee looks forward to scrutinising those business plans once they have been published.
Tourism also falls within the committee’s remit. As Mark Twain said,
“Travel is fatal to prejudice, bigotry, and narrow-mindedness”.
The budget for tourism is, in essence, the money that the Scottish Government provides to support the work of VisitScotland. It is proposed that in 2019-20, the budget for VisitScotland will be £45.3 million, which is essentially a standstill budget, as that has been its budget since 2016-17. The committee recognises that there has been a substantial increase in visitor numbers in recent years as a result of a variety of factors, including the weak pound, as well as the successful promotion of Scotland as a destination. Of course, that includes a contribution that is related to visitors being attracted to locations that have been the subject of successful screen productions filmed in Scotland.
Although that rise in numbers is welcome, the committee recognises that it can result in significant impacts on localities. The impacts of tourism on cities such as Edinburgh, as well as more rural locations such as the north coast of Scotland, are well documented. A key debate is taking place about the ability of local communities and, critically, local authorities to respond to the capacity and infrastructure challenges that increasing visitor numbers can present. The committee has taken evidence on the proposal for a transient visitor levy, which is more commonly known as the tourist tax. To date, the committee has not taken a position on the proposal, but we have sought to provide a forum for the articulation of views on the issue.
As ever, consideration of the budget raises as many questions as answers. The committee intends to undertake a range of work over the coming months that will contribute to our pre-budget scrutiny for next year, but which will also enable us to ascertain the outcomes from the 2019-20 budget. Ultimately, the budget sets out spending plans. It will be the outcomes that arise from the budget that most concern my committee and, indeed, the people of Scotland.
We have a little time in hand. I can be elastic, but not so elastic that it snaps.15:21
When it comes to new ways of approaching the budget, the Health and Sport Committee can claim to have played a leading role, and I thank past and present members of the committee, as well as its clerks, for consistently supporting such an innovative approach.
At the start of the current parliamentary session, ours was, I believe, the first subject committee to build an element of budget scrutiny into all its work throughout the year. We broke new ground, too, by producing pre-budget reports that sought to influence the content of the budget, rather than reactive reports that reflected on the budget after it had been produced. Those innovations were adopted in advance of the recommendations of the budget process review group, and it is good that committees generally are now taking the same approach.
It is clear that committees have an important and distinct role in the budget process, which I, along with other committee conveners, will describe this afternoon. It is important, though, also to recognise the limitations on what committees can claim in the context of the budget process. Precisely because committees seek to reach a consensus and focus on the budget in terms of what it does in a specific portfolio, a debate such as today’s cannot be a substitute for wider consideration of the Government’s budget by Parliament as a whole. Our input is to inform that wider debate; it is for Parliament as a whole to decide.
To inform the debate, the Health and Sport Committee has sought to do three things: to improve the transparency of the process and of the budget itself; to secure better outputs and outcomes, as measured against benchmarks and publicly stated policy objectives; and to scrutinise the Scottish Government’s budget proposals and their effectiveness in delivering those outcomes.
The health and sport budget totals more than £14 billion, which is a substantial share of all the funds that are spent by the Scottish Government on Parliament’s behalf. That is why transparency matters so much. The majority of that spending is the responsibility of health and social care integration authorities, which, typically, are integration joint boards that are made up of health board and local council representatives. Back in 2017, the £8 billion budget allocation to IJBs was not broken down even by individual integration authority. That really hindered the committee’s ability to fulfil its scrutiny function, and we said so in 2017 and again last year. Therefore, it is good to be able to report that we now receive quarterly consolidated financial returns from IJBs.
The committee also raised concerns about the limited financial information that was made available for national health service boards. Again, it is good to be able to report that detailed information is now being provided on a monthly basis. That information confirms the challenges that boards face in balancing their books, which is why the Government has a performance escalation framework that reflects its level of concern, or otherwise, about each board’s ability to operate within its budget.
At the committee last week, the Cabinet Secretary for Health and Sport agreed that she would publish, alongside the monthly financial information that we have secured, details of where each board stands on that escalation framework in respect of financial performance. That marks a further success for the committee in improving budget transparency in such an important area of public spending.
Beyond the annual budgetary challenges for NHS boards and IJBs, we have asked whether there are adequate financial frameworks to enable long-term financial planning by health and care providers. In line with the budget process review group’s recommendations, which call for a more strategic approach to financial planning, the committee has repeatedly recommended support for long-term budget planning. We therefore welcome the publication of the medium-term financial framework for health and social care.
In our pre-budget report, we pressed for clarification of how the planned £2 billion in additional health spending would be delivered. We requested further information on Barnett consequentials, on the actual amounts of spending and on the percentage increase in spending in particular areas of the portfolio. We are keen to ensure that the budget information published by the Government is as transparent as possible and consistent with other documentary evidence.
We have repeatedly called for a three-year financial planning cycle, and we are pleased that ministers have now introduced more financial flexibility for NHS boards over a three-year period. That does not yet allow three-year financial planning, though. Last week, Jeane Freeman told the committee that all that boards will be told about their baseline budgets for 2020-21 is that they will not be less than they are for 2019-20. Whether that flexibility goes far enough is therefore a matter to which we must return.
Another feature of health delivery in the recent past has been the development of regional plans for the north, east and west of Scotland. The committee asked that those be published ahead of the budget, precisely to improve our scrutiny of the budget itself. It is disappointing that that has not happened, although the cabinet secretary has committed to providing those plans within the financial year.
The second area where I wish to highlight the impact of our work on the budget process is in linkages with better outputs and outcomes. For us to scrutinise policy priorities and the allocation of resources, we need to know not just the sums allocated but the impacts and outcomes that the investment provides. Integration authorities have made only limited progress in reporting their budgets against the nine national health and wellbeing outcomes to show how the funds approved by Parliament are actually delivering. That is despite a statutory requirement for integration authorities to report on how they have used their resources to achieve outcomes for health and wellbeing. As a committee, we have highlighted our concern about that several times, and our pre-budget report called on the Scottish Government to make it clear that developing information that links budgets with outcomes should be a top priority.
The Scottish Government has acknowledged, on the basis of the available data, that there is wide variation in performance and in ambition for change among different integration authorities. That needs to be addressed, and the committee will explore those issues in more detail once the Scottish Government has published the findings of its own internal review of the current operation of integration authorities.
We have also explored the impact of health service targets on behaviour and outcomes, most recently with Sir Harry Burns in the context of his review of targets and indicators in health and social care in Scotland. The Scottish Government’s response to our pre-budget report states that there is no intention to change targets, which appears to mean that the work of that review has been shelved. If that is the case, that is another area that I expect the committee will want to look at again.
The third area that I wish to highlight is around the Scottish Government’s actual budget proposals. The committee has not taken a view on the Government’s revenue and spending proposals this year, nor have we proposed alternatives, partly because of our focus on the need for more transparency in the budget process and partly because of our focus on the relationship between spending and outcomes.
We have, though, raised a number of fundamental questions about the Scottish Government’s investment priorities. One of those areas is in shifting the balance of care. The current Government target is that at least 50 per cent of spending will be on health services in the community by the end of this session of Parliament. We believe that that target is not ambitious, and we have called for an acceleration in the pace of change and for the Scottish Government to consider setting a more ambitious target.
We have also repeatedly asked questions about the national resource allocation committee formula, which is the basis on which funding is allocated to territorial boards. Last week, the cabinet secretary conceded that there were issues with NRAC and suggested she was open to discussions on them, which is welcome.
Finally, we have explored spending on specific areas such as mental health, which Mr Mackay has already referred to, and alcohol and drug partnerships, and we have called for more transparency on funding and outcomes in those areas. I am sure that in future budget scrutiny we will return to them and pursue those questions further.
The committee will seek to continue to make a difference by increasing transparency, focusing on outcomes, pressing for budget decisions that support policy objectives and assisting the scrutiny of future budgets by Parliament as a whole.15:30
First, I thank the committee clerks for all their hard work and support as we have undertaken budget scrutiny and, in particular, fellow committee members for acting in a collegiate manner in all that we do and supporting me as their new convener.
The Environment, Climate Change and Land Reform Committee welcomes the focus on national outcomes in the new budget process and the opportunity to engage with the Scottish Government in advance of the draft budget’s publication, and we have been encouraged by the openness of that discussion. In our pre-budget scrutiny, we explored opportunities to achieve wider benefits for environmental spend and sought to understand the carbon impact of all capital budget decisions. After all, the decisions that we take on infrastructure today will lock in future emissions.
