Chamber
Plenary, 13 Dec 2000
13 Dec 2000 · S1 · Plenary
Item of business
Budget Process 2001-02: Stage 2
I am hardly likely to start off by saying, "Yes, let's go independent", am I? It is a shame that Alex Neil did not speak to his colleague Mr Quinan, who came with me to a conference at the University of Aberdeen recently, at which people from Galicia described the huge internal tensions and problems that are arising because of the different forms of devolution in Spain. What we must do—and this is what the debate is about—is ensure that the budget process in this Parliament does the job that it is supposed to do on behalf of the Scottish people. We must then go on to look at what we could do within that, before we worry about rocking the boat in the United Kingdom.
However, the plain facts are—I am sorry if this is a gloomy note—that the Scottish Parliament budget process this year has failed and the spending plans of the Executive have not been scrutinised properly by the Parliament's committees on behalf of the Scottish people. That is not because of a lack of planning by the financial issues advisory group, nor is it because of a lack of effort from the Finance Committee. It is because, under the agreed timetable, the necessary information was not available, either on time or in a form that made sense. There were many reasons for the chaos this year and they are stated clearly in the Finance Committee's report.
Some weeks ago, I said in the Finance Committee that the budget process for this year should be abandoned, thoroughly reviewed, and a new timetable for the presentation of budget information established, so that the subject committees of the Parliament could carry out their scrutinising role and produce adequate alternative proposals on time. To achieve that goal, the chamber must call on the Executive today, on the back of the report, to bring to the Finance Committee as early as possible a range of proposals that will allow for the openness and transparency with which ministers have declared their agreement.
Jack McConnell put great store in that last year. I pay credit to Angus MacKay who, when he came to the Finance Committee meeting in Aberdeen, gave the impression that that would also be his approach. We look forward to the fruits of that. However, the work cannot be done unless the Executive delivers the proposals within an agreed framework and time scale. Mike Watson clarified that point early on behalf of the committee. The issue for the future will be how we will resolve that problem.
I do not doubt that that will place a huge burden on the Executive and its staff, but in this new era of three-year budgets, much of the work will have been done early in the process and large parts of the funding will have been identified.
The doctor recommends an apple a day, but the Executive seems to have interpreted that to mean that there should be an announcement a day. The Executive must resist the temptation to litter the week with spending announcements. Under the current system, it is impossible for the subject committees to keep track of those announcements. It is hard to be sure where the money has come from; whether it is from an underspend, a new pot of gold or some other source.
As I said, the problem is not only the Westminster spending review, but the additional in-year announcements and the streams of announcements that we hear through the press, especially at weekends. If the Executive wants the process to work properly, it has a responsibility to move away from spin and the recycling of information. It must do away with the confusion that seems to be prevalent throughout the money-handling process. We need honesty and leadership if we are to salvage the process, and a firm commitment from the minister—which I hope he will give us today—that, in future, the subject committees will receive the information that they need when they need it and in the detail and form that they require.
All the committees' reports that are included in the Finance Committee's report are clear indictments of the situation. The matter is not about party politics; it is about the image of the Scottish Parliament and its ability to manage Scotland's finances openly and honestly. Today's debate is about democratic scrutiny and accountability; it is not about the scoring of cheap points. We are two years into the Parliament and it is time that we got a handle on the budget process. Mike Watson has told the Executive that the committee has offered to participate in anything that will move the process forward.
The move to resource accounting and end-year flexibility, which Mike Watson mentioned, means that every committee will carry a heavier load. Not only are projected spends by departments to be scrutinised, but actual spending is to be trailed. Underspends are to be accounted for, new announcements checked for their funding sources and the cross-cutting budgets that were mentioned are to be properly reviewed.
Mr Raffan mentioned the minister's cross-cutting work on drugs. However, do we know how much was spent on drugs issues and where that money came from? Did it come from agencies outwith Government, from the private sector, from the voluntary sector or from charity? Those are the issues that the people in Scotland want to be addressed.
