Finance and Public Administration Committee – The NEN

Scottish Budget faces difficult choices in challenging circumstances, says Finance Committee

The Scottish Government’s budget for 2024/25 has been set amidst a context of persistently high inflation, low growth and high interest rates amidst deep cuts to capital funding.

In its budget report published on Wednesday, Holyrood’s Finance and Public Administration Committee looks at the choices the Scottish Government has made, including on taxation.

Finance and Public Administration Committee Convener Kenneth Gibson said: “Significant pressure on Scotland’s public finances have presented difficult tax and spending decisions in the budget. Everybody recognises that.

“The Scottish Government priorities are based on delivering its three ‘missions’ of equality, opportunity and community. However, there was a great divergence in views from witnesses on what those priorities should be, with the focus understandably in areas where budgets will be reduced rather than increased.

“The committee is unclear how spending has been prioritised towards a fair, green and growing economy.

“Regarding taxation, there is uncertainty about the behavioural impact on taxpayers earning more than £75,000 per year and when there will be a fundamental review of the council tax.

“The Scottish Government needs to deliver long-term financial planning. At present it gives the impression that it’s procrastinating on important decision-making that would help the sustainability of Scotland’s public finances, albeit in the medium and longer-term.

“The Committee is also disappointed at continuing cuts to the capital budget by the UK Government which restricts the Scottish Government’s ability to invest in capital projects, achieving net zero and growing the economy.”

On public service reform Mr Gibson added: “The Scottish Government’s public service reform programme is critical to the sustainability of the Budget and ensuring effective delivery of public services.

“While the government has set out principles and objectives for its reform programme there are few other signs of progress. This is disappointing given the urgent need for reform.

“We need to see the government develop and deliver its reform programme at a quicker pace in the months and years to come.”

The report also says that the Scottish Government must explain why it has delayed:

the public sector pay policy 2024-25
an updated infrastructure project pipeline and
a financial strategy for public service reform.

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Holyrood Committee announces inquiry into Scotland’s Commissioners

DOES SCOTLAND NEED YET MORE COMMISSIONERS?

A new parliamentary inquiry examining Scotland’s Commissioner ‘landscape’ has been announced.

Holyrood’s Finance and Public Administration Committee will investigate whether a more “coherent and strategic approach” is needed for the creation of any further commissioners.

Scotland currently has seven commissioners directly responsible to Parliament. An eighth – the Patients Safety Commissioner – was agreed by Parliament in September 2023.

A further six commissioners have been proposed, or are being considered, that could potentially bring the total number to 14 by the end of this five-year session of Parliament.

Finance and Public Administration Committee Convener Kenneth Gibson said: “Seven commissioners cost £16.6m, according to budget figures for 2023/24. Each office comes with its own staff and its own running costs.

“The smallest cost £0.3m and the largest £6.7m. More are being proposed, or considered, by both the government and by backbench MSPs.

“Our committee believes this inquiry is both timely and necessary.

“The Scottish Government has already stated there is very little published research on commissioners in Scotland – or the UK – and little evaluation exploring their pros and cons, powers or ways of working.

“Our committee will therefore investigate whether a more coherent and strategic approach is needed for the creation of such commissioners in Scotland.”

The committee will launch a call for views in January. Oral evidence will be taken in March / April. The committee’s report is expected to be published in May / June 2024.

Holyrood Committee ‘concerns’ over Circular Economy Bill

The Scottish Government’s Circular Economy Bill has been criticised for a lack of financial transparency and accurate costings, in a report out today.

The Finance and Public Administration Committee (FPAC) doubts that the Bill complies with the Parliament’s rules on setting out “best estimates” of costs likely to arise.

FPAC Convener Kenneth Gibson MSP said: “Scrutiny of this Bill reinforces our concern that affordability does not appear to be a key factor in Scottish Government decision-making.

“The Minister, Lorna Slater MSP, has committed to consult on the cost of secondary legislation, but that should not replace an assessment of affordability at the point of a Bill’s introduction.

“Our committee is not convinced that this Bill’s financial memorandum meets the requirements set out in Parliament’s Standing Orders to provide: “best estimates of the costs, savings, and changes to revenues to which the provisions of the Bill would give rise”.

Mr Gibson continued: “We’ve seen an increasing use of ‘framework’ bills that provide government with future enabling powers. These do not, however, provide best estimates of all likely costs, and undermine parliamentary scrutiny.

