Spending Review 2007

– in the Scottish Parliament at 9:15 am on 10 January 2008.

Alert me about debates like this

Photo of Alex Fergusson Alex Fergusson None 9:15, 10 January 2008

Good morning. Members should have on their desks a revised section A of the Business Bulletin , which shows the amendment in Derek Brownlee's name as an amendment to John Swinney's amendment rather than to the motion in Iain Gray's name. That corrects an administrative error before publication of the Business Bulletin yesterday evening.

The first item of business is a debate on motion S3M-1105, in the name of Iain Gray, on the spending review 2007. I remind members that committee reports for the 2008-09 budget process have not yet been published and are private documents. I am sure that members will bear that in mind when making their speeches.

Photo of Iain Gray Iain Gray Labour 9:16, 10 January 2008

I am pleased to open the debate, which is designed to allow further scrutiny of the Government's spending review. As members know, our opinion was and is that cabinet secretaries should have debated their departmental budgets in Parliament, defended their decisions and clarified how their decisions support their departments' objectives. The Government refused to do that, which raised the question of what it has to hide.

That question remains, for although we have had almost two months to examine the Government's spending plans, we still see them "through a glass, darkly." The "glass" to which that phrase refers is a mirror: it has, indeed, been a budget of smoke and mirrors. First, we had the hysterical but synthetic outrage at the level of the settlement, which I have no doubt will be echoed today. All that sound and fury was intended to divert attention from the fact that Scotland obtained from the settlement what the Scottish National Party expected when it made its manifesto commitments. The settlement amounts to almost £90 billion, which renders ridiculous any argument that when the SNP fails to deliver or welches on its promises, it is someone else's fault.

Then the budget document appeared, but what did not appear were most of the level 3 budget lines, all the grant-aided expenditure totals for major local government services, comprehensive capital expenditure figures and real-terms spending trends at level 2. All that detail was introduced into budget information at committees' request after consideration of previous budgets. The previous Executive agreed to provide that information, which the Government has now removed without consultation. The Finance Committee wrote to ask the Cabinet Secretary for Finance and Sustainable Growth for that detail, as did the three main Opposition parties jointly, but the response was a list of 170 lines of budget information that had been rolled up—it has disappeared—and which could not be tracked or scrutinised. On top of that, 43 specific and previously ring-fenced funds have been dissolved into the single local government line.

I will return in a moment to the concordat with local government, but first I will get to the heart of the matter. Parliament is being asked to authorise through three budget lines £11 billion of funding to local government to deliver uncosted service developments, without any direct link to outcomes. The same situation applies to the block allocation of £8 billion to health boards. In total, that is £19 billion in year 1 alone that the Government will ask Parliament to sign up to providing through what will be, in effect, a blank cheque.

The minority Government does not have a mandate to govern unsupported. It should provide more information and more transparency in order to build an informed consensus.

Photo of John Swinney John Swinney Scottish National Party

How many times did the Administration that Mr Gray supported as a minister in the first session set out the budget for NHS boards in any more detail than the current budget document provides and for which he criticises me?

Photo of Iain Gray Iain Gray Labour

That Administration did not provide more detail, but the point is that, in previous consideration of the budget, it was agreed that more detail would be supplied in future years, for exactly the reason that has been given.

The Government gives every appearance of deliberately hiding the detail of its budget to avoid proper scrutiny. However, we can see clearly the string of broken promises that the budget contains—on police numbers, home buyer grants and smaller class sizes by 2011. Mr Swinney also prefaced his spending review statement with his confession to Scotland's students that instead of dumping their debt, he was dumping them.

Growing anxiety among those who deliver or depend on services is clear. Much of that anxiety relates to previously ring-fenced funds. The Prince's Trust has said:

"Potentially thousands of young people won't get the support they need and deserve."

Children 1st has said:

"The current climate is unpredictable".

The Scottish Association for Mental Health has said:

"funding we rely on ... may come under much more pressure".

NCH Scotland has said:

"We could ... have a postcode lottery".

Shelter Scotland has referred to a significant threat to about £600 million to £700 million of what we usually call the housing budget, and Scottish Women's Aid has said:

"This could mean a vast reduction in refuge and support services".

The Government has heaped scorn on those fears and described them as "negativity", but they are not just our concerns—they are the concerns of the homeless, the mentally ill, the disabled and their carers, young people who are fighting addiction, and women who are fleeing domestic violence. If those people find it hard to share the mood of optimism that the Government loves to claim exists, that is because they have been let down by life, society and all of us too many times not to fear for the services that they need. If those people find it hard simply to accept the assurances that the money for all those services is available and that there will be no problem, perhaps that is because those assurances come from the same people who promised to provide 1,000 extra police, smaller class sizes and first-time buyer grants, and to pay off student loans.

Mr Swinney will surely say, as he always does, that I do not understand the new relationship that he has with local government. [Interruption.] I do not doubt that many SNP members—from sedentary positions or otherwise—are sharpening their Pat Watters quotations for the debate. However, they should remember that when it was put to the president of the Convention of Scottish Local Authorities that Alex Salmond had promised to Parliament that there would be class sizes of 18 in primaries 1, 2 and 3 by 2011, Pat Watters said:

"And which council is he a member of?"

When COSLA's chief executive was asked about the concordat indicators, he said that COSLA had

"not signed up to them."

The Government cannot give the assurances that it has given.

I have heard John Swinney being compared to a bank manager. I think that it was meant kindly and was meant to suggest that he is dependable and can handle figures, but he asks us to see him as a bank manager—as someone who handles other people's money with little more than a word of advice as to how they might spend it. A bit of a threat of bank-managerial sternness is also present. On ring fencing, the minister responsible for housing told The Big Issue:

"If we find a local authority who decide to use the money for something else entirely, we can always re-introduce ring fencing."

That is called having your cake and eating it.

Such services matter so much because they tackle disadvantage and deprivation. Any budget should be measured by its contribution to social justice. I accept that removing ring fencing does not mean that services will certainly be lost, but it creates such fears, which the Government should not dismiss.

Other budget lines are also central to social justice and, as the smoke clears a little, we see that they are certain losers. On the day of the spending review announcement, every housing organisation protested that the housing budget would be cut in year 1 of the review period. They were told that they had to consider the whole three years and that the housing budget would really rise by 19 per cent. The budget allocates £1.6 billion to housing over the spending review period, but the previous Executive spent £1.5 billion on housing and regeneration over the previous spending review period. In real terms, that is a cut in the housing budget.

We now have detail of the fairer Scotland fund. It rolls up seven existing funds and it is budgeted at £145 million for each of the next three years, but those seven funds already add up to £145 million, so that is another real terms social justice cut.

If the budget fails the social justice test, surely it must invest in economic growth, given that the Government's all-embracing priority is sustainable economic growth. However, again the Government remains unconvincing.

On infrastructure, we have already lost the rail link to Edinburgh airport and we still await an announcement on the M74, although to be fair we are assured that the funding is in the budget. There is no funding allocated to upgrading Scotland's digital infrastructure and there is no replacement for the route development fund, which has supported more than 40 direct air routes from Scotland.

In recent weeks we have seen the cancellation, or at least the postponement, of the new route between Aberdeen and Houston and the cancellation of the Inverness to Heathrow link. Those are straws in the wind, but they are not encouraging.

It is when it comes to investing in its people that the Government's budget fails most. We have very good participation rates in higher education, but they are still lower than in many of the countries with which we will have to compete in the potentially difficult economic times ahead. Our universities are now telling us that they will, as a result of the budget, have to cap participation rates. When it comes to vocational training in schools and modern apprenticeships, we have still to hear of a single guaranteed extra place, while in England the huge increase that was recommended by the Leitch report will be delivered 10 years early. We are in danger of being left behind.

The budget could be better—small changes could improve it markedly. We will continue to argue for and promote in the budget process funded amendments that would inject social justice into the budget, better secure Scotland's economic future, and which would invest in our young people and their skills and in those who undertake higher education.

Photo of Alex Neil Alex Neil Scottish National Party

Can Iain Gray give us three examples of amendments that he will lodge and tell us where he will make cuts to fund the additional expenditure?

Photo of Iain Gray Iain Gray Labour

I cannot because, as the member knows, we are pursuing all the amendments and improvements to the budget through the budget process in committee. Those debates currently remain private. We will lodge those amendments two weeks from now and if they are accepted they will make possible the guarantee of, for example, 15,000 additional apprenticeships, vocational opportunities in every school in Scotland and support for connecting Scotland through direct air routes. Those are three examples that I can give straight away.

I do not doubt that the Tories will hold the Government's hand throughout today's debate, as they have done at every stage of the budget. I am not surprised, because when we defend the interests of the homeless, the disabled, the disadvantaged, poor pensioners and young people trying to get a start in life, we expect to find the Tories on the other side.

I began with an allusion to 1 Corinthians, chapter 13, verse 12, for those who were awake. The next verse refers to the great virtues of faith, hope and charity. The trouble with the budget is that it asks us to accept far too much on faith rather than providing numbers or evidence. In too many areas, including the central one of supporting economic growth, it substitutes hope for solid investment where it is needed. The Government should show a little charity or—even more unlikely—humility. It should respond to concerns about its budget and amend it before it comes before Parliament as a bill. It would be the better for it.

I move,

That the Parliament regrets the difficulties faced by subject committees in scrutinising the Spending Review 2007 due to the failure of the Scottish Government to provide figures to the level of detail established in previous budget consideration; notes the widely expressed concerns that provision in some areas is inadequate or rendered vulnerable through immediate removal of ring-fencing, and calls on the Scottish Government to work with the Parliament's committees in their detailed consideration of these areas and, as a starting point, amend its spending review proposals to boost economic growth and protect the most vulnerable in our society.

Photo of John Swinney John Swinney Scottish National Party 9:29, 10 January 2008

I am delighted to be able to take part in another debate on the spending review. When I heard about the topic of the debate last Friday, I was not sure on what ground the Labour party would stand in the debate. I thought that it would be reasonable to expect that Mr Gray might come to Parliament and substantiate the press statement that he issued—assisted by his party leader, Wendy Alexander—before the turn of the year. It set out numerous commitments on

"tackling health inequalities ... A water charge rebate for pensioners; Increasing the number of modern apprenticeships ... skills academies ... Increased higher education funding; Support for air services ... Increased funding for kinship carers; A town centre renewal fund" and

"Respite care for disabled children cared for by their parents."

The problem is that the Labour party has instead used its debating time to pick nits about process rather than to put forward the constructive alternatives to the Government's budget that Mr Neil has rightly sought. Mr Gray failed in his 14-minute speech to mention in one scintilla of any comment a single budget line that would be changed to pay for anything in that list of commitments.

Photo of Iain Gray Iain Gray Labour

The cabinet secretary is now hiding behind the Parliament's budget process. That is a disgrace. Two weeks from now, when he brings the budget bill to Parliament, we will lodge amendments on each and every one of those areas according to the proper process, which has been agreed. He should not hide behind the private nature of committee reports. That is a disgrace.

Photo of John Swinney John Swinney Scottish National Party

That was a pathetic response to my comments. If the Labour Party had seriously wanted to influence my thinking about the budget, it would have been reasonable for it to have set out today the changes that it wants me to make to the budget so that I could give, in the short time that is available to me, appropriate consideration to how we might address them. Instead, Mr Gray has come forward a week before the budget bill will be published without a scintilla of an idea about how he will pay for any of the additional proposals.

Photo of Richard Baker Richard Baker Labour

On a point of order presiding officer, I ask you to clarify that the reports that are being compiled by the committees on the budget process are private documents and therefore cannot be referred to in the debate. You made that clear in your comments at the beginning of the debate.

Photo of Alex Neil Alex Neil Scottish National Party

On a point of order, Presiding Officer.

Photo of Alex Fergusson Alex Fergusson None

Let me deal with Richard Baker's point of order first, if I may.

The reports on the committee's deliberations are private, but anything that is already in the public domain by way of evidence that has been given to those committees can, of course, be referred to.

Photo of Alex Neil Alex Neil Scottish National Party

On a point of order, Presiding Officer. Although the committee reports are still private, is not it the case that any party is free to put forward in the debate its own ideas, if it has any?

Photo of Alex Fergusson Alex Fergusson None

I do not think that that is a point of order, but it is a reality.

Photo of John Swinney John Swinney Scottish National Party

That makes my point. The debate is not listed in the Business Bulletin as a committee debate; it is a Labour Party debate, in which it is only reasonable for the Government to expect, if the Labour Party wants to change the budget, to hear some of that party's ideas about its alternative proposals—it has publicised a number of them—and to be given some idea of how they might be paid for. Mr Gray singularly failed to address or answer that question in his speech. Perhaps Dr Murray will come to the rescue of her front bench.

Photo of Elaine Murray Elaine Murray Labour

I do not claim to be doing that. Does the cabinet secretary accept that there is an opportunity at the Finance Committee next week for Labour Party amendments to the budget to be debated? Labour Party amendments to the budget will be lodged for that meeting of the Finance Committee.

Photo of John Swinney John Swinney Scottish National Party

We are back to having our cake and eating it. If the Labour Party wants to have a debate about the spending review and to advance its proposals, what is stopping it from telling us today what its changes to the budget would be? The Labour Party is not telling us that. It is telling us what alternative spending proposals it wants, but has given us no indication of how they would be paid for. That is fine—Labour Party members can go to the Finance Committee and argue for that. It is not a matter for me as I am not a member of the Finance Committee. I am a cabinet secretary responding to a debate about the spending review in which the Labour Party has completely flunked its opportunity to set out an alternative strategy, which shows the poverty of thinking in the Labour Opposition.

