Public Resources

– in the Scottish Parliament at 10:33 am on 27th September 2001.

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Photo of Patricia Ferguson Patricia Ferguson Labour 10:33 am, 27th September 2001

The next item of business is an SNP debate on motion S1M-2249, in the name of Alasdair Morgan, on Government stewardship of the public's resources. Members who wish to speak in the debate should press their request-to-speak buttons.

Photo of Alasdair Morgan Alasdair Morgan Scottish National Party 10:44 am, 27th September 2001

The motion simply invites the Parliament to take note of the press release that was issued last week on behalf of the Executive by the Minister for Finance and Local Government to announce the end-year flexibility—or, for normal mortals, underspend—in last year's budget. The reason why I lodged the motion and why it is important for Parliament to debate it is that, otherwise, Parliament—apart perhaps from some of its committees—will have no chance to discuss why last year's budget has been underspent by £718 million or what financial management steps the minister intends to take as a result of the underspend.

It is perhaps indicative of the way in which the Executive chooses to conduct its business that it is only in Opposition time that the Parliament has the opportunity to discuss this important matter. The minister would prefer simply to issue his press release, presenting the underspend and underachievement as a good-news story; he would prefer Parliament not to have its say. That cannot be right. The budget is the property of Parliament. It is the result of the budget process, in which all committees are involved, and of the subsequent Budget Bill. Deviations in the budget should be debated here. The SNP is happy to use its time to rectify that omission.

The debate contrasts significantly with the statement on the Executive's finances that the minister made to Parliament on 28 June, just before the beginning of the summer recess. Then, he was eager to announce to the chamber that, as a result of a "realignment" of the budget, he was able to put £289 million into different programmes. Clearly, £289 million is considered worthy of a statement in Parliament, because the minister thinks that it will generate positive publicity for the Executive, but £718 million does not merit any explanation to the chamber if there is a danger of negative coverage.

It is worth considering what the minister said in his June statement on readjustment. He said:

"we can both deliver a balanced budget and meet the ambitious policy objectives of the Scottish Executive."

Later, he said that he looked ahead

"to better management of Scottish public spending, with new focus, flexibility and effectiveness."—[Official Report, 28 June 2001; c 2096.]

Applying those yardsticks to the contents of the minister's press release on 19 September, we come to the conclusion that, for the past financial year, the Executive did not meet its self-proclaimed "ambitious policy objectives", nor was its management of public spending—if we use the minister's own criteria—focused or effective.

The budget for the past financial year, as far as departmental expenditure limits are concerned, which constitute the budget to which end-year flexibility applies, was £14,705 million. Therefore, the underspend that the minister announced amounts to about 5 per cent of budgeted expenditure. Not only is that a very substantial figure—which, if it had occurred in a local authority, would have caused the Executive to ask some hard questions—it is some 2 per cent higher than the figure for the previous year. The increase is even greater if we compare it with the first year of the current Labour Government in Scotland.

I can accept—because I am a very generous person—[MEMBERS: "You are."] It is a major failing of mine.

I can accept that, in the first year of the new devolved Administration in Scotland, the Executive might have had the beginnings of an argument to explain why it had some difficulty in making the financial outturn match the initial budget with a greater degree of accuracy. However, we have to remember that we are talking about budgets that Labour has been in charge of since 1997.

Photo of Alasdair Morgan Alasdair Morgan Scottish National Party

However, we need a considered explanation from the minister on why the situation has become significantly worse, rather than better, in the fourth year.

Does Mr Fitzpatrick wish to intervene? No? It seems that Labour members would prefer to snipe from a sedentary position.

In his evidence to the Finance Committee on 8 June, the Deputy Minister for Finance and Local Government said that he and his boss would take a hard look at end-year flexibility and that they were

"working on better management of budgets, to ensure that over time we squeeze down the amounts of EYF."—[Official Report, Finance Committee, 8 June 2001; c 1336.]

We need to hear an explanation from the minister of the measures that he is putting in place to ensure that in future years the outturn more closely approximates to the original plans. We need to hear what targets he is setting for end-year flexibility to be squeezed down to. Clearly, even the minister agrees that the current figure is unacceptable—so what would he like it to be?

The minister's press release of 19 September said:

"we nevertheless could improve our financial planning and management."

As one might expect of the minister, the press release is a model of modesty and understatement. The minister also said:

"I have therefore put in place new procedures to monitor the Executive's spending at regular intervals and to spot where there are possible delays or lags in funding."

Given that the introduction of such procedures is clearly not before time, why were they not put in place last year? I repeat my plea that we should have an explanation—if not just now, at least in a document later—of precisely what the procedures are. Will those procedures strengthen the pre-approval scrutiny that is given to projects to ensure that they have a realistic prospect of being undertaken within the planned time scale and will the relevant committees of the Parliament be involved in that process?

The minister should also tell us why we are not being alerted to underspends earlier, rather than five and a half months after the end of the financial year. Why was no mechanism available to warn the minister during the financial year that such an underspend was likely and when did he find out its size, which is clearly of some embarrassment to him? How long has it taken him to relay the information to Parliament and what indications of the size of the underspend had he received at the time of his June statement to Parliament? Finally—in this series of questions, at least—can the minister tell us whether all departments were equally efficient at revealing the extent of their potential end-year flexibility? Did some report it later than others? If so, can he tell us who the ministers are who need to, as the Daily Record so helpfully advised them last week, "GET A GRIP!"?

Although we are disappointed at the overall level of underspend across the Government's entire budget, the position becomes far more worrying when we consider how that total underspend has been made up, which departments contribute to it and by how much. My colleagues will concentrate on the detail of the underspend and will highlight some of the opportunities that have been lost and—more important—the needs that have gone unsatisfied while the underspend has been built up. In education, the underspend was 31 per cent; in social justice, it was 18 per cent. Of interest to me and my constituency is the environment and rural affairs department's underspend, which amounted to £67 million—about 6 per cent of that department's budget.

Along with many other members who represent rural areas, in the months since the outbreak in Scotland of foot-and-mouth disease on 1 March, I have spent much time arguing with the Government about the level of support for all industries in rural areas, especially in the south-west. Many of my constituents thought that the size of the recovery packages that were offered was in no way proportionate to the degree of devastation that had been caused. Their reaction would have been much more critical had they known the size of the underspend in the department that was meant to be helping them at that time. They simply would not have understood it.

Photo of Hugh Henry Hugh Henry Labour

Alasdair Morgan has listed his concerns about underspends and alleges that the Executive failed to react. If SNP members have been so concerned, can he explain why the SNP has never lodged any amendments to the budget over the past two and a half years?

Photo of Alasdair Morgan Alasdair Morgan Scottish National Party

This is not about the budget; it is about the way in which the budget is implemented. The Executive clearly cannot implement its own budget; there would be a fat chance of its implementing a budget that had been amended by us.

My constituents would not have accepted the constraints that were being put on the assistance that was given to them in their time of need. They will also wonder why Dumfries and Galloway Council is being forced to consider a public-private partnership in education, which will involve the closure of more than 40 schools because the council believes that it cannot otherwise deal with the backlog of school building repairs, although the underspend in the central education budget is £86 million.

I have referred to the urgent necessity to put in place better procedures to discover at an earlier stage when underspends are going to occur. I shall now say why some of the underspend is occurring and why no number of reporting procedures will cure it. Underspending is endemic in the new Labour project because that project depends much more on spin than on delivery—underspends are an inevitable consequence of that fact. Ministers are eager to rush to the press with announcements of programmes to come. Heaven knows that the same programmes have been announced time after time in recycled statements about recycled cash.

It is clear from the evidence that we have in front of us that announcements of expenditure programmes are often made before ministers have any idea whether the Executive is able to put into practice the projects that are the subject of those press releases. That is why the outturn does not match the budget. The budget is, in part, a wish list that has been cobbled together from ministers' press releases, driven by the need to spread yet another good-news story. The reality on the ground is that new Labour often cannot deliver on its programmes, not because there is not enough cash—there clearly is—but simply because they have not been thought through and the mechanisms do not exist to deliver them.

Photo of Cathie Craigie Cathie Craigie Labour

Alasdair Morgan says that the budget is a wish list. He also said, in response to a previous intervention from a back-bench Labour member, that the Executive could not manage its own budget, let alone the SNP's. If the budget is a wish list, why do we never see the SNP's wishes on paper, so that we could cost them?

Photo of Alasdair Morgan Alasdair Morgan Scottish National Party

Labour members obviously do not understand what this debate is about. It is about the outcome of the budget and whether the Administration can implement it. It would not matter whose budget was being implemented; the Administration is clearly unable to implement any budget.

Photo of Brian Monteith Brian Monteith Conservative

Is the ability to implement budgets the same as that which was required of the SNP, which could not handle its finances well enough to avoid having to sell its headquarters? At the weekend, the SNP could not count the pregnant chads well enough to save Mike Russell the embarrassment of losing his post temporarily—the same Mike Russell who called for the Scottish Qualifications Authority to be abolished. Should not the SNP be abolished?

Photo of Alasdair Morgan Alasdair Morgan Scottish National Party

I thought that the Tory party was in favour of selling off property to release the capital for use. When it was in power, it insisted that many bodies under its control should do that. If Brian Monteith is worried about our ability to add up, compared with the Executive's, I suggest that he look at the draft Scottish budget that was published last week, at the same time as the minister's statement. I invite him to try adding up the numbers in the first column of the second table in that budget—the total is £54 million adrift. I would rather trust a party that gets an addition sum £80 wrong than one that gets such a sum £54 million wrong.

One of the ironies of end-year flexibility is that it allows money that has been the subject of at least one—it is likely to have been more than one—announcement in the previous financial year to be transferred into the next financial year on other programmes and to become the subject of yet more announcements. I suspect that that is why it is so popular with the Executive.

The Parliament's committees will have to be much more rigorous in examining the detail of the spending proposals of the various departments, in trying to worm out of them the extent to which proposed programmes can be delivered and in establishing how programmes that have been announced are measuring up to the rhetoric of the budget. It is also up to ministers to take to heart the extent to which they have not delivered on the task of administering the public finances of Scotland and it is for them to put in place the necessary measures to ensure that the people and the Parliament can have confidence in the administration of their money. I hope that everyone within and outwith the chamber will note the gap between rhetoric and delivery that lies at the heart of the coalition Administration.