Before I discuss the detail of the committee’s views, I want to say that, although we welcome the move to setting out in each portfolio the total cost of delivery, including the cost of administration, and acknowledge the positive impact that that will have on transparency in future, our scrutiny was made quite difficult by this being the first year of the approach. Not having detailed information on the additional allocation of administration costs to our portfolio in 2019-20 has made it difficult to determine whether the portfolio budget has gone up or down or has remained the same. That said, we realise that things will be easier in that respect in future years, but the committee urges the cabinet secretary to provide the figures on the costs of administration that have now been included in the total cost of delivery to ensure that we can make a like-for-like comparison.
Overall, we remain concerned that the budget for the environment, climate change and land reform portfolio in respect of the relevant agencies and research has been declining over a number of years, even if we all agree that environmental spend can reduce burdens in other portfolios. The impact of that is apparent when considered against the performance of the relevant national indicators. We are particularly concerned about the budget for research, for Scottish Natural Heritage and for Marine Scotland, and we would stress the impact of that on delivering not only key environmental but economic and health outcomes.
The potential financial impact of EU exit is of great concern to us. The finance received from Europe to deliver environmental objectives is considerable, and the committee remains gravely concerned that there is still no certainty about what will replace it following the UK’s exit from the EU. Any reduction in budgets will have significant knock-on effects across the environmental sector in Scotland, and further work on the diversification of funding sources into the sector is vital. We have asked the Scottish Government to continue to press the UK Government to ensure that there is no detriment to Scotland’s finances and that Scotland maintains the same level of financial benefits that EU funding has provided. We have also recommended that the Scottish Government work closely with agencies, partners and the UK Government on identifying possible replacement funding streams as a matter of extreme urgency.
The committee agrees with the Scottish Government that investment in Scotland’s natural capital is not only fundamental to the economy but fundamentally linked to the delivery of health and wellbeing benefits and the global sustainable development goals. There are significant opportunities to improve key national outcomes, including health, wellbeing and economic growth, through investment in our environment and natural capital. The committee agrees with the Scottish Government that the natural environment is currently an underutilised resource; indeed, it is also significantly undervalued in terms of the understanding of its value to the economy and societal wellbeing.
In our budget scrutiny, we heard that now is not the time to draw back from investing in the environment and the circular economy. Significant health benefits and savings to the health service can be achieved through environmental spend.
For example, if 1 per cent of the sedentary population, of which I sometimes feel that we are part, moved to a healthy pathway, 1,000 or so lives would be saved and £1.4 billion would be saved across the UK. For every £1 that is invested in health walks, we see £8 to £9 of benefits. If people have easy access to nature, they are three times more likely to participate in physical activity and 40 per cent less likely to become overweight or obese.
Active travel is at the heart of Scotland’s policies to reduce air pollution and carbon. An estimated 2,500 deaths and 1,500 early deaths in Scotland each year result from air pollution. If Scotland met its ambition of 10 per cent of journeys being made by bicycle each year, £364 million would be saved as a result of the improvements to air quality. As such, we welcome not only the doubling of the active travel budget but the creation of low-emission zones in some of our cities. We also heard that there is a strong link to lower levels of stress, and associated health complications, in individuals who live in greener streets in greener urban areas, particularly in people who live in areas of multiple deprivation. The committee recommends that the Scottish Government reviews existing research on the health benefits of environmental spend, and, if necessary, commissions research to underpin future spending decisions.
The economic benefits of environmental spend are well documented. Current estimates suggest that Scotland’s natural capital is worth around £20 billion per annum to the economy, including the tourism, renewable energy, food and drink and other sectors. The importance of the environment cannot be overstated. The leverage rates for environmental spend are high: SNH’s £1.5 million spend on the Scottish rural development programme’s agri-environment climate scheme generated £47 million of additional benefit; the £11 million that was received by the Royal Botanic Garden Edinburgh from the Scottish Government in 2017 generated an additional £38 million for the Scottish economy and £102 million for the global economy; and the central Scotland green network will generate £6 billion by 2050 and has the potential to benefit 70 per cent of Scotland’s population. We also heard that investment in managing non-native invasive species could save £200 million a year by avoiding damage to forestry, crops and infrastructure.
We are keen to ensure that sufficient investment is made in Scotland’s green infrastructure, particularly in urban areas, and we encourage the Scottish Government to extend the green investment fund. We heard of the importance of education policy in mobilising teachers and children to access the environment and we encourage the Scottish Government to provide enhanced funding to support outdoor learning.
We are supportive of the Scottish Government’s ambition to transition to a circular economy and we heard that there are greater opportunities for public procurement to become a pull for new circular economy businesses. The committee encourages the Scottish Government to consider what more can be done to bring forward work on the circular economy and the green economy and to provide funding and support packages in order to fully realise the related benefits.
The committee is aware of the need to address the risks that climate change poses to the environment and to ensure that the environment is more resilient to the impacts of climate change. The committee heard that investment in the national ecological network is essential for climate change adaptation. Investment in peatland restoration and the management of water flow contributes to flood protection and the committee encourages the Scottish Government to extend funding to those initiatives in order to achieve the significant benefits.
I turn to the carbon impact and carbon assessment of the budget. We welcome the Scottish Government’s commitments to increase the percentage of capital spend on low-carbon projects and to engage more widely when considering the carbon impact of the budget. However, we are concerned that the infrastructure pipeline appears to have a lower percentage of low-carbon projects. We hope that the infrastructure commission will address that in its advice to the Government. Scotland needs to lock in a just transition to a zero-carbon future now, which will require a substantial shift in the proportion of investment that is spent on infrastructure that does not contribute negatively to climate change.
We have made a number of specific proposals about how supporting information could be improved and we are keen to work with the Scottish Government over the coming months to ensure that Parliament better understands the carbon impact of all budget decisions. We are also concerned about the impact of the proposed reduction in the sustainable action fund, which supports a number of new and innovative actions that will underpin much of the necessary success in driving behaviour change and action in new and challenging areas. The research budget underpins the delivery of a wide range of outcomes and generates significant additional benefits to the Scottish economy.
Committee members are satisfied that our committee is now able to play a much greater role in budget scrutiny than has been possible in the past.15:40
I am pleased to speak in this important debate, as the convener of the Rural Economy and Connectivity Committee. I thank my fellow members of the committee for all the hard work that they have put in, supported by the clerks, in dealing with the massive amount of work on our schedule. As I will talk about farming, I refer to my entry in the register of members’ interests. I should also say, from the outset, that I had grave concerns about the Parliament’s previous financial oversight system of post-budget scrutiny. Based on my experience in the business world, I believe that that system could not truthfully be described as scrutiny.
Therefore, the new system of looking at areas of interest to the committee before the budget is published, in the hope of influencing it, is laudable; I hope that that hope will not be proved to have been naive. The system needs a considerable amount of improvement work to make it truly worth while.
The committee chose to carry out the new process of pre-budget scrutiny on the strategic investment that is required to support the Clyde and Hebrides ferry services, and we did that throughout 2018 in a focused review. The well-documented problems and significant disruptions that were caused across the Clyde and Hebrides network in the spring and summer of 2018 helped to focus our decision on the issue to choose. More often than not, those problems were a consequence of unreliable and aged vessels. We were also influenced by our recent scrutiny of the Islands (Scotland) Act 2018, which highlighted the vital importance of ferries as lifeline services and linchpins for the on-going sustainability of island communities and economies.
When the committee carried out its scrutiny, it wanted to know whether the level of current and planned investment in ferries and infrastructure matched the need. Nearly all the stakeholders we heard from told the committee that ferry services and infrastructure have suffered from a lengthy period of substantial underinvestment. We heard that the fleet is old, with many vessels approaching the end of their working lives, and that there were no spare vessels or capacity. We also heard that efforts to purchase a second-hand vessel had failed and were likely to continue to fail because of the need for the vessel to have a shallow draft.
Eighty-five per cent of respondents to the committee’s online survey thought that the current and proposed level of investment in new ferries and port infrastructure was insufficient. Caledonian Maritime Assets Ltd, the Scottish Government-owned company that owns and operates the ferries, ports and harbours that serve the network, stated that a significant increase in investment would be required to ensure a properly managed programme of vessel replacement and improvements to ports and infrastructure. It stated that £30 million a year would need to be invested in new vessels and that £20 million a year would be needed for ports and harbours. When quizzed, CMAL said that, over the past 10 years, it had received less than half that amount.
Following consideration of the evidence, the committee recommended to the Scottish Government that it should prioritise ferry investment, with a focus on procuring new vessels to reduce the average age across the fleet, which would also improve service reliability.
So far so good—the committee had identified a problem, which was supported by evidence. It was a true opportunity for the committee’s work to influence Government expenditure.
In response to the committee’s report, Paul Wheelhouse, the Minister for Energy, Connectivity and the Islands, pointed out what we already knew: that two vessels had been commissioned—the MV Glen Sannox and hull 802—which were being constructed by Ferguson Marine. No other vessels had been ordered or confirmed.