Of course, this is just the Labour Party's systematic attempt to undermine the budget process. It started in the summer when the Labour Party advanced an argument in The Scotsman on 12 June about how there was going to be an enormous change to the budget process this year, the Procedures Committee would be called on to review the budget process and change it so that the Labour Party would have more influence over the process. I am not, however, aware of the Labour Party having lifted a finger to try to change the budget process through the Procedures Committee this year.

We had a debate in November last year in which the Labour Party demanded more debates on the budget. Cabinet secretaries and ministers have gone to a whole series of committee meetings to fulfil their statutory duty to inform committees about issues in connection with the budget. Now we have today's effort, in which the Labour Party has had a splendid opportunity to tell us how it will change the budget. Of course, it has singularly failed to do that.

Photo of John Swinney John Swinney Scottish National Party

I want to cover more ground; I have already been generous in giving way.

The Government has proposed a budget that addresses the needs of the people of Scotland. We have set out in enormous detail the contents of the budget document. We have set out at levels 1, 2 and 3 the volume of information that the Government would normally be expected to set out. I have also taken account of the Finance Committee's legacy paper on improving the presentation of the budget. Our spending plans provide a clear statement of our priorities, we have set out a new performance framework to allow for proper scrutiny and we have set out a clear statement of our plans for a sustained programme of cash-releasing efficiency savings.

The second point that I want to address in the context of the Labour motion is the question of removal of ring fencing. Mr Gray made a number of comments about charities that have expressed concern about that. What he omitted to say was that during the Christmas and new year holidays, virtually every one of the Labour Party's front-bench spokespeople were on the front foot scaremongering about the removal of ring fencing as a result of the budget. What the Labour Party's scaremongering argument about removal of ring fencing is saying is, "For heaven's sake, do not trust the local authority leaders of Scotland to deliver for the people of Scotland." They are saying that we cannot trust local authority leaders to deliver the public services that our people depend on. The problem with that is that the largest group of local authority leaders in Scotland comes from the Labour Party—12 out of 32 local authorities are led by the Labour Party. When a cabinet secretary of an SNP Government is prepared to trust Labour local authority leaders in Scotland, why is the Labour leadership in the Scottish Parliament not prepared to do so into the bargain? That is outrageous.

Photo of Margaret Curran Margaret Curran Labour

If that is the case, cabinet secretary, why are you not consistent in your approach?

Photo of Alex Fergusson Alex Fergusson None

Please speak through the chair.

Photo of Margaret Curran Margaret Curran Labour

I apologise, Presiding Officer, through you then. Why have you therefore kept ring fencing, cabinet secretary—[ Laughter ]—for some elements of funding to tackle violence against women, but abandoned it for others?

Photo of John Swinney John Swinney Scottish National Party

We are having a morning of having our cakes and eating them. A lot of cakes are being eaten on the Labour benches. I thought that we were all supposed to be getting trimmer after the new year holidays, but many more cakes are being eaten on the Labour side of the chamber.

What Mr Gray did not highlight in his comments were remarks that were made to The Herald newspaper on 7 January by Martin Sime, the chief executive of the Scottish Council for Voluntary Organisations. Mr Sime said:

"there will be few voluntary organisations who will claim that the old ring-fencing methods of control from the centre really were the best way to address such needs."

I thought that that was a particularly informed contribution—as informed as the contribution from the president of the Convention for Scottish Local Authorities, who said a number of interesting things in his article in The Herald at the turn of the year. He said:

"Concern has been expressed that, as ring-fencing is removed, vulnerable groups will not be guaranteed the service they have previously had. The argument goes that these groups are not numerically or electorally important, therefore they can easily be ignored. This is both a slur on local government politicians and a silly argument.

Does anybody really believe that if a section of the community is electorally unimportant, it is more likely to be protected by central government politicians than local ones?"

Councillor Watters went on to say that

"Under the previous executive, Cosla was promised year-on-year reduction in ring-fencing, so it is difficult to see why such a fuss is being made by the simple acceleration of that process."

That is another example of Councillor Watters pointing out how the Labour crowd wants to have their cake and eat it.

If ring fencing was to be removed by the previous Administration, why on earth is it complaining because the current Government has had the courage to put in place a framework of policy consideration in Scotland that ensures that we are unified around our purpose of increasing sustainable economic growth, and that is supported by the achievement of national outcomes to make Scotland a fairer and more successful country? If the Labour Party cannot see that, then it has regrettably failed yet another test of opposition, as it has failed today in its astonishing omission to propose alternatives to the spending review debate. That shows how weak, poor and pathetic the Labour Party is in its current state of affairs. That is why I am determined to press ahead, in consultation with Parliament's committees, with delivery of the Government's budget and to take forward the budget process.

I move, as amendment to motion S3M-1105 in the name of Iain Gray, to leave out from "regrets" to end, and insert:

"looks forward to the replacement of significant amounts of ring-fencing by single outcome agreements with local authorities that will support the achievement of national outcomes set out in the spending review; recognises that the effectiveness of the national outcomes and the removal of ring-fencing will require to be monitored, and looks forward to the continuation of full scrutiny of the Scottish Government's budget in the Finance Committee and the Parliament as part of the budget process."

Photo of Alex Fergusson Alex Fergusson None

I call Derek Brownlee to speak to and move amendment S3M-1105.2.1, which seeks to amend amendment S3M-1105.2, in the name of John Swinney. After all that, Mr Brownlee, you have seven minutes.

Photo of Derek Brownlee Derek Brownlee Conservative 9:41, 10 January 2008

Labour's motion refers to

"the difficulties faced by subject committees in scrutinising the Spending Review 2007".

As we all know, the subject committees have reported to the Finance Committee and those reports, along with the Finance Committee report, will be published next week. Labour's call for the Government to work with the committees in their detailed consideration of the budget comes three weeks after all but one committee has completed such consideration. At present, as the Presiding Officer said at the beginning of the debate, the committee reports are not in the public domain, so we cannot discuss or debate them, although it is, of course, open to members to discuss evidence that was heard in public session or other matters that relate to the spending review.

Iain Gray had a point when he spoke about the constraints on what we can say and discuss today. As far as I am aware, all MSPs on the committees were entirely happy with the timetable for publishing reports; it is not novel that such reports are private. What is novel, however, is that we are debating the subject today, because today's debate is one of the five that the Labour Party advocated we should have in its motion that was put to Parliament on 8 November.

I said at that time that we should not change the process arbitrarily a week before the budget process commenced. There could be no better argument for why that was the right approach than the fact that we are told today by the Labour Party, which called for those five debates, that we cannot have a full debate and discuss all the relevant matters. It is rather ironic that those debates, which were supposed to be the main enhancement of the budget process, are ones in which there cannot possibly be a full discussion. That goes exactly to the point that I made in the debate on 8 November that this chamber should not cut across the existing process and the work of the committees.

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat

The member will be aware that there was nothing to stop the Finance Committee publishing the committee reports that fed into its report if it so chose. There is no requirement for those reports to be private; it was simply the Finance Committee's decision, and one that it has taken in previous years.

Photo of Derek Brownlee Derek Brownlee Conservative

Indeed, and I wonder how the Liberal Democrat and Labour members of the Finance Committee reacted when that proposal was made. The committee has followed the same process that it followed in previous years. There is nothing novel about it.

Photo of Christine Grahame Christine Grahame Scottish National Party

There is certainly confusion about the situation. There is absolutely nothing to stop anyone in this chamber from making a point about what they think ought or ought not to be in the budget as long as they do not attribute it to a committee. They can make comments in this chamber that they made in private, but they must not say what a committee discussed in private or what it reported. That is an end to the matter.

Photo of Derek Brownlee Derek Brownlee Conservative

I will take the member's advice on that. It was open to committees, as it was to individual MSPs, to ask for additional information. As I understand it, the thrust of the Labour Party argument is that the budget documents do not contain the same level of detail as in previous years, and in particular they do not contain all the level 3 detail that was published previously. If I understand it correctly, the thrust of the Government argument is that it has included all the level 3 information. Clearly, both the Labour Party and the Government cannot be right.

Even if we assume for the moment that the Labour Party is right, it is entirely open to anyone to ask for further detail on the budget. For example, the day after the budget was published, I lodged a parliamentary question asking for a breakdown of a level 3 figure in the justice budget. I wanted more detail on the sum of £25.5 million under an "Other Miscellaneous" heading. As a result of the question, we now know that £0.01 million of the justice budget will be spent on the "HR Scotland project". That may not be a particularly consequential part of the budget, but the example shows that it is open to any member to ask for further information. As far as I am aware, where information has been requested, it has been given.

Photo of Des McNulty Des McNulty Labour

Mr Brownlee is, of course, a veteran of the Finance Committee in the previous session of the Parliament. Perhaps he will therefore recall that the former Finance Committee received level 3 information at every single budget round. Furthermore, on the efficiency savings to which Mr Swinney referred, the committee insisted on being given identified efficiency savings and not simply a figure, which is all that we have had from Mr Swinney.

Photo of Derek Brownlee Derek Brownlee Conservative

My point is that members can ask for further information, and that when we do so it is forthcoming—certainly, I found that to be the case. [ Laughter. ]

Photo of Derek Brownlee Derek Brownlee Conservative

Liberal Democrat members may laugh, but it was also open to them to ask for information. If they could not be bothered to do so, that is a matter for them.

I am not saying that there is no scope for improvement in the budget process. Later in my speech, I will address the Liberal Democrat conversion on the matter. I was delighted to read the reference in the Labour motion to protecting "the most vulnerable". I assume that it is not merely a subtle way of reaffirming additional office support for Wendy Alexander.

I note the comments that have been made on the removal of ring fencing. The key issue in the debate is the decision whether the removal of ring fencing is the right way to go forward. Clearly, there is political disagreement on that. The key to all of this is how effective the outcome agreements are in practice at delivering outcomes.

Photo of Iain Gray Iain Gray Labour

Mr Brownlee makes a fair point. However, we know that the outcome agreements will be available to us at the beginning of April at the earliest. My point was that we are being asked to sign off £11 billion of spending against outcome agreements that we will not have until April. Have I missed something? Perhaps the member will correct me.

Photo of Alex Fergusson Alex Fergusson None

You are now in your final minute, Mr Brownlee.

Photo of Derek Brownlee Derek Brownlee Conservative

All that the member has missed is that the £11 billion is to be spent by democratically elected councils.

I turn to the Liberal Democrats' amendment. I will pay them what must be, in the world of the Liberal Democrats, the ultimate compliment: we support and oppose parts of the amendment at the same time. The part of the amendment that we support is where it calls for

"a review of the budget process".

Indeed, my amendment refers to that, too. Of course, when we debated the subject the Liberal Democrats did not find it in their heart to support the process when we proposed it. However, we look forward to them playing a full part in such a review and to hearing their constructive proposals.

I do not agree entirely with all that the Liberal Democrat amendment says on the level of information that has been provided or on the efficiency savings. In 2005, the detailed efficiency technical notes were published two weeks after the Budget (Scotland) Act 2005 received royal assent. At the time, the Deputy Minister for Finance and Public Services was, I think, Tavish Scott.

Photo of Alex Fergusson Alex Fergusson None

You should close now, Mr Brownlee.

Photo of Derek Brownlee Derek Brownlee Conservative

The review of the budget process for which the Parliament voted on 8 November is critical. We should engage fully in the review when it comes. Iain Gray and other members will discover soon enough the Conservatives' response to the budget.

I move, as an amendment to amendment S3M-1105.2, amendment S3M-1105.2.1, to insert at end:

"notes the decision of the Parliament on 8 November 2007 in relation to a review of the budget process for future years, and calls on all interested parties to participate fully in that review when it commences."

Photo of Tavish Scott Tavish Scott Liberal Democrat 9:49, 10 January 2008

I wish a happy new year to all, although there has not been much of that this morning. Before Mr Swinney jumps to his feet, I say to him that I had a good share of Christmas cake this year, although I do not notice much humble pie being eaten by members on the SNP benches. The party used to make much of consensus, saying that this was a Parliament of minorities in which it was a minority Government. It used to say that politicians should work on the issues on which they agree and that it would propose and debate any changes for which it sought parliamentary approval.

Well, well, well. Eight months have gone by, and we have a minority Government, but with a majority ego. We have a Government whose motto is, "If you say it often enough, people will come to believe it"; a Government with the arrogance to dump its promise to scrap student debt without even bringing its plans to the floor of the chamber; and a Government that goes on to claim, without an ounce of shame, that it is delivering for students, when not one Scottish student will see their loan debt written off as promised. It appears that the SNP's promises are easily made and easily broken.

We now have a Government that, when it found itself skewered by its own budget plans for a real-terms cut in university funding next year, was prepared to instruct civil servants and publicly-paid spin doctors to produce dodgy tables to hide that fact. This is a Government that is prepared to send hecklers to disrupt a legitimate protest by students from across Scotland who came to the Parliament to point that fact out. [Interruption.] There are plenty of paid hecklers on the SNP benches today.

We now have a Government that is prepared to be so economical with the truth that the BBC has been forced to set up a whole new webpage on the topic of SNP spin. This is a Government that is so hopelessly wedded to spin that a key manifesto pledge to cut class sizes to 18 was deemed to be met by issuing a single piece of paper that was backed up by not a single extra penny—not one penny. I do not know whether the penny should be described as an historic penny, a landmark penny or simply one that has already been spent. It makes no difference: I see no mood of optimism sweeping the classrooms.

