Meeting of the Parliament 10 March 2016
The Scottish Fiscal Commission Bill will ensure that there is an independent fiscal institution operating at the heart of Scotland’s devolved fiscal framework. The bill safeguards the Scottish Fiscal Commission’s independence, transparency and accountability to Parliament and the public, and I commend it to Parliament.
The Finance Committee devoted many hours to scrutiny of the Government’s proposals for the Fiscal Commission prior to and during the legislative process. I am grateful to the convener and members of the committee for the thoughtful consideration that they have given to the issues and the challenge that they have brought to bear. That challenge has helped us to test and refine our proposals so that we can all be satisfied that the bill delivers the strongest possible arrangements to safeguard the forecasts that support the Scottish budget.
I would also like to put on record my thanks to the individuals and organisations that took time to respond to the Government’s consultation on our legislative proposals last year and to the various calls for evidence on the topic that the Finance Committee has issued since 2013. Those contributions have provided fresh perspectives, which have guided and helped us to shape our policy.
Parliament is aware that, in order to secure a fair deal for Scotland on the block grant adjustment that ensured that there was no detriment to Scotland’s budget, I agreed to compromise on the production of forecasts in the fiscal framework agreement. I have previously expressed significant reservations about the proposed forecasting model, but I am confident that the arrangements in the bill will ensure that the commission is equipped to produce robust forecasts to underpin the Scottish budget, and that Parliament can appropriately hold the commission to account for its work.
The amendments that Parliament has agreed to mean that the commission will prepare five-year forecasts of receipts from the fully devolved taxes, from non-domestic rates and from the Scottish rate of income tax, and that those forecasts will be prepared in time to meet the needs of the Scottish budget process.
The commission will be required to publish an explanation of the methodology and assumptions that it applied in preparing its forecasts so that those can be scrutinised by Parliament, academic commentators and others. Furthermore, our amendments will ensure that the commission’s forecasts are the official forecasts that support the Scottish budget. The commission’s core statutory function is to prepare forecasts and assessments that inform the Scottish budget.
I have gone further than the equivalent obligations on the United Kingdom Government by providing in statute that the Scottish ministers must make a statement to Parliament if they depart from the commission’s forecasts in preparing the Scottish budget. That will ensure that Parliament can properly hold ministers to account for choosing such a course of action. I anticipate that the Scottish ministers would not take such a decision lightly and that alternative forecasts would be used in a Scottish budget only in truly exceptional circumstances.