Paul Wheelhouse pointed to a further £4 million that had been invested in a resilience fund, which was set up to address vessel reliability issues. We were told that that was to allow the forward purchase of fast-moving spares. That would be fine if all the ferries were a standard model, but they are not. I am sure that the committee will want to monitor how the resilience fund is used in the course of this year.
Those points were repeated when Michael Matheson, the Cabinet Secretary for Transport, Infrastructure and Connectivity, appeared before the committee last week. The investment is welcome, but the problem is that the delivery of both new vessels is late and subject to significant delays. The Glen Sannox is not due until summer 2019 and hull 802 is not due until spring 2020, so there will be at least another two summers of disruption. When the committee took evidence, there was also dubiety about whether those dates were realistic.
Michael Matheson indicated that planning has begun for the future replacement of the Islay ferry. However, there are no concrete plans beyond that for vessel procurement, which the committee called for before the budget.
The committee called on the Scottish Government to conduct an urgent review of the ferries plan to meet current and future needs. Therefore, it welcomes the Scottish Government’s commitment to a review of the plan that will cover vessels and infrastructure; sadly, that review is not to be completed before the end of this year or before next year’s budget is produced.
It would be unfair to expect a committee response to the point that I am about to put, but I am genuinely trying to be constructive. On ferries, there is cross-party interest in the structure of decisions on transport and procurement. Perhaps the committee could assist the Government with that and explore governance, which might help us with delivery issues.
Absolutely. The committee visited Ferguson Marine Engineering and would like to be involved and to understand how the delivery of ferries is carried out. We have taken evidence from agencies on the design of ferries, which is critical to ensuring that delivery is on time. The committee will want to follow up on that.
The committee is very aware that similar recommendations to those we made before the budget, about the need for strategic planning backed by appropriate investment, were made by the Transport, Infrastructure and Climate Change Committee in 2008. Despite that previous work, it still appears to the committee that ferries are suffering from underinvestment and a lack of strategic planning. I will not be speaking for the committee in 2028, but if our views are still being reflected in 10 years’ time, as we are reflecting the views of the committee 10 years ago, I think that a future committee would find that unacceptable.
The proposed new ferries plan, when it is delivered, will provide an opportunity for the Scottish Government to deliver a strategic plan that will give confidence to island communities, businesses and the tourism industry that in the future ferry services will be fit for purpose and will meet their needs. That is critical and the committee will monitor that closely.
The committee looked at the road equivalent tariff and recommended that the Scottish Government should reflect on the evidence that it received about ways of further improving and developing RET—for example, through differential or dynamic pricing and enabling islanders to take priority, particularly in emergencies. I am pleased that, in his written response to the committee, Mr Wheelhouse undertook to take that recommendation into account in the network-wide review of RET, which is due to conclude by the end of 2019.
Following a recent evidence session, there was genuine concern in the committee that the Scottish Government might be considering fare increases on some routes in the short term to reduce demand. That move would impact most of the island communities that we heard from in considering the Islands (Scotland) Bill and would be detrimental to their future.
The committee also took evidence from the relevant cabinet secretaries on the budget as it relates to agriculture and the digital economy. That threw up several important issues, which included the reduction in less favoured area support scheme payments and the investment that is required to deliver the ambitious reaching 100 per cent superfast broadband—or R100—project by 2021. The committee was informed that it will have to await the award of the R100 contract, which should have happened next month but will not now happen until later in 2019, before it can scrutinise arrangements. We will be looking at the £600 million that it will cost to deliver the programme in future budgets. I know that the committee will take a close interest in the issue in the future.
In conclusion, the Rural Economy and Connectivity Committee responded well to the new way of looking at the budget, but we have not seen many of the items that we called for in the budget that has been produced. We look forward to the Scottish Government taking into account the important matters that we raised on critical ferry services to the islands and to reviewing those in next year’s budget.15:50
I welcome the opportunity to participate in today’s debate and to share the pre-budget work of the Equalities and Human Rights Committee.
The committee has a crucial role in driving forward scrutiny of Scottish public funding to deliver equalities outcomes. Since September 2016, the committee has also considered how human rights could be more explicitly identified through the Scottish Government’s budget. The report that the committee published just over a year ago, “Making the Most of Equalities and Human Rights Levers”, sets the scene. The committee has sought to build on that work. I thank the clerks for their diligence and support for that, and I thank my fellow members for their dedication in exploring those matters through the pre-budget phase. I also acknowledge that scrutiny of cross-cutting issues can be challenging and requires sustained commitment over the longer term to make progress.
I also recognise the contribution that was made by the public bodies, organisations and individuals who shared their experience with us and helped us to keep the spotlight on equalities and now human rights. The committee also appreciates the way in which the Minister for Older People and Equalities has engaged with us and welcomes the carefully considered response to our findings from the Cabinet Secretary for Social Security and Older People.
The budget for promoting equality is £24.6 million. We note that that is a cash increase of 8.4 per cent on last year. The Government has told us it will be used to respond to recommendations from the advisory council on women and girls and the First Minister’s advisory group on human rights. The budget line will implement the social isolation and loneliness strategy and deliver a framework policy on older people. It will deliver on and respond to the advisory council on women and girls and continue to support front-line services and wider activity to address gender-based violence and inequalities, including a major campaign to challenge sexual harassment and sexism.
Because of the cross-cutting nature of equalities and human rights, we note that some of the spending plans come under the communities and local government portfolio. The committee might have a small budget line to scrutinise, but we have a big role and significant challenge in looking strategically at the account that is taken of equalities across the Scottish Government’s budget.
It has been 10 years since the Scottish Government first published an equality budget statement. We are a world leader in equalities budgeting, with many countries striving to achieve a similar approach. Equalities budgeting has moved on, and the revised budget process offers us an opportunity to reinvigorate the focus on equalities. Starting this year, under the new approach, the Scottish Government has committed to publishing additional equalities information prior to the summer recess. The committee welcomes that crucial step forward and encourages other committees to make use of the information to support and influence their budget scrutiny. That in turn should influence the Government’s budgetary decisions to deliver equality outcomes across portfolios.
The committee understands from the Government that work is under way on developing options for the information that could be included, and my committee would be pleased to meet the Cabinet Secretary for Social Security and Older People to discuss the various options that are under consideration. It is important that we ensure that Scotland builds on its equalities leadership and we would welcome the views of all committees to support such a discussion.
A key area of focus for the committee is the collection of equalities data. Data is crucial if we are going to be able to successfully measure outcomes. Chris Oswald from the Equality and Human Rights Commission told us that the 10-yearly census remains the gold standard of equalities data but that the UK Government has decided to reduce the amount of administrative data it collects. He said:
“The situation in Scotland, in particular, is unhelpful, because the ethnicity categories are collapsed into five, when the data is gathered across 14 categories. That means that it is not possible to discern the distinctions between the outcomes for Pakistani, Bangladeshi or Indian people, which are quite stark if we are looking for nuanced policy.”—[Official Report, Equalities and Human Rights Committee, 25 October 2018; c 18.]
Similarly, Dr Alison Hosie, of the Scottish Human Rights Commission, spoke of the problem of carrying out analysis from a rights perspective on the currently available Scottish data sets referring to the rights to health, housing, food and social security. She said that trying to examine key aspects of those rights was “extremely difficult” owing to the lack of
“financial information in the budget that related to those particular spends”.—[Official Report, Equalities and Human Rights Committee, 25 October 2018; c 19.]
In its response, the Government pointed us to a range of data sources, for example, the Scottish surveys core questions, which cover a range of areas, such as equality characteristics, housing and employment; its new gender index, which captures information on gender equality; and, on health, a new report entitled “Measuring Use of Health Services by Equality Group”.
The Government acknowledges that all public bodies need to do more, and, in 2017, it produced an equality evidence strategy. That identifies the evidence gaps in equalities information. It has also updated the equality evidence finder tool. I urge committees to make use of those tools and resources to help inform their scrutiny work so that, together, we can work towards filling the gaps and, in doing so, gain a clearer picture of equalities outcomes.
The use of equality impact assessments is a continuous theme for the committee. We agree with the Government that EqIAs are an invaluable tool for determining the impact of particular policies on protected characteristics. These assessments should be the backbone of policy development and should underpin spending decisions. They should draw out issues of intersectionality where a policy has a cumulative equality impact on, for example, people with a combination of protected characteristics, such as an older disabled man or a pregnant Muslim woman.
A recent strand of our work has focused on cumulative impact assessments and their use by local authorities. They can show where decisions across an authority have a cumulative impact on certain groups in their communities and can therefore help with budget setting.