We now have a Government that is prepared to threaten councils with the loss of both their share of the extra council tax money and their efficiency savings, and the re-imposition of ring fencing. It is prepared to do that simply because councils may reasonably assess that, without a single penny of extra funding, they will be unable to make progress on class sizes.

Photo of Kenneth Gibson Kenneth Gibson Scottish National Party

Is it not the case that there is a 13.2 per cent increase in capital funding over the next year, specifically to ensure that the class size commitment is met?

Photo of Tavish Scott Tavish Scott Liberal Democrat

Mr Gibson should ask local authorities how much money they have been given to achieve the policy, on which I assume he stood at the election. All 32 local authorities will tell him that they have received not one single penny.

This is a budget of broken promises. The problem for the SNP is that its sums did not add up before the election and they do not add up now. The SNP overpromised, and now the SNP Government has had to backtrack and break promise after promise. It has blamed Westminster and the Opposition parties. Liberal Democrats suspect that it is now gearing up to blame the councils.

The 2007 spending review and the budget for the next year are an object lesson in Parliamentary hoodwinking. The SNP strategy is simple: disguise, hide and obfuscate. It has made its budget choices, as any Government should do. Liberal Democrats do not oppose the right of the SNP Government to make choices—absolutely not. Our criticism is that the choices that it has made are set out in a budget that lacks detail and transparency. Quite simply, this is the most opaque budget since 1999.

Budget lines have been renamed, merged and dropped without explanation. It took a fortnight for the Government to admit that. Members across the political spectrum have found the presentation of financial information on the transfer of budget lines to local government to be wholly inadequate, completely lacking in transparency and unhelpful in any analysis of the impact of the spending review. On that point, the Liberal Democrats agree with Labour. However, we will not support the Labour amendment. An amendment that supports ring fencing is an amendment that supports centralisation. Liberal Democrats trust local government and we trust local councillors. As I said before Christmas, Liberal Democrats support the principle of ending ring fencing.

There is innovative thinking in local government that can be helped and promoted. I refer to thinking such as that on the City of Edinburgh Council, where the Liberal Democrats are promoting new business-friendly tax regimes in the city centre and on the waterfront. However, the Parliament should be clear on ring fencing.

There has never been less time in a budget process for councils to reappraise their budgets. We know that, every day, officials are phoning the Scottish Government seeking clarification on one or other budget line. No wonder the Parliament does not know where the money will go and to whom—neither does the Government, nor local councils. Given that elected members have to set budgets early next month, the best that they can hope to achieve in the impossible circumstances that the SNP timetable allows is a budget rollover, which is much the same as last year.

Photo of John Swinney John Swinney Scottish National Party

Does Mr Scott recognise that, in the local government finance settlement of December, the Government gave local authorities more information on a greater sum of money earlier in the process than any previous Administration in Scotland has done?

Photo of Tavish Scott Tavish Scott Liberal Democrat

I would need to come back to Mr Swinney on whether there was more information—I simply cannot give him an honest or straight answer on that, because I do not know. However, I know that all the councils have been telephoning his department to ask for clarification on budget lines, because they simply do not know what the situation is and they need to inform their members so that they can set a budget in the coming weeks. That does not suggest to me that more information was provided to local councils in the process that Mr Swinney mentioned.

Mr Swinney's position is that there should be no compulsory public sector redundancies, so it is ironic that local enterprise network staff in the Highlands and Islands already know that 50 of them will go throughout the network, including some from Lerwick, Kirkwall and the Western Isles. The £40 million cut from the Highlands and Islands Enterprise budget is a cut by the SNP in investment in the area's economy.

The Parliament is not a rubber stamp to approve SNP plans. We should scrutinise the budget, not have improvements to that process blocked by the SNP and the Tories. The Tory amendment goes only so far. The review of the budget process is a matter of urgency. It must consider the timescale, content and nature of the process, and it must improve the process so that committees can take more and real evidence on alternative spending proposals and increase the scrutiny of the Government's plans. The review must involve wider civic Scotland and it must act swiftly if the flaws in this year's process are to be avoided next year. We urge the Tories to support the Liberal Democrat amendment, which makes that absolutely clear.

It was wrong of the Tories to block extra debates on the budget, especially given that their finance spokesman has rightly supported reform. We hope that the Tories will be consistent today, although not by simply propping up the SNP. We hope that they will be consistent on a more important issue: parliamentary scrutiny of the budget. The Liberal Democrats will give the Tories due credit if they are consistent on that point today.

The budget process has been flawed. The committee reports, which have been watered down through the fair but inevitable process of seeking a consensus, will show that to be the case in the coming days. No matter how much time the cabinet secretary and his taxpayer-funded political advisers spend trying to create terribly clever traps, the Liberal Democrats are not going there. No—the budget process and the Government's choices are flawed.

I move amendment S3M-1105.3, to leave out from "regrets" to end and insert:

"recognises that no party holds a parliamentary majority and believes therefore that the 2007 Spending Review was an opportunity to create a budget of the whole Parliament; regrets the SNP Government's failure to match its rhetoric on consensus with action in this Parliament; believes that the budget document is the most opaque seen under devolution and fails to provide an appropriate level of detail and transparency; regrets the Government's failure to detail how it intends to achieve the proposed £1.6 billion of efficiency savings; notes the concerns across the public sector at delays to infrastructure investment caused by uncertainty over the future of PPP; believes that urgent reform of the budget process is required to increase the opportunities for parliamentary committees to take evidence on alternative spending proposals and consider government spending plans in more detail; welcomes the resolution of the Parliament to establish a review of the budget process, and calls for this review to commence as a matter of urgency, involve wider civic Scotland, consider the timescale, content and nature of the budget process and report to the Parliament at the earliest possible opportunity in order that its recommendations can be implemented in time for the 2009-10 budget."

Photo of Alex Fergusson Alex Fergusson None

We now move to the open debate, with speeches of a tight six minutes—and I mean tight.

Photo of Kenneth Gibson Kenneth Gibson Scottish National Party 9:57, 10 January 2008

What has the once-mighty Labour Party been reduced to with this pitiful motion, which repeats the same tired old mantra of fears and smears? With the removal of ring fencing, every poor, disabled and vulnerable group will be left to the mercy of those heartless, cruel and uncaring brutes we call councillors. They are an evil and rapacious group of 1,222 men and women from throughout Scotland, who at this very moment are plotting how to deny their most defenceless constituents the largesse that has been bestowed upon them by a generous, loving and caring Westminster via those scoundrels we know as the Scottish Government. So shameful and debased are the councillors that even those who were elected only last year by a naive and trusting public under the once-loved and respected name of Labour are apparently part of that dreadful conspiracy, which is fronted today by that shadowy figure who goes by the mysterious and innocuous-sounding name of John Swinney.

Only the true and noble forces of the mighty Wendy Alexander MSP—who is dazzled by the sunlight after many days and nights holed up in her bunker—can save the day, as she rides out on her white charger to rescue the weak and the meek from that wicked scoundrel, the aforementioned and dastardly Mr Swinney, and his horde of deluded, manipulated and brainwashed local government followers. Honestly, the script of "Enchanted" has more in common with reality than the tired nonsense that we heard today from Mr Gray. It is the weary and worn-out Labour strategy of the big lie—if we say something preposterous loud enough and often enough, people will believe it. For years, Labour has repeated the big lie that Scotland is too poor and too wee, and that the Scots, uniquely, are too stupid to run our own country.

The latest nonsense—which is, in a nutshell, that councillors do not care about their vulnerable constituents—follows hard on the heels of Labour's deeply insulting Holyrood election campaign, and shows that Labour is a party not of lions but of kittens led by donkeys, and that it has learned nothing in defeat. Scots are fed up with Labour crying wolf, and no one is being taken in by the latest attempt at frightening not just anyone, but the most vulnerable in our society.

To quote, since its election, the SNP Government has used

"executive powers to drive through an astonishing range of initiatives and reforms with no particular consensus sought. Saving hospital A&E departments, abolishing prescription charges, bridge tolls and student fees, freezing council tax, cutting business rates, axing government departments and quangos such as Scottish Enterprise, rejecting nuclear power, opposing Trident, replacing PFI and ending private involvement in the NHS. It was impossible to keep up.

In the process, Salmond has created a new form of progressive nationalism, unlike anything seen in Europe in the past three decades. The image of nationalism as a backward and narrow-minded political force, preoccupied with ethnicity and hostile to foreigners, has finally been dispelled. The SNP has made a reverse takeover of the Scottish social democratic consensus that Labour has presided over for the past half-century.

Instead of the SNP being blown away by the unionist majority, Labour were almost blown away by the sheer verve of Salmond's hyperactive administration. Labour end this annus horribilis in a terrible state, with a leadership crisis and a donations scandal. The new Labour leader, Wendy Alexander, has failed to offer any intellectual challenge to Alex Salmond's populist nationalism, and the party organisation is disintegrating.

Labour have feigned opposition to SNP initiatives ... and then ended up supporting them. In fact, it is hard to find much that the nationalists have done in the past nine months that Labour really oppose as a matter of principle. They even support Donald Trump's blessed golf course. The truth is that the SNP were doing a lot of things that Labour MSPs would have liked to do, but couldn't because of the London connection.

Despite being only one seat behind the SNP, Labour have yet to mount any coherent opposition in Holyrood, and have ceded the initiative on many key issues".

That lengthy quote, from the esteemed political commentator Iain Macwhirter in the Sunday Herald of 23 December last year, sums up where we are politically in Scotland. Could any of us have said it better?

Of course, we are now into 2008. Last Monday, Jackie Baillie appeared on "Newsnight" to offer a stout defence of her leader. During the programme, she ludicrously posited that the SNP is on the run over Labour's virtually-forgotten-already constitutional commission.

Photo of Alasdair Morgan Alasdair Morgan Scottish National Party

I know that the debate is fairly broad, but the member could perhaps mention the budget occasionally.

Photo of Kenneth Gibson Kenneth Gibson Scottish National Party

With Labour members suffering from that level of delusion, there is not much hope for them, is there, Presiding Officer?

Photo of Elaine Murray Elaine Murray Labour 10:02, 10 January 2008

I will follow that, if I can. I am not sure whether I should be a kitten or a donkey but, as an animal lover, I am not too bothered about being either.

I assure Mr Swinney that his colleagues on the Finance Committee will not have long to wait to find out about Labour's amendments to the budget proposals. In fact, I feel challenged to lodge even more amendments than I was thinking of lodging, so we can look forward to a long meeting on Tuesday.

The consideration of the Scottish budget and spending review has been difficult for all concerned because of the compressed timetable, which I admit is not the fault of anybody in the Parliament, but an inevitable consequence of the election and other factors that delayed the United Kingdom spending review. However, scrutiny by the committees and other interested parties has been hindered further by the lack of detail in the budget, to which our motion refers. As Iain Gray and Derek Brownlee mentioned, members of all parties have asked questions and elicited further information while expressing concerns about the lack of level 3 funding detail and the grant-aided expenditure figures, which were included in previous budget documents. Concerns have also been expressed about the failure to publish real-terms level 2 data.

The cabinet secretary provided the Finance Committee with information about several level 3 lines that have been merged, renamed or dropped, and he gave a commitment to make the real-terms level 2 data available through the Scottish Parliament information centre. Further, he maintained in a letter to the committee that the publication of the GAE figures was often misinterpreted, which is why it has not been done. I say to him that the additional information was not requested to be awkward or negative. In the previous session of Parliament, Finance Committee members of all political parties commented on the difficulty of tracking decisions in the absence of baseline data and when targets were changed.

I will not mention anything that is not on the record, but I will mention information that was given on the record to committees by people such as Professor Arthur Midwinter, who at the time was acting as an adviser to the Scottish Police Federation. [Laughter.] It is rather offensive to cast aspersions on the intellectual rigour of a person such as Arthur Midwinter because of his political opinions. He is an eminent academic in Scotland, so SNP members should behave a little more courteously towards him. He told the Justice Committee:

"One of the great disappointments of the new budget document ... is the reduction in the number of budget lines".—[Official Report, Justice Committee, 27 November 2007; c 375.]

He pointed out that two of the budget lines that matter most to the Justice Committee are the GAE line and the police capital grant line, both of which have disappeared, making it difficult for the committee to interpret the figures.

I know that the SNP does not particularly like Professor Midwinter, but his concerns were echoed by the Institute for Public Policy Research in its briefing on the Scottish budget of 7 December. The authors noted that the supporting documents made it extremely difficult to assess how the reallocation had affected the 2007-08 baselines of the transferring budget. They also noted that the detail necessary to make an informed judgment through independent scrutiny was largely missing.

I know that the cabinet secretary is proud of the concordat, but there is confusion about what it will mean. The cabinet secretary seeks to purchase a council tax freeze for the sum of £70 million, yet Councillor Pat Watters, the president of the Convention of Scottish Local Authorities, advised the Finance Committee on 4 December that it was not in the gift of Government to say that there would be a council tax freeze. I understand that COSLA is now seeking legal advice on whether the Government is able to withhold from local authorities that do not freeze council tax their proportion of that £70 million.

The following day, Councillor Isabel Hutton advised the Education, Lifelong Learning and Culture Committee:

"We have not agreed in the concordat to reduce all P1 to P3 class sizes by the end of the specified period."—[Official Report, Education, Lifelong Learning and Culture Committee, 5 December 2007; c 413.]

