S2M-807 Budget (Scotland) Bill: Stage 1

Scottish Parliament

Thursday 29 January 2004

[THE PRESIDING OFFICER opened the meeting at 09:30]

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Budget (Scotland) Bill: Stage 1

The Deputy Presiding Officer (Murray Tosh): The next item of business is a debate on motion S2M-807, in the name of Mr Andy Kerr, on the general principles of the Budget (Scotland) Bill.

15:12

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15:47

Stewart Stevenson (Banff and Buchan) (SNP): The minister opened the debate by saying that we needed a transparent and rigorous review of the budget. That is hardly a statement that anyone in the chamber would have any serious difficulty with. I want to cover a number of technical issues that can, however, get in the way of achieving such a review. Before I do so, I acknowledge that, over the years, we have seen improvements in the presentation of the data that are important to this process; we have also seen improvements in the scope of the data. However, there is more to be done. In essence, we are the management board of the company and we are reviewing the performance of the officers who have been given charge of the operation. I ask Fergus Ewing not to take away my copy of FRS 17 just yet; I shall need it.

Let me start with income and expenditure. The minister said something quite interesting. I think that he said that he had put in £1 billion to cover pensions liability, but that it was not a cash £1 billion. Of course, that is perfectly proper because we have not yet had to pay any money in respect of that particular liability. The minister placed the liability in the context of income and expenditure. However, were we talking about a company, I would have expected, as does FRS 17, that it would have come after

"Accruals and deferred income but before ... Capital and reserves".

In other words, it is part of the assets and liabilities of the enterprise that is the Scottish Executive, rather than part of income and expenditure. Of course, that figure will move from assets and liabilities to income and expenditure at the point when the liability for future payment of pensions—which has previously been underestimated—translates into our actually paying the pensions. In the Executive—as in many commercial companies—that provision has been underfunded. The minister has therefore immediately opened up a difficulty.

Jeremy Purvis referred to the deficit in the Scottish economy but, of course, he is talking only about identifiable public expenditure—

Jeremy Purvis rose—

Stewart Stevenson: No. Wait.

Jeremy Purvis is talking only about identifiable public expenditure; he is not talking about the other 50 per cent of public expenditure that is non-identifiable. In that connection, I direct him to a Westminster parliamentary answer of 31 March 1997 from the previous Conservative Administration. The answer showed that from 1979 to 1997, Scotland paid £30 billion more into the Westminster coffers than it received. That was a clarification of an answer that had been given some seven weeks earlier, which had suggested a figure of £27 billion. Those are substantial sums of money and they more properly reflect the balance between identifiable public expenditure and non-identifiable public expenditure.

Murdo Fraser (Mid Scotland and Fife) (Con): Will the member take an intervention?

Stewart Stevenson: If Jeremy Purvis has not forgotten why he stood up, I will take his intervention.

Jeremy Purvis: I was highlighting the deficit in the SNP's ability to provide an alternative, rather than the proposed surplus that we would have. Has the member seen the Policy Institute document "Paying our Way", by Professor Ross Harper and Iain Stewart, which is described as

"A definitive guide to the debate on 'fiscal autonomy'"?

That document says quite definitively that, even including all the aspects that Stewart Stevenson mentions and 90 per cent of oil revenues, there would still be a Scottish deficit of £1.1 billion.

Stewart Stevenson: We always welcome contributions to the debate from apolitical sources such as Ross Harper, but if Scotland is doing so badly, that is hardly a ringing endorsement of the present arrangements.

There are other technical issues that we must deal with and I will return to specific points about expenditure. In answering my intervention, the minister was unable to tell us the interest rate that we are paying on average. One of the reasons for his inability to do so is that we do not have a statement of assets and liabilities against which to assess whether the interest rate is sensible, what its nature is and how it breaks down. Furthermore, without assets and liabilities, we have no way of knowing our future private finance initiative liabilities and no way of assessing whether the depreciation that moves from assets and liabilities into the current account is a sensible provision in relation to the nature of the assets and liabilities that there may be.

We have plenty of targets—in the draft budget, there are 147. What is missing—from parliamentary answers, I know it to be missing—is any understanding of whether ministers are getting adequate support from civil servants in taking responsibility for delivering on those 147 targets. Privately, some people suggest that they are not. Sure, the minister can leave office if we fail to meet a target, but the reality is that that will just mean another minister will come in and fail, if the civil service does not change its culture to take on board accountability for the targets. Also, initiatives and projects that transcend both the budget lines and the yearly budgets are not described in a way that helps us to understand them. The minister should consider that point for the future.

I will end by pinpointing one target and commending the Executive. It is rare to miss a target even before we have reached the financial year to which it applies. Target 7 for health and community care states:

"No patient should wait longer than 26 weeks for a new outpatient appointment by the end of 2005."

Nonetheless, the Executive has already failed to reach that target. I have an appointment as an outpatient at Woolmanhill hospital for 14 August 2007—that is more than six months after the end of 2005. I say to the minister that he has problems.

15:54