Also, on cumulative impact, evidence from the Equality and Human Rights Commission highlighted the work that it was undertaking with Landman Economics to develop better scrutiny of budgetary decisions that were taken by the UK Government between 2010 and 2015. A report of that work is due to be published shortly. It will assess the potential impacts on different groups of changes to taxation, social security and public services up to 2022. Chris Oswald told us that that work has allowed the EHRC
“to identify that, going forward, the largest losses will be for those in income decile 2, for any family with more than three children and lone parents—those three groups will have the most significant losses. Black and Caribbean communities are the next most affected, and then it is people with severe disabilities. In terms of age, the most significant losses are among the 18 to 24-year-old age group.”—[Official Report, Equalities and Human Rights Committee, 25 October 2018; c 20.]
The committee notes the Scottish Government’s publication of its distributional analysis on income tax changes, which looked at changes by income group, age and disability. We welcome the Government’s commitment to continue to explore cumulative distributional analysis during this year and suggest that the Government might want to consider the work that has been commissioned by the EHRC and any lessons that can be learned from it.
Before I conclude, it would be remiss of me not to highlight the action that is being taken to identify human rights explicitly through the budget process. The committee is pleased to see the inclusion of a human rights outcome in the Scottish Government’s refreshed national performance framework. It says:
“We respect, protect and fulfil human rights and live free from discrimination”.
We look forward to the development of indicators in support of that this year.
The committee is supportive of the development of human rights-based budgeting in the Scottish budget system to ensure that Scotland is meeting its international and national human rights obligations, but we recognise that that will need to happen in a planned way, ensuring that the right building blocks are put in place first, and we acknowledge that that will take time.
In closing, I would like to leave members with one key message. Scotland has previously been at the forefront of equalities budgeting, and we must continue to lead. A lot of innovative work is going on across Government and public bodies. It is essential that we all make the most of the work that has been done and of the information and the tools that are available to us so that we can be assured of a solid connection between public policy making, resource allocation and stated equalities and human rights outcomes.16:00
I very much welcome the new pre-budget process and the opportunity that it affords me, as the convener of the Justice Committee, and other conveners, to set out our committee members’ priorities and the issues that they have highlighted.
From the Justice Committee’s perspective, the new process has worked well and has ensured that, during the year, the committee has kept budgetary issues at the centre of much of our scrutiny of bills and our inquiries. I thank my fellow Justice Committee members for their contributions to our pre-budget scrutiny this year and for the consensual way in which we reached our unanimous conclusions. I also thank the members of the Justice Sub-Committee on Policing and its convener, John Finnie, for their work on policing aspects of the justice budget. I pay tribute to the committee clerks for their invaluable assistance and support as well as to all the organisations and individuals who gave evidence to both committees as part of our budget scrutiny.
The justice portfolio budget is a little over £2.7 billion, which equates to approximately 6.5 per cent of the Scottish Government’s total proposed budget for 2019-20. Although that is a relatively small percentage of the Scottish Government’s budget, it is important to stress that justice portfolio spending decisions have potentially major consequences for the protection of the public, the functioning of a fair justice system and the effectiveness of our police and fire services. That means that those decisions are among the highest priorities of any Government.
The Justice Committee therefore focused on the following Government-planned spending: funding for the Crown Office and Procurator Fiscal Service; funding for information technology projects in the justice sector; and funding for the third and voluntary sectors. I will address each of those areas in turn, starting with the Crown Office and Procurator Fiscal Service. The smooth running of that service is fundamental to the effectiveness of Scotland’s justice system, which is why the first inquiry that was carried out by the Justice Committee in 2016-17 was on the functioning of the Crown Office. That was considered to be a priority, as the committee heard evidence that, at that time and for some considerable time prior to that, the service was “just about managing” with its budget.
Since then, and over several years, the Crown Office and Procurator Fiscal Service has been the subject of the Justice Committee’s budget scrutiny and of the monitoring of the committee’s inquiry recommendations. Consequently, additional funding of up to £3.6 million has now been provided for the Crown Office and Procurator Fiscal Service, and £300,000 has been provided for the Scottish Courts and Tribunals Service. In addition, the committee is gratified that the continuity in scrutiny has led to 60 newly appointed COPFS staff who will be prosecutors and that some of the additional £3.6 million COPFS funding has been provided for resources to increase the number of prosecutions for domestic violence and sexual offences.
The COPFS IT systems provide crucial services such as witness notification, the provision of real-time information on witness citations and case management. The need to improve those IT systems was stressed during a very worthwhile meeting that the deputy convener and I had with the Lord Advocate and the Crown Agent to discuss how they planned to use some of the £3.6 million of additional funds. The committee considers that it is vital that the IT systems are modernised and improved and that they link seamlessly with the Scottish Courts and Tribunals Service and Police Scotland to ensure the effective functioning of our justice system.
IT funding more generally, and specifically for policing, was the second area on which the Justice Committee focused. In 2018, the Scottish Police Authority board supported an online business case for a £298 million IT upgrade for Police Scotland over the next nine years. An upgrade is required to modernise existing systems and introduce new mobile devices to ensure that our front-line officers have the technology that they need. Although the additional £12 million in the draft budget for IT purposes is welcome, it falls far short of what is required and might reasonably have been expected, given the challenges and potential dangers that our officers face every day. The committee therefore welcomed the reassurances that the Cabinet Secretary for Justice gave the Justice Sub-Committee on Policing on 17 January, when the matter was put to him. He said, in effect, that our police have to be given the tools for the job.
In addition, both committees heard the SPA view that £23 million is
“a disproportionately small capital budget”—[Official Report, Justice Sub-Committee on Policing, 4 October 2018; c 23.]
for a body of the scale and importance of Police Scotland. That has implications for fleet maintenance, in relation to which Police Scotland has confirmed that it has an overspend of around £6 million per year. Although the Scottish Government is aware of that, it appears to have provided no extra funds for fleet and estate management in this year’s capital budget, which remains the same as it was in 2018-19. The committee therefore welcomed the cabinet secretary’s reassurance to the Justice Sub-Committee on Policing that he would look at the issue before the next spending review.
The Justice Committee pays tribute to the outstanding work of the many organisations that work in this portfolio. During our scrutiny of the Scottish Government’s Management of Offenders (Scotland) Bill, it was evident that, when prisoners are released from prison, support from the voluntary sector is critical in helping with housing, employment and access to general practitioner services. It was worrying to hear that, if such services are not available, joined up and properly resourced, the result is almost certainly that we set up the ex-prisoner to fail—and, potentially, to return to prison.
The Justice Committee therefore seeks to ensure that voluntary organisations that are engaged in such work are adequately funded. Quite simply, that makes sense, given that imprisonment costs tens of thousands of pounds more than it costs to provide support services to prisoners on their release. Crucially, the committee calls on the Government to consider multiyear funding, which would help to ensure that third and voluntary sector organisations could focus on the vital services that they supply instead of being trapped in a continuous cycle of applications for funding. In that regard, the committee welcomed the cabinet secretary’s commitment to continue to look for opportunities to move victim support organisations to longer-term funding cycles. However, we urge him to go further and expand that funding approach to other voluntary and third sector organisations in the civil and criminal justice systems.
As the Parliament takes on more powers, the scrutiny work of its committees becomes even more important. Members of the Justice Committee and its sub-committee call on the cabinet secretary to take on board our findings when he finalises funding decisions in relation to the COPFS, Police Scotland IT projects and multiyear funding for voluntary sector organisations that work in the civil and criminal justice sectors.
In the meantime, both committees thank the Cabinet Secretary for Justice for the constructive way in which he has engaged with members. We look forward to working with him in the coming months on the issues that we have raised today.16:09
I speak today as convener of the Social Security Committee and I welcome the opportunity to participate in this debate on committees’ pre-budget scrutiny. It is the first such debate as part of the revised budget process, as members will know, and I am sure that it will enlighten and inform both fellow parliamentarians and, more important, the wider public about the scrutiny that all committees give to financial matters here in the Parliament.
First, I will provide a bit of context. In April last year, the Parliament unanimously passed the Social Security (Scotland) Act 2018, paving the way for the Scottish Government to deliver newly devolved benefits to the people of Scotland. Those benefits will form one part of what is a complex delivery of social security, with different agencies delivering different aspects of that system.
The majority of social security benefits remain reserved to Westminster and are administered by the Department for Work and Pensions. Those include the much debated universal credit, which replaces six legacy benefits: housing benefit, income support, income-based jobseekers allowance, income-related employment and support allowance, child tax credit and working tax credit. It is worth noting that those two tax credits were previously the responsibility of HMRC.
In addition, local authorities are responsible for discretionary housing payments and the Scottish welfare fund; the Department for Work and Pensions is paying carers allowance on behalf of the Scottish Government under an agency arrangement; and Social Security Scotland is currently paying a carers allowance supplement and best start grant pregnancy and baby payments.