I move,

That the Parliament notes the Scottish Executive's news release of 19 September 2001 on end-year flexibility.

Photo of Angus MacKay Angus MacKay Labour 10:59 am, 27th September 2001

The sensible approach to end-year flexibility was introduced by the Labour Government for a clear purpose: to improve effectiveness in public spending and to stop the absurd end-of-year spending spree that was once common throughout the public sector, in which walls were painted, carpets were replaced, furniture was bought and everything else was done to get the money out the door. EYF is money that is transferred forward for use, not lost to services or sent back to the Treasury as it was under the Tories. An underspend represents a real opportunity to shape our services in accordance with our priorities.

Let us look at last year's underspend. Around £250 million was slippage in capital projects; £90 million was carried forward to finance the Glasgow stock transfer, which was perhaps Scotland's biggest-ever anti-poverty measure; £65 million was planned carry-forward before the McCrone settlement, which was a massive investment in teachers and education; and £55 million was retained by health boards, which retain 1 per cent flexibility from year to year, allowing them useful discretion to improve their services. Together, those four areas account for more than £450 million of the underspend.

Photo of Angus MacKay Angus MacKay Labour

Not this early in my speech.

The remainder, from various budgets, amounts to the equivalent of just five days' spending. We have taken steps to ensure that underspending is reduced in future and that, where it occurs, it is legitimate and sensible. Departmental spending will be closely monitored and there will be quarterly briefings to Peter Peacock and me. If departments are not spending according to plan, we will want to know why. Where underspending is forecast, ministers will consider re-allocating spend and presenting proposals to the Finance Committee.

Photo of Brian Adam Brian Adam Scottish National Party

The minister said that he will receive quarterly reports on the budget outturns. Will he confirm that he did not receive such reports in the past and will he assure us that not only will they appear on his desk, they will come before the Finance Committee, as they concern the Parliament's budget?

Photo of Angus MacKay Angus MacKay Labour

The Finance Committee will receive whatever documentation and information is appropriate under parliamentary procedures and expectations. One reason why the monitoring procedure—

Photo of Angus MacKay Angus MacKay Labour

No, I will continue with my point. Monitoring procedures had to change because we moved to resource account budgeting, which means that we have an entirely new system in place to deal with our budgets. Brian Adam will know about that from the detailed financial convolutions that we went through with various finance spokespersons and the Finance Committee. We now have a more rigorous method of costing what we are spending and reporting back in good time to ministers and departments how the spend is going out the door.

We know that underspend can happen for good reasons and that we have to plan ahead for it. That is why we have established a clear process to ensure that it is re-invested in ways that support our highest priorities. Departments automatically retain 75 per cent of their underspends, but they are required to make clear how it will be invested and in what time scale. The rest is pooled centrally and is bid for competitively. That process is rigorous, but it is fair, and it prioritises our key objectives. That is why health and education have gained about £15 million more than they underspent in the year.

There is an underspend, but it is dealt with fairly, according to our priorities and in a way that produces results.

Photo of Alasdair Morgan Alasdair Morgan Scottish National Party

Will the minister say whether the same process that is in place to scrutinise initial bids for expenditure is in place to scrutinise bids for EYF? If so, is there any guarantee that the departments will spend the EYF funding better than they spent their initial funding?

Photo of Angus MacKay Angus MacKay Labour

No, the same process is not in place, but, yes, there is a guarantee that there will be better scrutiny.

Last week, we used EYF money to wipe out historic national health service trust deficits. That was welcomed by Tayside Health Board, as The Press and Journal reports, with spontaneous applause from staff at the announcement. In Alasdair Morgan's area, Dumfries and Galloway Health Board, which has a good record of managing its finances, has an extra £2 million from EYF for further improvements to its services. As its chief executive said:

"the investment has come at exactly the right time".

A total of £79 million went to NHS Scotland to deal with deficits, as well as £11 million, also from EYF, to meet winter pressures. Over the next few weeks, there will be further announcements about the use of EYF for our other main priority, education. The investments will be welcomed in schools all over Scotland.

I have set out the facts, the process applied to EYF and the benefits of EYF. I will now address some of the fictions that the Opposition has been promoting about it. Last week, in The Press and Journal, Alasdair Morgan claimed that EYF was

"a startling example of mismanagement and financial incompetence on a grand scale".

I have already dealt with that assertion in setting out how £450 million of the money emerged. He also claimed that we had underspent our education budget by 31 per cent. I will take him through a fairly simple calculation: 31 per cent of £3.2 billion, which is what we spend in total on education centrally and through local government, is almost £1 billion, but the education underspend, as a matter of record, was £86.5 million. The percentage underspend—if he is still following me—is 2.7 per cent, not 31 per cent. I hope that he is still with me.

Photo of Angus MacKay Angus MacKay Labour

Sit down and listen.

If we have doubts about the SNP's numeracy, we also are entitled to have pretty grave doubts about whether Alasdair Morgan or anyone else in his party is paying attention. He claimed, again in The Press and Journal, that SNP members have not been told anything. The fact is they have not been paying attention. In early June, Peter Peacock told the Finance Committee that the amount of new money reaching departments inevitably was leading to underspends. He told the committee what was going on and what we were doing about it. He is on record stating that there would be additional and significant EYF and he gave the timetable and process for dealing with it that I have just described. Did any SNP member of the Finance Committee ask any questions about EYF? No. In fact, the then SNP finance spokesman did not even turn up to the committee.

One month later, in July, by which time Mr Morgan was assiduously minding his brief as chief Opposition finance spokesman, he, all his MSP colleagues, all five of the SNP's Westminster MPs and the entire party appeared to have overlooked a major public statement by a reasonably high-profile politician—the Chancellor of the Exchequer—that spells out our total underspend. The details are set out in Gordon Brown's white paper "Public Expenditure 2000-01 Provisional Outturn", the accompanying press release and the subsequent quarter-page of coverage in The Guardian, all of which I have here and would be happy to give to Mr Morgan.

Photo of Angus MacKay Angus MacKay Labour

Sit down.

If only the SNP would pay attention. By then there were, as I said, five SNP MPs at Westminster, including, apparently, an economist—their leader in exile—but still there was no interest or comment and there were no questions. That says much about the synthetic sincerity of the SNP.

Photo of Angus MacKay Angus MacKay Labour

Sit down and listen.

It is a feature of the Scottish Parliament that parliamentary questions can be asked throughout the summer recess. So, did the SNP finance spokesman or any other SNP MSP take advantage of that? No—except, to be fair, for Andrew Wilson, who recently asked when we would be making an announcement.

But perhaps we should not expect too much. The SNP, as we know, is not good with numbers. "Free by 93" certainly did not add up. Is it not sad that to determine the scale of the deficit in their party's finances, SNP members were forced, in the middle of a press conference, to borrow a calculator from a journalist to work out the numbers? Just last week at its conference, the SNP had trouble with the votes for its executive elections. It was forced to introduce to British politics the new concept of end-conference voting flexibility. As the Daily Record said:

"the best brains in the SNP can't count up to 182."

Photo of Angus MacKay Angus MacKay Labour

It is no surprise that even one of its own senior figures describes the SNP's policies as financially illiterate. In the Evening Times this week, Duncan Hamilton, who somewhat ridiculously is still described as

"The fresh new voice of Scottish politics", said of his own party's tax policies:

"this looks a ridiculously risky strategy".

He reminded the SNP that it needs to

"learn from the mistakes of the past".

Should the SNP decide to learn from the mistakes of the past, its learning opportunities must surely be many and various. It campaigned for a penny for Scotland and its leader said at its conference that he wanted to raise tax, but here in the Scottish Parliament, there has been not a single tax-varying proposal, budget amendment or coherent policy.

Photo of Angus MacKay Angus MacKay Labour

Let us get away from the SNP and back to reality. We have taken hold of Scotland's public finances, we have taken hard decisions to achieve our priorities and we have been rigorous in finding the money to pay for them. Free personal care, the abolition of tuition fees and the reform of teachers' pay are all fully funded and have been funded within our budget. EYF is part of that process. What about members of the Opposition? We know all that we need to know about their financial capabilities: they cannot count, they will not count and that is why they do not count.

Photo of David Davidson David Davidson Conservative 11:09 am, 27th September 2001

First, it is remarkably good fun sitting here watching the Minister for Finance and Local Government for once laying into somebody; it is fairly obvious that in the budget process he has not laid into any of his ministers. Secondly, I thank the SNP for having this debate and fetching the Minister for Finance and Local Government to come before us. I hope that some light will be shed on the tangled web of illusion and spin that is the Executive's handling of the spending of the Scottish budget.

Much has been made of the role of the Finance Committee. I remind Alasdair Morgan—a new member of that committee—and the minister that, over the past two years, I have repeatedly asked for either quarterly or half-yearly statements of the roll-out of programmes. I cannot believe that those statements do not exist. I know that the accounting officers must have them. Perhaps the truth is that the minister and his team do not bother to ask for them because they are so busy writing up their next press release.

I find it incredible that hospital trusts, police forces, fire brigades, schools, universities and colleges of further education could have been denied the support that they required while money has been sloshing around within the Executive's departmental coffers. Did the minister know that the money was there? If not, why not? I remember the First Minister announcing a grand new department that was going to supervise all of that. I do not recall there being much of an outcome from that department.

Nevertheless, I feel quite sorry for the minister. It is obvious that his colleagues are incapable of managing their allocations and keeping him informed of the progress of the delivery of the services for which they are responsible. Perhaps the problem now lies not in spending but in the formulation of budgets and their inability to cost anything that they wish to deliver.

The figures mentioned today do not include the £430 million underspend from the year 2000-01 that was highlighted in the draft budget that came out the other week. Our adviser on the Finance Committee assures us that he could not see any link between the £430 million underspend and the £718 million that we are dealing with today. If one considers the total figure, we are talking about £1 billion out of an annual budget of £20 billion. Even in SNP terms—if Andrew Wilson remembers how to do his sums—that is a significant sum of money. It cannot be glossed over with a few idle statements here and there.

I have another question for the minister. How is it that, even under new Labour, the Scottish Office managed to deal with an annual approximate roll-over of only £300 million? I know that it did not paint every wall every year.

Photo of Andrew Wilson Andrew Wilson Scottish National Party

In order to make the debate interesting at this stage, would Mr Davidson care to comment on how much of the underspend went back to the Treasury over the period of Conservative government? How much did we lose from underspend under the Conservatives?