“It also risks the Parliament passing legislation which may in the end – once outcomes are fully understood – lead to significant cost increases.

“The increased use of framework bills with no clear implementation costs, poses a long-term risk to the Scottish Budget, both now and for successive governments.

“The FPAC is disappointed that Scottish Ministers have still to meet our previous recommendations or expectations around the level of financial data, clarity and transparency required.

“In the end, it will be for Parliament to decide when voting on the general principles of this framework bill, whether the outcomes it seeks to deliver outweigh any financial or affordability considerations.”

On income from fly-tipping and litter fines, the report said:

The assumption in this financial memorandum (FM) of a 100% payment rate for fixed penalty notices is entirely unrealistic. Therefore, given that the level of income from fines assumed in the FM is not attainable, it should not be used to ‘off set’ some of the costs of enforcement, such as in relation to fly tipping. We consider this approach to identifying potential savings to be unsatisfactory.

Updates every six months:

We request that the updates, committed to by the Minister in her letter of 20 November be provided to the Committee every six months. These updates should include updated information on the expenditure incurred to date, any changes in forecast costs and any savings arising from the Bill and the subsequent Act (subject to the Bill being passed) and relevant secondary legislation, until all provisions are operational.

Holyrood’s Finance Committee calls for long-term planning to ensure fiscal sustainability

The Scottish Parliament’s Finance and Public Administration Committee is not convinced the Scottish Government is carrying out enough long-term financial planning to ensure Scotland’s fiscal sustainability.

On the Scottish Government’s public service reform programme, the committee says it has no overall strategic purpose with limited oversight and direction from government.

Finance and Public Administration Committee Convener Kenneth Gibson MSP said: “As the Scottish Budget approaches, we’ve seen little evidence to suggest a shift away from the Scottish Government’s short-term approach towards financial planning; an approach hampered by reliance on one year UK financial settlements.

“We therefore strongly recommend that the Scottish Government produces a full response to the Scottish Fiscal Commission’s sustainability report, setting out the actions it will take to address the longer-term challenges ahead.

“We are also concerned that the UK Government’s decision not to inflation proof capital funding available to Scottish Ministers will mean a 16% reduction in 2028-29 compared to this financial year, at a time when governments need to invest in infrastructure to stimulate economic growth.

“The creation of a Scottish Government advisory group on taxation is welcome. Given the financial challenges ahead, it is imperative that their work to create a clear taxation strategy for Scotland proceeds at pace.”

On the government’s public service reform programme, Mr Gibson said: “We are concerned that the focus of the government’s reform programme has changed multiple times since May 2022, as have the timescales for publishing further detail on what it will entail.

“Given the financial challenges facing the Scottish Budget, this represents a missed opportunity to be further along the path to delivering more effective and sustainable public services.

“The recommendations in our report aim to bring much-needed impetus, focus and direction to the Scottish Government’s reform programme.”

Read the full report:

Pre-Budget 2024-25 Report on the Sustainability of Scotland’s Finances

Holyrood’s Finance Committee to hear from North Coast people about Scotland’s Budget challenges

MSPs from the Scottish Parliament’s Finance and Public Administration Committee will visit Largs next week (Wednesday 30 August) to hear from local people about Scotland’s Budget challenges.

The visit is part of a parliamentary inquiry into the sustainability of Scotland’s finances.

It follows the Scottish Government’s forecast that public spending in Scotland is set to outstrip income expected by £1 billion in 2024/25, rising to £1.9 billion in 2027-28.

This means the government is forecasting that it will not have sufficient money to fund the spending it currently wishes to make.

The politicians are meeting with local people, organisations and businesses to hear their views on what the Scottish Government’s priorities should be in its 2024-25 budget.

Their views will help inform the committee’s scrutiny of the government’s budget in the autumn.

Finance and Public Administration Committee Convener Kenneth Gibson MSP said: “The focus of our work this year is how the budget for 2024-25 and beyond will ensure Scotland’s finances are sustainable in both the short and longer-term.

“It is an incredibly important subject matter given the forecast budget pressures and longer-term demographic challenges in Scotland.

“Coming to Largs and talking to North Coast people – including businesses, third sector bodies and residents – will enable us to hear different views of the impact of the Scottish Government’s tax and spending decisions.

“And that matters because the budget and the long-term sustainability of Scotland’s finances will affect everyone in the country.

“I am delighted that we will also meet the following day in Seamill to discuss our committee’s work programme for the forthcoming parliamentary year.”