It is not good enough for ministers to tell committees that they will have the information that they need so late in the process that there can be no chance that they will influence ministers' proposals. I believe that the Rural Affairs Committee was told that it might get some numbers in February—that will be a little bit late. To do that is almost to make a mockery of the Parliament. If the ruling parties are into modern democracy—as they insist they are—we must hear some serious proposals from the minister and his colleagues early in the new year.
It is impossible to undo the damage that the process has done to Parliament's credibility, but there is a lot that we can do together. Last year, when he was Minister for Finance, Jack McConnell said that there was to be no reserve, although there was one. This year, Angus MacKay has told us that there is a reserve. At the end of his performance this afternoon, will he tell the chamber what the rules of access to the reserve are? What does it exist there to do? Will access to that reserve mean a reduction in access to the UK reserve? Will it have any impact on the Barnett settlement? What will stop the Treasury clawing it back? Most important, why did not the minister come to the chamber to make a statement to explain the rules when the reserve was set up? Will the minister publish monthly statements on the reserve, detailing where the money came from and will he make announcements of any draw-downs as they happen? Have any programme underspends this year been placed there already? If the money is sitting in a reserve wasting away, under the RAB rules, will a charge be placed in the accounts for the opportunity costs of failing to spend the money on public services—on our health service, for example? How will the minister explain to those who are ill why they are waiting for treatment because of a shortage of medical staff that results from under-investment in the service while money sits in the reserve? Is the reserve to be used to accumulate wealth that can be spent in the year before the election? I hope not. The minister has an opportunity to explain to us today exactly what he intends to do.
The budget process is supposed to be a partnership between the Executive and Parliament. The Scottish Parliament is up to its side of that partnership—what we need is for the Executive to come out to play with us.
On a more positive note, I welcome the new Minister for Finance and Local Government's apparent willingness to be more open and co-operative with all the Parliament's committees. I hope that he and his officials, when they examine the proposals in the Finance Committee's report in detail, will return with some positive input—although that may leave us only the bare bones—as soon as possible.
A major problem of the budget process is that a standardised form of accounting and reporting is not yet in place in the Executive's departments. There must be a huge effort on the part of the Executive to ensure not only that departments issue the information on time, but that that information feeds into the centre in a uniform manner.
Other members have mentioned such issues as the use of real-terms figures. One issue that has not been fully played out is that of measurable outcomes. There are not enough statements about what outcomes are expected and there is not enough scrutiny of the desired outcomes. There is not yet enough work being done in Parliament on how to measure outcomes, in terms not only of perceived public service, but of delivery on the ground.
One of the objectives of the budget process is to explain to everybody in Scotland exactly what is proposed. One means of doing that is to produce a proactive, web-based spreadsheet of the budget, which has regular updates on spending flows and which highlights unspent balances. One of the reporter groups, chaired by Elaine Thomson, has done a lot of work on that. I hope that we can finish that work in due course, but we would like to hear the minister's response to that idea. The budget spreadsheet could then contain hyperlinks and descriptive comment on the various aspects that might be assessed as appropriate to the interests of any sector. If such a spreadsheet was produced to allow such features, we could have—as I regularly request of the minister—quarterly management statements of the Executive's spending plans. I acknowledge that, at the Aberdeen meeting of the Finance Committee on 20 November, the minister offered to try, as a start, to get six-monthly statements out. I welcome that very much—it is a tremendous step forward.
It is essential not to try to do everything with hindsight. I had assumed that Parliament was going to set its sights high, particularly on accountability and proactive exchange between the chamber and the Executive. That challenge has still not been fully met, but I look forward to its improved delivery during the coming year.
In a previous Finance Committee debate on the budget process on 28 June, I stated that the Finance Committee report that was being debated then was a
"well-constructed report, which not only demonstrates the inadequacies of the system introduced by the Executive, but clearly sets out the Executive's failure to play its part in what is supposed to be a transparent process."—[Official Report, 28 June 2000; Vol 7, c 794.]
That comment is almost valid six months on, but I look forward very much to hearing the minister's reply to the detailed questions that I have posed to him this afternoon.
