“Financial Resolutions and scrutiny of revised Financial Memoranda”

– in the Scottish Parliament at on 9 March 2011.

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Photo of Trish Godman Trish Godman Labour

The next item of business is a debate on motion S3M-8080, in the name of Gil Paterson, on “Financial Resolutions and scrutiny of revised Financial Memoranda”.

I call on Gil Paterson to speak to and move the motion on behalf of the Standards, Procedures and Public Appointments Committee.

Photo of Gil Paterson Gil Paterson Scottish National Party

I thank and am grateful to my committee for its work over the past few years. I am also grateful for the back-up that the clerking team, the lawyers and the officials have provided. Their help has been exceptionally good.

I will speak first about financial resolutions, before I briefly cover rule changes on financial memoranda. The committee’s inquiry stemmed from stage 2 scrutiny of the Education (Additional Support for Learning) (Scotland) Bill. The limited ability of the existing procedures to accommodate scrutiny of cost-bearing amendments became apparent when such amendments were lodged at stage 2 of that bill, and the matter was highlighted to the Standards, Procedures and Public Appointments Committee by the Finance Committee. The rules relating to financial resolutions and the changes that the committee has proposed are technical in nature, which is probably why the chamber virtually emptied when the previous debate ended.

I will begin with the background. At present, the Presiding Officer considers whether a bill requires a financial resolution, in advance of its being formally introduced. That process is based on the criteria that are set out in rule 9.12.3 of standing orders. For example, if a bill would significantly increase expenditure from the Scottish consolidated fund for a new or existing purpose, it requires a financial resolution. When the Presiding Officer deems that a financial resolution is required, it must be passed by Parliament to allow a bill to progress to the amendment stages. If it is disagreed to, the bill falls. Regardless of who introduces a bill, it is for the Government to decide whether to produce a financial resolution.

The committee began its inquiry by considering the basis for the existing rules on financial resolutions. That included questioning whether financial resolutions were necessary at all and, if so, whether the Government should retain its current role in relation to them. The balance of submissions that we received supported the underlying principle on which the financial resolutions rule is based, which is that it is for the Government to retain responsibility for, and therefore control of, overall levels of expenditure and income. The committee agrees with that and does not propose any change to the Government’s role in relation to financial resolutions.

The committee does, however, consider that there is scope for change in relation to the procedures for considering cost-bearing amendments when a bill does not require a financial resolution. Rule 9.12.6 provides that no proceedings may be taken on such amendments, which prevents Parliament from formally debating and agreeing cost-bearing amendments that fall below the threshold for triggering the need for a financial resolution.

The proposed rule changes would allow such amendments to be debated and voted on at stages 2 and 3. The changes would also allow for stage 2 debate on amendments that, on their own, are too expensive to be made to the bill. That should serve a number of purposes. First, it would allow the member who lodged the amendment to put on record the policy that they advocate should appear in the bill. Secondly, it could generate sufficient support that the Government is persuaded to propose a financial resolution. Thirdly, the discussion on the policy could generate an idea for a new stage 3 amendment that might be less expensive and could therefore be made to the bill.

Throughout the inquiry, the committee was aware that proposed changes to procedures should be proportionate. We were also aware that, so far, Parliament has considered only one bill in which the rules on cost-bearing amendments have proved to be limiting. Fundamental changes to established procedures would not be appropriate, so the committee has tried to keep changes to stage 3 procedure to a minimum. However, the committee has also been guided by the principle that there should be an opportunity to consider all cumulative cost-bearing amendments alongside each other, in addition to the usual consideration of amendments that are grouped according to subject. That is because when only a limited number of cumulative cost-bearing amendments can be agreed, decisions must be taken on the merit of each amendment and on whether one amendment is of more merit than another.

The committee recommends that, when cost-bearing amendments are lodged, an additional debate should be held at the end of stage 2. Such amendments and any related amendments should be voted on after that debate. When that procedure requires to be followed, it will disrupt marshalled-list order consideration at stage 2, so the proposed rules have been carefully worded to keep such disruption to a minimum.

On financial memoranda, the proposed rule change is far more straightforward than those for financial resolutions. It will extend the period of time that will be available for scrutiny of revised financial memoranda that require to be produced to reflect changes that have been made to a bill at stage 2. That will allow the Finance Committee and individual members the same period of time to scrutinise a financial memorandum as the Subordinate Legislation Committee has to scrutinise a delegated powers memorandum.

I thank the Finance Committee for highlighting the need for consideration of the rules on financial resolutions and financial memoranda to the attention of the Standards, Procedures and Public Appointments Committee. I consider that the committee has, through in-depth deliberations, developed sensible rule changes that are proportionate and conducive to ensuring open debate on all policy matters, including those that have financial implications.

I move,

That the Parliament notes the Standards, Procedures and Public Appointments Committee’s 1st Report 2011 (Session 3), Financial Resolutions and scrutiny of revised Financial Memoranda (SP Paper 565), and agrees that the changes to Standing Orders set out in Annexe A to the report be made with effect from 1 April 2011.

Photo of Nanette Milne Nanette Milne Conservative

I appreciate that the rule changes are technical in nature and may therefore strike members as being challenging to apply in practice. However, detailed changes will be made to the public bills guidance to supplement the rules. In addition, when cost-bearing amendments are lodged, supporting documents that are used during stages 2 and 3, such as the groupings, will also highlight any elements of proceedings that are a break from the norm.