Photo of David Davidson David Davidson Conservative

It is not a case of losing. Perhaps we were a bit more prudent about how we raised taxes. The money belonged to the taxpayer and was reallocated centrally to the needs of the taxpayer.

The minister has mentioned the McCrone settlement. I want to know about the way it was rolled out. The problem is not with the global sum of money; it is that there is not enough money to deal with the number of schools.

In the area of health, we have had the sticking-plaster of millions from Susan Deacon to bail out the Arbuthnott formula. Next year, will the minister again have to bail out that iniquitous formula from EYF? It is another failed Labour policy and the minister has been sent out as the first-aid paramedic to try and patch up the holes.

Last year, I asked the First Minister about how many universities were going into deficit. Although he had only just left the department of enterprise and lifelong learning, he did not have a clue. Does Angus MacKay have a clue?

I will go further and talk about our developing economic woes. Alasdair Morgan touched on the problems in Dumfries and Galloway. However, a lot of Scotland has been affected in many ways. Apart from the service sector, we are almost at a standstill. The rural economy is on its knees, yet in the minister's recent statement, there is a reduction in spending and the enterprise budget. That does not stack up. If we consider the spending of the unspent millions, competitiveness might have been to the fore of the minister's mind, or perhaps he did not listen to pleas that Wendy Alexander perhaps did not make. I do not know.

We have to look at helping our businesses recover. All the difficulties were there before the terrible disaster in New York. The problems are not new. All through last year the signals were there. The reports that came out talked about the state of our economy. The minister has a tool in his hand to use, properly and effectively, to help the economy, but there is no mention of that, possibly because that is a sector that he is not bothered about.

The problem is what we are going to do with the small, innovative Scottish companies that are doing lots of good research, but cannot access venture capital that would drive forward connections into the oil and gas industry in particular. We also see struggling biotechnology parks that might even move abroad for foreign investment. What about creative use of budgets?

One could accept the minister not getting his sums right at the initial predictive stage, if he had the common courtesy to come to the committees and say "Come on, give us a hand here. What do you think?" However, the subject committees of the Parliament are denied the sort of information that they need to make commonsense decisions on the outcomes of what the Executive is trying to deliver.

Photo of Michael Russell Michael Russell Scottish National Party

With regard to information being provided to parliamentary committees, would Mr Davidson support my and many other people's calls to the minister to publish detailed information about which budgets were underspent, along with some explanation of that, so that the committees can see the impact of the Administration's incompetence?

Photo of David Davidson David Davidson Conservative

Mr Russell has obviously read my speech before. I will just clip on quickly The truth is that Executive ministers tell us in speech after speech that we must get our infrastructure upgraded. You name it and those who sit on the Executive front bench have mentioned it. However, there is nothing for the future. Scotland cannot continue to tolerate an attitude that is concerned with the short term only. Where did the £718 million come from? We did not get an answer to Alasdair Morgan's question about that. What were those moneys supposed to have been spent on? We do not know.

It would have been helpful for the next stage of the budget discussions that we are entering into if the minister had been able to tell us where the £430 million that is in the new budget documents came from. We do not know that. The minister wonders why committees do not make comments. I am getting a little bit tired of having to repeat this. Some of us have been on the Finance Committee for a fair time now and members of all parties in the committee are asking the same question time in, time out.

Photo of David Davidson David Davidson Conservative

Thank you, Presiding Officer.

If one looks at Scotland's business communities, council tax payers and rural dwellers, one sees that they are disadvantaged, but the minister does nothing. Perhaps he should ask his colleague the First Minister why he keeps looking south for additional funding when there is money in the bank. That is going to get Scotland a bad name. We see Helen Liddell and other ministers coming up here and beginning to interfere, because they have patently lost faith in what the Executive is trying to deliver.

I do not have much time left, but I have a short comment for the SNP. It is the wish-list party of Scotland—from which the minister is trying to take lessons. I would love to hear Mr Adam tell us in his wind-up speech what he would have spent the money on. We have not had that information today.

I turn fleetingly to the Liberals—this is my last comment, Presiding Officer—whose numbers are sadly depleted today. I do not doubt that they will whinge and cringe on every subject under the sun, but I guarantee that at the end of today they will still vote with their Labour masters.

Photo of Jamie Stone Jamie Stone Liberal Democrat 11:19 am, 27th September 2001

It might be wise to remind ourselves what the situation was like before we had devolution. The mandarins conducted government in Scotland. With the stroke of a pen in the Scottish Office they could throw money this way or take it back and fire it down to the Treasury. We are here today because those actions were not accountable or open to public scrutiny.

Remember the bad old days. When ministers point out the splurge of spending that used to happen at all levels, those of us who were in local government or other public sector areas remember. Paint was literally put on walls and vehicles were bought. I can remember rows of street lamps going up in the middle of nowhere just to get money out of the budget before that dreaded date was reached. Remember, colleagues, that the general public hated that kind of thing. They knew that that was a waste of money and that it was money wrongly spent. Now we have EYF that allows funding to carry into other years. That is welcome flexibility in public finances. It means that we can get away from the non-essential spending on painting walls and vehicles and move the money to the priorities of the Scottish Parliament, where it should be spent.

Last year's underspend is a significant amount of money, but we should consider for a couple of minutes why such underspends are created. Public spending is growing at such a rate that it is almost inevitable that underspends will occur. Those of us who have worked in the public sector will know that that is true. When Peter Peacock and I were members of Highland Council, we had to tackle that issue every year.

The direct funding of nurses is affected by recruitment problems. The required number of nurses—or doctors or staff of whatever professions are needed—may not be obtained as soon as we would like. Capital slippage is another factor. Those who have worked in local authorities will know that that is true. As the minister said, that has played a major part in the underspend.

I will pose a question to the SNP, prompted by what Alasdair Morgan said. Will Mr Adam say in his summing-up whether the SNP is against the proposals? We have an acceptance of reality. Surely the system allows prudent management of public funds. I need a clear answer. Is the SNP saying that it would like to return to the bad old system of spending quickly to get rid of all the money?

The SNP must also tackle the question that the Conservatives asked: what are the SNP's priorities? Are SNP members saying that they would not give money to some NHS trusts? If so, which? Is the SNP against our giving money to health and education—the Government's priorities?

Photo of Michael Russell Michael Russell Scottish National Party

I will explain what the SNP is saying and use an analogy from Mr Stone's background—I remember that he is a distinguished cheese maker. Our argument is that if the budget for his cheese-making enterprise was 30 per cent underspent, it would be obvious that some of his customers had not had some cheese delivered to them, because the cheese would not have been made. I hope that Mr Stone understands the argument now.

Photo of Jamie Stone Jamie Stone Liberal Democrat

When the debate started, the SNP went off on a great charge—it was as if an R101 were flying in the chamber. Now Mr Russell is going on about cheese. The Scottish Government is not involved in cheese making, for goodness' sake.

Photo of David Davidson David Davidson Conservative

Perhaps the member has not yet realised that the Executive's purpose is to support the public relations industry.

Photo of Jamie Stone Jamie Stone Liberal Democrat

Ah, dear me.

We have a straightforward good-news story. It is right and proper that Angus MacKay and Peter Peacock are putting the required procedure in place, which will manage our moneys prudently.

I welcomed Angus MacKay's comments on 19 September, when he said:

"I am however concerned that the Executive is not making use of the considerable growth in the Scottish budget as quickly as it could. I have therefore taken a much more rigorous approach to examining Departmental underspends and their entitlement to carry forward money this year."

My party welcomes that and the minister's comment that he will develop early reviews. I am sure that that will improve matters.

However, we must remember that in comparison with the previous system, we have open scrutiny in this democratic chamber. Those who carp and criticise from the committee point of view should use the committees to obtain the information. My goodness, the Education, Culture and Sport Committee did that during the Scottish Qualifications Authority inquiry. It is the members' Parliament. I say to David Davidson that there is a wealth of difference from the previous system. I warmly support the Scottish Executive and I will vote not for my masters, but for my partners, who happen to be doing a very good job.

Photo of George Reid George Reid Scottish National Party

We proceed to the open debate. If members keep their speeches to four minutes, we shall be able to include everyone.

Photo of Kenneth Gibson Kenneth Gibson Scottish National Party

That is likely to be unfulfilled.

The first thought that springs to mind is: come back, Jack McConnell, all is forgiven. At least he kept the underspend down to a relatively modest £430 million. It is sad that the Minister for Finance and Local Government gave us not only arrogance and a whiff of complacency, but the stench of incompetence. Last year, Henry McLeish's crown prince was Deputy Minister for Justice and did not realise that sex offender legislation fell within his remit. Now he does not appear to realise that good financial husbandry falls within his remit. I would like the minister to tell me which local authorities he would allow to have a 31 per cent underspend.

I was astonished that Peter Peacock did not leap in and correct the Minister for Finance and Local Government when he made something of a faux pas and said that the education budget was £3 billion. That is correct for local authorities, but according to the written answer that the minister gave Mike Watson on 19 September, the Executive's education budget is £280 million and the underspend is £86.5 million. Before the minister signs off the answers that his civil servants write for him, he might want to read them.

Photo of Angus MacKay Angus MacKay Labour

The point that I made in my speech was that it is wrong for Mr Morgan or any other SNP spokesman to suggest that the total education budget was underspent by 31 per cent. The core education spend through the Executive is a small part of the total education spend that the Executive promotes, particularly through local government. That is why it is dangerous and overblown to throw around figures as Mr Morgan did in the press.

Kenny Gibson asked what we would tolerate in underspend by local authorities. SNP-controlled Falkirk Council is carrying forward an underspend of £1.6 million for a park-and-ride scheme—

Photo of Kenneth Gibson Kenneth Gibson Scottish National Party

The minister has used 45 seconds of my four-minute speech. He can sit down now.

Photo of Angus MacKay Angus MacKay Labour

Will Mr Gibson respond to my point?

Photo of Hugh Henry Hugh Henry Labour

On a point of order, Presiding Officer.

Photo of Kenneth Gibson Kenneth Gibson Scottish National Party

The SNP in Falkirk was in control for less than six weeks before the end of the financial year—

Photo of Hugh Henry Hugh Henry Labour

On a point of order, Presiding Officer. When you allow a member to intervene, subject to the agreement of the member who is speaking, is it for the member who was speaking to determine when the member intervening should finish speaking, or is it for you?

