Publication - Corporate report

Scottish Budget 2019-2020

Published: 12 Dec 2018
Directorate:
Financial Management Directorate
Part of:
Economy, Scottish Budget
ISBN:
9781787813960

The Scottish Government's proposed spending and tax plans for 2019 to 2020.

241 page PDF

5.1 MB

241 page PDF

5.1 MB

Contents
Scottish Budget 2019-2020
Chapter 4 Pre-Budget Scrutiny by Parliamentary Committees

241 page PDF

5.1 MB

Chapter 4 Pre-Budget Scrutiny by Parliamentary Committees

This chapter provides a summary of how the pre-budget scrutiny from the Scottish Parliament’s committees has influenced the formulation of the Scottish Budget. 

This is a new aspect of the Budget document this year and arises from the recommendations in June 2017 by the Budget Process Review Group (BPRG), which was jointly established by the Scottish Parliament Finance and Constitution Committee and the Scottish Government. The BPRG recommended a process which takes a full year approach to budget scrutiny involving a continuous cycle of scrutiny with a focus on the outcomes being achieved by budgets.

The BPRG recommended that parliamentary committees should prepare a pre-budget report in which they set out their views on the delivery, impact and funding of existing policy priorities and any proposed changes including any new policy priorities. 

In addition to the material contained in this chapter, following the publication of the Scottish Budget, each Cabinet Secretary or relevant Minister will respond to their respective committee with a written response on the individual committee reports. These responses will issue within five sitting days of the Scottish Budget being announced in Parliament.

After the publication of these written responses, there will be further occasions when the committee pre-budget reports will be considered including:

  • when committees invite Ministers to give evidence on the Scottish Budget; and
  • prior to the Stage 1 debate on the general principles of the Budget Bill, when there will be a parliamentary debate on the committee pre-budget reports.

The following section provides an initial response to the various committee pre-budget reports.

Equalities and Human Rights Committee

We welcome the Equalities and Human Rights Committee’s ongoing scrutiny of the 2019-20 Budget and in particular the use of data to support budget scrutiny.

The Equality Evidence Finder is the main tool that we use for equality data. We continue to implement improvements, and this year have focused on gender and child poverty. We are working closely with stakeholders to develop the gender index which will include intersectional data where available. The Child Poverty Delivery Plan also built in equality data from the start including wide engagement with equality stakeholders. 

The 11 National Outcomes in the National Performance Framework include new outcomes on fair work, poverty and culture, and a re-focusing of an outcome for children with more emphasis on the children’s own voice and perspective. The outcomes have also been aligned with the UN Sustainable Development Goals. 

Wherever possible we will report on the new National Indicators on the National Performance Framework website in relation to protected characteristics, socio-economic disadvantage and geography. 

Over the next year we will look for opportunities to draw this data together to create a more in-depth picture of performance across the National Indicators and Outcomes, and will explore options for improving the linkages between spend and outcomes in response to the BPRG recommendations. We will also explore ways to strengthen equality reporting on outcomes with a commitment to produce equality assessment prior to summer recess 2019.

Culture, Tourism, Europe and External Affairs Committee

The Culture, Tourism and External Affairs Committee raised as its priorities the role of local authorities, the outcomes achieved by cultural spend and major events, the screen industry, the consultation on the Transient Visitor Levy, EU funding and our Innovation and Investment Hubs. 

The 2019-20 Budget confirms continued investment in culture and tourism priorities, including in the production of a new Culture Strategy for Scotland. We recognise the importance of setting out clearly the outcomes of expenditure in the culture portfolio, including expenditure on major events, and considering the equalities impact of spending. While fully capturing outcomes associated with this spending is not easy, we are committed to making progress in the year ahead. This will include looking at the outcomes achieved by Screen Scotland, to whom we are continuing to provide a further £10 million, maintaining the total screen investment at £20 million. 