There is therefore a period of transition, which is also reflected in the 2019-20 budget portfolio. For the first time, the social security budget has been set out separately from the Scotland Act implementation line, adding more clarity to the Scottish Government’s spending plans. In 2019-20, the social security budget will be £560 million, which consists of support for the programme of delivery and the administration of Social Security Scotland. From that £560 million, it is forecast that £435 million will be paid to people across Scotland.
Our committee would like to highlight several aspects of the Scottish Government’s budget for 2019-20, the first being the establishment of Social Security Scotland. Last October, committee members were delighted to have the opportunity to visit the agency’s new headquarters in Dundee, where some of the recently recruited staff talked enthusiastically about the challenge of setting up the new organisation from scratch. It was those members of staff who helped to administer some of the first payments delivered in 2018: the carers allowance supplement payments and the best start grant pregnancy and baby payments.
The committee was pleased to hear that the best start grants received exceptional numbers of applications. That is a good thing, but as that is demand-led expenditure, the committee asked how the Government would cope with greater than anticipated demand. The cabinet secretary has assured the committee that if demand is greater than expected, all eligible people will be paid and that the Government will be keeping “an exceptionally close eye” on any in-year budgetary pressures. The committee welcomes that.
In 2019-20, Social Security Scotland will continue to expand its functions and will deliver an estimated £56 million in benefits across the country. The agency is expecting to deliver elements of the best start grant, best start foods, funeral expense assistance and the young carer grant. In keeping with the spirit of the Social Security (Scotland) Act 2018, the Scottish Government consulted on each of those forms of assistance. In order to contribute to those consultations, the committee heard evidence from stakeholders, charities and people with lived experience who are expected to receive those forms of assistance. Those people told us about their personal circumstances and the difficulties currently facing them. I thank all of them for contributing to our committee’s work.
The regulations for elements of the best start grant and funeral expense assistance have recently been laid in the Parliament and will be considered by the committee in due course. It is interesting to pick out some of the key points that the Scottish Government has highlighted. The funeral expense assistance, which will replace the current DWP funeral payment, will increase eligibility in Scotland by around 40 per cent. It is forecast that in its first full year of operation, the Government will spend £6.3 million, which is 25 per cent more than the DWP spent on the equivalent benefit in 2017-18. Under the early years assistance best start grant, two new grants will be added: the early learning grant and the school age grant. The value of both grants is expected to be £250.
New forms of assistance continue to be proposed by the Scottish Government and it opened its consultation last week on the job grant, which aims to help meet the initial costs of starting work and to support the smooth transition into employment for young people on low incomes. The grant will consist of a one-off payment of £250, or £400 if the young person is a parent.
The Government also confirmed that it will uprate the carers allowance supplement by the rate of inflation, as required under the Social Security (Scotland) Act 2018. The Government uses the consumer prices index as its measure of inflation, meaning that the weekly rate will increase by 2.3 per cent to £8.70 in 2019-20.
The Scottish Government has classified that form of assistance as wave 1 and expects to deliver it by the summer of 2019. Wave 2 includes the meatier, larger projects such as disability-related benefits, including the replacement in Scotland of the personal independence payment and other forms of support for people with long-term illnesses, injuries or impairments. The delivery of benefits under wave 2 is not included in this year’s budget, but the agency continues to increase its capacity to be able to deal with those benefits in future. That is reflected in the operating budget of Social Security Scotland, which has increased to £41.5 million: £20.1 million in staffing costs; £5.6 million in information and communications technology; £4.2 million in facilities and property; and £11.6 million in other payments, including administration payments to the DWP for functions delivered. Over the next four years—between 2017-18 and 2020-21—the Scottish Government estimates that the implementation costs for Social Security Scotland will be around £308 million. The committee will continue to monitor the cost of implementation as part of its on-going budget scrutiny.
The committee today met the Scottish Fiscal Commission, which explained its role in providing the forecasts of expenditure for claimants in the Scottish Government’s social security system, both for the year ahead and a five-year estimate. A second set of forecasts is provided in May to accompany the Scottish Government’s medium-term financial strategy. The Scottish Fiscal Commission evaluates its forecasts annually and that evaluation is published annually, at around the same time as the Scottish Government’s fiscal framework outturn report in the autumn.
Given that the new Scottish social security system remains in its infancy, I suspect that the committee will be interested to see how accurate the forecasts were, come the autumn. For instance—and I merely speculate—should uptake exceed forecasts, the committee will be interested in how those cost pressures were managed and what implications that may have for the following year’s budget. Similarly, if uptake is behind forecasts, the committee will be interested in whether that will impact on the following year’s budget in terms of the money allocated to the benefit, or whether there might be an entitlement campaign to drive uptake.
When looking at budget lines and cost pressures and what scrutiny the committee wanted to undertake in relation to the social security budget, the Scottish Fiscal Commission asked committee members to bear in mind the following three aspects: eligibility criteria, uptake and the level of the benefit. Changing any one of those aspects can cause the outturn to change dramatically in relation to moneys paid and the policy outcome. The committee will look at all those aspects.
I must mention the Scottish welfare fund. The funds that are administered by Social Security Scotland are not the only social security payments that are made by the Scottish Government. The Scottish welfare fund is delivered by local authorities. The previous convener, Clare Adamson, and the committee had concerns about whether the welfare fund was high enough to meet the needs and the demand that are out there in society, noting that the fund’s £33 million budget had not increased since its inception. Had the budget been increased at the rate of inflation, it would today be £36 million. Our committee has similar concerns about whether that budget will meet the demand that is out there across our local authorities and we are disappointed that the Scottish Government has not agreed with that.
One caveat is that the Scottish welfare fund does not spend all the moneys that are allocated to it. We must ask why Scottish Borders Council, for example, spends only 64 per cent of the money that it is allocated under the Scottish welfare fund, but Inverclyde Council spends 110 per cent; it supplements it.
There are a whole range of new budget lines for the Social Security Committee to scrutinise. We are getting our baselines this financial year and there will be lots more scrutiny going forward, as part of a rolling programme in this new budget scrutiny process.16:19
I am pleased to speak in the debate on behalf of the Local Government and Communities Committee. The local government and housing budget is vast. This year, the committee decided to focus on three issues: first, the biggest spend in our remit, which is the local government annual settlement; secondly, what is, in relative terms, a small spend—funding for housing adaptations for older and disabled people; and, thirdly, the thematic, cross-cutting issue of workforce planning in local authorities. We took evidence on all three issues, and we thank the witnesses for their expert input.
Some of that work dates from before I became the committee’s convener, in September, and the committee’s work this year builds on a body of evidence taken throughout the parliamentary session. I therefore thank my colleagues on the committee—both past and present—for their hard work, as well as my predecessor, Bob Doris, who helped to set the priorities during his time as the convener.
I will take the three issues in reverse order. I suspect that workforce planning in local government has become something of a Cinderella subject in the context of parliamentary scrutiny, yet it is critical. Tighter public finances and demographic changes, including the challenges of an ageing population, are leading local authorities to ask big questions about how they organise their human resources to optimise service delivery. Council workers are not merely resources; they are people, and any changes must take account of the human factor.
Over the past decade, council workforces have shrunk and, understandably, councils wish to avoid compulsory redundancies. However, one of the concerns that the committee heard from witnesses was about a perceived hollowing out of council workforces, with more senior and better-paid staff accepting a nudge from management to move on in an effort to save money and avoid compulsory redundancies. The committee heard evidence that, in many cases, that has turned out to be a false economy, with valuable experience having been lost for good.
The underlying question that the committee posed in a pre-budget letter to the Scottish Government was this: where does the balance lie between respecting the autonomy of each council and recognising the Government’s responsibility on strategic challenges? As we said in our letter:
“The balance of evidence suggests ... that there is a need for more work done at a national level: data-gathering, horizon scanning, and decision-making, and that the Scottish Government has a role to play in this.”
Given the Government’s response, we are not totally convinced that it has engaged with that point. Of course, we must not forget that there is also plenty of scope for councils to exercise collective leadership. The underlying challenges on that issue are not going away, so the dialogue is bound to continue. The committee’s next step will be an evidence session on absenteeism in the local government workforce.
I now turn to housing adaptations, which is about making physical changes to homes to help elderly people and those with disabilities to go on living in them. Spending in that area is small in global terms, but, as we all know from constituency cases, it is far from an insignificant issue. A good intervention can be transformative and can vastly improve someone’s quality of life. It can also be a textbook example of spending to save. If we enable people to go on living at home when the only realistic alternative would be full-time care, as well as making the quality of life better for the individual and their family, we ensure that the impact on the public purse is reduced.
There is much very good work already going on, and, if there are problems, it is important not to overstate them. However, let me signal a couple of related matters in relation to which the committee has shown a dogged interest.