There was further confusion on the extent to which the Government could ensure the protection of vulnerable people. Pressed by Wendy Alexander on the issue of domestic violence, the First Minister assured Parliament on 29 November that the outcome agreements that he was negotiating with each individual local authority would

"have the reduction of domestic violence as the highest priority."—[Official Report, 29 November 2007; c 3938.]

However, just five days later, Councillor Watters, when answering a question from me on that very issue, told the Finance Committee:

"the Government cannot give an assurance on behalf of 32 councils. We are independently elected to look after our communities."—[Official Report, Finance Committee, 4 December 2007; c 189.]

The cabinet secretary has appeared confused on how funding for issues such as flood prevention, which previously was ring fenced, will be distributed in the future. Mr Swinney will probably recall answering my question on 10 December. He said:

"There will be a number of instances in which allocations will be made on the basis of need. The flood prevention budget line is a good example of that. Work will be done in individual localities. Once that work is complete, money will no longer be needed there, so it can be reallocated to other areas. The issue forms part of the distribution discussions that we have undertaken with local authorities".—[Official Report, Finance Committee, 10 December 2007; c 225.]

A few days later, he told Parliament:

"funding that was previously earmarked, through local government, for deprivation, victims of domestic violence, mental health, homelessness and supporting people, or for any of the previously ring-fenced grants that are now rolled up, such as for flooding, will still be allocated to the same councils in the same way and according to the same practice as before."—[Official Report, 13 December 2007; c 4460.]

Even the cabinet secretary is confused about the spending review and how funding is to be allocated. I therefore urge him to work with the Parliament's committees to achieve clarification and to produce a budget that promotes sustainable economic growth and also promotes social justice.

Photo of Alex Neil Alex Neil Scottish National Party 10:08, 10 January 2008

This morning, we have learned from members on the Labour benches that an intellectual vacuum now pervades new Labour in Scotland. During the summer, we were promised a swathe of new bills from the Labour Opposition, which would flood the Parliament with new and exciting proposals to implement Labour's manifesto commitments. In eight months, the party has produced one bill, on tanning. That is the sum total of its effort on that front.

During the summer, Labour put forward a whole range of proposals for amendments to the budget, but this morning we have not heard one substantive proposal or one new idea from members on the Labour benches. The party talks about social justice, but where are its proposals for additional expenditure on social justice? What does Labour want to spend more money on, and what will it cut in order to fund that expenditure?

Photo of Margaret Curran Margaret Curran Labour

I am not on a committee, Presiding Officer, but I presume that, in making this suggestion, I am keeping within the rules. Does Alex Neil agree that we should increase resources to tackle health inequalities and that we should shift some money away from information technology?

Photo of Alex Neil Alex Neil Scottish National Party

I agree that more money should be spent on dealing with health inequality, and more money for that is already in the budget.

Photo of Alex Neil Alex Neil Scottish National Party

One way of dealing with health inequality is by making substantial additional investment in housing.

Photo of Alex Neil Alex Neil Scottish National Party

We have to deal with the causes of inequality, not just with the consequences.

Photo of Alex Neil Alex Neil Scottish National Party

Members should compare our proposals to build 35,000 new houses with the miserable 24,000 new houses built under the Lib-Lab pact—an increase of nearly 50 per cent.

Photo of Alex Neil Alex Neil Scottish National Party

I will let Iain Gray, in his frustration, come in at this point.

Photo of Iain Gray Iain Gray Labour

Mr Neil is correct—I am frustrated. He is claiming an increase in the housing budget, but I demonstrated this morning that it is being reduced in real terms over the next three years. Changing £1.5 billion to £1.6 billion is actually a reduction in real terms over a three-year period.

Photo of Alex Neil Alex Neil Scottish National Party

That is comparing apples with oranges. Iain Gray talked about our housing budget but compared it with Labour's money on housing and regeneration. Anyone who cannot see through that should not be a finance spokesman.

A big race is going on in the Labour Party to see who will succeed Wendy.

Photo of Alasdair Morgan Alasdair Morgan Scottish National Party

Please use people's full names, Mr Neil.

Photo of Alex Neil Alex Neil Scottish National Party

After Iain Gray's contribution this morning, my money is on Malcolm Chisholm.

One thing that the Labour Party did not mention is that, since the summer, the price of oil has gone up to $100 a barrel. If we are talking about budget revision, fairness and the distribution of resources, we should say that we would have an additional £3 billion to spend in each of the next three years if we had control over our own money.

The Labour Party has made a big thing about ring fencing, but the party does not understand two fundamental points about the removal of ring fencing. The first concerns a vote of confidence in local democracy. Every other major party in this chamber—the Tories and the Liberal Democrats as well as the SNP—has faith in local democracy. The Labour Party leadership wants to return to the Stalinist centralism that it has practised for the past 30 years.

Photo of Alex Neil Alex Neil Scottish National Party

No, I have taken enough interventions.

The second point that the Labour Party does not understand relates to single outcome agreements. It has missed the point entirely. Single outcome agreements do not apply only to areas that were previously ring fenced; they apply to the whole scope of local government funding. We therefore now have a far better and more appropriate balance between local government and the Government, which allocates resources to local government. It should be noted that, like the universities, local government now has, over the three-year period, a higher share of total Scottish Government expenditure than it had under the previous Executive.

Photo of Alex Neil Alex Neil Scottish National Party

I do not have time for more interventions.

We now have a proper balance between allocating resources from the centre and allowing people in local areas to decide how to spend their budget. If a local council wants to ring fence its funding internally, it is entitled to do so. If it wants to shift expenditure from one priority to another, it is entitled to do so. A council is best placed to know its community's priorities. Decisions should not come via some centralised diktat from Edinburgh.

The logical conclusion of Labour's argument is that we should not just ring fence what was ring fenced but should ring fence all local government expenditure. Why do Labour members not totally destroy local democracy while they are it? That is the logic of their argument. That is why, on this budget, their arguments are vacuous and their intellect is a vacuum.

Photo of John Park John Park Labour 10:14, 10 January 2008

I will try my best to fill that vacuum. I am new to the budget process but I have to admit that I have been disappointed by and concerned over the lack of detail in the Government's first budget. I am disappointed because the SNP has been vague, at best, on most issues since it formed a minority Government—the policy-lite themed debates that began in May 2007 were followed by a summer of parliamentary questions that could not be answered until the spending review had taken place.

What concerns me most about what we can glean from the little detail that is in the budget is that the budget priorities of the SNP appear to be vastly different from those of any other Government that claims to be social democratic, no matter what Kenny Gibson says. The SNP's budget has a business tax-cutting agenda that would make David Cameron blush—no wonder the Tories have been falling over themselves to support it.

Scotland needs collective solutions and leadership from Government. Let us look at skills, for example. It is particularly unclear how money will be spent to support vocational training. I suppose that that is not much of a surprise, given that the SNP manifesto said next to nothing about workforce development. That showed in the skills strategy's lack of substance and the fact that the economic strategy said more about a desire to have control over corporation tax and workers' rights than it did about workplace learning. We are in a period in which no strategic action will be taken while we wait for a skills body to be set up to deliver the few targets that the Government has set.

Given that few targets have been set and no measures have been taken, I find myself asking what the money that has been set aside for skills in the budget will deliver. Will it deliver 50,000 modern apprenticeships by 2011? Unfortunately for Scottish industry, it will not. It is clear that the Cabinet Secretary for Education and Lifelong Learning, Fiona Hyslop, has tried to portray the SNP's plan to have 50,000 people in training as being the same as providing 50,000 modern apprenticeships. In a parliamentary debate on 21 November 2007, at column 3591, she said:

"this Government will see 50,000 people in training. The Westminster Government's recent announcement of 120,000 apprenticeships brings its total"—

Photo of Christopher Harvie Christopher Harvie Scottish National Party

Does Mr Park accept that the quality of apprenticeship training has a great deal to do with an economy's level of manufacturing?

Photo of John Park John Park Labour

Absolutely. I accept that that is an issue, but as the member knows—[ Interruption. ]

Photo of Alasdair Morgan Alasdair Morgan Scottish National Party

You do not get a second bite at the cherry, Mr Harvie. [ Interruption. ] Order.

Photo of John Park John Park Labour

Manufacturing is an issue but, as Mr Harvie knows, the Labour-led Executive created a number of modern apprenticeships in a number of different disciplines over the eight years for which it was in power. We should not forget that the most worrying factor is that this Government has no targets for modern apprenticeships.

If the Government thinks that 50,000 nondescript training places are a substitute for the 50,000 modern apprenticeships per year that Labour would have delivered, I suggest that it should read the Leitch report to find out what the real challenges are. Once the Cabinet Secretary for Education and Lifelong Learning has read the Leitch report, if she still thinks that the provision of 50,000 training places compares well with the 7 million comparable places that are being rolled out across the rest of the UK, I suggest that she should go for a lie down in a darkened room. Frankly, zero targets for modern apprenticeships does not compare well with anything.

The fact that the Government has made no commitment, financial or otherwise, to increasing apprentice numbers sends out completely the wrong message to employers, who will think that it is okay not to train their own employees. Exasperated by the lack of opportunities, young Scots will give up looking for slots. Everyone is telling me—they must be telling the Government, as well—that the Government must provide leadership on modern apprenticeships.

For me, the most disappointing aspect of the SNP Government's behaviour, in a Parliament of minorities, is that it appears that it does not want to be seen to provide financial support specifically for modern apprenticeships because they are seen as a Labour Party priority, both here in Scotland and south of the border. In other words, its motivation is purely political.

Before the end of last year, in a parliamentary question to the Cabinet Secretary for Education and Lifelong Learning, I asked what targets the Scottish Government would set for training modern apprentices. Her response was:

"We will not overburden Skills Development Scotland with volume based targets, as these in isolation can drive behaviour."—[Official Report, Written Answers, 4 December 2007; S3W-6985.]

I say to the cabinet secretary that the whole point of investing and setting targets in training is about changing behaviour. There is a lesson from the recent past on that issue. The last Tory Government cut Government funding for training and left workforce development to the free market. We are still paying the price for that approach, through skills shortages and a culture wherein training is seen as a cost rather than an investment by many businesses.

Over the past 10 years or so, significant progress has been made in encouraging employers to change course and recognise the importance of workforce development for performance, productivity and staff retention.

In conclusion, I am deeply concerned about the message that the Government is sending out with its budget priorities. It is giving business the clear message, "We're not setting any targets on apprenticeships, so you don't have to provide any apprentice places. By the way, here's a cut in your business rates—spend it as you like." Ironically, businesses will probably have to spend any future tax cuts that they get from the Government on staff wages in a few years' time, when skill shortages get even worse as a result of the Government's flawed policy on workplace training.

I assure the Parliament that I take no pleasure in making such points because, in reality, the long-term ability of our economy to help deliver social justice is being undermined by the budget, and I am sure that no member wants to see that.

Photo of Christina McKelvie Christina McKelvie Scottish National Party 10:20, 10 January 2008

I saw the motion for today's debate and wondered why it was that, among the people who have an interest in local government funding in Scotland, Labour MSPs alone do not understand the deleterious effects of ring fencing. Given that Labour councillors the length and breadth of the country have welcomed the removal of ring fencing and that Labour MPs have supported the London Government in following the example set by the Scottish Government, one would have thought that Labour MSPs would embrace changes that will free up local authority spending. I thought that it was strange that they had not done so, so I took the time to have a wee glance back through the Official Report . I would like to offer a few quotes that might help to illuminate the debate.

Let us go back eight years to 2000, when the then Minister for Finance and Local Government, Angus MacKay, said:

"we want to move away from ring fencing ... we will move away from the current approach of ring fencing in some areas to give the maximum flexibility to local authorities in the delivery of services."—[Official Report, 7 December 2000; vol 9, c 706.]

So Labour has known for at least eight years that removing ring fencing would help councils to deliver services more effectively.

But there is more. In January 2002, Andy Kerr, the then Minister for Finance, said:

"We will consider the potential for further reductions in ring-fenced controls".

Michael McMahon was moved to reply:

"When the move from ring fencing to local outcome agreements develops further, we will, I hope, see further progress on optimising service provision."

Photo of Christina McKelvie Christina McKelvie Scottish National Party

Not right now, thanks.

Des McNulty added:

"We should also welcome the steps that have been taken to reduce ring fencing."—[Official Report, 31 January 2002; c 6007, 6016, 6020.]

In June of that year, Andy Kerr was back on the subject. He said:

"Ring fencing remains a concern of the Parliament and the leaders of local authorities and I continue discussions on the matter."—[Official Report, 19 June 2002; c 12795.]

His then deputy, Peter Peacock—I am not missing anyone out—said:

"We have listened to the arguments about ring fencing; we want to take action on a case-by-case basis to reduce ring fencing."—[Official Report, 19 June 2002; c 12834.]

Photo of Christina McKelvie Christina McKelvie Scottish National Party

In September 2005, Hugh Henry, the then Deputy Minister for Justice, said:

"the Scottish Executive cannot be a substitute for local decision makers making local funding decisions".—[Official Report, 15 September 2005; c 19116.]

The same applies, of course, to any central Government.

In November 2005, in reply to Labour councillor and Glasgow City Council leader Steven Purcell, Des McNulty, as convener of the Finance Committee, said:

"I accept that you need there to be less ring-fenced funding."—[Official Report, Finance Committee, 1 November 2005; c 2970.]