Photo of George Reid George Reid Scottish National Party

It is for me to determine, as I did there.

Photo of Kenneth Gibson Kenneth Gibson Scottish National Party

Throughout the course of the Parliament, we have had spin, spin and more spin from the Executive. One example is KickStart—a wonderful innovation, which the SNP supported and which was launched on 4 November 2000 to help disadvantaged community organisations to access community fund moneys. The money was announced in November and reannounced in February. No money had been spent 10 months after the launch. Further, by the end of the financial year, nothing had been spent on the central heating initiative that was announced on 15 September 2000.

As for new housing partnerships, I am sure that we all recall the balls-up that Wendy Alexander made when she went to Glasgow in May 2000 and announced £12 million of new money that had been announced 15 months earlier and of which not a penny had been spent. The underspend in the social justice budget has more than doubled from £57 million in 1999-2000 to £122 million in 2000-01. The culprit in both instances was the new housing partnerships fund. Because of the massive slippage to which the minister alluded in the housing stock transfer programme, that fund cannot meet its targets.

That problem is compounded by the fact that the wholesale debt relief that the new housing partnerships budget was designed to facilitate has been available in England from the Treasury as a matter of course. We have been informed only now that our Executive intends to take the same route, which will mean that money that was allocated to be spent on NHPs has probably never been needed. How long has the Executive known that Treasury money was available? If it did not know, what was it playing at? If it did know, why did not it spend that money on Scotland's crumbling housing stock?

Vast sums of money have not been spent. Today, Glasgow City Council was reported to be at odds with the Executive on stock transfer. Why is money not being spent in that city, which is desperate for investment? On the day when the Executive's own press release says that homelessness applications have risen again, we are considering a £122 million—18 per cent—underspend in the social justice budget. The number of households in temporary accommodation, including those with children, has also risen. The Executive trips over itself to provide good news but is not so desperate to spend where money is needed. Jack McConnell sounded a fanfare when a measly £12 million was allocated for additional repairs to school buildings, yet £86.5 million is sloshing around, much of which could have been put into that programme.

As for the complacent statements of "Oh yeah, a wee bit of end-year flexibility, blah, blah, blah," why are there underspends of 0.2 per cent in the audit budget and of 31 per cent in education and an overspend of 1.7 per cent in forestry? The minister may laugh, but several organisations and departments are desperate for resources and are not receiving the money that they need. It is about time that the Executive did what it said in its press release. It must improve its financial planning and management. That should have been done already for this financial year. The Executive should get its act together.

Photo of Brian Fitzpatrick Brian Fitzpatrick Labour

On a point of order, Presiding Officer. I wondered about the language being used in the chamber. I appreciate that Mr Gibson was engaged in his usual rant—perhaps he has taken his lead from Mr Davidson's speechwriter—but he used an especially ugly phrase, which I am sure on reflection Mr Gibson would care to withdraw.

Photo of Kenneth Gibson Kenneth Gibson Scottish National Party

On a point of order, Presiding Officer. When Mr Fitzpatrick was a member of Pollok SNP, he often heard that phraseology being used.

Photo of George Reid George Reid Scottish National Party

That is not a point of order.

From time to time, inappropriate language is used in the chamber. I do not want to dramatise it, but I ask members to remember that this is a Parliament.

Photo of Mike Watson Mike Watson Labour 11:30 am, 27th September 2001

A lot of moral indignation is emerging from the SNP, not for the first time. It is not well-founded on this occasion. I was especially taken by Kenny Gibson's comment that we should bring back the previous finance minister; I am not sure if he said that all is forgiven, but that was the thrust of his argument.

Let us take that literally and consider the figures under the previous finance minister. I think that I am right in saying that end-year flexibility in June of last year was about £430 million. Is Mr Gibson saying that that is a satisfactory level for EYF?

Photo of Kenneth Gibson Kenneth Gibson Scottish National Party

It is not, but it is better than £718 million.

Photo of Mike Watson Mike Watson Labour

If he was not saying that, I am not sure what he was saying.

What is the SNP saying is an acceptable percentage? Is it an overall percentage of the budget? Is it a specific figure? Does the SNP approve of the concept of end-year flexibility? It has not given EYF a warm welcome, despite the fact that when Mr Swinney was a member of the Finance Committee, before he became leader of the party, he welcomed the 75:25 per cent split and seemed to be in favour of it.

Photo of Alasdair Morgan Alasdair Morgan Scottish National Party

Does Mr Watson acknowledge that one of the questions that I asked in my opening speech was what would be the acceptable level of end-year flexibility? I expect the Deputy Minister for Finance and Local Government to answer that when he sums up.

Photo of Mike Watson Mike Watson Labour

My point is, what is the SNP's position on an acceptable figure? I cannot speak for the minister.

Does the SNP have a figure in mind? I do not think it has. It is all very well asking questions, but we get this time and time again with the SNP. It always asks questions; it never gives any answers about its own spending priorities.

Photo of Mike Watson Mike Watson Labour

I do not have a figure for the acceptable percentage of EYF. I do not know whether Alasdair Morgan does.

The Minister for Finance and Local Government has made this point at least twice this morning, but I will make it clear again as Mr Gibson went on to repeat the nonsense about £86 million, as he put it, "sloshing around" in the education budget. I say to Mr Gibson that that is not the budget that can be spent on building schools or providing new books. It is the central education budget, which is not the same thing. If Mr Gibson is suggesting a change from one budget head to another, that is the sort of suggestion that we would be delighted to hear in the Finance Committee, because we have not heard anything like that from the SNP before. Perhaps the SNP will produce suggestions such as that next year.

How many times do we have to make this point? Mr Russell made it himself a week ago at First Minister's question time. He also asked another question, which showed how ill-prepared he was for his first appearance at First Minister's questions. He asked about the modernising government budget. He was apparently unaware that the initial budget of £13 million had been supplemented by an additional £10 million as a budget consequential from the UK budget. That is why it looks as if the underspend is more than the additional figure. Why did Mike Russell not know that?

Photo of Michael Russell Michael Russell Scottish National Party

The point that I made, which Mike Watson has not clarified in any sense, is how can an official set of figures—in the minister's press release—show a budget of £13 million and an underspend of £22 million? It is ludicrous. If the convener of the Finance Committee cannot see how ludicrous that is, I suggest that he should take a refresher course in simple English.

Photo of Mike Watson Mike Watson Labour

I was aware when Mike Russell asked the question last week that that was not the actual figure. He should have been aware of that as well when he prepared for First Minister's questions. That is the point that I am making.

Photo of Mike Watson Mike Watson Labour

I am sorry. My time is restricted.

I have a serious point to make about my role as convener of the Finance Committee. This week the committee discussed the draft budget, which was published on the same day as the end-year flexibility figures were put out. It was not easy for the committee. We had an informal meeting with finance division officials and made that point to them. We will make the point to the minister and his deputy. Last year the announcement was made in June; this year it was made in September. It would be helpful to have the figures earlier.

From what the Minister for Finance and Local Government said, I took it that the quarterly reviews that he was producing would make it easier to track and easier for the committee to follow the EYF figures and put them into the context of the draft budget. When we try to evaluate the draft budget, we are considering a moving feast, as there are supplementaries, yearly revisions every second year and a comprehensive spending review.

Photo of Mike Watson Mike Watson Labour

I am sorry. I do not have time to take an intervention.

It is difficult for us to grasp the figures and make something meaningful of them. When figures for end-year flexibility come along on the same day as the draft budget is announced, we are considering the draft budget and do not have the ability to put the two in context. I make that point on behalf of the committee and ask the minister to bear it in mind.

In general, surely the SNP can see that the system of end-year flexibility that we now have is much less wasteful. It provides for more focused spending, which must be a good thing for spending within this Parliament.

Photo of David McLetchie David McLetchie Conservative 11:35 am, 27th September 2001

I must say that the Executive's failure to spend more than £700 million of its budget last year demonstrates what a brass neck it has to keep going to the Labour Government in Westminster to plead for more money.

It is odd, to say the least, that in a week in which the First Minister has been embroiled in a dispute with the Treasury and Alistair Darling over £20 million in attendance allowances for people in need of care, we find that he has enough in the kitty to fund the apparent shortfall for 35 years. I expect that he will get a dusty response from his former friend the Chancellor of the Exchequer when he next pleads poverty. There is a limit to how many times even this First Minister can cry wolf.

It is not for me to become involved in the internal Labour party wrangles over money, although I must say that it would help if the Minister for Finance and Local Government knew the difference between a white paper and a red book.

The most interesting aspect of the debate is what it tells us about the SNP and its recent lurch to the left. Judging by some of the pronouncements at its recent conference it will merge with the Scottish Socialist Party in the not-too-distant future. The frightening thing is that many SNP members of this Parliament would not regard that as a shocking prospect. They have abandoned all pretensions to be a national movement and wear their left-wing credentials as a badge of pride.

In the debate on how to improve our health service, the SNP has shown that it has nothing to offer. SNP members are more concerned about clinging to the outdated ideology that puts ideological purity before the interests of patients. They will not countenance any partnership with the independent sector, even if it can be demonstrated to reduce waiting lists and waiting times.

Photo of Alasdair Morgan Alasdair Morgan Scottish National Party

Can Mr McLetchie tell us what his speech has to do with the motion or anything that has been said in the debate?

Photo of David McLetchie David McLetchie Conservative

A great deal. The debate is about the spending of public finances and the relationship between that and taxes. If Alasdair Morgan gives me a few minutes, I will get to the main points.

The SNP's attitude to public spending betrays its belief that the answer to all of Scotland's problems can be found in ever higher public expenditure and, as an inevitable consequence of that, ever higher taxation of our people and businesses.

Remember the previous Scottish Parliament elections when the SNP promised us a penny for Scotland or, more accurately, a penny for being Scots. Sadly, the SNP seem to be like the Bourbons after the French revolution. They have learnt nothing and forgotten nothing.

Photo of David McLetchie David McLetchie Conservative

No. The Bourbons are not a biscuit, Mr Wilson.

Instead of denouncing the Executive as incompetent because it failed to spend enough money, it would be far better for us all if the nationalists considered the other side of the coin. Why do we not do something truly revolutionary and consider ways of reducing the burden of tax on people living in Scotland, who already pay far too much?

