Hansard

I have to say that I am pleased to be able to close the debate on the revised written agreement between the Finance Committee and the Scottish Government on the budget process.

In his opening speech, the convener set out what the revised written agreement means in terms of expectations on the Parliament and the Government. That having been explained, I will say a little bit about what it means for scrutiny of the draft budget in practice and how we can move forward our approach to financial scrutiny.

In our report on the draft budget 2014-15, the Finance Committee agreed to adopt four principles of financial scrutiny: affordability, prioritisation, value for money and budget processes. Those principles provide a framework for the budget process that recognises distinct roles for the Finance Committee and subject committees. The issues of prioritisation and value for money will be for subject committees to pursue in their scrutiny, in which they will look at the decisions that the Scottish Government makes in directing its resources, and at how effectively public services spend that money to achieve outcomes. Questions of affordability and budget processes will be for the Finance Committee to consider. It will ask whether the appropriate balance has been struck between revenue and expenditure and it will ask about integration of service planning and performance budgeting.

The written agreement already recognises an element of the budget processes principle, with the draft budget including an overall assessment of the progress that is being made towards a more preventative approach to public spending. The principle of affordability will provide us with a new challenge when scrutinising the use of the financial powers in the Scotland Act 2012, including the Government’s revenue forecasts, the commentary that will be provided on those forecasts, details of any planned borrowing, and information about calculation of the adjustment to the Scottish block grant to take account of expected revenue levels.

This year, the Finance Committee intends to use its call for evidence to focus on the revenues that might be raised by the land and buildings transaction tax, and will seek views on the impact of the rates and thresholds that the Government sets for that tax. In doing so, the committee may have regard to the likely impact on the property market and the wider economy of the level at which the taxes are set. Undertaking that scrutiny at the earliest opportunity should ensure that we start to develop the experience that will be necessary to fully scrutinise revenue decisions in future years.

When debating the committee’s report on the draft budget 2014-15, the cabinet secretary challenged the committees that were involved in budget scrutiny to tell him how the Government could improve the linkage between expenditure and performance, as measured through the national performance framework—a framework that has, it has to be said, been widely welcomed. I am confident that the scrutiny framework that we now have in place will enable committees to respond to that challenge positively and constructively.

I realise that this has not been the most confrontational or contentious of debates, but one or two interesting points have been made along the way—by Iain Gray, for example, in relation to the timetable. It must be accepted that there had to be a change of timetable this year; broadly speaking, the committee was in agreement on that. Gavin Brown gave a positive report about how the cabinet secretary had moved on his initial proposed timetable.

I say, as an accountant, to Iain Gray that we have to have some sympathy for staff. It is all very well saying that the cabinet secretary could publish the budget somewhat earlier, but that would have practical implications.

The revised written agreement marks a clear transition in the approach to financial scrutiny and the role that the committees of Parliament have in holding the Government to account for its budget decisions. I and other members of the Finance Committee are very much looking forward to scrutinising the forthcoming draft budget.