Indeed, that committee, with Des McNulty as its convener, Wendy Alexander as a member and Arthur Midwinter as its adviser, produced a cross-cutting expenditure review of deprivation in April 2006. Elaine Murray was highly selective in her quoting of Professor Midwinter. A key conclusion of that report was:

"the Committee believes greater accountability and better effectiveness can be achieved by removing ring-fencing of resources allocation, giving local partners greater scope to identify local priorities and implement partnership outcome agreements."

Amazing.

Photo of Christina McKelvie Christina McKelvie Scottish National Party

It is abundantly clear that Labour members in the Parliament—especially former ministers—are well aware of how damaging ring fencing is. They know that ending the ring fencing of resources that are given to local authorities will improve the performance of local authorities and of government in general. That begs the question why Labour Party members have become so vehemently opposed to removing that barrier to good governance.

Photo of Rhona Brankin Rhona Brankin Labour

Will the member confirm for us that the SNP manifesto contained a commitment to £30 million of ring-fenced funding for additional support for learning? Can she tell the parents of young people who have additional support needs where that £30 million of ring-fenced funding has gone?

Photo of Christina McKelvie Christina McKelvie Scottish National Party

The money is still there.

There is an issue about trust in councillors. Because of proportional representation, the IQ of local government has increased considerably—perhaps that is because the SNP has the most councillors. Perhaps Labour members are unable to trust Labour councillors or have a terror of subsidiarity and of letting go and allowing decisions to be made at the most appropriate level. Perhaps they simply have not thought through the consequences of their actions. Surely Labour members are not ignoring what is best for Scotland so that they can try to score petty party-political points. Are they talking Scotland down just so that they can scaremonger about everything from mental health groups to Hogmanay parties?

I read the newspapers as they rolled past during the holidays. A procession of Labour members claimed that ending ring fencing would bring plague and pestilence upon the land. Every day I read of another judgment to be visited on the heads of the Scottish people as a result of the sensible move to allow local authorities the flexibility to deliver services in the most appropriate manner for their areas. The messages were so strident that I was reminded of the dire warnings before the May election that if the SNP won the sky would fall in, every employer would immediately leave the country and we would be consigned to a life of darkness. The harbingers of doom were wrong about that and they are wrong about the removal of ring fencing. We know that what they say is rubbish, and so do the people of Scotland. There is a hungry caterpillar somewhere that is starting to eat its own tail and does not have long for this world.

I offer the hand of friendship and an olive branch to Labour members. They still have time to recant and restore a tiny bit of pride. They can support the SNP amendment and show that they still have a shred of decency.

Photo of Richard Baker Richard Baker Labour 10:26, 10 January 2008

The day before the spending review was announced, the First Minister outlined the Government's strategy for economic growth and set out aspirations that attract broad support in the Parliament. However, as happened in other areas, the Government's words on economic growth were not matched with investment through the spending review. Far from being the vehicle for the delivery of a more prosperous Scotland based on a knowledge economy, the spending review announcements ran counter to that aim. Instead of driving Mr Mather's overarching purpose, the spending review ran it over.

The contradiction was pointed out at the time by university principals, who made clear their astonishment at the funding settlement for their institutions. The student community's fury at the announcement that the promise on graduate debt, which had played a central role in the election campaign, was being unceremoniously dumped, was matched by principals' dismay at the opportunity cost to Scotland of their being awarded only £30 million of the £168 million that they had requested, and a budget share that is at best flatlining. Alex Neil should know that—if not, Universities Scotland will tell him.

That is why we call on ministers to amend the spending review and invest in areas that will boost economic growth.

Photo of Richard Baker Richard Baker Labour

The member would not take an intervention from me, but I will give way to him.

Photo of Alex Neil Alex Neil Scottish National Party

That was only because I was running out of time. The member's interventions are always productive.

How much additional money does the member want to give to the universities? What would he cut to fund that spending?

Photo of Richard Baker Richard Baker Labour

There are certainly ways of increasing the revenue line for universities and we have made a proposal to the Education, Lifelong Learning and Culture Committee in that regard, as Mr Neil well knows.

There is other action that we can take to ensure that the spending review is consistent with the promotion of a strong knowledge economy. John Park talked about the Government's failure to produce a comprehensive skills strategy. The failure to invest adequately in skills will be a costly decision for our country as we seek to compete globally. Other countries are massively increasing investment in their people's skills and academic expertise.

The previous coalition Executive put its money where its mouth was on the delivery of economic growth through investment in education. Spending on universities increased by some 18 per cent and spending across tertiary education increased by some 22 per cent. We reaped the rewards of that investment. We met universities' funding requests because we knew that Scotland as a whole would benefit if we helped to develop areas such as life sciences and to bring in private investment from companies such as Wyeth Pharmaceuticals.

In contrast, under the current Government the universities have received a settlement that offers only a 2.3 per cent uplift in their budget over the spending review period and a real-terms cut next year. Universities Scotland tells us that given commitments on pay there will be a £20 million funding gap for universities next year. It is an unfortunate irony that the funding settlement was announced by the Cabinet Secretary for Finance and Sustainable Growth, who argued in January 2004 that giving a funding advantage to universities south of the border would lead to

"a draining of Scotland's academic resources" and to putting

"Scotland's universities ... to the financial sword"— like Christina McKelvie, I can quote members.

John Swinney's words were eloquent, but his fears were misplaced, because significant extra investment in tertiary education followed. The bitter irony is that under Mr Swinney's budget settlement a 5 per cent funding gap will emerge for the first time between our universities and English institutions, as the Education, Lifelong Learning and Culture Committee heard from Universities Scotland.

It is clear that the Scottish Government's proposals in no way reflect the consensus on the issues. It is incumbent on us to make proposals for a review of the settlement, and we are doing that in the committee. It is also incumbent on the Government to listen and respond to the deeply held concerns of the people of Scotland. People are worried about decisions that have been made about an important part of public life. The vague promise of extra end-year funding for universities and the establishment of the future thinking task force, which includes neither trade unions nor student bodies, represent an inadequate response to people's serious concerns.

We need short-term action to address the issue. In the medium and long term, we need an independent review of how we fund higher education, so that we can maintain and improve our current position. We have two universities in the world's top 100 universities, whereas the Scandinavian countries, to which the Government is fond of referring, have only one university in the top 100.

Not only has the Government dumped its promise on graduate debt but it has no coherent strategy on student hardship. The Government has the wrong spending priorities. It seeks to abolish the graduate endowment but offers no significant increase to the young students bursary, which provides money for students who need it most, particularly students from poor backgrounds. As other members said, the Government's approach is another example of how it has put political expedience before social justice in its budget.

I say to Mr Gibson that although the SNP has portrayed itself as a socially progressive party for years, its actions in government make clear that it is nothing of the kind. It does not surprise me that in Aberdeen—where local government certainly has not been improved by PR—SNP members are seeking to invest in expensive new office provision for themselves while cutting care packages for vulnerable people in the city. It is no wonder that there is concern that the SNP nationally is abandoning national strategies that ensure that key services are provided for the most vulnerable people. The SNP is failing the people who should have been prioritised in the spending review, just as it is failing to deliver its strategy for economic growth. If those two key areas are not served by the spending review, Scotland will not be served by the spending review. That is why it must change.

Photo of Gavin Brown Gavin Brown Conservative 10:33, 10 January 2008

I have some sympathy with the part of the Labour motion that criticises the Government for the level of detail that we have been given in the budget. Although in some budget lines, such as the line on tourism, the level of detail is identical to the level of detail that the previous Executive provided in its most recent budget, in other areas, such as the lines on Scottish Enterprise and Highlands and Islands Enterprise, there is less detail than we have been given in the past. Members can talk about level 3 as much as they like, but what has been provided does not correlate to what was provided in previous budgets. The draft budget for 2008-09 provides a budget line for Scottish Enterprise, but under the heading "Scottish Enterprise" in the previous year's budget we were given figures for "Growing Business", "Skills and Learning", "Global Connections", "Management and Administration", "Careers Scotland", "Voted Loans", and non-cash budgets—seven clear budget lines. In some instances, the level of detail in the current budget is not as good as it could have been. That should be addressed in the next budget.

However, I part company with Labour on most of its motion and on most of what Labour members have said in the debate. A couple of members said that Labour is the party of economic growth, blindly ignoring the fact that growth in Scotland during the past eight years trailed behind growth in the United Kingdom as a whole.

The Labour Party is at best lukewarm about the excellent proposal for business rate cuts—something that we think should be done more quickly. In the chamber, Wendy Alexander proposed that the business rate cut should be tied to a promise by companies to spend the money investing in something else, such as research and development. However, that would not allow businesses to decide what they do with the money. If Labour Party members are genuinely concerned about economic growth, I suggest that they pick up the phone to the Chancellor of the Exchequer and enterprise ministers down south and explain to them that increasing corporation tax on small businesses by 3p in the pound is not good for economic growth. Perhaps they could also explain to them that the end of taper relief without any consultation with business is not good for business growth—whether in small, medium or large businesses.

We have heard a lot about ring fencing this morning. The Scottish Conservatives strongly support what the Government is trying to do. The reality is that there will be a reduction in the amount of ring-fenced money—it is not an all-or-nothing situation. We are moving from a situation in which about £2.7 billion is ring fenced to a situation in which £0.5 billion is ring fenced. It is a question of degree, as opposed to the absolutes suggested by Labour Party members in press reports and again today. The previous system has been described by local authorities as too rigid. It results in their having to report in 50 separate ways how the ring-fenced money has been spent. That is a waste of time and effort, and it does not help to progress anyone or anything.

In our 2003 and 2007 manifestos, we supported a move to a reduction in ring fencing. It is a good idea. It gives flexibility to councils and allows them to find local solutions to local problems. They can spend the money as they see fit. MSPs sometimes forget that councillors have the same strength of democratic mandate as they do. The electorate put councillors into their positions, and it is right and proper that they should be judged on how they perform. A reduction in ring fencing will give them much greater accountability and could renew and reinvigorate local democracy.

The counter-arguments that we have heard do not hold up. The idea that councillors do not care as much about the vulnerable as MSPs do is wrong. Local councillors can care just as much about issues in their local areas as we do, and can perhaps be far more effective. We heard Iain Gray talk about the dangers of a postcode lottery if we reduce ring fencing. We have one of the most centralised systems in western Europe, and we already have a postcode lottery. There are disparities in health, literacy and life expectancy with that overcentralised system.

Photo of Iain Gray Iain Gray Labour

I did not say that I was concerned about a postcode lottery. I said that NCH Scotland was concerned about the possibility of a postcode lottery. I am not expressing the fears of the Labour Party but the fears of those who deliver the services.

Photo of Gavin Brown Gavin Brown Conservative

The fact that Mr Gray put great stress on quoting what NCH Scotland said suggests he agrees entirely with it. I have heard a number of Labour members state, to the press and in the chamber, that they are concerned about a postcode lottery, so the point still stands.

The Scottish Conservatives would consider going further by giving some power and even funding to community councils, taking power one step closer to the electorate. However, that is not a debate for today. We are in favour of the reduction in ring fencing, which we believe can reinvigorate local democracy. We want economic growth to be put at the heart of the Government's budget.

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat 10:39, 10 January 2008

This is, again, a budget in which we are discussing figures that are in effect a grant from another Parliament. This is the third parliamentary session in which Scottish expenditure is still predominantly determined by the Treasury at Westminster. That is not sustainable, which is why agreement is growing in Parliament for developing greater responsibility in Scotland for raising revenue. Indeed, one of the conclusions of the report from the Steel commission, which was set up by the Liberal Democrats, is that no self-respecting Parliament should exist solely on the handouts of other Parliaments. That principle applies to local government, too.

We have heard member after member from the SNP talking about local discretion, local freedom and local responsibility, yet in effect SNP ministers are ring fencing the whole of local government expenditure. The Government is threatening councils—and will continue to do so—that they will not be able to retain efficiencies, that they will not be able to have other funding, and that they will not be able to benefit from other elements of funding unless they freeze the local tax rate. That means that 100 per cent of spend in councils will be determined by ministers.

Photo of Joe FitzPatrick Joe FitzPatrick Scottish National Party

Do the Liberal Democrats support the council tax freeze throughout Scotland?

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat

The Liberal Democrats support greater flexibility for local government to raise its own revenue. That is a fundamental point. The SNP cannot say that it supports local discretion and local freedom while tying the hands of local government in setting the budget for three years.

This is not a budget for education, skills or learning. Education received a passing reference in the First Minister's statement on the Government's priorities. The Government was reluctant to debate its proposals for education policy in the Parliament. When it did so, those proposals were shown to be ill considered and—as is evident from the budget—uncosted. The budget exposes the regrettable betrayal of many people who believed that education was the SNP's top priority. Students from across Scotland have contacted MSPs with a sense of bitterness at the SNP for dumping its policy to scrap student debt. They are angry—rightly so—at having been let down. As Tavish Scott said, when students from the University of Edinburgh chose to indicate their frustration at the Government peacefully outside the Parliament, SNP-paid researchers heckled and jostled not only the students but MSPs who went out to address them.

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat

The member says it is not true, but it is true. An SNP researcher heckled and jostled me outside the Parliament when I was having a dialogue with students. What does that say about a Government in the middle of a budget process? It is afraid to hear the voice of students and seeks to disrupt a peaceful meeting.