There is frustration at the lack of progress in realising what the jargon calls a “tenure-neutral” approach. In plain English, it should not matter whether someone is an owner-occupier, a private tenant or in social housing; everyone should have an equal chance to get an adaptation done—and done to the same standard. That is a long-standing Government goal, but it is clear from the evidence that some tenures are still less equal than others, and it appears that it is tenants of registered social landlords who are most likely to lose out. It appears that total demands on the RSL adaptation budget increasingly outstrip available funding, and the committee wants the Scottish Government to do more work to cost the level of unmet demand on that budget line.
The level of spending by integration joint boards, which are still relatively new bodies, is also somewhat opaque, and there are question marks over how well they plan their services in respect of adaptations. It is natural that some will perform better than others—that is what devolved decision making means in practice—but, in the years ahead, the committee would like to see evidence of good practice being shared and overall standards being driven up. We intend to take evidence on IJBs in the next financial year.
I turn finally to the local government settlement. The public discussion that takes place each year on that budget line is a passionate one, as the state of our care services, our public libraries, our roads, our refuse collection and our public spaces is important to us all. People may be a wee bit surprised to hear this, but party politics occasionally strays into that debate. I will outline what the committee has agreed on.
We all accept that the past decade has been tough for public services, including local government. Clearly, local government financing has been impacted by the overall amount of money that is available in the Scottish public finances, which, in turn, is impacted by the state of the UK public finances. It has been said elsewhere that the era of austerity in the UK public finances is coming to an end. Let us hope so. Does that mean that next year’s financial settlement signals the beginning of the end of a period of what the committee, in our pre-budget letter, called “doing more with less”? “Yes,” says the Scottish Government. “No,” says COSLA.
For guidance, I turned to the Scottish Parliament information centre briefing paper on the settlement, which states—on the same page—that the local government budget will both increase by 2 per cent and decrease by 3.4 per cent in real terms. I hope that that clears the matter up for everyone.
The convener is right in saying that there are different ways of interpreting those figures, but he is also aware that, in its evidence to the committee, COSLA described not only the reduction in the non-ring-fenced part of the local government budget but new national protections and new national priorities. It stated that this combined
“perfect storm ... will have a fundamental impact on the ability of local authorities to invest in people, places and inclusive growth”.
Can the convener tell us whether his committee has heard from any local councils that do not share that deep concern about the impact that there will be on their local services if the budget is passed in its current form?
We heard from a number of witnesses who accepted the fact that local government has the ability to access money that would protect its budget, including through raising council tax and other methods of raising finance. Although they may have been complaining that the budget that comes directly from the cabinet secretary is not to their liking, they accepted that, if they took all the opportunities that are available to raise finance, there would be no drop in their budget.
Will the member take an intervention?
This is all getting very interesting.
Will the convener remind members whether the resources spokesperson for COSLA described the priorities that Patrick Harvie mentions as “excellent priorities” that COSLA and local government support?
The cabinet secretary is spot on. COSLA said that it did not want to go down the route of the mess that local authorities in England are in through funding under the Westminster Government.
Will the member take an intervention?
Yes, I am happy to do so.
Hold on a minute. We are getting close to time, so please make it quick, Mr Doris.
Does the convener recognise—as I did when I was the convener of the committee—that COSLA will always try to make the financial position of councils seem as bleak as possible while the Scottish Government will try to make it seem as positive as possible and that there is a balance to be struck, which we need in this debate?
I appreciate that COSLA is there to represent its local authority members and will, therefore, make the best case it possibly can for the local authorities.
I am surprised by the number of interventions—I thought that this was going to be one of my quieter speeches.
It is going to become that. Could you wind up, please?
I will try my hardest to do so, Presiding Officer.
Let me be clear: this is no criticism of the SPICe paper, which merely reflects the underlying confusion around local government financing. The paper carefully explains that whether we see a rise or a cut depends on how we classify new non-discretionary spending that is given to councils for specified purposes. In a letter that was published yesterday, the committee called on the Scottish Government to set out its own interpretation of which elements of local government spending are discretionary and which are ring fenced, and to work with the local government sector to find a common language on the issue.
I am under no illusion that we can eliminate partisan disagreement about local government spending, and I am not sure that we should even try. However, when politicians get stuck in semantic arguments about accounting points—about whether a cut is actually a rise or whether a rise is actually a cut—the public reaction is to switch off and go and watch “Coronation Street”. For that reason alone, it would benefit us all to have a bit more clarity about the meaning of protected and discretionary spending in the future and more reassurance that, even when they cannot agree, central and local government are speaking the same language. We look forward to the Government’s response on that issue.
In concluding, I thank all my clerks and other support staff for all their help both to the committee and to me as the convener.16:29
I thank the clerks of my committee for all the work that they do throughout the year. It is very much appreciated by me and all our members.
The Public Audit and Post-legislative Scrutiny Committee’s role is to examine whether public funds are spent wisely and to hold to account those who are charged with spending taxpayers’ money. Our committee undertakes that work primarily through its scrutiny of reports that are prepared by the Auditor General for Scotland.
As a result, traditionally the committee has had little direct involvement in the budget scrutiny process; we focus instead on how and whether spending decisions are good and wise and whether policy is delivered. However, the shift in the Parliament’s new budget process to an outcomes-based approach suggests that, in future, there may be a unique role for our committee in supporting the subject committees in their budget scrutiny. That is why I am speaking today.
The budget process review group noted:
“An outcomes-based scrutiny approach provides a means for evaluating the economic and social outcomes being achieved by public spending. This involves bringing financial and performance information together, so that the impact of spending decisions can be better understood.”
In its audit scrutiny, the committee has regularly emphasised that there should be a clear link between what public money is being spent on and the outcomes that it delivers.
Today, I will highlight three aspects: inputs and outcomes; better data; and the need for an explicit link between public spending and the national performance framework. Despite the long-standing commitment to an outcomes-based approach, the audit reports that we receive suggest that the performance of many public services is still measured in terms of inputs rather than outcomes. For example, the Auditor General’s 2018 report on “Early learning and childcare” indicated that
“The Scottish Government did not set out what specific outcomes the expansion to 600 hours of funded ELC was intended to achieve.”
That leads me to the matter of better data. The new budget process emphasises the need for better performance reporting to provide a clearer focus on the delivery of outcomes. That includes better information about the activity that public spending will support, its aims, and the contribution that it expects to make to national outcomes. However, a number of reports from the Auditor General suggest that data that demonstrates improved outcomes or progress towards longer-term reforms is often completely absent or underdeveloped. In the “Early learning and childcare” report, the Auditor General concluded that the Scottish Government
“did not plan how to evaluate the impact”
of the 600 hours expansion, while the “Self-directed support: 2017 progress report” stated:
“Data should have been developed earlier in the life of the strategy, in order to measure the progress and impact of the strategy and the legislation.”
Finally, the explicit link between the national performance framework and the Government’s individual policies and strategies, its detailed spending proposals and the agreed national outcomes is not always evident.
Let me give another example. Audit Scotland noted that the national performance framework
“measures progress towards economic targets and outcomes but it does not measure the contribution of policies and initiatives to delivering these outcomes.”
In her recent report “The 2017-18 audit of the Scottish Government Consolidated Accounts”, the Auditor General noted that
“as with previous years, the accounts do not report on the performance of individual portfolios or the Scottish Government as a whole, limiting the reader’s ability to see the Government’s own contribution to national outcomes.”
That needs to be addressed if we are to have confidence in the system.
The budget process review group report indicated that the Parliament’s committees
“are able to draw on a basket of evidence”
“the intended impact of policies and public spending and the effect these are having.”
The group noted that that will be a key part of how the Parliament’s committees
“evaluate public spending and how they seek to influence the formulation of future spending proposals.”
The group concluded that there was scope for committees to make better use of audit reports as part of that basket of evidence to support their evaluation of public spending.
While individual subject committees will continue to have a key interest in how well specific policies and programmes are delivered, the Public Audit and Post-legislative Scrutiny Committee is well placed to offer an overarching perspective on how effective the Government is, overall, in delivering improved outcomes for the people of Scotland. I am keen for the committee to explore with the subject committees how such support might be delivered and what form it might take following the completion of the first year of the new process.16:35
I welcome the opportunity to take part in the debate on behalf of the Scottish Commission for Public Audit, and I thank the clerks for their work in preparing our report of 21 January.
The commission was established under the Public Finance and Accountability (Scotland) Act 2000. Its membership consists of five MSPs, including me as chair, and one of its main areas of responsibility is to
“examine Audit Scotland’s proposals for the use of resources and expenditure and report on them to the Parliament”.