Last year's underspend was £435 million, £400 million of which was carried forward. We now have a £700 million underspend. That demonstrates that the first year's underspend was not a one-off. This suggests to me that the Government is taking far too much in tax. If it cannot spend the money sensibly and efficiently on our public services, it should give the money back to the people to whom it belongs—the taxpayers of Scotland—so that they can spend it on themselves and their families, something that I am sure they would do to far better effect than this Scottish Executive.

Photo of Andrew Wilson Andrew Wilson Scottish National Party

I am grateful to the Conservative leader for giving way. His speech on financial prudence comes a few years after the Conservatives were in office. Will he recognise that during their long and painful time in office the average deficit for the nation's finances—in other words, when they were in the red—was more than £30,000 million? The Conservatives beggared Britain. Why are they now giving speeches in Scotland?

Photo of David McLetchie David McLetchie Conservative

The Conservative Government set this country on a path of prosperity over a period of 18 years. It reduced tax levels across the board and reduced the proportion of our national product taken in taxes. Unfortunately, that proportion has been on the rise for the past five years in a row.

Let us consider the underspend, for example. The average yearly underspend of £350 million would be more than enough to restore a uniform business rate poundage throughout the United Kingdom and re-establish a level rates playing field for all our businesses, large and small, to help them cope with the looming recession. Why should our businesses pay a rates poundage in Scotland that is 9 per cent higher than businesses down south?

The underspend could also be used to abolish the £2,000 graduate tax that the Executive has imposed on our students. It could be used to consider reductions in the level of council tax, about which I frequently receive complaints from council tax payers the length and breadth of Scotland. Any of those options could and should be considered as a way to utilise the underspend. It is a sad reflection of the tunnel vision of our opponents that those options are not even on the table.

Labour and the Liberal Democrats, along with the SNP, believe that politicians are better at spending people's money than people themselves are. The SNP seems to think that raising the tartan tax is some sort of political virility symbol, the Liberal Democrats confuse high taxation with compassion and, when he tears himself away from his fixation with foxes, our Finance Committee convener, Mike Watson, spends his time urging his Labour colleagues to levy the full 3p of tartan tax on Scots.

The record shows that only the Scottish Conservatives stand against that unholy tax alliance of Labour, Liberals and the SNP and the tax-and-spend policies that they pursue, which will be the ruination of this country.

Photo of Michael Russell Michael Russell Scottish National Party 11:42 am, 27th September 2001

We have just seen a graphic example of the Scottish Tory party's rush to the right. Its conversion is not so much Damascene as Gadarene. Unfortunately, it is rushing to destruction yet again. It is clear that the party wants to slash public spending and Scottish public services. Whatever else divides the chamber, the vast majority of members know that that would be a recipe for disaster in Scotland. It has been a recipe for disaster for the Scottish Tories—clearly that will continue.

Before I talk about the education underspend—because, no matter what the Minister for Finance and Local Government says, there is an education underspend—I must say that I am intrigued by a report from the Finance Committee on stage 1 of the 2002-03 budget process. At the committee meeting on 22 May, the convener was involved in a long discussion with committee advisers and members about exactly what the modernising government fund is. One of the advisers said:

"Entering the £13 million in that table— the table of finance— seems to have been a mistake."—[Official Report, Finance Committee, 22 May 2001; c 1268.]

The convener later admitted that he had no idea who was responsible for the programme. He said that the clerks had checked the introduction to the report and that there was no specific mention of it. If we pin that down, we should be able to identify where the cost falls. Mr Watson is an expert on the matter now, but he did not seem to know anything about it then.

The reality of the situation is that, in the past 12 months, schools, hospitals and public services in Scotland did not get the money that they needed. That is irrefutable. I talk regularly to teachers and ask them what they need; they know that their services are underfunded. They were horrified to discover, at a time of cuts in education when it was impossible to get books in classrooms and some schools were closing, that the Executive had underspent its budget by £85 million.

The minister and the Finance Committee convener may shake their heads, but people cannot be fooled. They know whether a Government is doing its job. When they cannot get hospital services and their children cannot get books in schools, they know that the Government is to blame. When they discover that, although the Government spins and blusters about every programme and announces and re-announces, it is not spending the money and the programmes are not taking place, people know that the blame lies in only one place: on the front bench, with a Minister for Finance and Local Government who cannot run finances efficiently and a Minister for Education, Europe and External Affairs who is not performing and not delivering. There is no way round that.

Photo of Angus MacKay Angus MacKay Labour

The member quotes a figure of £86 million, but fails to acknowledge that approximately £70 million of that was planned underspend, to ensure the successful implementation of the McCrone package, which is precisely to ensure that we have excellence in the education system. That leaves about £16 million. If the member's synthetic concern about that really amounts to something, perhaps he will address a point I raised earlier. Why has it taken three or four months for the member to ask a single question about this, despite the fact that his colleagues at Westminster knew about it and it was in The Guardian ? It was not exactly a secret. What do we pay SNP MSPs for?

Photo of Michael Russell Michael Russell Scottish National Party

A much better question today would be, "What do we pay the Minister for Finance and Local Government for?" If he is saying that all this has been done by his friend Gordon Brown and told to people at Westminster, and that he is only just following it up, we should not be paying him a penny. [ Interruption. ] I am coming to the McCrone issue.

The reality of the situation is that the Minister for Education, Europe and External Affairs told the chamber that there will be no transfer of resources away from key priorities into teachers' pay. If he is saying that, at the very beginning of the McCrone process, there was a plan to transfer money from things like school repairs into teachers' pay, he should have told us. We supported—and continue to support—the McCrone settlement. What we do not support is economy with the truth in the chamber or in answer to the people of Scotland. That is clearly what is happening.

I have a letter here from Comann nam Pàrant (Nàiseanta)—the Gaelic education parents group—to the minister. It suggests what the minister could spend a small amount of the money on—if he is so incompetent that money is available. Matters such as Gaelic education, which was bitterly opposed by Mr Peacock when he was the Deputy Minister for Children and Education, are still not being funded. People are looking at the Executive and saying, "It can talk, put out press releases and bluster, but it cannot help the people of Scotland."

Photo of Hugh Henry Hugh Henry Labour 11:47 am, 27th September 2001

During his speech, David Davidson said that Mike Russell had obviously read his speech. It might have been helpful if David Davidson had read his own speech before he contributed, because some of the content was not only contradictory and confusing, but downright mischievous. There were times when I did not know what he was talking about—I do not know whether he did either. Mr Davidson told the minister that he has a tool in his hand. I think I know what Mr Davidson was talking about, but I do not know whether he knew what he meant by that.

The SNP's contribution today has been pitiful. We have here another example of a party bereft of leadership, ideas and relevance to the political debate in Scotland. There are contradictions and splits in the SNP. Mike Russell says that the blame lies with the Minister for Education, Europe and External Affairs, but Kenny Gibson said earlier, "Come back, Jack McConnell, all is forgiven." Kenny and Mike need to get their act sorted out about whether and where they want Jack McConnell.

This is an example of the SNP's ability to talk up a crisis where none exists, to identify problems where none exist and to clutch at straws in its attempt to advance a weak form of opportunism. It would have been too much to expect the SNP to say that we should praise the Executive for introducing the mechanism of end-year flexibility.

Photo of Andrew Wilson Andrew Wilson Scottish National Party

I praise the Executive for introducing that mechanism, whereby it moves money forward at the end of the year if it is underspent. I criticise the Executive because the underspend is getting bigger and the Executive seems to be totally out of control.

Photo of Hugh Henry Hugh Henry Labour

If the member praises the Executive for introducing a mechanism for underspend he must recognise that, for specific reasons, there will be underspends from time to time. The minister and others have indicated some of those reasons.

It would have been too much to expect the SNP to recognise that we have moved significantly beyond what was available before devolution. It would have been too much to expect the SNP to recognise the progress that has been made in two short years. Never the ones to miss an opportunity to whine for Scotland, SNP members have yet again risen to the occasion.

Mike Russell talked about McCrone and gave a very convoluted argument that, quite frankly, led him nowhere. If the minister and the Executive had not properly prepared or accounted for the McCrone money and had simply disbursed it for expenditure and then revealed that they had not budgeted for that money, SNP members would have been the first to criticise the lack of forward planning and forward thinking. We are hearing pathetic arguments from a pathetic party.

When I reflect on my experience as an employee in local government and as leader of a local council, I remember attempts by officials in departments to spend money for the sake of spending money at the year end, with no thought for next year or the year after. The flexibility that is being introduced will be of tremendous benefit, not just in three-year programmes for local government, but also in Executive expenditure on behalf of the Parliament. We have moved forward and are making progress, and it is about time that the SNP started to face up to that.

Photo of Brian Monteith Brian Monteith Conservative 11:51 am, 27th September 2001

I found myself agreeing with much of what Hugh Henry said, which is unusual. In debating the Executive's press release on underspending, the Scottish National Party has tried to present itself as the guardian of financial prudence and the custodian of fiscal probity, but we all know that that will not wash. It will not wash, because the SNP's central financial policy is itself a dishonest charade that will fool no one, will lead to division in the SNP and to the party's eventual humiliation in future elections.

Why is it dishonest? The SNP is always quick to attack Labour politicians for adopting Tory ideas. How is it, then, that the SNP can so easily adopt a modern Tory idea? I am speaking, of course, of fiscal freedom. Just as Labour rechristened PFI as PPP, so SNP members have rebranded fiscal freedom as financial independence. They can call it what they want, but that will not remove the Tory origins of the policy.

Let me give Andrew Wilson some education in that respect. Back in 1988, Brian Meek, Struan Stevenson and Michael Fry published a Tory reform group paper that explained how devolution could be made to work. A Scottish Parliament, they argued, should be able to collect all the taxes due in Scotland and pay a precept to the UK Treasury for the common services, such as defence and welfare benefits, that we enjoy as part of the United Kingdom of Great Britain and Northern Ireland. I enjoy that bit, so I shall say it again: the United Kingdom of Great Britain and Northern Ireland.

Fiscal freedom has been, is now and always will be a unionist policy. It is designed to reduce tensions within Britain, not to raise them. Of course, it carries some risk and it will be for the unionist politicians to decide at some time in the future, if at all, whether that model should eventually be adopted and what effect it will have on overspending or underspending.

