Draft Budget 2014-15

Part of the debate – in the Scottish Parliament on 19th December 2013.

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Photo of Malcolm Chisholm Malcolm Chisholm Labour

The Finance Committee has done the Parliament and perhaps Scotland more generally a service by helping to bring Scotland performs out of the shadows. We certainly heard many compliments about it in the Finance Committee, but it is a fact that it is not widely known, and to many people its purpose and intended audience are not clear.

Although compliments were paid about Scotland performs, many qualifications were also made about it. The key qualification, of course, related to there being no clear link between spending and outcomes. The cabinet secretary was very concerned to rebut that, of course, but it is a fact that expert witnesses in significant numbers and several committees made that point, so it cannot be so easily brushed aside. I was not overimpressed by the cabinet secretary’s line of argument on that. I intervened during his speech because it seemed odd to me that he would judge the success of all the measures that he put in his economic policy by the outcomes. First, because the outcomes are open to debate, as Iain Gray said, and, secondly, we all know—the Scottish Government emphasises this repeatedly in other contexts—that the Scottish Government by no means has control of all the external economic factors. I was not overimpressed by that argument.

It would be a good discipline to connect individual spending decisions to Scotland performs and, perhaps most obviously, to the indicators. If we do not do that, the danger is that spending decisions will be made for political reasons. The charge has been made—in fact it was the Government’s spin doctors who set the hare running—about Scotland for independence. Be that as it may, the suspicion will be that the decisions are made for political reasons rather than because of the objectives of Scotland performs.

If we focus on the indicators and relate spend to them that would be a step forward. There was a lot of discussion about the indicators; many people thought that there were too many and we should certainly discuss that as part of the budget process. I was impressed by the idea of having median household income as a new economic indicator. I hope that the Government will look at some of those issues.

We commend the Government’s intentions on preventative spend and pay tribute to the Finance Committee in this and the previous session for doing a lot of the initial work on the topic. Everyone is signed up to those intentions in principle but the committee has made several points about that. First, more evaluation and monitoring are needed. Secondly—to cite a quote in the committee’s report—the Health and Social Care Alliance was concerned that the change funds may

“prop up existing service provision so that it is maintained rather than driving the change agenda.”

I do not think that the committee necessarily endorsed that view, but it highlights the need for monitoring and evaluation because that is the view expressed by some expert players in the field.

The Finance Committee’s main point was that we are not seeing the disinvestment that is required in order to make preventative spend of a sufficient scale to be effective. The committee was not being overcritical in that regard, because many witnesses highlighted the difficulties of disinvestment at this time, particularly with regard to demography, which I think was Glasgow City Council’s main point, as quoted by the convener earlier. That is a very challenging situation, given the financial circumstances that we face. However, if we cannot get more focus on disinvestment, it will be very difficult to get the scale of preventative spend investment that we want.

However, we have a golden opportunity in the budget—I am two thirds of the way through my speech and I am moving on from the Finance Committee’s report—because we need to start considering what spending shifts we want. As someone who has supported further investment in childcare for several decades—certainly during all my time in politics—I am very attracted to what Labour is putting forward with regard to using the consequentials from the Westminster budget to start the process of expanding childcare.

The big gap in the Scottish Government’s childcare arrangements is in provision for two-year-olds, yet all of us, because of our commitment to preventative spend, believe in early intervention. Crucially, one of the main insights that we had on preventative spend when I was on the Finance Committee is that nought to three are the crucial years. I do not think that anyone can argue in principle against more investment for two-year-olds. I find the Government’s objection to investing in childcare under devolution absolutely absurd. In other contexts—I think it was the Deputy First Minister who said this—the Government says that it cannot invest in childcare because the economic fruits will go to Westminster. For goodness’ sake—that argument undermines the whole purpose of the Government. Why on earth is its main purpose economic development when the fruits of taxation go to Westminster? That is a completely illogical argument.

Iain Gray’s second proposal related to the bedroom tax. On that matter, I merely quote Danny Alexander, Chief Secretary to the Treasury, who was asked specifically whether the Scottish Government would be penalised if it gave more than £20 million to bedroom tax alleviation. He said:

“what the Scottish Government does with its block grant is a matter for the Scottish Government.”—[Official Report, Finance Committee, 4 September 2013; c2890.]

He was clearly signalling that how much money is given to local authorities and housing associations to deal with the bedroom tax is entirely at the discretion of the Scottish Government.

Labour has flagged up its two main priorities for the budget: childcare—particularly for two-year-olds—and the bedroom tax. I hope that the Finance Committee members will forgive me for using the last third of my speech to repeat those points.