The budget is about the SNP's spending choices. Universities and colleges have been disappointed with the priorities that have been set. Next year, there will be a real-terms cut in university funding—not just a slow-down, but a funding reduction. How can any education minister worth their salt sign up to a document that gives a key part of their portfolio a real-terms cut in expenditure in one of the three years of the spending review? The First Minister misled Parliament when he stated that throughout the three years of the budget there would be continuous growth in the education sector. The Cabinet Secretary for Education and Lifelong Learning was more forthcoming, saying that there was a real-terms cut next year. However, the First Minister double-counted £100 million of capital funding that was announced for this financial year and spread it over the following three financial years. We were told by SNP spin doctors that that was for "illustrative purposes".

Universities Scotland was dismissed when it said that the budget is not consistent with the Government's economic strategy. To easily dismiss the university sector in Scotland, as SNP members have done, lets down one of the key sectors in Scotland, and one of our best hopes for the future of our economy.

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat

I will not. If I have time, I will come back to Mr Neil.

Concern has been expressed about the level of commitment in Scotland for schools and skills. The Government has chosen to set up a new quango on skills—a centralised, national body with set-up costs alone of £16 million. The entire budget for delivering the skills strategy is £19 million. It says something when a Government is prepared to spend on bureaucracy just a shade less than it has allocated to an entire budget.

There has been considerable confusion about whether money that has been transferred to local government can easily be tracked. One of the key areas is the promise on class sizes. On 14 November, the Cabinet Secretary for Finance and Sustainable Growth told me that much of the enterprise and education budget was being transferred to local government. I asked COSLA whether that was the case, but it did not know; COSLA said that it did not have those figures. I also asked COSLA whether the Government could put a clear figure on how much local government would have to spend on education. Robert Nicol of COSLA told me:

"No element of the local government settlement was allocated specifically for education"—[Official Report, Education, Lifelong Learning and Culture Committee, 5 December 2007; c 433.]

That is COSLA's statement.

It is not just COSLA, or Universities Scotland, or members of this Parliament who have said that the budget is not good for education and does not match our national priorities. That is deeply regrettable.

Photo of Christine Grahame Christine Grahame Scottish National Party 10:45, 10 January 2008

I will not spend too much time dealing with the Labour Party's self-denying ordinance on the embargo on addressing committee reports, which is quite right. However, as I said in the intervention that Derek Brownlee allowed me to make, that does not prohibit members from making points in the chamber. The guidance that I issued in that intervention was comprehensive. I can think only either that the Opposition does not understand parliamentary procedure or that some cunning tactics are at hand and the Labour Party intends to reprise its arguments in two weeks' time. If today has been a trailer for the budget debate, I will not be sitting in on Labour members' speeches, because they will not be worth a candle.

Having taken my advice, Margaret Curran made a point about reallocating money from IT to health inequalities. That is a fine idea but, if she looks through the Official Report of the Health and Sport Committee, she will see that the committee has taken no evidence on that matter. However, the committee is the place in which such a proposal could be tested on witnesses and put to the cabinet secretary. A debate in the chamber is not the place for such a proposal to be raised, as its quality cannot be tested. Nothing about such a reallocation appears in the Official Report—members can check it.

Photo of Margaret Curran Margaret Curran Labour

With the greatest respect, Christine Grahame cannot have it both ways. She says that I should make a specific proposal but, when I do so, she tells me that the place for that to happen is the committee. She should make up her mind.

Photo of Christine Grahame Christine Grahame Scottish National Party

The specific proposal is fine, and the committee might have agreed to it, if it had had the opportunity to test it on witnesses. For example, we could have asked about the impact on the IT budget and how the money would have gone towards tackling health inequalities. However, we were unable to ask such questions because, as the Official Report shows, no one gave the committee the opportunity to test the proposal. It is not sufficient to make a proposal in a debate without evidence to prove its value.

I will deal with three issues: the clarity of the budget; the timescale for committees; and ring fencing. Clarity of the budget has been an issue for a long time. It is enlightening to look back to the Finance Committee's previous draft budget report. Annex C, which is the Communities Committee's report to the Finance Committee, says:

"The Committee is of the view there is insufficient transparency in the draft budget in relation to the CUP ... Whilst the Committee recognises that the autumn and spring Revisions include departmental transfers to and from the CUP, it notes that there is a lack of consistency and insufficient detail in the recording of the transfers".

There are many comments about lack of clarity. Further on, we read a comment from the Education Committee:

"The Committee noted concerns that a number of points in last year's budget report had not been fully addressed, and expressed disappointment that, despite its continued concerns, the budget has been presented in the same format."

The parties who formed the previous Administration have a cheek to come here and complain about the budget process when it was within their power for eight years to assist the parliamentary committees, which said, time after time, that they could not see where the money was coming from or where it was going to.

Photo of Christine Grahame Christine Grahame Scottish National Party

Let me make some progress first.

In the Finance Committee's report, the Education Committee also said:

"The Committee expressed continued concern that the budget continues to be presented in the same format. The Committee would welcome any refinements in budget presentation that would make tracking of performance and expenditure and budget scrutiny in general more meaningful."

Hear, hear. That is why the Parliament needs a proper review process, as proposed in the Conservative amendment.

The Finance Committee's report also contains this comment from the Enterprise and Culture Committee:

"members are not convinced that the current budget process and the type of information provided to subject committees enables scrutiny of cross-cutting expenditure".

The Health and Sport Committee fully agrees with that view. Therefore, in relation to the alcohol and drugs budget, we asked three cabinet secretaries to come before us—the Cabinet Secretary for Justice, the Cabinet Secretary for Health and Wellbeing and the Cabinet Secretary for Finance and Sustainable Growth—and made them present to us and to members of the Local Government and Communities Committee and the Justice Committee how their budgets were being fully utilised to address a matter that we all agree is a major scandal across Scotland and which costs this country a great deal of money and causes a great deal of human misery. We have tried to tackle the scrutiny problem that has been identified. Indeed, in the very format of the Cabinet, there is an endeavour to streamline and tighten that process.

There are many comments in the previous Finance Committee's draft budget report. Even ministers in the previous Administration would agree that the committees' job is not only to hold ministers to account but to assist them, through detailed examination of witnesses.

Photo of Christine Grahame Christine Grahame Scottish National Party

I have only one minute left.

One does not need to go far to hear about the problems of ring fencing. Pat Watters—no doubt he will get the black spot from Labour now, poor man—said:

"I am entering this debate, not on a party political basis, but in an attempt to provide reassurance to vulnerable members of our communities and those who make provision for them that removal of ring-fencing can lead to better, more effective services - not, as some claim, the opposite".

I could not have put it better myself. Ring fencing is a lazy way of handling funding. It looks smart and it makes it look like people know what it happening, but neither of those things is true. I will never forget the words of one of the previous Executive's many health ministers, Malcolm Chisholm, who, when asked by the Health Committee whether his investment of £10 million in cancer services had made any difference, said that he did not know.

With outcome agreements, we are trying to make a difference by giving local authorities the democratic control that they deserve. Goodness me, how would we feel if Westminster told us what to do with our money in our various portfolios? We would be screaming with anger, which is what local authorities were doing. The Labour Party should be ashamed of attacking its own councillors.

Photo of Paul Martin Paul Martin Labour 10:51, 10 January 2008

Christine Grahame and Alex Neil referred to ring fencing and have confirmed their confidence in local democracy throughout Scotland. Why does that confidence not extend to the setting of local income tax levels? I understand from the SNP's manifesto that those will be set centrally.

Photo of Christine Grahame Christine Grahame Scottish National Party

I am interested that Mr Martin attacks us for moving towards a local income tax. At no point during the eight years in which the Labour-Liberal coalition was in power did the Executive deal with the council tax's penalisation of low-income families and pensioners. Paul Martin should be ashamed of himself for trying to prop up the council tax.

Photo of Paul Martin Paul Martin Labour

Earlier, I heard some poor comments from Christina McKelvie regarding the intellectual deficit in the Parliament, but, given that answer from Christine Grahame, it is just not good enough to say that.

After being elected as First Minister, Alex Salmond said:

"My pledge to the Parliament today is that any Scottish Government that is led by me will respect and include the Parliament in the governance of Scotland over the next four years."—[Official Report, 16 May 2007; c 36.]

The First Minister should transmit such aspirations to his cabinet secretaries, who, at various committees during the scrutiny of the spending review, have failed to respect the role of committees in ensuring that we interrogate effectively the spending plans.

I will elaborate that point in relation to Kenny MacAskill's performance during his session with the Justice Committee on 4 December 2007. As we know, and have discussed a number of times, the SNP said that it would deliver 1,000 additional police officers on our streets throughout Scotland. It is perfectly legitimate for members of the Opposition to interrogate ministers about how they intend to deliver those 1,000 police officers. Ministers have said that that will be achieved through improved retention, redeployment of officers and increased recruitment.

The Cabinet Secretary for Justice is absolutely confident that he will deliver those extra police officers, but I am afraid that I am not. It is perfectly legitimate for us—

Photo of Kenneth Gibson Kenneth Gibson Scottish National Party

On 17 October, Strathclyde Police acknowledged that 121 jobs of a non-front-line nature have already been civilianised, which will release 121 police officers on to the streets of Strathclyde from February this year. Is Mr Martin aware of that?

Photo of Paul Martin Paul Martin Labour

I will take no lectures from SNP members with regard to the creativity that we showed during our coalition years to ensure that officers were released for front-line duties. Our alliance contract, which I understand the members of Kenny Gibson's party opposed, was one of the measures that released 250 officers for front-line duties throughout Scotland. However, the issue here is that the minister has advised us that the process of retention will assist the Government in ensuring that an additional 1,000 police officers can be recruited.

It is perfectly legitimate for members to ask the Cabinet Secretary for Justice how he expects to achieve that increase from retention, and whether his Government officials have carried out any illustrations or simulations of how they expect to do that. The Cabinet Secretary for Justice's answer was that there are no illustrations of how he expects to achieve that increase as a result of the retention of police officers, and that there have been no projects within his Government office to ensure that that happens. We have seen back-of-a-cigarette-packet politics from ministers—they are not willing to provide illustrations of how they expect 1,000 police officers to be delivered.

The Government announced last year that it would procure a new prison in the Bishopbriggs area of Glasgow through the publicly procured process. As part of the interrogation process in the Justice Committee on 4 December last year, it was legitimate for us to question the cabinet secretary on how he expects that to progress. We received no information from him on how the procurement process would be pursued. Again, there is not enough information from the Government on how it will pursue its agenda. For the Government to sign a blank cheque in that regard is not good enough. Our motion sets out very clearly what we expect from the Government, and we expect the Government to deliver on that.

Photo of Joe FitzPatrick Joe FitzPatrick Scottish National Party 10:57, 10 January 2008

I welcome the opportunity that is provided by today's debate, because it clearly highlights the difference between a Government that is delivering and an Opposition that is just going through the motions. We have heard a lot of scaremongering from Labour members regarding ring fencing. Despite reassurances from the COSLA president—the Labour councillor Pat Watters—that ending ring fencing will enable local authorities to deliver services better to the most vulnerable groups, the Labour Party persists with its misguided attacks.

"We know that effective service delivery for families and communities cannot come from central command and control but requires local initiative and accountability. For all the time I have been involved in politics I have believed in devolving power, so that those who are affected by the decisions are close to and can hold accountable those who make the decisions—and our aim must always be the maximum devolution of power possible: government encouraging not stifling local action, local people making local decisions about local needs ... the goals we share cannot be realised in practice without central government devolving power to local communities" and that is why this Government is committed to

"reductions in ring fencing of revenue from central government".

I should have said that in a Fife accent, because those are not my words, but the words of the then Chancellor of the Exchequer, Gordon Brown, in a speech to the Local Government Association general assembly in 2001.

Photo of Margaret Curran Margaret Curran Labour

Why did the SNP have the increasing of ring fencing for mental health services in its manifesto?

Photo of Joe FitzPatrick Joe FitzPatrick Scottish National Party

I would have to check the specifics, but I am sure the cabinet secretary will look at that—later, perhaps.

We have heard derogatory comments about the historic concordat that the Cabinet Secretary for Finance and Sustainable Growth, John Swinney, has made with Scotland's local authorities, particularly from Iain Gray, who has left the chamber. Yet when the Labour Secretary of State for Communities and Local Government, Hazel Blears, signed a similar concordat with local authorities in England last month, she stated:

"The historic shift outlined today will help unleash the potential of local communities, giving them new freedoms in delivering what local people want. For local authorities, it promises the progressive removal of obstacles that prevent them from pursuing their role."

The United Kingdom 2007 comprehensive spending review clearly supports the reduction in ring fencing, and the UK Government has established a presumption against ring fencing in local authority spending.

So to recap—we have the Labour leader in favour of scrapping ring fencing and the Labour Secretary of State for Communities and Local Government enthusiastically signing up to greater financial freedom for local authorities. Labour councillors throughout Scotland also support the reduction in ring fencing, and Scottish Labour MSPs appear to be the only ones who disagree. That has, however, not always been the case, as we heard from Christina McKelvie earlier. In the past, Labour MSPs have been clear about their support for the removal of ring fencing, and today their UK counterparts are enthusiastically moving towards financial freedom for local authorities.

Today's debate has seen Labour members at their most petty, as they have failed to grasp the issues and ignored the reassurances of Pat Watters and COSLA. They have failed to read the concordat, which clearly states the outcomes that are expected of local authorities in relation to vulnerable groups. Their message is clear: the removal of ring fencing is acceptable as long as it is proposed by Labour politicians.