Photo of Andrew Wilson Andrew Wilson Scottish National Party

Will Brian Monteith clarify whether what he is describing as fiscal freedom is Conservative policy, because the leader of his party looks a wee bit glum as he listens to his speech? What is the Conservative policy on the constitution now? Is he now arguing that the Conservative party is in favour of full financial independence?

Photo of Brian Monteith Brian Monteith Conservative

Conservative policy is entirely clear and I support it. We do not support fiscal freedom. What we do support is having a debate about the way in which the Parliament should run its finances. That is what we are doing today and I am examining the alternative vision that the SNP offers. In case Andrew Wilson missed my point, I shall make it again. It will be for unionist politicians to introduce any form of change.

It is impossible for the SNP to deliver fiscal freedom. That is why it is doubly dishonest of SNP members to tout fiscal freedom as their solution to Scotland's ills. To introduce fiscal freedom will require the consent of Westminster—something that the SNP cannot deliver. If the SNP were to become, let us say, the largest party in the Parliament, it might want to hold a referendum, but on what question—fiscal freedom or independence? Surely there is no prospect of the SNP brokering any deal on fiscal freedom, if it had the opportunity to deliver independence. Therein lie the seeds of conflict in the SNP and therein lies the dishonesty of its policy. Why would its politicians settle for not going the whole way?

Over the years, the Scottish Conservatives will weigh up whether or not the funding of Scotland's Government requires change. We will make our decision on what we see as best for Scotland, believing, as we do, that Scotland's interests are best served by remaining in the union. It is a policy that is not without risks, but there are those in the Parliament who sincerely fear that, without such powers, the Parliament can be used by the nationalists to undermine the union enough to let the SNP deliver independence. However, the SNP does not take such a pragmatic view. The SNP ideologues would have fiscal freedom, whether it was good or bad for Scotland.

The truth is simple. If we are to have better control of our finances, whether to prevent overspending or to control underspending, we must tread carefully, cautiously weighing up what is good for Scotland, and not delivering what is good in the eyes of the SNP.

Photo of Andrew Wilson Andrew Wilson Scottish National Party 11:56 am, 27th September 2001

It has been a surprisingly lively and enjoyable debate, and I thank all members who have taken part in that spirit.

I begin by questioning the criticism of Mike Russell, a man who is obviously never wrong. The criticism was that he was wrong, at last week's question time, to use the figure of £13 million for the capital modernisation fund. It is fair to say that he made the mistake of using as his source an Executive press release from the day before, which said that the capital modernisation fund is £13 million. The Scottish Parliament must therefore be dubious about Executive sources of information, because the Executive admits that it can be wrong.

As Alasdair Morgan said, we should look at the budget released by the—very hard-working, I am sure, despite the criticisms of his colleagues—Angus MacKay. In the very first column of only the second table of that document, we find that £54 million has gone a-begging. Will that perhaps be next year's underspend? If the Executive cannot add up official Government tables, with a bank of advisers, twice as many ministers as Jack McConnell had to back him up, and a whole host of special advisers under the purse, how can we trust anything that the Government has to say? As an effective Opposition, we have the job of doing our best to scrutinise the Executive's plans but, if even its own plans are all over the shop, what hope do we have?

As I mentioned, it is true—and it is a troubling trend—that there is a whispering campaign across the Executive and the Labour party saying that the Minister for Finance and Local Government is perhaps not the hardest grafter on the Government benches. It is said that he springs out of bed at the crack of noon and is home in time for "Neighbours". I think that that is wrong and is a slight on the hard-working finance team, which I know does a rigorous job at the heart of the Executive.

However, let us look at Angus MacKay's press release on the underspend, which has a very Romanesque picture of Angus himself, with a nice profile, and the very nice headline:

"Health and education win extra cash".

That is the equivalent of a father going into his child's bedroom, taking money out of his piggybank and saying, "Look, son, there's some extra cash for your pocket money." That is an effective metaphor for what is actually going on.

All that has happened is that Angus MacKay, rather than going for a 75:25 split, has allowed the departments to retain their money. We do not even have Jack McConnell's star chamber. There was no negotiation. The only areas that lost out in this round of negotiations were the capital modernisation fund and local government borrowing consents. Which schools are not being built as a result of the cancellation of local government borrowing consents?

Photo of Andrew Wilson Andrew Wilson Scottish National Party

I will take an intervention in a moment.

That is the reality of what has actually gone on. It would not be too hard to understand, if it were not for the fact that Labour finance ministers do not have that much to do. Angus MacKay mentioned a balanced budget. He cannot not have a balanced budget in Scotland, because there are no borrowing consents. If Jamie Stone would like to argue for borrowing powers, as the Liberal Democrat treasury spokesman in London did this week, that would be a good thing. Let us hear from Jamie. Does he agree that the Parliament should have borrowing powers?

Photo of Jamie Stone Jamie Stone Liberal Democrat

I think that Andrew Wilson seriously misunderstands the section 94 element of the budget document that is in front of him. That sum of money was historically always kept back by the Scottish Office—now the Scottish Executive. In the old days, it might have been punted out here and there around councils. Does he acknowledge that, despite what he said about money going in and out of the piggybank, the fund in question is, in fact, up by £15.4 million? That is the point, and that is why the press release says that there is extra money for education.

Photo of Andrew Wilson Andrew Wilson Scottish National Party

The question that Jamie Stone fails to answer is whether the Liberal party agrees that we should have the ability to have properly rounded budgets, with borrowing consents and greater taxation powers.

It is bizarre that, over the past year and a half to three years, the Labour party has gone around the country managing expectations by telling people that we cannot have better public services and that things will have to get worse because money is too tight to mention. How can the Labour party now go around community groups throughout Scotland and tell them that the Government has had up its jouk more than £700 million? There is an £86 million underspend on education. How is there such money to spare on education? Why is there £143 million to spare on health? With not one council house built, how is there £121 million to spare on social justice? Incidentally, education and social justice have the highest underspends of any UK department.

That cuts to the nub of what we are talking about. We are not criticising the fact that there is underspend. We understand that underspend happens—Mike Watson was right to allude to that. However, we are concerned about—and are right to bring up—the fact that Labour is presiding over an increasing mess, despite there being four times as many ministers in the Scottish Parliament as there were when the Conservatives left office. When the Conservatives left office, the underspend was 1 per cent—it is now going on for 5 per cent. Why is the underspend getting worse, despite the fact that more people are employed by Parliament to look after and scrutinise budgets? Finance ministers must get a grip. Perhaps the Minister for Finance and Local Government needs to silence the critics on his back benches who say that he is not working as hard as he might. Colleagues might say that he does not work, but it is clear to the people of Scotland that his policies are not working.

Photo of Hugh Henry Hugh Henry Labour

On a point of order. A serious accusation of indolence has been levelled against the minister. It would be helpful to those of us who must consider the veracity of those accusations if the Deputy Presiding Officer could obtain information on how many Scotland away matches Andrew Wilson attended while Parliament was sitting.

Photo of George Reid George Reid Scottish National Party

I hope that it is a genuine point of order.

Photo of Mike Watson Mike Watson Labour

It is not just the allegation that is important—where the allegation came from is important, too. The allegation is refuted on the Labour benches and Andrew Wilson should justify such statements.

Photo of Elaine Thomson Elaine Thomson Labour 12:02 pm, 27th September 2001

I am surprised that the SNP feels the need to bring this debate to the chamber and I am particularly surprised at what Alasdair Morgan said about inadequate discussion of Scotland's finances. Over the past two years—since Parliament came into existence—there has been a quantum leap in the level of scrutiny of Scotland's budget.

Photo of Elaine Thomson Elaine Thomson Labour

No, thank you.

There is constant discussion of Scotland's finances in the Finance Committee, of which I am a member, in Parliament, with the minister and with Scottish Executive finance officials. There is considerable movement in how we look after the current financial systems and how we report on the Scottish budget. As we were told by Scottish Executive finance officials, we have moved considerably from the days when one solitary academic in Scotland asked regular questions about the Scottish budget.

End-year flexibility is part of the improving process in looking after Scottish money. There has been substantial improvement in being able to carry money over from one financial year to the next. I am pleased that Andrew Wilson got as far as recognising that EYF is a good thing—that was about the only sensible thing that he said.

Other improvements include three-year budgeting, which puts paid to the stop-start spending of previous years whereby money had to be spent in the financial year or be lost. We now have sound financial planning.

The amount available for EYF this year is large, but that is due in part to the sustained increase in the Scottish budget. As Peter Peacock said to the Finance Committee in June:

"Currently, so much new money is coming into the system that departments are taking a while to be able to spend it. It is taking longer than one would wish to get the programmes geared up."—[Official Report, Finance Committee, 8 June 2001; c 1335.]

Thank goodness we are in a position where increased money is coming in. More money is now being invested in public services than has been for a generation. It is essential that that money is spent wisely and effectively. It is totally counterproductive for departments to rush out and spend money simply because it is there.

Labour is using money effectively and is continuing to invest in the priorities of health and education. The new health boards that are being formed are being given a very good start by having their historic deficits wiped out. Aberdeen has a trust with a deficit and I welcome the opportunity for that deficit to be eliminated so that Grampian Health Board can start with a clean slate.

I welcome the fact that there is increased and substantial growth in the Scottish budget, which will increase by about £1 billion a year within this three-year cycle. When the Deputy Minister for Finance and Local Government came before the Finance Committee in June, he said that there is a commitment to continuing to improve the Scottish Executive's planning and management. That is good. The increased money in the Scottish budget should be translated into better services as soon as possible. That will mean, for example, more teachers and classroom assistants. Training and recruiting takes time. As has been said this morning, some of the underspend is planned to allow the smooth implementation of the McCrone settlement—that is sensible financial management.

The Scottish Executive should be congratulated for improvements in its financial planning. Practice in Scotland is ahead of that at Westminster. End-year flexibility is a sensible and prudent way to manage the Scottish budget to Scotland's best advantage.

Photo of George Reid George Reid Scottish National Party

We move to winding-up speeches. Robert Brown has four minutes and David Davidson has five minutes.

Photo of Robert Brown Robert Brown Liberal Democrat 12:06 pm, 27th September 2001

The debate has been interesting and there have been many good contributions to it, as Andrew Wilson said. There have been many interesting cross-currents.

