Committee
Economy, Energy and Tourism Committee, 05 Dec 2007
05 Dec 2007 · S3 · Economy, Energy and Tourism Committee
Item of business
Budget Process 2008-09
I will ask strictly about the budget. You have talked about priorities in the budget, the impact of decisions and not micromanaging. You will not be surprised that my first question is about skills. The Minister for Enterprise, Energy and Tourism determines the budget for the Scottish Further and Higher Education Funding Council, and it will drop in real terms next year. I am interested in how the council will work with your new skills agency and how much funding will be available to that agency from HIE and Scottish Enterprise to progress one of your priorities.We heard evidence from Scottish Enterprise that it will keep back funding for workforce development, so what percentage of its budget will support modern apprenticeships? As you know, I am the convener of the cross-party group on construction, which is concerned about the need to increase the number of modern apprenticeships to sustain the Government's priorities on building houses and the trunk roads that the cabinet secretary mentioned.If the number of modern apprenticeships is not increased, that will be a huge inhibitor to economic growth. In real terms, how much money will move from Scottish Enterprise to the new skills agency? How does that compare with what is currently spent? Will there be any funding increases? How will the cabinet secretary be able to influence matters?Members who lodge written parliamentary questions on such matters are told that they come within Scottish Enterprise's remit, so they cannot find out what is happening to money, which is frustrating. We asked Scottish Enterprise how much of its current budget will move to the skills agency and about Government supervision over the money that will move. HIE gave us indicative figures.
In the same item of business
The Convener:
LD
Item 2 is the budget process 2008-09, at stage 2. We are pleased to be joined this morning by John Swinney, the Cabinet Secretary for Finance and Sustainable...
The Cabinet Secretary for Finance and Sustainable Growth (John Swinney):
SNP
I could give you an opening statement, but in the interests of my voice I shall save you from that.
The Convener:
LD
I will start with some factual questions on the budget, referring to the advice that we have received from our budget adviser. We have information suggesting...
John Swinney:
SNP
I do not know on what basis your—
The Convener:
LD
In real terms.
John Swinney:
SNP
They may well be; in cash terms, the figure for Scottish Enterprise is 7.2 per cent, and it is 14.3 per cent for Highlands and Islands Enterprise.
The Convener:
LD
Would you be able to tell the committee how those budgets were constructed?
John Swinney:
SNP
We examined the size and operations of the organisations as we envisage them going forward, and we considered other investments that the Government is making...
The Convener:
LD
That will be after the committee has had to take a view on the budget.
John Swinney:
SNP
It will—although I will remind you of the time circumstance that we face. The budget was announced on 14 November, four and a half weeks after the informatio...
The Convener:
LD
I accept that, but I am interested in the construction of the enterprise budgets. This is a difficult matter for the committee, as has been plain in the past...
John Swinney:
SNP
The basis was arrived at through our having made a number of judgments, some of which I have spoken about already. Some related to the expected size of the o...
The Convener:
LD
So there was not a zero-base budgeting exercise in relation to Scottish Enterprise, for example. I am still not clear about this. I understand everything tha...
John Swinney:
SNP
As I said, the budget was constructed on the basis of an assessment of the on-going priorities of the organisations. In my statement of 26 September, I set o...
The Convener:
LD
That answer is fair. Surely it is also fair to say that, following your decision of 26 September on the enterprise networks, you gave both bodies a budget an...
John Swinney:
SNP
The quantum of the budgets was determined by the Government's assessment of the role and functions that we consider appropriate for Scottish Enterprise and H...
The Convener:
LD
That is fine, but it should also be a matter of record that Sandy Cumming said last week that he did not know why his budget had been cut. That is an importa...
Gavin Brown (Lothians) (Con):
Con
The Government says that it knows what it wants Scottish Enterprise and HIE to do, and what it wants them not to do. At the moment, we have only headline fig...
John Swinney:
SNP
The Government has provided the committee with additional detail by way of a letter of 26 November, in which a table sets out the spending review and include...
Gavin Brown:
Con
Is not the solution, in that case, to assess outturn expenditure rather than simply not bother?
John Swinney:
SNP
I will certainly assess outturn expenditure. Under this Government, organisations will be subjected to the most rigorous assessment of their outturn performa...
Gavin Brown:
Con
I accept that, but we are going to be assessing that based on current funding of £295 million, net investment funding of £52 million and administration costs...
John Swinney:
SNP
Those headings will be translated into operating plan details, which will be the subject of scrutiny by the committee, based on Scottish Enterprise's reporti...
Gavin Brown:
Con
I accept that we can look at the operating plan, but I assume that that will come out after we have voted on the budget in its entirety. Is this information ...
John Swinney:
SNP
That is a realistic assessment. The operating plan is currently in development and it is unlikely that it will be available to Parliament before Parliament v...
Lewis Macdonald (Aberdeen Central) (Lab):
Lab
You described the previous budget headings for the enterprise network's expenditure as "pointless" because they were not reported on in the way that you desc...
John Swinney:
SNP
I have considered that. There will be a reporting mechanism that will be based on the operating plan of Scottish Enterprise.
Lewis Macdonald:
Lab
Did you consider a reporting mechanism that would be based on the previous budget lines, which would involve, for example, the distinction between growing bu...
John Swinney:
SNP
Those budget lines were aligned—as Lewis Macdonald will know—with the smart, successful Scotland strategy, which was the property of the previous Administrat...
Lewis Macdonald:
Lab
You have removed the previous criteria; however, I fail to see in your letter much detail about how the expenditure of the enterprise networks will address t...