Hansard

I accept that that was part of the Enterprise and Lifelong Learning Committee's report. Obviously, my quotes are selective, but I will deal with transparency later. Alex Neil's points fall under that heading.

There was evidence that information had been either incomplete or inadequate or had not been supplied and that there was a lack of indicators in some departmental figures. That made it difficult to compare policy objectives and targets. The Finance Committee regards such evidence as a flaw in the budget process and we expect the various departments to overcome those problems for next year's annual expenditure report.

One means of doing so would be for the various departments to present information in a standardised form. We urge the Minister for Finance and Local Government to take steps to convince his cabinet colleagues of the need for that. This year's summary document—which is a welcome departure—showed evidence of such a co-ordinated approach among departments and we look forward to that being extended to the full report next year.

Given our determination to bring about improvements in the content of the annual expenditure report, the committee was naturally concerned about what we regard as a step backwards in respect of the provision of information relating to private finance initiative and public-private partnership projects. The disappearance of the table on capital spending by the private sector on such projects, which featured last year, is unhelpful. No doubt the table will be reinstated.

The concerns that we expressed in our report about the transparency of funding of such projects reflect comments that were made in the Health and Community Care Committee and the Transport and the Environment Committee reports. The Finance Committee's wider interest in that area is reflected in the fact that we have just commenced our own inquiry into PFIs and PPPs. The report that we produce will recommend means of providing budget information that will ensure transparency on the capital and servicing costs of such projects.

On the content of the annual expenditure report, the committee believes that transparency and accountability would be enhanced if in future all sources of income were clearly shown. We have asked for the inclusion of tables that show consequentials from the comprehensive spending review, the UK budgets and Barnett, plus end-year flexibility and Scottish and UK reserves. The committee sees that as a logical and sensible development of the presentation of information.

The committee welcomes the Executive's eagerness to move to outcome-based budgeting. The ability to quantify the effectiveness of spending needs to progress from the short-term, and often misleading, measure of outputs to a longer-term evaluation. Simply to announce, for example, the recruitment of 1,000 more teachers is a limited barometer of success; indeed, it may not be much of a success at all and proper evaluation of the efficacy of such an increase in numbers may need to be delayed for several years, perhaps until evidence of, for example, an increase in the number of pupils remaining at school after 16 or achieving a college or university place filters through the system. Outputs are not sufficient—we are looking for outcomes and we welcome the Executive's support on that.

Such is the committee's belief in outcomes as a form of measurement that we have commissioned external research to examine methods by which that can be achieved most effectively. We accept that that is a medium-term goal, but we nevertheless expect to see incremental improvements year on year, which is why we ask the Executive to publish plans on how it intends to achieve those improvements.

In the debate on last year's stage 1 report, the Finance Committee urged the Executive to carry out

"a gender audit across spending programmes to assess their overall impact on women and to identify desired outcomes so that we know what the Scottish Executive or individual departments want to achieve".—[Official Report, 28 June 2000; Vol 7, c 785-86.]

A year later, we are no further forward in having that aim met.

As part of this year's process, the Equal Opportunities Committee report—which was, I think, the most voluminous of all the committee reports—was most critical of the Executive's performance. In evidence, that committee had heard witnesses who saw no evidence of a gender impact analysis whatever. Another opined:

"a commitment to gender awareness—never mind gender equality—is so visibly lacking in the budget document."—[Official Report, Equal Opportunities Committee, 1 May 2001; c 1209.]

In addition, the Social Justice Committee lamented the fact that no obligation was placed on all departments to mainstream equalities in their work. It is a fact that there are few signs of an equality strategy being applied to the budget process. That is an area in which we believe firmly that an improvement must begin to be exhibited next time round.

When the Deputy Minister for Finance and Local Government, Peter Peacock, gave evidence to the Finance Committee this month, he was frank in his admission of the difficulty in determining the impact on men and women of expenditure programmes. We do not suggest that he exaggerated the case, but it should be noted that such difficulties have been overcome in other countries—most notably in Canada and New Zealand. Therefore, we hold to the not unreasonable expectation that progress on that important aspect of the budget process should be capable of being recorded by next year. In doing that, we are encouraged by the establishment of the equality proofing advisory group and by the Deputy Minister for Finance and Local Government's commitment to us on the development of equality performance indicators by the end of this year.

However, the approach should be two-pronged. That is why we also recommend that the Equal Opportunities Committee liaise directly with the relevant departments on how its proposals can be progressed. Only if realistic targets are set for next year's annual expenditure report will it be possible for us to record movement in a year's time.

The final aspect I will highlight concerns the linked issues of end-year flexibility and the Scottish and UK reserves. Despite questioning the Minister for Finance and Local Government, his deputy and finance division officials on the reserves on several occasions, it is fair to say that an air of mystique continues to surround them. We would like to receive definitive answers to the following questions. Why should end-year flexibility money be held in the UK consolidated fund rather than in the Scottish one? What precisely is the role of Treasury officials in determining the amount of end-year flexibility money that reverts automatically to Scottish Executive departments and how does the mechanism for accessing the UK reserve operate? Given the importance of such issues, a "don't ask, don't tell" philosophy is inappropriate. Post devolution, transparency is required and the committee intends to ensure that it is achieved.

The budget process has been refined this year and its refinement will doubtless continue. There have been several important developments. The Finance Committee welcomes the fact that four committees used, for the first time, specialist advisers to assist them in formulating their response. However, despite that, no committee felt able to recommend a redirection in the spending proposals. That may well develop in future years; it is to be hoped that it does, because it was clearly envisaged by the financial issues advisory group in its seminal report, which recommended the novel three-stage budget process in which we are now involved. Time is also a factor. That was shown in today's debate on the Protection from Abuse (Scotland) Bill, which is the first bill to begin its course in a committee. It is a matter of evolution; the processes will develop.

The committees are becoming more attuned to the need to schedule the budget process into their work programme. We in the Finance Committee welcome the support of the Procedures Committee in urging the Parliamentary Bureau to take into account the requirements of standing orders in relation to the committees' role in the budget process.

This year, for the first time, each member of the Finance Committee was attached to one of the subject committees, to act as a reporter on stage 1 consideration of the annual expenditure report. That seems to have been valuable to the Finance Committee and to members of subject committees.

The Finance Committee is determined that the budget process should be as accessible and as meaningful as possible to as broad a cross-section of the people in our country as possible. That is why we have insisted in our report that the information provided in the annual expenditure report and the summary document should be supplemented by a leaflet that can be made more widely available. We took the committee to Aberdeen in November 2000 and to Perth earlier this month, as part of our policy of meeting outwith Edinburgh at stages 1 and 2 each year and, if at all possible, taking evidence from the minister at such meetings to provide the occasion with added gravitas. We intend to engage with individuals and organisations from localities the length and breadth of Scotland and to make the budget process a little more understandable. That may not be the most exciting journey undertaken by the Scottish Parliament's committees, but it is certainly one of the most important.

I move,

That the Parliament notes the 10th Report, 2001 of the Finance Committee, Stage 1 of the 2002/03 Budget Process (SP Paper 364) and commends the recommendations to the Scottish Executive.