It was sensible of the SNP to lodge a neutral motion that enables the chamber to perform without being too diverted by party political issues—although there have been many such issues in the debate. Parliament's proper purpose is to scrutinise the Executive's spending and the efficiency of its spend. Back benchers and front benchers are entitled to have their views and to put forward their points to test ministers. That is what scrutiny is all about. End-year flexibility procedures have been a considerable advance in allowing open, transparent and proper scrutiny.

Different party visions have been clear. It was, for example, reasonably clear where David McLetchie was coming from in his remarks on the Conservative view. Whether members agree with that view is another matter.

The Liberal Democrats unreservedly welcome the additional money for our spending priorities of health and education. We welcome the write-off of the historic trust deficits, although we must be careful that the message does not go out to NHS trusts that that is a precedent for the future. We are still looking for efficiency of spend and for them to meet their objectives within the budgets that they have been set. We should not give mixed messages about that.

We should also give credit for the fact that matters are more transparent than they used to be and for the fact that a good part of the Executive's spending is not directly spent by the Executive. Trust spending, for example, is spent at second remove, in a sense. The Executive does not therefore have immediate control. The comparison with local authorities is not entirely good in that respect.

We have to be clear that the underspend is not lost money in any sense: it is money that carries forward, that we can use further. We no longer have the need for last-minute, senseless decisions on spending on desks, headed notepaper or painting store rooms.

A number of items in the budget—such as Holyrood capital—are clearly one-offs and have explanations that the Parliament accepts, whatever political use members may make of them. The same considerations apply to the new housing partnership money. There is nothing new about such items—they were known about and required to be dealt with in due course.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

Robert Brown may recall a meeting of the Social Justice Committee about 18 months ago—I think—when Wendy Alexander gave evidence. Members of the committee questioned whether it would be possible to deliver the new housing partnership. We thought that money could be released and put into immediate and desperately needed investment in housing. Does he agree that it is worrying that the stewardship highlighted 18 months ago is still being perpetuated by the Government?

Photo of Robert Brown Robert Brown Liberal Democrat

With regard to the housing budget and the situation relating to the Housing (Scotland) Act 2001, the stock transfer mechanisms and so on, the important point is the framework for delivering effective and accountable spending on housing, which is what we all want. The underspend will be spent on the area in due course. The question is to do with the time scale in which the money is spent.

The Executive must deal with several critical issues. We have talked about the effects of an underspend on end-year spending. There is political pressure to reduce the underspend—the Executive must deal with the £700 million somehow. We must ensure that, when putting in place the mechanisms for the spending of public funds, the Executive continues to seek efficient and effective ways of doing so. I know that the Executive will do that.

It should be within the bounds of Executive competence to make adjustments at the mid-year point that will head towards a more effective spending of the budget in the year, as problems arise when a budget is not spent in the allotted time. We must deal with issues around the acceptable percentage of end-year flexibility. Is there an optimum level that the Executive should be heading towards? Such questions must be asked and it is right that the Parliament has done so this morning. I hope that we will get some answers as the process develops.

This has been a good and transparent debate. It has shown the Scottish Parliament at its best and allowed it to play its proper role of scrutinising the performance of the Executive.

Photo of David Davidson David Davidson Conservative 12:11 pm, 27th September 2001

I thank the SNP for securing this debate and agree wholeheartedly with Robert Brown that the fact that there are no outlandish amendments has allowed us to discuss a topic that is of vital importance. The people of Scotland will have watched this debate and the press corps will report it in one way or another. That shows that we are moving forward in terms of transparency.

I agree with Mike Watson: all the parties who are represented on the Finance Committee are agreed on end-year flexibility. What was not agreed was a finite definition of end-year flexibility. That is the basis of today's debate. All members of the Parliament and of the Finance Committee are engaged in a learning process. If we do not have a clear handle on how moneys flow in the Executive, the democratic process of Scottish Parliament committee scrutiny of the Executive will fail. We have to understand the rules and play by them. First, however, we have to agree what the rules should be. During today's debate, it has become clear that there is a need for the conveners of the committees and the party leaders to discuss how we should handle the budget system. Frankly, there is not enough information to allow the subject committees to work efficiently. It would be nice if we were able to move towards outcome budgeting to allow people in the street to understand what we are trying to deliver. Each of us will approach that issue differently, but it is important that we quantify the discussion and ensure that it does not appear to be a numbers game. It is hard to explain to people who live in poor accommodation or who have children in a school that seems to be failing why those things are not the priorities of the Government.

Photo of David Davidson David Davidson Conservative

I will make another point first.

We must debate the future role of bodies that receive funding from the Scottish Executive. We must decide on the function of those bodies, how they report, what they are responsible for and how they are accountable. We have not yet got into that grown-up debate. If one thing has come out of today's debate it is that it is essential that we deal with those issues in the Parliament. That will no doubt require a long consultation process, but the matter cannot be put off for much longer.

A huge amount of money goes out through local government, but there appears to be overlap and differences in delivery and focus. The people of Scotland look to the Parliament to deal with that.

I hope that the minister will agree in his reply to the debate that we need an early view of what is in the new draft budget. How does the £430 million in the draft budget break down? The figures are unknown. We just have a total. We have no idea where that total came from and what might be done with it. If the minister can assure us that the Finance Committee will get details of the figures in the very near future, that would be helpful.

I would also like from the minister an assurance that the Executive is not developing a war chest for the next election. We will hold the Executive to three-year budgeting, not just the short-termism that happens every fourth year and which must be a temptation to it.

Interestingly, we have not really touched on public-private partnership and the private finance initiative, but I know that the Finance Committee will consider them in the near future. They will affect how additional moneys appear in the budget. We have to question the Executive on what will happen with the released capital that comes from PPP and PFI. Will there be an improvement in services? Will there be a refocusing? Perhaps the minister can reply to those questions in future.

Some good comments have been made. I agree wholeheartedly with David McLetchie that the uniform business rate, council tax, the graduate tax and the tartan tax are still to be dealt with. All budgets are based on where the money comes from. I will be interested to hear what the Scottish National Party has to say about that. It will have to get an awful lot of money to follow its promises.

Mike Watson was correct. Elaine Thomson mentioned the defence of the budget process. No control mechanisms are in place. I am sorry that Elaine Thomson is not in the chamber. I know that she believes in transparency—she works that way in the Finance Committee—but I cannot believe that she accepts that the partial transparency that we have is adequate to do justice to the subject.

I thank all those who have contributed to the debate. Although it has been partisan in part, at least it has lifted the lid on some of what is happening.

Photo of George Reid George Reid Scottish National Party

Before we continue with the last two closing speeches, I have two points of business to make. First, I apologise to Cathie Craigie, who sat through the debate without being called.

Secondly, I have a response to the points of order made by Mike Watson and Hugh Henry. Until now, the position of the presiding officers has always been that the content of speeches is a matter for members and that we intervene only if the language is disorderly or disrespectful. I did not pick up anything that merited my intervention, and neither did the clerks. We will read the Official Report and, if the two members concerned wish to write to me, we will give the matter consideration.

Photo of Peter Peacock Peter Peacock Labour 12:18 pm, 27th September 2001

The debate has been one of great contrasts. The Liberal Democrats and Labour members have made constructive, positive comments on the procedures that are now in place. In contrast, the SNP has failed in another attempt to manufacture bad news from good. Creating smoke where there is no fire is a modern form of alchemy.

Angus MacKay set out the clear procedures that the Executive has followed in dealing with EYF and its benefits. The position that he set out continues the firm theme of a rigorous and prudent approach to Scotland's finances. That approach brings rewards and ensures priority for our key objectives of improving education and health—Robert Brown drew attention to that.

The approach also ensures minimum wastage in the use of public finances. Jamie Stone, Mike Watson and Hugh Henry drew attention to that. Hugh Henry also correctly pointed out that, had we not made sensible provision for the McCrone settlement, the SNP would have been the first to criticise us. That is why we made sensible provision and why we have the best teachers' settlement for many generations.

Our approach is in stark contrast to that of the SNP, which is a party with no sense of priority. The SNP has nothing to say on the value that we get from our current and significant resources. It seeks to tax Scots more heavily, apparently as a matter of fundamental principle.

The SNP complains that we took months to announce our position on EYF, but as Angus MacKay set out clearly, our position was open and entirely transparent. The big question is why the SNP did not see that. That may have something to do with the fact that Andrew Wilson, the SNP's then finance spokesman, did not show up at the meeting of the Finance Committee at which all those matters were dealt with and in which I set out in some detail the position on EYF. Why did Andrew Wilson not turn up on that day? I will tell members why. It was a famous day. It was the day the Finance Committee met in Perth. Not only that, it was 8 June 2001—the day of the general election results when Labour was returned for a second term of office and our Liberal Democrat colleagues made a national advance.

It was also the day on which the full extent of the humiliating collapse of the SNP vote became apparent and on which it was confirmed that the SNP had failed to capture its No 1 priority seat and had been forced, in its second priority seat, into a humiliating fourth place. It was the day the SNP just scraped home in Perth—against the Tories, of all parties—and lost one in six of its representatives at Westminster. It was the day of the lowest SNP vote for decades and the day the seat of its new finance spokesman was lost to the Tories. The party of financial irresponsibility had been defeated by the party of financial incompetence. It was the day Labour won seat after seat because the people know that the Labour party is the party of financial competence and responsibility, as we are demonstrating in Scotland with our partnership colleagues.

Photo of Alasdair Morgan Alasdair Morgan Scottish National Party

The SNP vote at the election changed by a much smaller percentage than the percentage by which the Government's underspend has changed.

Is it true that the sum—presumably just the total, not the detail—of the Government's underspend was announced in a parliamentary answer at Westminster? Does the member think it satisfactory that the Parliament and its finances should be treated as if they were simply a Westminster department and that, regardless of what has been given to members at Westminster, no indication should be given to members of the Scottish Parliament?

Photo of Peter Peacock Peter Peacock Labour

My point is that I was giving evidence on 8 June, just five weeks after the end of the financial year—[ Interruption. ] If SNP members give me a moment, I will explain. I set out very clearly why we expected an increase in EYF and explained that there would be an addition to the sums. I know that the SNP finds it difficult to add up figures, but if SNP members had turned up to that committee meeting and listened, they would have received all the information that was openly given and they would have been able to question ministers if they had so wished. They simply did not turn up to do so.