However, the plain facts are—I am sorry if this is a gloomy note—that the Scottish Parliament budget process this year has failed and the spending plans of the Executive have not been scrutinised properly by the Parliament's committees on behalf of the Scottish people. That is not because of a lack of planning by the financial issues advisory group, nor is it because of a lack of effort from the Finance Committee. It is because, under the agreed timetable, the necessary information was not available, either on time or in a form that made sense. There were many reasons for the chaos this year and they are stated clearly in the Finance Committee's report.
Some weeks ago, I said in the Finance Committee that the budget process for this year should be abandoned, thoroughly reviewed, and a new timetable for the presentation of budget information established, so that the subject committees of the Parliament could carry out their scrutinising role and produce adequate alternative proposals on time. To achieve that goal, the chamber must call on the Executive today, on the back of the report, to bring to the Finance Committee as early as possible a range of proposals that will allow for the openness and transparency with which ministers have declared their agreement.
Jack McConnell put great store in that last year. I pay credit to Angus MacKay who, when he came to the Finance Committee meeting in Aberdeen, gave the impression that that would also be his approach. We look forward to the fruits of that. However, the work cannot be done unless the Executive delivers the proposals within an agreed framework and time scale. Mike Watson clarified that point early on behalf of the committee. The issue for the future will be how we will resolve that problem.
I do not doubt that that will place a huge burden on the Executive and its staff, but in this new era of three-year budgets, much of the work will have been done early in the process and large parts of the funding will have been identified.
The doctor recommends an apple a day, but the Executive seems to have interpreted that to mean that there should be an announcement a day. The Executive must resist the temptation to litter the week with spending announcements. Under the current system, it is impossible for the subject committees to keep track of those announcements. It is hard to be sure where the money has come from; whether it is from an underspend, a new pot of gold or some other source.
As I said, the problem is not only the Westminster spending review, but the additional in-year announcements and the streams of announcements that we hear through the press, especially at weekends. If the Executive wants the process to work properly, it has a responsibility to move away from spin and the recycling of information. It must do away with the confusion that seems to be prevalent throughout the money-handling process. We need honesty and leadership if we are to salvage the process, and a firm commitment from the minister—which I hope he will give us today—that, in future, the subject committees will receive the information that they need when they need it and in the detail and form that they require.
All the committees' reports that are included in the Finance Committee's report are clear indictments of the situation. The matter is not about party politics; it is about the image of the Scottish Parliament and its ability to manage Scotland's finances openly and honestly. Today's debate is about democratic scrutiny and accountability; it is not about the scoring of cheap points. We are two years into the Parliament and it is time that we got a handle on the budget process. Mike Watson has told the Executive that the committee has offered to participate in anything that will move the process forward.
The move to resource accounting and end-year flexibility, which Mike Watson mentioned, means that every committee will carry a heavier load. Not only are projected spends by departments to be scrutinised, but actual spending is to be trailed. Underspends are to be accounted for, new announcements checked for their funding sources and the cross-cutting budgets that were mentioned are to be properly reviewed.
Mr Raffan mentioned the minister's cross-cutting work on drugs. However, do we know how much was spent on drugs issues and where that money came from? Did it come from agencies outwith Government, from the private sector, from the voluntary sector or from charity? Those are the issues that the people in Scotland want to be addressed.
It is not good enough for ministers to tell committees that they will have the information that they need so late in the process that there can be no chance that they will influence ministers' proposals. I believe that the Rural Affairs Committee was told that it might get some numbers in February—that will be a little bit late. To do that is almost to make a mockery of the Parliament. If the ruling parties are into modern democracy—as they insist they are—we must hear some serious proposals from the minister and his colleagues early in the new year.