Participants will be asked to give views on:

what should the Scottish Government’s priorities be for its budget in 2024-25, given the challenges that Scotland faces next year, and in the years ahead?

Finance Committee launches inquiry into Scottish Government’s public service reform programme

A new parliamentary inquiry into the Scottish Government’s public service reform programme has been announced.

Holyrood’s Finance and Public Administration Committee wants to examine the detail of the reform programme, which is focused on digitalisation, innovation, estates, public body landscape and procurement.

As part of this work, the committee will examine how public bodies are working to achieve the government’s plans to make efficiencies, while ensuring effective delivery of public services, in 2023-24 and beyond.

It will also consider the government’s ambitions to:

keep the public service pay bill costs at 2022-23 levels and
return the public sector workforce “broadly to pre-Covid-19 levels”.

Finance and Public Administration Committee Convener, Kenneth Gibson MSP said: “The Scottish Government’s Resource Spending Review published in May 2022 set out its high-level spending plans up until 2026-27 to deliver on its ambitions.

“Further information on the government’s plans for reform and workforce levels were expected in the Scottish Budget 2023-24 but did not materialise due to ongoing economic turbulence.

“Our committee therefore wants to look at how public bodies are working to put in place the government’s ambitions for reform.“We also want to establish from where in the public sector reductions in headcount to pre-pandemic levels will be made, and to what timescales.

“Clarity and transparency around these issues are crucial, during what is an uncertain time for the public sector.”

A call for views from public sector bodies, academics, think tanks and other interested parties has been launched today, with a closing date of 1 May 2023.

To inform this inquiry, the committee is seeking written views from Scottish public bodies on their plans for public service reform in their sectors, and others with a view on how the reform programme is working in practice and how it is delivering effective and efficient services.

The committee is particularly keen to hear from:

all types and sizes of public sector bodies from across the public sector
others affected by the Scottish Government’s public service reform programme, and
think-tanks, academics and commentators on progress with, and outcomes from, the reform programme.

Submit your views

Sustained progress needed on Scotland’s National Performance Framework ambitions, says Holyrood’s Finance Committee

In a report published yesterday, the committee sets out a suite of recommendations aimed at ensuring the NPF is a “much more explicit” part of policy making.

This begins, says the committee, with the Scottish Government making clear how it will use the NPF in setting national policy, and in collaborating with local government and wider Scottish society.

The report also says Scottish Government funding decisions need to be aligned with NPF outcomes, and that greater scrutiny and accountability is required.

Finance and Public Administration Committee Convener Kenneth Gibson said: “The NPF remains an important vision of the type of place Scotland should aspire to be, but there needs to be more sustained progress towards achieving that vision.

“While there is no single solution, of key importance is positioning the NPF as the start of a ‘golden thread’ from which all other frameworks, strategies and plans flow, through to delivery on the ground.

“We recommend that the government explicitly set out how its policies will contribute to the delivery of specific NPF outcomes, their intended impact on NPF outcomes, and approaches to monitoring and evaluation.

“Similarly, government funding decisions should also be aligned with National Outcomes. From the wide range of organisations we heard from the NPF is not currently seen to drive financial decisions, nor is it a mechanism by which organisations are held to account for spending effectively.”

The report also makes recommendations for strengthening and refocussing scrutiny – including by parliamentary committees – over how organisations have regard to the NPF.

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Cost of living crisis: Holyrood’s Finance Committee launches inquiry

How will the rising cost of living affect the Scottish Budget in 2023-24? Will the Scottish Government’s proposals for reforming the public service deliver the efficiencies expected?

These and other key questions are the focus of the Finance and Public Administration Committee’s inquiry that begins today.

The committee is seeking views from organisations and the public to inform its pre-budget scrutiny work, prior to the Scottish Government publishing its 2023/24 budget later this year.

Committee Convener Kenneth Gibson MSP said: “The next Scottish Budget will be challenging as the current cost-of-living crisis impacts on Scotland.

The Committee is therefore keen to hear from organisations and individuals how the Scottish Government’s Budget in 2023-24 should respond to this crisis.

“We also want to hear views on how the government’s proposed reform of the public service will support its future spending plans.”

Mr Gibson concluded: “Using the government’s resource spending review announced in May, we will focus our pre-budget scrutiny on the proposals for reforming the public service, the impact of the cost of living crisis on the Scottish Budget, and how spending priorities might affect the delivery of national outcomes.”