We have shared with the Committee further information on the national discussion we are facilitating about Tourism Taxes and look forward to working with the Committee in exploring this issue further.

This year’s budget reflects our commitment to Scotland’s role as a good global citizen and to playing our part in tackling global challenges, and continues to support Scotland as an open, connected country with an expanded network of external offices supported by £4.5 million from the Culture, Tourism and External Affairs portfolio and £3 million from the Finance, Economy and Fair Work portfolio.

Economy, Energy and Fair Work Committee

The Economy, Energy and Fair Work pre-budget scrutiny focused on promoting employment and encouraging fair work, covering the roles of Scottish Enterprise (SE) and Highlands and Islands Enterprise (HIE) and newly devolved employability programmes. The Committee highlighted it is vital to know the extent of provision and expenditure across all employability programmes and noted the Scottish Government’s intention to map out the provision of services across Scotland. We agree with the Committee and are working with local authority counterparts to develop closer alignment of local and national government employability delivery and produce a coherent, strategic and cross-cutting plan for greater integration and closer joint working.

On the Employability Fund, the Committee highlighted the evidence that one-year contracts can be problematic and tendering takes time, effort and money and organisations should be offered three-year contracts instead. On devolved employment support, the Committee commented on the new Fair Start Scotland programme including the length of contracts, referrals, payment by results method and the voluntary nature of the programme. We acknowledge providers would prefer the security of three-year contracts and we will consider this and the wider points raised by the Committee as part of our review of directly funded employability services.

Regarding Scottish Enterprise and Highlands and Islands Enterprise, the Committee commented on level of spend, agency targets, inclusive growth, equalities, conditionality, job quality and impact of automation. Our budgets for Scottish Enterprise and Highlands and Islands Enterprise support the delivery of their business plans which take on board the Committee’s comments, and enable them to create the conditions for innovation, internationalisation and inclusive growth to thrive; and also support Scottish Enterprise to explore new proposals to increase the demand for, and use of, Financial Transactions. An update on progress is due to the Committee in April 2019.

The Committee also asked Scottish Government to respond to the points raised on community and locally-owned energy. We are committed to becoming a world leader in the development of local energy systems, providing local solutions to match local energy needs whilst achieving better outcomes for all consumers of energy. In 2018 we reviewed the existing Good Practice Principles for Shared Ownership and Community Benefit opportunities from renewables. The consultation is live until 31 January 2019.

Education and Skills Committee

The Education and Skills Committee raised issues on additional support needs, in-year transfers of education funding and attainment funding.

We have continued to provide national funding of £10.5 million to support learning provision for children and young people with complex additional support needs. This funding is used to enhance support to children and young people who learn in the grant-aided special school sector in Scotland. 

With regards to Education Scotland’s budget, this is set at the start of each financial year on the basis of known and agreed spend. We have budget and planning discussions with Education Scotland throughout the year, and it is therefore common for further funding to be transferred to Education Scotland in response to changing circumstances. Where those become part of Education Scotland’s core functions going forward, they would be considered in future annual budget discussions. This flexibility, where further funding can be transferred during a school or financial year, is important to supporting our partnership approach with local government, as it enables us to inject further available funding to wherever it is most needed to support our education reforms, both to Education Scotland and to other partners such as the Regional Improvement Collaboratives.

We will continue to invest in the Scottish Attainment Challenge in 2019-20, providing £62 million for the Attainment Scotland Fund and a further £120 million for the Pupil Equity Fund. We will provide a total of £750 million by the end of this Parliament to help close the poverty-related attainment gap. The Attainment Scotland Fund will continue to be monitored and Pupil Equity Funding will be considered in the evaluation. The findings of the interim evaluation are already showing the impact this funding is having on the attainment of many of our young people.

Environment, Climate Change and Land Reform Committee

The Environment, Climate Change and Land Reform Committee commented on a range of issues, including the wider benefits from environmental spend and scope for the portfolio to make a larger contribution to achieving National Outcomes. We agree that environmental expenditure delivers a wide range of benefits and the 2019-20 Budget highlights how action across the portfolio is helping to deliver a range of National Outcomes. 