Audit Scotland is an independent body that carries out audits on public entities to ensure best value and efficiency. Its work covers more than 220 organisations, which spend about £40 billion of public money annually. In previous years, the commission has reported on its scrutiny of Audit Scotland’s annual budget proposal to the Finance and Constitution Committee, but following the report of the budget process review group in June 2017, the commission now reports directly to the Parliament. As Audit Scotland’s budget forms part of the total Scottish budget, the commission’s report, which was published last Monday, supports the Parliament’s wider scrutiny of the budget for 2019-20.
Audit Scotland’s budget is drawn from two main sources. The first source, which makes up around 75 per cent of its total budget, consists of the fees that it charges audited bodies for their annual audit work. The second source of Audit Scotland’s budget consists of the moneys that are approved by the Parliament from the Scottish consolidated fund. This year, Audit Scotland is seeking £7.564 million from the Scottish consolidated fund, which is an increase of £416,000 on last year’s total resource requirement of £7.148 million.
Through its budget proposal of December 2018, Audit Scotland seeks, broadly, to fund activities that the organisation carries out, such as performance audits and implementation of the national fraud initiative and the new financial powers that are in the process of being devolved to Scotland. Audit Scotland notes that the budget proposal has been prepared in the context of a number of significant uncertainties, such as the impact of the UK autumn budget statement on Scottish budgets, the Scottish Government’s public sector pay policy and the impact of the UK leaving the EU. The UK is moving rapidly towards its exit from the EU on 29 March, and Brexit carries with it unknown risks and implications, especially for the public sector. As such, it is likely that the amount of work that will have to be done for the current fiscal year will increase as the UK exit strategy becomes clearer. As a result, Audit Scotland might have to hire more employees.
The budget proposal also contains a request to double the management contingency from £150,000 to £300,000. At the commission’s meeting on 12 December 2018, the Auditor General for Scotland said that that
“is a direct response to the uncertainty that we are now facing ... Given the extent of the uncertainty that we are now facing with regard to not just the work that we might need to carry out ... but what the impact might be on our costs in future, we propose to increase the contingency to £300,000.”—[Official Report, Scottish Commission for Public Audit, 12 December 2018; c 9.]
As members will see from our report, Audit Scotland has a three-year phased approach to resourcing the audit needs associated with the new financial powers. We looked at that approach for the first time last year, and we have done so again this year. This year’s budget proposal highlights the additional work requirements that will arise from the financial and performance work that will need to be undertaken on Social Security Scotland. The budget proposal states:
“Social Security Scotland began operating as an executive agency on 1 September 2018 and will be responsible for delivering ten devolved benefits totalling around £3.3 billion of spending annually.”
Audit Scotland is the appointed auditor for the agency and its payments and, as such, has a new team to lead on all financial and performance audit work on social security. The commission recognises that the devolution of further financial powers will result in an increased workload for Audit Scotland and considers that its proposed increase of £285,000 to fund people costs is appropriate to meet the requirements of the phased transfer of the new financial powers to Scotland.
Additionally, part of VAT receipts will be assigned to the Scottish budget from April this year. Audit Scotland will work closely with the National Audit Office to ensure a managed VAT assignment to the Scottish Parliament.
Audit Scotland will also work closely with the National Audit Office on the Scottish income tax, which will provide increased assurance to the Scottish Parliament on HMRC’s administration of different tax bands and rates for Scottish taxpayers.
We note in our report that there are some signs that performance in audit quality has fallen. Audit Scotland’s budget provides £250,000 to address that, with Audit Scotland confirming that it is increasing its learning and development work to tackle the concerns raised during its audit quality annual report. The commission will, in future, look to see how effective that budget is in improving audit quality.
The Scottish budget is linked to economic performance. As such, Audit Scotland will need to build capacity to oversee the reporting of fiscal management and financial sustainability, which will help the Parliament to maintain scrutiny.
Last year, and again this year, the commission looked at Audit Scotland’s fee strategy. In this year’s budget proposal, while the costs of auditing NHS and education bodies remained broadly the same as in 2018-19, the cost of the audit of local authorities has increased by 4.2 per cent, or £483,000. Audit Scotland has explained that that is because local government meets all the costs of its audit work, and the increased costs seen this year have arisen from the increased number of local government bodies being audited. Furthermore, the integration joint boards have increased in size as they have begun to take on their full responsibilities.
Having considered and reported on Audit Scotland’s budget proposal, the commission has agreed to recommend to Parliament that Audit Scotland’s budget proposal for 2019-20, including the request for a total resource requirement of £7.564 million, be approved.
That concludes the conveners’ contributions and we move to the winding-up speeches. It is disappointing to note that some conveners are absent from the chamber.16:42
I thank the committee conveners, not only for their contribution to the debate but for their budget scrutiny and the way in which they have led their committees over the past few weeks and months.
The debate is part of the implementation of the recommendations of the budget process review group. The revised budget approach is structured around the framework of a full-year approach, which some conveners touched on. It was recommended that there should be a broader process, in which committees would have the flexibility to incorporate budget scrutiny in a continuous cycle rather than just as a one-off. Critically—Jenny Marra touched on this—it was recommended that the process be outcome focused. Scrutiny should be evaluative, with an emphasis on what budgets have achieved and aim to achieve over the long term. In accordance with fiscal responsibility, scrutiny should focus more on prioritisation.
Lastly, and perhaps most interestingly from the point of view of today’s debate, scrutiny should focus more on the interdependent nature of many of the policies that the budget is seeking to deliver. Although the debate has been two and a half hours of discussion of different subject areas, it has demonstrated the interdependence of committees.
I hope that conveners feel that they were able to lead on the up-front scrutiny, rather than it just being, as Edward Mountain suggested conveners felt it to be in the past, scrutiny post-publication of the draft budget.
The debate has also shown the huge breadth of budget spend and priorities in areas such as education, health, infrastructure, justice, transport and the environment. There will no doubt be ample time in debates in the next few weeks to discuss those spend priorities. Although there is a range of views on those priorities, there is nevertheless a lot of agreement on the importance of outcomes, and indeed a lot of agreement on the outcomes that we all seek. Instead of fixating on the numbers, important as they are, I think it important that we look at the way in which those numbers impact on people.
I am sure that the chamber will be delighted to hear this, but I will not be able to respond to all the points that have been raised in the debate—I will leave that to the next speaker, who is no doubt scribbling furiously. However, I know that the Government has responded—or its responses will be forthcoming—to the letters from committees.
That said, I want to touch on all the committees whose conveners have contributed to today’s debate, and to do so in the context of the outcomes that I have mentioned. Starting with education, I want to make it clear that we want young people to achieve their best in this country and to be able to access the same opportunities, no matter where they are from, where they live or what they want to achieve. The draft budget invests over £180 million in closing the poverty-related attainment gap that was mentioned earlier, including £120 million for headteachers to spend on closing that gap. As we want our young people to have those opportunities at an early age, the draft budget contains £210 million of resource and a total of £500 million for nursery buildings and nursery staff. We also recognise the specific challenges that exist and, as a result, we are making £12 million available for mental health provision.
With regard to the economy and fair work and Gordon Lindhurst’s speech, we want a healthy economy, businesses to grow and thrive, jobs to be created and people in this country to enjoy a steady and fair wage. We want jobs to be fair. Of course, economic challenges lie ahead, which is why the draft budget invests in the economy, with a new £50 million fund for town centres to drive local economic activity and to stimulate place-based improvements. One of the things that I was most delighted to see in the draft budget was a new £1 million digital start fund to ensure that those who are furthest from the digital workforce, whether they be women returning to work or those from more disadvantaged backgrounds, get the support that they need.
Moving on to culture and Joan McAlpine’s contribution, we want to celebrate our historic environment, promote our tourism industry and support cultural organisations. This is the second year in which £6.6 million of additional funding will be available to Creative Scotland to maintain support for its regular funding programme. As for the hub offices around the world that Joan McAlpine mentioned, it is hugely important now, more than ever, that we as a country and as a Government are outward looking.
On health and Lewis Macdonald’s speech, we want people to access free healthcare and free health services at the point of need, and we need to drive reform, particularly in light of the demographic challenges that Bruce Crawford touched on. That, again, shows the importance of pooling a lot of the budget scrutiny and discussing the challenges that we face across different areas. Of course, we need to invest wisely, and the budget transforms the NHS with £730 million of additional investment in health and social care. However, it is right that committees scrutinise where that money is spent. We are extending free personal care and increasing direct investment in mental health to £1.1 billion. Lewis Macdonald touched on the importance of long-term budget planning, and in that area perhaps more than anywhere else it is important that we target our investment wisely.