While we are demonstrating competent and prudent stewardship of Scotland's finances and showing that we can make rapid progress in developing public services while still being prudent, the SNP is rushing to raise taxes. An increase in tax is not needed. In contrast to our position, the SNP has not mentioned prudence or rigour and, as others have mentioned, the party that cannot add up to 182 questions our competence with figures.

Photo of Andrew Welsh Andrew Welsh Scottish National Party

Surely budgets should be about the accurate forecasting of desired outcomes. Massive underspends simply should not happen unless the initial budget is inaccurate or misleading. The problem is when the budget process becomes a case of smoke and mirrors instead of accurate, responsible forecasting.

Photo of Peter Peacock Peter Peacock Labour

The point that Angus MacKay, I and others have tried to make this morning is that the flexibility that we now have at the end of a financial year gives us the opportunity to manage public finances more effectively than happened in the past. Because of the one-year accounting conventions that were followed in the public sector at that time, money was very often spent on lesser priorities to ensure that the cash was not lost the following year. Now we are able to hold money over a financial year and target it on the Executive's priorities.

Instead of managing finances prudently, the SNP wants to raise Scotland's taxes as an alternative to the rigour that brings such big rewards. It is no wonder that the SNP finance spokesman was hiding from public view while the Executive was talking openly about the level and management of EYF and our processes for dealing with it.

Although the Tories' finance spokesman attended the Finance Committee meeting on 8 June, he was also so shell-shocked by the result of the general election that he was unable to lecture us on anything. Did he follow up that discussion with a parliamentary question on EYF? No, he did not; however, he soon indicated his own priorities by asking a parliamentary question on the Montrose vehicle extravaganza.

Photo of David Davidson David Davidson Conservative

It is infinitely superb to go from zero to one. As our south-west of Scotland SNP colleagues will acknowledge, our magnificent victory was almost technically incalculable.

Photo of Peter Peacock Peter Peacock Labour

I hope that Brian Adam—whom I genuinely welcome to the front bench—will take this opportunity, so soon after the SNP conference at which his party leader pledged to raise taxes, to tell the Parliament by how much the SNP plans to raise them. The penny for Scotland was clearly not enough; tuppence for Scotland is also clearly not enough for the SNP, nor is thruppence. The SNP wants to go higher. That is the only reason why it is arguing for so-called financial independence, which gives more scope for raising taxes even more. I urge Brian Adam to say how much and when. In this Parliament, the opportunity exists to bring forward detailed proposals, but I am perplexed as to why the SNP will not do so and will not reveal its cards fully. When he is winding up, perhaps Brian Adam could also explain why on earth, given that the SNP claims—fallaciously, in our view—that there is a £7 billion Scottish surplus, it proposes to raise Scotland's taxes. There is a clear intellectual contradiction in that, which I hope Brian Adam will take the opportunity to explain.

Only SNP members greet good news by girning. We write off health board debts and they moan; we give more to education and they girn; we give more to health and they greet. Moanin, girnin, greetin—the hallmarks of the SNP. That is why the Scottish people reject the SNP and trust this coalition with the sound stewardship of their finances.

Photo of Brian Adam Brian Adam Scottish National Party 12:26 pm, 27th September 2001

It is unfortunate that Angus MacKay, the Minister for Finance and Local Government, has decided that he needs an early lunch today. It is also unfortunate that he failed to make a statement and take questions on the massive underspends in the past financial year. We gave him that opportunity today and he has been found wanting. We have had—[ Interruption. ] Ah, welcome back, Mr MacKay.

We have had a series of interesting contributions from Labour members, none of which appear to address the motion before us. The minister has provided no good evidence of financial control over the Scottish budget. The minister and his departmental colleagues may not receive regular updates—although I think we heard a confession earlier that they will now start to receive them. We heard no commitment that they will be shared with the rest of us. I hope that that will be rectified and that the Finance Committee convener will press the minister to ensure that that is done. We have no evidence to suggest that the minister and his colleagues are capable and competent in managing our resources.

I want to put it on record that we support end-year flexibility. There seems to have been an attempt to confuse on that point. We also support the 75:25 split in how it is used. We were asked why we had not discussed that before. Members who remember the Public Finance and Accountability (Scotland) Bill—I am sure that the convener of the Finance Committee remembers it—will recall that I lodged an amendment that dealt with adding a fixed percentage. I admit that my motivation for doing so was concern that an Administration—even a future Administration—might wish to hoard some money to spend in an election year. I suggested a figure in my amendment, but I was generous: I set the figure a little higher than the underspend that existed under a previous arrangement.

I readily admit that we needed a little more flexibility to have planned expenditure. I accept that we do not want people to be tarring roads on 31 March just to get rid of money. I did not get a lot of comfort on that matter from the previous Minister for Finance. We do not appear to have heard any willingness on the part of the Government in today's debate, from either the Minister for Finance and Local Government or his deputy, to recognise that there should be some guidance. The Finance Committee may well return to that matter and offer some firm advice to ministers on it. Given that underspends were previously of the order of 1 to 1.5 per cent, my suggestion of 2 per cent, plus my willingness to discuss it, would offer a way forward. I am not going to suggest, on behalf of the SNP, what the final figure should be, as that is a matter on which we could reach consensus.

Photo of Cathie Craigie Cathie Craigie Labour

I join other members in welcoming Brian Adam to his new position. Does he agree that even if his proposal were adopted, there would still be the risk of roads being tarred at 12 o'clock at night on 31 July—or whenever it is—if the figure were set at 2 per cent or 1.5 per cent? Does he agree that even if such a figure were set, organisations or departments would still have to run around spending money to reach the target?

Photo of Brian Adam Brian Adam Scottish National Party

The limit that I proposed might have encouraged the Executive to be more rigorous in drawing up budgets and monitoring them during the financial year. There is always a danger that people will do things that are inappropriate, but surely it is inappropriate that the underspend should have been 1 per cent three years ago but should be 5 per cent now. That is indefensible.

The minister and his deputy have been at pains to describe how they informed the Parliament of the underspend—or, rather, how they did not. I hope that the minister will not have Gordon Brown make all his financial announcements for him. That would be a very unusual approach and it would be a telling admission on the minister's part. Gordon Brown was the first person to reveal the total figure. All the smoke and mirrors of what may or may not have happened on 8 June are not relevant to this debate. The same applies to much that has been said by Labour members today.

Not only did I ask for a figure to be set for end-year flexibility and to have that debated during consideration of the Public Finance and Accountability (Scotland) Bill, I asked for regular reports to be made. I may not have asked for those reports to be made with the same frequency that David Davidson requested—although I cannot find David Davidson's contribution in the Official Reports for the meetings concerned—but I have asked for them to be made on a regular basis.

Irrespective of who has asked for such reports, the Parliament deserves to have them. Those who are charged with scrutinising the Executive's budget—the Finance Committee and, in particular, the Opposition—should have access to the information. There is doubt in my mind as to whether ministers have the information. Indeed, I have doubts as to whether they have pursued the information. They are trying to dress up a £718 million underspend as financial prudence. To my mind, it is clearly the result of mismanagement. There is a problem at the input end of the process.

Photo of Helen Eadie Helen Eadie Labour

The member mentioned Gordon Brown's favourite woman: prudence. By his prudent management of the economy, Gordon Brown has been able constantly to stream money through the country. He has been able to supply us with new money throughout the year. How can Brian Adam say to the chamber that spending can be targeted when we do not know when new money will come in? For the past three years we have received nothing but new money.

Photo of Brian Adam Brian Adam Scottish National Party

We are talking about the management of that money. Ministers have not shown that they are capable of managing the money in their budgets. By ministers I mean ministers in general, as there is a string of underspends. There is no control over how money is being spent. Recycling money and reannouncing it for different programmes because of failure to deliver the programmes that were initially announced is no proof of prudence or rigour on the part of this Administration.

Mike Watson asked whether the money could have been spent on school buildings. I refer him to page 54 of the Scottish budget document, which states:

"We are initiating a strategic approach to the improvement of the school estate".

Money could have been used for that purpose, but there is a 31 per cent underspend on the central education budget. Lumping in all the other money to make things look better does not show the minister in a good light.

In his statement of 28 June, the minister was at pains to tell us that

"The real significance of this statement is that it goes beyond the traditional inter-departmental numbers game of who is up and who is down and instead looks ahead to better management of Scottish public spending".—[Official Report, 28 June 2001; c 2096.]

To be frank, the minister did all he could to hide who was up, who was down, who was managing their budget well and who was not. We had to ask a series of questions over a number of weeks to find out about the background. Those who regularly lecture us on open government would be much better placed to do so if they practised open government. The purpose of today's debate was to facilitate open government, yet the minister, his deputy and the Administration have not participated in that exercise.

The object of today's exercise was to allow members the opportunity to ask questions and get answers on what we are to do in future. I hope that the Administration will not continue to try to disguise things or to slip information out through placed questions—[Interruption.] I cannot remember whether that is the correct term. [MEMBERS: "Planted questions."] A minister in another Government in—dare I say it—another country makes the announcement and the Minister for Finance and Local Government has the temerity to suggest that that is a good procedure.

I found what the Conservatives offered today most interesting. Not only do they want to continue to slash public services, but there seems to be a great divide in the Conservative party on whether we ought to control our own finances in Scotland. I welcome Brian Monteith's conversion to the idea of financial independence for Scotland. I hope that that does not put Mr McLetchie under too much of a threat. I do not know whether Brian Monteith was making a leadership bid or whether Iain Duncan Smith allowed or encouraged Brian Monteith to make such comments. I know that Brian Monteith believes firmly in financial independence for Scotland, as he published documents on the subject prior to the Scottish Parliament elections. I am delighted that he is a convert to the idea that we ought to be running our own affairs, both financial and otherwise.

Photo of Brian Adam Brian Adam Scottish National Party

The Government cannot deal with problems in Scotland because it is not aware of the detail. Its planning is weak, but its opportunities to respin are legion.

In the past few days, I visited a hospital—

Photo of George Reid George Reid Scottish National Party

You must close now, Mr Adam. You are a minute and a half over your limit.

Photo of Brian Adam Brian Adam Scottish National Party

For me, that visit highlighted the problem. We are trying to invest money in cancer care but cannot make progress because the lead times for the programmes are far too short. We cannot spend the capital, install the equipment or train the staff because it takes too long to do so. That is where the failures arise and why there is an underspend. I commend the SNP's motion to the Parliament.