Good morning to you, convener, and the committee. With the presence of Anas Sarwar, Fulton MacGregor and Gillian Martin, I feel almost like a Finance and Constitution Committee veteran in comparison.
Happy new year to you all. When I appeared before the committee just over a year ago, I advised that the SPCB was continuing to take a prudent approach to financial planning that was consistent with our medium-term financial plan. After a step change in investment to address Brexit earlier in the session, that plan was intended to manage other pressures and uncertainties within our normal budget limits until the end of the current session.
As the committee will appreciate, just a few short months following that appearance, we faced the worldwide pandemic. As a result, it has been a year of unprecedented change for the Parliament, and the SPCB has had to undertake regular and significant reprioritisation decisions to ensure that the Parliament could continue to fulfil its vital constitutional role safely and sustainably.
We near the end of the current financial year within our budget. However, that has had an impact on staffing, revenue and project budgets, and the on-going pandemic has been a key consideration in how we have framed and shaped the budget submission. The SPCB has also sought in the submission to address other uncertainties and pressures, which I will deal with briefly—they include Brexit scrutiny support, which has been a concern for the committee, as well as the review of the staff cost provision, election planning and office-holders’ costs.
The proposed budget for 2021-22, excluding capital charges and non-cash items, represents a net 16.9 per cent increase on the current financial year’s budget. That is 8.4 per cent higher than the indicative budget for 2021-22 that was presented to the committee just over a year ago. The increase is attributable primarily to the review of the staff cost provision and Electoral Commission costs.
Turning first to our planning assumptions in relation to the pandemic’s impact on our operations, the current temporary way of running the Parliament is more expensive, and it is unlikely to be a linear process back to normality. That said, the SPCB has already made certain investments, such as in technologies to support business and working from home and physical changes to meet public health requirements, which are not recurring in 2021-22. Our expectation is that we will gradually return to a fully functioning Parliament, and we have built the budget assuming a normal election year and that we will reprioritise budgets as necessary throughout the year to address the demands of the pandemic. We have retained our usual contingency provision to cover that and other unforeseen circumstances.
As identified by the Parliament in a plenary debate on 8 December, there remains a great deal of uncertainty around the impact of Brexit on the Parliament’s scrutiny function. There will undoubtedly be impacts arising from areas such as the common frameworks, the United Kingdom Internal Market Act 2020 and keeping pace powers. We will continue to have the additional staff resources that the SPCB put in place three years ago to advise and support members. We will continue to invest in the Scottish Parliament Information Centre academic engagement programme and committee advisers to extend the specialist support and expertise available to members. The SPCB constantly reprioritises within its resources to meet the changing demands of the Parliament across the year, and it has additional flexibility within the contingency to meet new operational pressures. That is financially prudent and offers flexibility to respond to emerging legislative and scrutiny demands while we plan for a longer term investment.
We are also proposing changes to the overall expenses scheme and, in particular, to the level of staff cost provision, having reviewed that provision and evidenced the increasing demands for members, primarily in representing constituents. The SPCB proposes to address those pressures by increasing the level of staff cost provision in session 6 from £93,900 to £133,200 per member. It is up to each member, as an employer, to determine how they use their provision to staff their office within the overall cap. Other alterations that we propose to the expenses scheme for session 6 are cost neutral. The proposed SCP changes result in the budget bid being £5.8 million higher, based on its application from the start of session 6. That figure includes an uplift of 2.7 per cent, in line with the approach to the annual uprating of that provision, agreed by the SPCB in March 2020. Following the budgetary process, the review recommendations will be subject to approval by Parliament in the coming weeks.
The financial year 2021-22 is also the point in our parliamentary cycle when we must address the planning and resourcing requirements arising from the Scottish parliamentary elections. As indicated to the committee in December 2019, we have set aside an additional £3 million in contingency, to cover the one-off costs associated with the 2021 election, including resettlement grants, winding up costs and staff redundancy payments, in line with the equivalent provision made at the start of session 5.
As the committee knows, office-holder resourcing is an on-going SPCB responsibility. It is also a constantly evolving landscape, as the Parliament continues to add additional responsibilities and/or create new office-holders. The office-holders’ draft 2021-22 budget submissions total £14.8 million, which is £3.8 million or 34.7 per cent higher than the current year. As indicated to the committee last year, the SPCB will be responsible for funding the Electoral Commission, for its devolved activities in Scotland, from 2021 as a result of the Scottish Elections (Reform) Act 2020. I can confirm that the costs for 2021-22 are now known, at £2.6 million, which covers work relating to the forthcoming Scottish parliamentary elections and preparatory work for the local government elections in 2022. The bid also reflects additional funding requirements for the Scottish Public Services Ombudsman, as a result of becoming the independent national whistleblowing officer for the national health service. Excluding those additional elements, the budget increased by £378,000, or 3.4 per cent, over the 2020-21 budget. The increased figure of £378,000 also includes the impact of the full rent for Bridgeside house, which accommodates three of the office-holders, becoming payable.
Finally, I can confirm that SPCB’s budget bid, as advised to members, reflects a 0 per cent uplift for MSPs’ and ministerial salaries, reflecting political leadership from the Parliament as the country faces exceptional economic circumstances arising from the on-going pandemic.
I apologise for the slightly longer than usual introductory remarks, but there was quite a lot that I felt I needed to go through. My colleagues and I would be more than happy to answer any questions from the committee.