One thing that is evident from today's debate and from Labour members' response over the past couple of months to the budget is their inability to give credit where credit is due. The SNP has produced a budget that will benefit the whole of Scotland, and although we do not expect Opposition parties to agree with everything in the spending review, I would have hoped that they could put party politics aside in the areas that clearly aim to improve the lives of Scots.

One such area is the commitment in the budget to delivering a healthier Scotland. In Labour's manifesto, the party called for action on tackling health inequalities in areas of multiple deprivations. That is a laudable aim, and when the spending review announced that there would be a particular focus on the areas and communities with the worst health records, with an extra £12.5 million pounds a year to strengthen primary health care in the most deprived areas, it seemed that Labour would welcome such a commitment.

However, we have learned during the Labour Party's time in opposition that its members look not at the delivery of the policy, but at the party that is proposing it. For the benefit of Labour members, I remind them of what the spending review will deliver for the health and well-being of all our communities. It will deliver £350 million of new money for health improvements and better public health, including £85 million to reduce harm done by alcohol, £3 million a year for further action to reduce smoking and £11.5 million a year to prevent obesity. There is £270 million allocated to ensure that, by the end of 2011, nobody will wait longer than 18 weeks from a general practitioner's referral to treatment for routine conditions and £30 million to ensure more flexible access to primary care.

Most important, there is £97 million to phase out prescription charges to ensure that sick people are not financially disadvantaged. I would have loved to be a fly on the wall at the Labour group meeting when members were told that they would be voting against the scrapping of prescription charges. Any pretensions that the Labour Party had to represent the working Scots were lost forever on the day that it decided to vote in favour of a tax on ill health, which is what prescription charges are.

The Labour Party failed to listen to the people of Scotland and it paid the price at the ballot box. From what we have learned in today's debate, its members are still a long way off learning their lesson.

Photo of Helen Eadie Helen Eadie Labour 11:03, 10 January 2008

I say to Joe FitzPatrick that I always give credit where it is deserved. I will give credit to a minister who abolishes the tolls, and to a minister who says that he will build a new bridge, but I will not give credit to—and I will condemn totally—those members who are sitting in Government producing the most right-wing reactionary policies that the people of Scotland have seen in many years. That is what we are witnessing.

The weakness of John Swinney's approach in removing ring fencing is that it requires only monitoring—there is no mention of sanctions if his hoped-for national outcome agreements are not matched. What will the sanctions of his Government be? How will he and the Scottish Government protect the voiceless, vulnerable frail victims in my constituency and in other areas throughout Scotland?

When the Labour council in Fife set its budget last year, the Opposition parties put up their alternative budgets, and guess what? The alternative budget that was proposed by the SNP in Fife was £1 million less than Labour's budget, yet the SNP has had the temerity to blame Labour in Fife for the budget that it has inherited and worked on in the past year.

I question the Scottish Government's unequivocal confidence in local authorities, and I will explain why. Fife Council is doing some of the most atrocious things. I will give some examples of what is happening. The Government should tell the patients in Fife hospitals who are assessed as being fit to go home why they must stay in hospital. There are 142 of them right now, and their stay in hospital costs £1,000 a day. The SNP is not fit to govern at either local or national level. Over 10 days, the cost is £142,000, and over 100 days it is almost £1.5 million. The cost escalates up the scale. That is why the Labour Government always had a safety net to ensure that there were controls to help those who were going to be in difficulties.

I say to Mr Swinney that the reason why I do not trust the SNP and the Liberal party in Fife is that my people cannot have their cake. The Government is saying of my people "Let them eat cake", but some of them cannot afford cake after the increases that they have faced in social work charges. Some of them might not be able to eat anything. Some people in Fife have seen their social work charges go from £273 a year up to nearly £8,000 a year. The Government tells them to eat cake, but they are some of the most frail, vulnerable and dependent people in our community. Under an SNP Government, that is what happens to support for the needs of people in our communities.

I say to Peter Grant and Frances Melville of the Liberal and SNP-controlled Fife Council that my people are angry, I am angry, and my colleagues in the Labour Party are angry because the council is hurting the most frail and vulnerable people. If society does not measure up in helping to protect the most frail and vulnerable people, we must stand up for those people, but the Scottish Government is not doing that.

Let Mr Swinney tell Ryan Turner—a little baby who is barely seven months old and has been in hospital since he was born, even though he has been assessed as clinically fit to go home—why his loving, caring, SNP and Liberal-controlled council says that he cannot go home. The cost is £1,000 a day, but worse than that is the fact that he is still in hospital after seven months despite having been told that he can go home. He was told that he might not even get out of hospital next Christmas, let alone this Christmas. Why? If we add up the total cost over that period of time, it is £500,000. That is the amount that the health board will spend on that baby staying in hospital. That could have bought two or three houses for families that need to be cared for.

That is just one example of the gross mismanagement and one reason why there needs to be control by central Government. The Government needs to be able to go back and address such cases. I do not accept that the Government has the strategies in place to cope with such mismanagement. It needs to have controls at the centre. Although it is important and good to have control—

Photo of Helen Eadie Helen Eadie Labour

Let me just finish this point.

I ask Mr Swinney and Mr Neil why the folks in Fife should have confidence. They should consider the situation in Inverkeithing, where people were forcibly removed from their houses because asbestos was discovered. That is fine—it happens—but every possession that they had was destroyed and thrown away and there was no effort to make restoration to those families, or the restoration was minimal. That is appalling. Here they are, three months down the line, having been forcibly evicted.

What safety nets will the Government put in place? It has a policy of laissez-faire. In the days of the Tories, we experienced some of the worst laissez-faire policies, but now we have the most right-wing Government that Scotland has had. I am angry. I am furious for my people. I am angry about the case of Marie Robson in Lochgelly, who got a brand new house seven months ago. She is a 40-year-old who has special needs. She is now in the domain where she cannot move into a beautiful house—it is the most amazing house I have ever seen—that was built by a local housing association. That woman, her father, who is over 80, and her mum, who is nearly 80, are trying to control a situation that is out of their control. The house is standing empty and will stand empty for more months because the SNP and Liberal Democrats in Fife will not do anything to help her.

That is the kind of Government that we have. That is why I have no confidence. The Government needs to have safety nets and ring fencing. We need to provide ways to protect people. All the things that I described are happening on the Scottish Government's watch. I could give a litany of such cases; I have a casework file full of them. Dozens of such cases have emerged in recent days. That is happening on the SNP-controlled Scottish Government's watch, and on that of the SNP and Liberal Democrat-controlled council in Fife.

I am not happy, Presiding Officer, and I have made my views clear. I will support my colleague's motion because I believe that the Labour Government had the right strategy to help the most frail and vulnerable victims, whom the Labour Party has always stood up for and tried to protect.

Photo of Liam McArthur Liam McArthur Liberal Democrat 11:10, 10 January 2008

By and large, the debate has been interesting, and there were thoughtful speeches from a number of members—John Park, Gavin Brown, Jeremy Purvis and others. It is not just me who thinks that. I note that the cabinet secretary has been scribbling away feverishly in the past couple of hours. There was much talk of cake and of eating it. I am not entirely sure what cakes Kenny Gibson was eating over Christmas, but I would gently encourage him to check the ingredients rather more carefully in the future. Christine Grahame's unambiguous bid as the Presiding Officer in waiting will not have gone unnoticed.

We heard a range of views this morning, but it is clear that the current arrangements for scrutinising the budget—for enabling Parliament to perform its role of holding the Government to account—are inadequate. Parliament has already accepted that. That much is evident from the decision, taken in the chamber last November, that the Standards, Procedures and Public Appointments Committee should review the budget process for future years. As Derek Brownlee rightly pointed out, that idea was raised by the Tories, but it was raised in an attempt to suppress further debate in the Parliament on the detail of the Government's spending plans. Today, again, the coalition that dare not speak its name is ready to unite on the budget.

However, despite its dubious parentage and the squalid circumstances of its birth, the proposal offers a way forward in addressing the shortcomings in the current process, which were highlighted again today. Tory and SNP spokespeople—most vividly Christine Grahame—protest that if the rules were good enough for the previous Administration we have no right to call for changes.

Photo of Liam McArthur Liam McArthur Liberal Democrat

In a second.

Leaving aside what they said in years gone by about the scrutiny process, they are now all too happy to ring fence. The behaviour of the minority Administration vividly demonstrates why the rules must be recast, and urgently.

Photo of Derek Brownlee Derek Brownlee Conservative

I am delighted that the Liberal Democrats have changed their position on that. Does the member accept the point that we made in the debate on 8 November 2007, which was simply that we should not change the budget process a week before it began? The fact that we are going through the budget process with a minority Administration will give us the ideal evidence base to make constructive suggestions about how the process might be improved in the context of minority and coalition government.

Photo of Liam McArthur Liam McArthur Liberal Democrat

I certainly accept Derek Brownlee's point about where we go from here, but I gently remind him that his colleagues were all too willing to sign up to the idea of additional debates, only to do a volte-face in the final 24 hours.

As my colleague Tavish Scott said, the SNP came into office making much of the need for consensus. Back in May 2007, with perhaps unconvincing humility, the First Minister talked of a minority Government in a Parliament of minorities. He called on politicians of all parties to work together on issues on which there was agreement. He promised that he and his ministers would propose and discuss their changes in seeking parliamentary approval. The subsequent eight months have shown that that was not uncharacteristic humility from the First Minister, but rather trademark hubris.

The budget is the most opaque that we have had since the Parliament was established. Elaine Murray mentioned the views of the Centre for Public Policy Research, which has criticised the lack of detail and transparency—detail and transparency that the Parliament and its committees fought for and secured in recent years. SNP ministers have been hauled before committees that have desperately sought greater clarity on the Government's intentions, but in many cases to little avail. As Iain Gray said, we even had a situation in which the Finance Committee was forced to write to the Cabinet Secretary for Finance and Sustainable Growth to demand a greater level of detail—detail that was readily and timeously provided by Mr Swinney's predecessors.

Change is required. Following the debate last November, the Liberal Democrats believe that the review by the Standards, Procedures and Public Appointments Committee needs to be taken forward urgently. It must involve not just other parliamentary committees but wider civic Scotland, and it should consider the timescale, content and nature of the budget process. All of that should be done so that the Parliament is in a position to consider, debate and adopt recommendations in time for them to be implemented before the budget process in 2009-10. I hope that there is genuine political consensus on that.

The lack of clarity in the Government's spending proposals has been well documented. However, I highlight an area of particular concern to the Liberal Democrats. Mr Swinney has set the Government and the public sector efficiency targets, which are generally accepted to be challenging. There is almost certainly political consensus, if not unanimous support, for the need to make the public sector as efficient as possible and focused on delivering high-quality services to the people of Scotland. However, to date we have seen precious little detail about how the Government intends or expects to achieve those efficiencies. Given the extent to which Mr Swinney's spending plans depend on achieving the £1.6 billion efficiencies, that is a cause for real concern. What are the implications if, for example, only £1.4 billion savings are achieved? How and where will the cuts fall?

Mr Swinney has been clear that his target relates to cash-releasing savings. However, on "Newsnight Scotland" last night, his colleague Stewart Maxwell insisted that time-saving efficiencies were as important as those that release actual cash. Granted, Mr Maxwell was desperately trying to spin himself out of having to admit that he had just performed a spectacular, albeit welcome, U-turn on the retention of sportscotland. Nevertheless, his remarks and indeed the ditching of SNP plans to abolish sportscotland throw into stark relief the lack of clarity about the Government's intentions. They also seem to betray a total confusion in Government about how it will achieve its efficiency target.

This has been a useful debate. It has demonstrated again the failure of the Government to deal in an open and transparent fashion with the Parliament, and it has laid bare the constraints on Parliament in holding this minority Government to account. Liberal Democrats want the situation reviewed and rectified as a matter of urgency. I support the amendment in Tavish Scott's name.

Photo of Alex Johnstone Alex Johnstone Conservative 11:16, 10 January 2008

It is usual, at the outset of a winding-up speech, to take something positive from the debate and I have been trying to think of something positive to say. The first thing that I would like to point out, to the previous speaker in particular, is that the Conservative party was never of a mind to agree to a long process of five debates on the budget. However, I can take one positive from the result of the decision by Parliament: if today's represents the quality of debate that we would have had, thank goodness that we have had only one, rather than the five that were originally proposed by the Labour Party.

Photo of Margaret Curran Margaret Curran Labour

Is that you being positive, Alex?

Photo of Alex Johnstone Alex Johnstone Conservative

Let us consider the issues that have been raised in the debate.

The first issue is the process. I agree that it is important that we examine the process in the future and the Conservative amendment to the Government amendment is designed specifically to achieve that. I hope that it finds widespread support.

The process and how we handle it has been thrown into the discussion because many members do not realise where they now sit. That is particularly the case for Labour members, who now sit in opposition. When they were in government, they knew perfectly well what was going on in the budget process. Now the boot is on the other foot, and the information that they have on the budget process is the same as that which those of us who used to be in opposition, and those of us who still are, have to put up with.

Photo of Iain Gray Iain Gray Labour

I am puzzled by Mr Johnstone's point because Mr Brown, who is sitting next to him, said exactly the opposite in his speech, using Scottish Enterprise budget lines as an example. We do not have the same level of detail as we had previously.