It is impossible to undo the damage that the process has done to Parliament's credibility, but there is a lot that we can do together. Last year, when he was Minister for Finance, Jack McConnell said that there was to be no reserve, although there was one. This year, Angus MacKay has told us that there is a reserve. At the end of his performance this afternoon, will he tell the chamber what the rules of access to the reserve are? What does it exist there to do? Will access to that reserve mean a reduction in access to the UK reserve? Will it have any impact on the Barnett settlement? What will stop the Treasury clawing it back? Most important, why did not the minister come to the chamber to make a statement to explain the rules when the reserve was set up? Will the minister publish monthly statements on the reserve, detailing where the money came from and will he make announcements of any draw-downs as they happen? Have any programme underspends this year been placed there already? If the money is sitting in a reserve wasting away, under the RAB rules, will a charge be placed in the accounts for the opportunity costs of failing to spend the money on public services—on our health service, for example? How will the minister explain to those who are ill why they are waiting for treatment because of a shortage of medical staff that results from under-investment in the service while money sits in the reserve? Is the reserve to be used to accumulate wealth that can be spent in the year before the election? I hope not. The minister has an opportunity to explain to us today exactly what he intends to do.
The budget process is supposed to be a partnership between the Executive and Parliament. The Scottish Parliament is up to its side of that partnership—what we need is for the Executive to come out to play with us.
On a more positive note, I welcome the new Minister for Finance and Local Government's apparent willingness to be more open and co-operative with all the Parliament's committees. I hope that he and his officials, when they examine the proposals in the Finance Committee's report in detail, will return with some positive input—although that may leave us only the bare bones—as soon as possible.
A major problem of the budget process is that a standardised form of accounting and reporting is not yet in place in the Executive's departments. There must be a huge effort on the part of the Executive to ensure not only that departments issue the information on time, but that that information feeds into the centre in a uniform manner.
Other members have mentioned such issues as the use of real-terms figures. One issue that has not been fully played out is that of measurable outcomes. There are not enough statements about what outcomes are expected and there is not enough scrutiny of the desired outcomes. There is not yet enough work being done in Parliament on how to measure outcomes, in terms not only of perceived public service, but of delivery on the ground.
One of the objectives of the budget process is to explain to everybody in Scotland exactly what is proposed. One means of doing that is to produce a proactive, web-based spreadsheet of the budget, which has regular updates on spending flows and which highlights unspent balances. One of the reporter groups, chaired by Elaine Thomson, has done a lot of work on that. I hope that we can finish that work in due course, but we would like to hear the minister's response to that idea. The budget spreadsheet could then contain hyperlinks and descriptive comment on the various aspects that might be assessed as appropriate to the interests of any sector. If such a spreadsheet was produced to allow such features, we could have—as I regularly request of the minister—quarterly management statements of the Executive's spending plans. I acknowledge that, at the Aberdeen meeting of the Finance Committee on 20 November, the minister offered to try, as a start, to get six-monthly statements out. I welcome that very much—it is a tremendous step forward.
It is essential not to try to do everything with hindsight. I had assumed that Parliament was going to set its sights high, particularly on accountability and proactive exchange between the chamber and the Executive. That challenge has still not been fully met, but I look forward to its improved delivery during the coming year.
In a previous Finance Committee debate on the budget process on 28 June, I stated that the Finance Committee report that was being debated then was a
"well-constructed report, which not only demonstrates the inadequacies of the system introduced by the Executive, but clearly sets out the Executive's failure to play its part in what is supposed to be a transparent process."—[Official Report, 28 June 2000; Vol 7, c 794.]
That comment is almost valid six months on, but I look forward very much to hearing the minister's reply to the detailed questions that I have posed to him this afternoon.
In the same item of business
The Presiding Officer (Sir David Steel):
NPA
This afternoon's debate is on motion S1M-1449, in the name of Mike Watson, on behalf of the Finance Committee, on the budget process.
Mike Watson (Glasgow Cathcart) (Lab):
Lab
I welcome the opportunity to open this debate on the Finance Committee stage 2 report on the 2001-02 budget process. I cower slightly in the face of the info...
The Presiding Officer:
NPA
It seems to me that there are excitements elsewhere—you may have some latitude on time today.
