Hansard

As the Parliament moves into its third budgeting cycle, it increasingly seems like it is summer time, therefore it is the stage 1 budget debate. I dare say that it is a key annual date. I am sure that Jamie Stone has it pencilled in his diary, as he is so enthusiastic.

One of the innovations that were introduced by the Finance Committee two years ago was increased consultation with Scotland outside Edinburgh. One of the benefits that that affords is the opportunity to see different parts of Scotland in the summer, when they look at their best.

This year, the Finance Committee took evidence from a range of organisations in Orkney. A clear message was received by the committee, and no doubt by the Minister for Finance and Public Services, about the issues that affect Orkney. In particular, we heard how transport is becoming ever more important and how the adequacy or otherwise of transport links impacts on almost every aspect of island life. It is vital that the Parliament understands clearly how issues affect communities, in particular when deciding on something as crucial as the Scottish budget. It matters how the budget is constructed and how priorities are made.

For the financial year 2003-04, the Scottish budget has continued to increase in real terms. Over the three-year period 2001-02 to 2003-04, TME has increased in real terms by 6.6 per cent, or £1.3 billion, which gives us a total budget of £22 billion. The Scottish Executive has made clear its priorities for spending—investing to provide effective public services and building an infrastructure in Scotland that is fit for the 21st century.

Significant steps are being taken by subject committees to scrutinise the budget. Advisers are assisting each committee and members of the Finance Committee have acted as reporters on the subject committees to assist them with the budget process. As has been said, increasingly large numbers of witnesses are participating in the budget process, either via the subject committees or this year, for the first time, directly with the Finance Committee. We took evidence from the Scottish Trades Union Congress, the CBI, some economic specialists and the Scottish Civic Forum.

This year, for the first time, we are beginning to move away from presentational issues towards discussing and making recommendations on budget choices. However, a number of issues remain that relate to the timing of the budget process and events that occur subsequent to the publication of the budget documents. Iain Smith raised some of those issues and spoke about how they impact on local government. The budget documents are published and a number of events then happen which, however welcome, have an impact on the information that is available to the Parliament. This year, there were consequentials from the UK budget. Yesterday, extra resources were made available as a result of this year's EYF. Later this summer, there will be the 2002 spending review. All those will affect the stage 2 budget process, as extra resources are added to the Scottish budget. That has led the Finance Committee to make recommendations on having more information about baseline figures. New financial proposals should come forward with more information about outputs.

This year, as a result of the UK budget, some 50 per cent more resources will be available to spend on health. The Scottish Parliament information centre briefing, which was ably prepared by Murray McVicar, makes it clear that that will add a further £224 million in financial year 2003-04 and £858 million in 2004-05, and that that will rise to an extra £3.2 billion in 2007-08. The Finance Committee discussed the proposals for the increased health budget in Orkney and whether health budget consequentials should go into health, but not necessarily straight into the NHS budget. The committee welcomes that approach and accepts that it is a Scottish solution to a Scottish problem and wholly consistent with the principles of devolution.

Increasingly, committees are producing more thoughtful and detailed reports on budget issues. The Health and Community Care Committee, for example, has made it clear that there are still issues to do with the transparency of the health budget and the need for the publication of health board allocations and budgets to aid that transparency. Mary Scanlon raised some of those issues this morning.

The Finance Committee has made further recommendations in respect of health that relate to delaying the implementation of the Arbuthnott formula to general medical services as a result of problems in the rolling out of the McCrone settlement. I look forward to seeing what happens.

Other committees are coming forward with different budgeting options. The Local Government Committee, for example, is concerned about the implications of national insurance increases. This morning, Alex Neil made proposals on the enterprise and lifelong learning budget and Alex Fergusson outlined clear proposals in respect of the rural development budget to support the Scottish fishing industry. Christine Grahame discussed the need for greater funding for the justice portfolio.

The Finance Committee and I welcome the minister's continued willingness to work effectively with the subject committees and the Finance Committee to discuss and understand issues and to help the Parliament to move towards outcome-based budgeting, which members have mentioned. I think that we all agree that we wish to go in that direction.

I also welcome the minister's commitment to continue to work towards equality proofing the budget. The committee is keen on the development of clearer definitions and on the development of a mechanism to ensure that the equality strategy is reflected in budgeting allocations. The committee and I look forward to the outcome of the discussions that the Executive will hold with the Equal Opportunities Committee and the results of the work of the equality proofing advisory group and others who are interested in the area, such as Engender. It is clear that instant solutions in that area, as in many other areas, are not available.

Whatever its faults, the Scottish budgeting process is at the leading edge of budgetary processes that are used by Parliaments. A lot of time and effort is going into the Scottish budget process on the part of many people within and outwith the Parliament. Increasingly, it is building a sound basis for the scrutiny of financial decisions that I am sure will grow and develop. As Jamie Stone and others have mentioned, the level of scrutiny that is possible now is several light years away from what was possible in pre-devolutionary years. As Jamie Stone said, input from ordinary people is vital. That, together with the ability of the budget to deliver for the people of Scotland, will be one of the touchstones for the success of the Scottish Parliament and I commend this year's budget report to the chamber.