Meeting of the Parliament 07 October 2015
That should be the case. One of the things that came through strongly in the evidence that we took was that the Treasury is sometimes quite byzantine in the way that it works, in terms of both transparency and the formulas that it uses. I am sure that colleagues will explore that matter further as we proceed.
Last week, the Scottish Government introduced a bill to put the Scottish Fiscal Commission on a statutory footing. The policy memorandum to the bill states:
“enactment of these legislative proposals will play a vital role in delivering the Smith Commission’s recommendation that ‘the Scottish Parliament should seek to expand and strengthen the independent scrutiny of Scotland’s public finances’.”
Colleagues will be aware that the Finance Committee has already carried out a considerable amount of work on the proposals for a fiscal commission in Scotland and we will be the lead committee in scrutinising the bill at stage 1. We agreed our approach to the stage 1 inquiry this morning, we will publish our call for evidence on Friday and we hope to publish our report before the Christmas recess.
The committee published its report on proposals for a fiscal commission in January 2014. Our main recommendation was that the commission should adhere to Organisation for Economic Co-operation and Development principles and in particular the principles of independence, non-partisanship and transparency. As part of our inquiry on the fiscal framework we focused on an enhanced role for the commission post-Smith. Witnesses identified two main roles for the commission.
First, there was a general consensus that the commission should produce its own forecasts. The committee recommended that the Scottish Fiscal Commission Bill should be amended accordingly. The Scottish Government responded that it is not persuaded that the commission should prepare the official forecasts. That still leaves open the question of whether it should be able to conduct its own forecasts. The committee will consider that issue further as part of its stage 1 inquiry.
Secondly, there was strong support for the commission having a wider role in monitoring the adherence of the Scottish Government to its fiscal rules and the sustainability of the public finances. The committee recommended that the draft bill should be amended to include those roles. The Deputy First Minister responded that it may be desirable for the commission to have a future role in assessing the Government’s performance against fiscal rules. The committee will also consider the issue further as part of its stage 1 inquiry.
The committee also considered in detail the transparency of the Barnett formula and the need for improved intergovernmental relations on fiscal rules. That will be covered in detail by the deputy convener, John Mason, in his closing speech.
I finish by again emphasising the significance of the fiscal framework to the new devolution arrangements. It is, therefore, essential that this Parliament is given an opportunity to scrutinise a draft framework prior to any agreement between the two Governments.
I move,
That the Parliament notes the 12th Report, 2015 (Session 4) of the Finance Committee, Scotland’s Fiscal Framework (SP Paper 771), including its recommendations to the Scottish Government.
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