I also highlight a matter that does not require a rule change, but which will be crucial to successful implementation of the changes: specifically, the timetabling of stages 2 and 3 consideration of bills when cost-bearing amendments are lodged. As we know, costing amendments for the Education (Additional Support for Learning) (Scotland) Bill was time consuming for members, Parliament clerks and Government officials. Expecting such cost assessment, consideration by the Presiding Officer and publication of the groupings to take place to current stage 2 timescales is simply not feasible.

The Standards, Procedures and Public Appointments Committee considered lengthening the existing deadlines for lodging amendments at stage 2 to allow sufficient time for that to be the standard process. However, the committee anticipates that, although the number of instances of bills being introduced with no financial resolution is likely to increase, cost-bearing amendments will not necessarily be lodged for each bill. The majority of bills that will be passed by Parliament will most likely proceed according to standard procedures, as opposed to having to adhere to the procedures that are set out in the report. Therefore, on balance, the committee considered that lengthening the time between lodging amendments and their consideration at stage 2 for all bills would be a disproportionate response.

Although the committee is not recommending a change to standing orders to extend deadlines for lodging amendments, it strongly encourages the Parliamentary Bureau to allow additional time at stage 2 for bills without financial resolutions, if the bill has a wide scope or is based on a policy that is likely to be conducive to cost-bearing amendments being lodged. At least an additional week should be factored in to stage 2 deadlines in such situations, and the knock-on effects of timetabling chamber time for stage 3 should also be taken into account. In addition, the committee recommends that committees that consider such bills should factor sufficient flexibility into their work programmes to allow for stage 2 considerations to be timetabled for a later date when cost-bearing amendments are lodged.

I support the committee’s recommendations and the associated rule changes.

Photo of Jim Hume Jim Hume Liberal Democrat

I am pleased to contribute to this afternoon’s short debate. I have been a member of the Standards, Procedures and Public Appointments Committee for just a short time, but this is already my second debate on one of its reports.

I know that we are fairly time limited, so I will offer only a few brief thoughts. In short, financial resolutions are important. They are important because it is vital that any bill that is brought before Parliament, that may significantly influence the Scottish consolidated fund, be fully costed to ensure that members are aware of its full implications. The financial implications of a bill are always just as important as its policy implications, particularly now, in times of tight finances.

We are fast approaching the end of the third session of the Parliament, and there is no harm in doing a little spring cleaning with the standing orders. Indeed, the difficulties in costing the financial implications of proposed amendments to the Education (Additional Support for Learning) (Scotland) Bill, as highlighted by the Finance Committee’s letter, demonstrated that it was perhaps time that we looked again at the rules governing financial resolutions. The Finance Committee’s desire to develop an approach to considering cost-bearing amendments when no financial resolution existed was clearly worthy of consideration.

As the Standards, Procedures and Public Appointments Committee report highlighted, voting on cumulative cost-bearing amendments in the standard marshalled-list order gives rise to the possibility of members failing to be afforded the opportunity to debate their own cumulative cost-bearing amendments. That could happen if amendments up to the financial threshold have already been agreed to in earlier sections of the bill.

I agree entirely with the committee that that is both “unfair and arbitrary”. The failure of any amendment should depend entirely on its merits and not on where it happens to fall in the bill. That is why I support the committee’s recommendation that, although cumulative cost-bearing amendments should be debated by subject matter, as they are currently, the putting of the question on those cumulative cost-bearing amendments that fall within the financial threshold should be deferred until the end of stage 2.

Some thought was clearly given as to whether stage 2 or stage 3 would be the appropriate time to consider cumulative cost-bearing amendments. In my eyes, stage 2 appears to be the natural choice, due to the obvious flexibility that it offers in comparison with stage 3 proceedings, which involve a strict timescale and many more members than a committee. I agree with the committee entirely.

I thank the clerks, all the associated staff, the convener and the other members of the committee for their hard work during the consultation and the preparation of the report. I fully endorse the committee’s recommendations and will support the convener’s motion.

Photo of Marilyn Livingstone Marilyn Livingstone Labour

I, too, thank the clerks and the lawyers who have given us immense support on these very complex and technical changes, to which we have given substantial consideration.

I highlight an issue that is distinct from those that were outlined by the convener—the role of the Presiding Officer in relation to financial resolutions. As a starting point, it was clear to the committee that, to ensure political impartiality, the most appropriate individual to determine the potential cost of amendments is the Presiding Officer. The rule changes seek to make clear the role of the Presiding Officer in assessing whether a bill requires a financial resolution, whether amendments are cost bearing and, if so, whether an amendment is sufficiently expensive to trigger the need for a financial resolution.

The committee acknowledges the issues that were raised in its consultation in relation to the difficulties that are associated with assessing costs. Those include the likelihood of a number of estimates being put forward, including estimates from the Government, the member who has lodged the amendment and parliamentary officials. It is unavoidable that assessing the cost of policies behind amendments is likely, to some degree, to be speculative and subjective. The committee wishes to put on record that the Presiding Officer is in a difficult position in the circumstances, being required to place a specific cost on each cost-bearing amendment when a number of suggested estimates offer notably different figures. However, it is difficult to conceive of an approach to legislation that allows cost-bearing amendments to be debated and agreed to, but which also ensures that the Parliament legislates with the necessary financial thresholds without placing a value on the overall cost of the bill, the threshold for significant expenditure and each cumulative cost-bearing amendment.

The committee considers that the changes that are proposed to the rules will ensure that the functions that are required of the Presiding Officer are underpinned by the standing orders. I support the motion in the name of the convener and hope that it will receive the support of the Parliament at decision time this evening.