With regard to the environment and Gillian Martin’s speech, we need to play our role in mitigating and adapting to climate change, caring for the planet and using not just our financial but our other resources wisely. The budget includes £20 million for Zero Waste Scotland to help support the transition to a more resource-efficient circular economy as well as investment of over £145 million in energy efficiency, tackling fuel poverty and heat decarbonisation. Here perhaps more than anywhere we see the importance of preventative spend, given the economic and health benefits that come from targeting our investment wisely in the environment portfolio. There is a clear overlap of budgets in that respect.
Moving swiftly on the rural economy and Edward Mountain’s contribution, I certainly agree with him that we want people in rural areas to have the same opportunities, the same services and the same level of infrastructure as anyone else in this country has. We need to support and invest in sectors such as agriculture, forestry and seafood given that they, perhaps more than others, face the challenges of Brexit. I certainly endorse the committee’s focus on ferry transport and the importance of investing in ferries.
I will move on to social security and Bob Doris’s speech. We have transformed, and we are transforming, the landscape for social security benefits in Scotland to deliver a system that treats people with dignity, fairness and respect. The budget provides £435 million of direct assistance through our social security interventions, including more than £100 million to support people on low incomes and to continue, as we have been doing for some years, to mitigate the impact of the hugely unfair bedroom tax and UK welfare cuts.
On Margaret Mitchell’s contribution and the importance of access to justice, I agree that the law courts and policing are the foundation stones of our society, which ensure that nobody is deprived of access to justice. The budget includes £18 million to support victims of crime and tackle violence against women and girls.
Ruth Maguire eloquently touched on the way in which equalities and human rights have to be embedded in every portfolio.
I could go on, but I will stop now as I realise that time is of the essence. In a nutshell, the debate has been a very helpful one and I hope that it helps committees to drive and be at the forefront of budget scrutiny.16:51
It is my pleasure to close the debate on behalf of the Finance and Constitution Committee.
I will start where the convener of the committee, my friend Bruce Crawford, started, by thanking the clerks who serve the committee. It is clear from the debate that all committees are well served by their clerks, but none more so than the Finance and Constitution Committee, and we are very much in their debt.
As we have heard, the debate is one part—an important part—of the new process of budget scrutiny, which, among other things, was designed to bring the Parliament’s subject committees much more to its forefront. The year-round budget scrutiny process has at least three aims in mind: first, that there should be greater parliamentary influence over the Government’s budget priorities and decisions; secondly, that there should be fuller transparency with regard to the budget process; and thirdly, that there should be a sharper focus on better outputs and outcomes of spending decisions. As the convener said in his opening remarks, as much as anything else, that requires a change in our culture so that, politically, in both the Government and the Opposition, we focus not only on short-term numbers but on long-term outcomes.
It is clear from what we have heard this afternoon that the enterprise has been shared seriously by committees across the portfolio spectrum, not least with regard to health. Lewis Macdonald said that the Health and Sport Committee that he convenes has been at the vanguard of the revised budget scrutiny process, especially regarding transparency of the budgets of health boards and integration joint boards. In a striking remark, he warned us that even integration authorities, which are statutorily required to report to Parliament on their budgets in a matter that directly links them to outcomes, are poor at doing so. They do not necessarily fail to do so, but they are struggling to do so, which I think should give us all—not just the Health and Sport Committee—pause for thought.
It is clear that there has been serious engagement with the process across the Parliament, but concerns have been expressed during the debate by one or two committee conveners. Most notably, Edward Mountain warned us that we should not be naive in relation to what we can expect from the input of committees into the process.
I do not want to go through what we have heard committee by committee but, if I may, I will draw out two or three themes from a number of the contributions that caught my ear and that will require us to think a bit deeper. One of them has just been mentioned by Kate Forbes in her closing remarks on behalf of the Government: preventative spend, which is something that the Christie commission told us a long time ago we needed to do much more of in Scotland. Notwithstanding the recommendations of the Christie commission and the fact that all political parties accepted and endorsed those recommendations, we are still not very good at preventative spend in Scotland. We need to have an honest conversation about why our parliamentary politics is not very good at delivering effective preventative spend.
One reason why we are not very good at that is that it is sometimes difficult to see the results of effective preventative spend within a parliamentary cycle. I passionately believe in parliamentary democracy—I much prefer it to direct democracy, which is another form of democracy, but perhaps that is a debate for another day—but one of its flaws is that we think that we need to see results within a parliamentary cycle. That is not a plea for fewer elections or longer parliamentary cycles, but for what Bruce Crawford referred to as a change of culture, so that we—in Government and Opposition—accept that effective preventative spend is not necessarily going to yield visible or tangible results in a single parliamentary session.
Will Adam Tomkins give way?
I will just give two examples, then I will happily give way to the minister.
Gillian Martin spoke interestingly about that in the context of the environment and in what she said about health walks, active travel, air quality and stress, and the relationship between those things.
Margaret Mitchell also talked about preventative spend very effectively and gave another interesting example in the context of the work that the Justice Committee has been doing. She said that, in the Justice Committee’s scrutiny of the Management of Offenders (Scotland) Bill, its work on budgetary scrutiny is to the forefront of its thinking. There is a direct relationship between that committee’s bill scrutiny work and its thinking about the budget in a year-round way. She said that it is evident from the evidence that the committee has received that, without adequate resourcing, our management of offenders is doomed to fail. It needs to be joined up and properly resourced, otherwise there is more potential for ex-offenders to return to prison and cost much more to the public purse.
I have a question on preventative spend from a committee perspective. For it to work, it has to happen on a cross-committee basis and committees have to be willing to recognise that a budget line might need to go elsewhere. How does Adam Tomkins see that happening?
That is an interesting question. Later in my remarks, I want to talk about one or two of the challenges that have been posed in this afternoon’s speeches, one of which is exactly that. I think that, in the minister’s speech, she referred to it as interdependence.
There are a couple of interesting examples of where, to be effective, spending has to be understood to be cross-portfolio. If we have subject committees that are focused on individual portfolios, how can we ensure that the budget and spending decisions across those portfolios are effective? There were two striking examples of that in the debate. The first was in what Clare Adamson had to say about the complex and extraordinarily important relationship between child poverty and education policy. The second was in what Gillian Martin said about the importance of environmental education. Are those issues for the Social Security Committee, the Education and Skills Committee or the Environment, Climate Change and Land Reform Committee? The answer is that they are for all those committees.
As we go forward with this process, we might need more effective joined-up working between committees. That happens increasingly in the House of Commons, and we might want that in this Parliament as well. That might address the remarks that the minister just made.
The second theme to which I will briefly allude was strikingly discussed in the comments of Gordon Lindhurst from the Economy, Energy and Fair Work Committee. It was about the importance not of preventative spend but of the effectiveness of spend. He asked an interesting question to which I think that, with respect, the minister did not respond. He said that we are told that for every £1 that is spent by the enterprise agencies, between £6 and £9 is added to the value of the Scottish economy. That is a brilliant example of the effectiveness of spend, yet the enterprise agencies’ budget has been cut over the past decade of SNP Administrations. That is an example of the kind of long-term economic planning—with an emphasis on the effectiveness of spend and on outcomes, as the convener said—that we need to focus on in the future.
This afternoon, we have heard that there are a number of challenges as we go forward in the budget process. There are challenges for the future review of the fiscal framework, to which the Finance and Constitution Committee convener referred in his opening remarks, and for the Scottish Government, whoever the Scottish Government is at the material time.
Challenges for the fiscal framework include the management and allocation of volatility, uncertainty and risk. We all know that there is increased volatility, uncertainty and risk in the Scottish budget. The question is whether that risk is fairly allocated between the Scottish Government and other institutions in the United Kingdom. One aspect of that, which we heard quite a lot about this afternoon, is the relevance and importance to the budget of relative population decline on the health of Scotland’s public services and the added risk that Brexit poses to that. Those are the challenges for the fiscal framework that, from this afternoon’s debate, I think the Parliament will want to take forward.
Challenges for the Scottish Government, as underscored in the Finance and Constitution Committee’s pre-budget scrutiny report, are on-going subdued growth relative to growth in the rest of the United Kingdom and the much lower number of higher-rate and additional-rate income tax payers in Scotland than was initially forecast, which we have not heard much about this afternoon, although it has been central to the committee’s consideration of this year’s budget. Whoever is in government, those challenges will have to be taken seriously.
As I have said before in the chamber, we are entering a new period of devolution, in which our Parliament is responsible for raising much of the revenue to fund our public services. That requires us all to rise to the challenge of using the new powers wisely and to manage the inevitable risks with a pragmatic and reasonable approach.
I echo the view that Bruce Crawford set out at the beginning of the debate, which is that the biggest challenge that we face is cultural. Let us allow our politics to mature, with a clear focus on outcomes and on what we seek to achieve, rather than argue only about numbers, notwithstanding how important they can sometimes be. I support the motion in the name of the convener of the Finance and Constitution Committee.