Mike Watson:
Lab
Thank you.This may not be startlingly original—indeed, I made similar comments when I introduced the stage 1 debate in the chamber on 28 June—but we are, in ...
Mr Keith Raffan (Mid Scotland and Fife) (LD):
LD
I am grateful to Mike Watson for giving way and agree with nearly everything that he has said. Although he says that this is not a typical year, we will have...
Mike Watson:
Lab
I accept that point; I will come on to address it. We must find a means of ensuring that the difficulties that emerged this year do not recur. Of course we a...
Andrew Wilson (Central Scotland) (SNP):
SNP
I agree with Mike Watson's analysis and endorse what he said. How is it possible for the minister to argue that we must identify the true cost of capital if ...
Mike Watson:
Lab
I very much agree with what Andrew Wilson has said, which reflects the view of the committee. There was no division or difference of opinion on that matter a...
The Presiding Officer:
NPA
Considering the number of members present and the requests to speak that are shown on my screen, we can allow back benchers six minutes in this debate rather...
Andrew Wilson (Central Scotland) (SNP):
SNP
I thank the Finance Committee convener for a captivating 20 minutes. He should not do himself down. It was a very interesting report and a very interesting s...
Alex Neil (Central Scotland) (SNP):
SNP
Will the member give way?
Andrew Wilson:
SNP
Of course. I would be over the moon. Laughter.
Alex Neil:
SNP
Does the member agree with me, as I am sure he will—Laughter. We have even got time for a laugh this afternoon. Does the member agree that the financial powe...
Andrew Wilson:
SNP
I thank Alex Neil for his intervention. As always, I absolutely agree with everything that he says. It is right to point out that—as I am sure the Liberal De...
Mr Mike Rumbles (West Aberdeenshire and Kincardine) (LD):
LD
Will the member give way?
Andrew Wilson:
SNP
Again, I am over the moon at giving way.
Mr Rumbles:
LD
I hope that the member will agree that this Parliament has the power to raise and reduce tax. However, he must recognise the political reality that the major...
Andrew Wilson:
SNP
Of course I accept that point. We took a policy of progressive taxation to the electorate and our vote went up; the Liberal Democrats took their policies to ...
Mr David Davidson (North-East Scotland) (Con):
Con
Mr Wilson's time is running out. I thought that we were here to discuss the budget process. Is he going to address that?
Andrew Wilson:
SNP
Mike Watson covered the bases adequately in respect of the report, and I have made my support for what he said clear. It would be remiss of members not to be...
Mr Raffan:
LD
Hear, hear.
Andrew Wilson:
SNP
I am sure that Keith Raffan agrees and I am delighted to see him back in firm health and joining the debate.We have a wealth of potential in Scotland. We are...
Mr David Davidson (North-East Scotland) (Con):
Con
On behalf of the Conservative party, I welcome the report. It is a thorough document and much work has gone into it, particularly by the clerks, for which we...
Andrew Wilson:
SNP
Why do the Conservatives not want the opportunity to cut tax and improve public services in Scotland, given that they do not have the powers to do so at the ...
Mr Davidson:
Con
That is because we have bought into devolution and, as far as we are concerned, as long as the Government manages well in Westminster—we look forward to doin...
Alex Neil:
SNP
Does not the member realise that where there is devolution in other parts of Europe, for example in Spain, the provincial governments have far greater fiscal...
Mr Davidson:
Con
I am hardly likely to start off by saying, "Yes, let's go independent", am I? It is a shame that Alex Neil did not speak to his colleague Mr Quinan, who came...
Mr Keith Raffan (Mid Scotland and Fife) (LD):
LD
Before I make my main remarks, I must come to the rescue of my good friend Mr Andrew Wilson, in the face of Mr Davidson's cruel and unfair intervention on hi...
Alex Neil:
SNP
Is it the case that the Oregon legislature is responsible for the revenue as well as the expenditure side of its budget?
Mr Raffan:
LD
No, not all of it. In any case, that was not my point. My point is about presentation—if we can get away from independence and the SNP's single-issue diet th...