Photo of Alex Johnstone Alex Johnstone Conservative

Gavin Brown said that in some areas the information is certainly different. However, it has to be pointed out that, as an Opposition party, Labour is in the position that we have been in: we do not have the inside line on information. I remind the Labour Party that it had the great talent of being able to hide information from the rest of the Parliament, at times with extraordinary rigour. I need mention nothing other than the Howat report to indicate the Labour Party's tendency in government to disguise the facts on which it based its decisions.

The process that we are in now has given us the opportunity to highlight the fact that there have been difficulties in assessing the budget in the past. It is important that we take the opportunity to move forward and consider how the process should be dealt with in the future.

Ring fencing has been at the centre of today's debate, and I was surprised to hear some of the comments that have been made, particularly from Labour members, about how it is desirable. Indeed, Helen Eadie's contribution could be described as nothing less than a passionate argument for Stalinist centralisation.

The move to outcome agreements has found wide support in the Parliament in the past, including, as was pointed out in a well-researched contribution by Christina McKelvie, from the Labour Party and many of its former ministers when they were in a position to influence direction. Labour members should be proud of their record of opposition to ring fencing, and their performance today is the biggest volte-face of any that we have seen.

Photo of Liam McArthur Liam McArthur Liberal Democrat

The views on ring fencing from Conservative members have been clear, but will Alex Johnstone remind the chamber which Government of which political party first introduced ring fencing?

Photo of Alex Johnstone Alex Johnstone Conservative

I would love to give members a history lesson—it was some time in the past—but let us pass over that.

I have one more point about ring fencing, which is that we must all learn to value the independence of local government and place trust in it. I am surprised that the Labour Party has decided not to trust local government and, in fact, has suggested that ring fencing is essential in order to prevent the people of Scotland from being subjected to the will of local government.

However, the autonomy of local government is under threat from more than one direction. I suggest that the SNP, which today defends the principle of devolving power to local government, remembers that it is the party that proposes a local income tax on a basis that would take the ability to set local taxation away from local government and end another route by which we can hold local government to account. We must all consider our own proposals and ensure that we do not undermine local government.

I will finally move on to the few positive contributions that have emerged from Labour members today. One or two members had genuine proposals, and they took the opportunity to make them to Parliament. I know also that there have been attempts in committee to introduce formal proposals, and I look forward to hearing them discussed at greater length in the debate on the budget.

I am gravely concerned about the tendency among Labour members to lean on the idea that investment exclusively in the public sector can be the solution to Scotland's problems. That is why the Conservatives will continue to campaign for a reduction in the tax burden on small businesses. We want to build an economy that can be a success for Scotland in the future—one that combines the benefits of public and private sectors and does not miss the point that the private sector is important too.

Photo of John Swinney John Swinney Scottish National Party 11:22, 10 January 2008

I will respond to the debate by addressing three areas: the detail of the Government's spending review; ring fencing; and alternative spending proposals. Those have been at the heart of an interesting and informative debate.

Let me refer first to the detail of the spending review. The Government has provided detail in its budget to levels 1, 2 and 3. That approach to the production of budget information to Parliament was taken by all previous Administrations. There have certainly been changes to budget lines, but part of the budget contention and part of what the Parliament has to resolve is to accept that the Government has decided to pursue the allocation of significant parts of its budget to local authorities in a different way from before. It has been clear from this and other debates, including on local government finance, that Parliament will take some time to adjust to the new way of working that the Government intends to follow.

There has been talk about two aspects: the removal of GAE detail; and some of the budget lines that have been rolled up into the local authority settlement. GAE were never budget lines; they were indicators that were much misunderstood in the distribution of public expenditure. On the ring-fenced funds—which I will say more about in a moment—we have set out the transitional arrangements that indicate how we will monitor the achievement of outcomes in the absence of budget lines on ring-fenced funds.

Ring-fenced funds are not a particularly productive way of operating, and as the excellent speech by my colleague Christina McKelvie made clear, many members, including Labour members, have talked about how inappropriate ring fencing is as an operating mechanism. The answer to Liam McArthur's intervention on Alex Johnstone is that the Conservatives invented ring fencing, so I would have thought that this Administration's relaxation of ring fencing would have been popular among the Labour members.

Photo of Paul Martin Paul Martin Labour

I always welcome the confidence that John Swinney has shown in local government. However, I ask him a similar question to the one that I asked Christine Grahame. Will he extend that confidence to allow local councils to set the local income tax that his party proposes to implement?

Photo of John Swinney John Swinney Scottish National Party

It is important to set local taxation at an affordable level. That is why we should have a straightforward, easy-to-administer level across the country, and why the Government should put in place the resources that will guarantee a council tax freeze in every single part of the country.

On the detail, there has been a great deal of information about whether additional resources have been allocated to local authorities. For the record, I point out that the Government is not only allowing local authorities to use the new money that has been given—a 4.9 per cent increase in 2008-09, a 4.1 per cent increase in 2009-10, and a 3.4 per cent increase in 2010-11—we are also allowing local authorities to retain their efficiency savings for the first time, and we are facilitating the removal of ring fencing, which will give local authorities a significant financial advantage.

On ring fencing, as I said a moment ago, Christina McKelvie aptly captured the consensus that exists on the importance of removing ring fencing. That is why the Government has responded to the long-expressed pleas of local authorities and the Finance Committee of this Parliament to remove ring fencing. We have significantly reduced it and will replace it with single outcome agreements that are related to the national outcomes that the Government is determined to achieve to protect some of the most vulnerable in our society, and to focus all public expenditure on delivering a range of the Government's objectives and initiatives.

Photo of Margaret Curran Margaret Curran Labour

Why, then, did the SNP manifesto say

"An SNP government will restore ring-fenced funding for drugs education"?

Photo of John Swinney John Swinney Scottish National Party

We have come to our conclusions because the Government has listened to the persuasive arguments and debates of local authorities and previous Finance Committees. I do not think that the Government should be criticised for listening to the body of debate and moving to relax ring fencing.

Gavin Brown helpfully took an intervention from Iain Gray, in which Iain Gray denied that he was concerned about ring fencing and allocated all the responsibility for the concern about it to Children 1st. Anyone who was watching the Labour Party's premeditated issuing of news releases during the Christmas period would have seen one shadow spokesperson after another queuing up to criticise the Government's stance on ring fencing.

Photo of John Swinney John Swinney Scottish National Party

Perhaps this will be an apology or clarification—who knows?—but I will listen.

Photo of Iain Gray Iain Gray Labour

This is not an apology at all. That was simply a gross distortion of my intervention. Mr Brown used a direct quote taken from a speech that was attributed to me, but which was a quote from NCH Scotland. I am concerned about what could happen with ring fencing, but those concerns have been expressed most eloquently by those who deliver the services directly. Mr Swinney made a gross misrepresentation.

Photo of John Swinney John Swinney Scottish National Party

Well, we will allow the record to speak for itself, but when Mr Gray is reading the Official Report , which will chart how miserable and appalling this debate has been for the Labour Party, he will be able to find the quote from Martin Sime that I put on the record. Martin Sime works very closely with voluntary organisations in Scotland and my quote indicates that their approach to ring fencing is very different to the one being advanced by Mr Gray and the Labour Party.

I will conclude my remarks by addressing the question of alternative spending, and reiterate what I said earlier. This has been a disgraceful waste of an opportunity for the Labour Party to set out its alternative propositions. Today, the Labour Party is asking members to vote for a motion that encourages greater expenditure on economic growth and on social justice issues. If the Labour Party had won last May's election and its manifesto been implemented, the health service in Scotland would be getting not the 4.2 per cent increase in its budget that it is getting under the SNP Government, but an inflation increase of 2.7 per cent under a Labour government. So if Labour had got back into office, its Government would have cut the budget for the health service that this SNP Government is prepared to deliver. What sort of fashion is it of delivering social justice when that lot put one thing to the electorate and then determine to cut the money going into health? This Government has come to the rescue of the health service in Scotland.

The Labour Party will have to do formidably better than the shockingly poor performance that it has given today. It has missed an opportunity to hold the Government to account and failed to make any constructive alternative proposals. The people of Scotland who are watching this debate will be clear and assured that Scotland is in safe hands and that the Labour Party is finished.

Photo of Margaret Curran Margaret Curran Labour 11:30, 10 January 2008

I begin by reminding Mr Swinney that he should not talk about manifestos. When his party's manifesto was published in April, it promised ring fencing, but he had completely changed his mind by May. I will not remind him about manifestos, but I will return to that point during my contribution.

As others have said, the debate has been interesting and it is central to the future of this Government. The hallmark of any Administration must be its budget; it is where we find the evidence of what a Government is about.

My speech will concentrate on two fundamental charges that Labour makes against the SNP. First, it knowingly presented a manifesto that was not costed properly and it practised a deception on the Scottish people. That is why in this morning's debate, speaker after speaker from the SNP gave abuse rather than argument. Secondly, the SNP has failed to continue with Scotland's historic commitment to promoting economic growth and social justice.

As the debate has made clear, we have seen what really matters to this Government: the downgrading of social justice as a central theme of Government interventions. Commitments can be ditched without a blush because they have not been costed properly.

We know that the SNP does not want us to talk about broken promises; if I was one of them, I would not blame them. However, I have news for the SNP. We will remind the Scottish people time and again that the SNP has indulged in the most blatant exercise of cynical politics that I have ever witnessed. This is a Government of false promises that governs under false pretences.

John Swinney knew the level of resource that was available to him; that is clear from the financial manifesto that he published. However, he and the SNP deliberately presented a manifesto that was overcosted and could not be delivered, and you are now trying to perpetrate cons to try to hide that.

John, did you know that you did not have the resources to deliver the first time buyer grant? Did you know that you did not have the resources to deliver on student debt, John? Did you know that you did not have the resources to implement the rise in police numbers, John? It is a fundamental premise of politics that you should be honest with the people that you seek to represent. I could go on—

Photo of Ian McKee Ian McKee Scottish National Party

On a point of order, Presiding Officer.

Photo of Trish Godman Trish Godman Labour

It is a point of order, Ms Curran, so would you sit down.

Photo of Ian McKee Ian McKee Scottish National Party

I am doing my best to follow this debate so that I can decide how to vote at 5 o'clock, and so that I can understand the contrasting arguments that are going to and fro. However, the member who is speaking at the moment keeps referring to someone called John and I am not quite certain who that is. Is it not in order that she should be making her remarks through the Deputy Presiding Officer and not to individuals in the chamber?

Photo of Trish Godman Trish Godman Labour

Mr McKee, that is not a point of order. I was about to bring Ms Curran into order when she stopped using the first name. I am absolutely sure that you know who John is.

Photo of Margaret Curran Margaret Curran Labour

If that is the best that the SNP can do against me, I do not think that I have anything to worry about in this debate.

Serious concerns have been raised about this budget, because you have raised expectations that you cannot meet. You cannot blame people for being worried. The SNP is now backpedalling at a rate of knots and is trying to hide behind further arguments.

In that context, I want to make some serious points about ring fencing. It is fundamentally false to say that funding must be either national or local; the fact is that vital public services require both kinds of funding. The answer is for the Scottish Government and local government to work together. As I think Tavish Scott made clear, many innovative and important developments are happening at a local level. Indeed, I worked very constructively with local government colleagues and delivered on that basis. The answer is not conflict, but partnership.

Photo of Margaret Curran Margaret Curran Labour

I know that partnership is not part of the SNP's DNA and that it does not come naturally to it. However, the argument must focus on that very area.

As Mr Swinney knows, I have been exercised about mental health services. Mental health charities have set out substantial arguments against the abolition of ring fencing not because they do not trust local government—indeed, they have worked very well with local government—but because such a move

"would lead to a loss of service".

They are concerned that there is no guarantee of even a minimum level of service throughout Scotland, no national plan and no national standards. It is not anti-local government to say that a national Government should issue national standards and expect them to be met.

Photo of John Swinney John Swinney Scottish National Party

The first line of the concordat between the Government and local authorities says:

"This concordat sets out the terms of a new relationship between the Scottish Government and local government, based on mutual respect and partnership."

What on earth is the member's point?

Photo of Margaret Curran Margaret Curran Labour

As I understand it, COSLA has not signed up to the concordat.

Photo of Margaret Curran Margaret Curran Labour

If Mr Swinney honestly believes that the best way forward for mental health services is the abolition of ring fencing, why does the SNP say in its manifesto that it will improve mental health services

"backed with ring-fenced funding to health boards and local authorities"?

Either he should win the prize for the greatest hypocrite of the year or he is misleading the people of Scotland. He cannot say in his manifesto in April that funding for mental health will be ring fenced and then say that the best solution for mental health services is to abolish ring fencing.

My other charge is that the SNP has abolished its commitment to social justice. As Iain Gray pointed out, in bringing together seven funds under the fairer Scotland fund, the budget in that respect has actually flatlined. How can the SNP, particularly its back benchers, present themselves as anti-poverty campaigners and then justify a budget that on the one hand cuts business taxes with no strings attached and, on the other, cuts resources for public housing, homelessness, single parents and the most needy children? The nationalists tell us that they are great independents. I do not see many independents on the back benches challenging their leadership on its promotion of social justice. [Interruption.]

As I said, abuse is not a substitute for argument. Mr Swinney asked what Labour would do if it were in Government. We have proved that a Government can deliver both economic growth and social justice. It is not acceptable to say one thing in an election and do something entirely different when in Government—which is exactly what has happened here.

An American commentator has said that if we want to understand what a Government is all about we should look at its budget. Your budget has failed the people of Scotland; you have been hypocrites and have misled people about social justice. You deserve the challenge that the Labour Party has presented you with this morning.