The level of expenditure on the environment and climate change, and how this has changed over recent years, was also raised by the Committee. The 2019-20 Budget recognises the fundamental importance of the environment and tackling climate change. Specifically, we have maintained the level of funding for Scottish Natural Heritage which supports their role in engaging people with nature and their co-ordination of work by the public, private and third sectors on biodiversity as we strive to meet the international 2020 Aichi biodiversity targets.

The Committee rightly highlights the implications for the Environment, Climate Change and Land Reform portfolio of the UK Government’s decision to leave the European Union. Around 80 per cent of our environmental legislation comes from the EU and membership has provided essential sources of funding, labour and scientific expertise. We are committed to maintaining and enhancing environmental standards in Scotland and carrying forward EU environmental principles. We will continue to prepare for leaving the EU, including the development of future environmental governance arrangements following consultation.

Finance and Constitution Committee

A number of the issues raised by the Finance and Constitution Committee in its pre-budget scrutiny report relate to financial risk to the Scottish Budget. The Committee highlighted, in particular, risks relating to forecast error, divergence between Scotland and the rest of the UK on economic performance and demographics, and EU exit. The Committee also raised other points including the implementation of Air Passenger Duty and VAT, plans for capital borrowing and a review of the Fiscal Framework.

The Scottish Government welcomes the Committee’s input on these issues and will keep the Committee and Parliament informed on developments. Financial risks were considered in detail in ‘Scotland’s Fiscal Outlook: the Scottish Government’s Five Year Financial Strategy’. As outlined in that document, it is increasingly clear that the UK Government’s immigration policy does not address our economic, demographic and social needs. We believe that the case for new powers for the Scottish Parliament is clear. 

It is also clear that EU exit creates significant risks for the Scottish economy. We agree with the Committee that there needs to be much greater transparency and consultation with the devolved institutions in developing and agreeing the successor arrangements for EU funding.

Health and Sport Committee

Recognising the Health and Sport Committee’s comments and recommendations as part of the pre-budget scrutiny, we demonstrate our commitment to transparency of reporting by publishing regular consolidated reports on the financial position of NHS Boards and Integration Authorities. This is in addition to more detailed finance reports available from the individual organisations.

The Committee has highlighted the importance of financial planning, and in October we published the Health and Social Care Medium Term Financial Framework, providing NHS Boards and their Integration Authority partners with a framework to complement existing planning arrangements. The framework gives NHS Boards the option to deliver a breakeven position over a three-year period, with the flexibility to overspend or underspend by up to 1 per cent in any single year. This allows NHS Boards and their integration partners to agree a greater degree of financial flexibility over the medium term.

Acknowledging another key interest of the Committee, we continue to work with partners to shift the balance of care to focus on the provision of community-based and more joined-up, anticipatory care and preventative care. Integration aims to improve care and support for those who use health and social care services, equipping our services for the challenges the future will bring.

Justice Committee

The Justice Committee’s letter was addressed to both the Cabinet Secretary for Justice and the Lord Advocate and focused on general priorities in the justice portfolio; funding provided to third and voluntary sector organisations for their work in civil and criminal justice matters; the implications of the additional in-year spending provided to the Crown Office and Procurator Fiscal Service; and planned expenditure on the police, in particular, on the police service’s ICT projects, capital projects, estates and maintenance. 

The 2019-20 Budget confirms investment, in spite of the challenges of a budget constrained by UK Government austerity, across justice system priorities highlighted by the Committee. We continue to invest in both our police and staff workforce – the revenue budget available for policing rises by £30.3 million (including £19.1 million revenue protection). The police capital allocation increases from £23 million to £35 million which will help to support the maintenance of police assets (its estate and fleet) and provide funding to invest in modern mobile devices for officers working in communities. The Crown Office and Procurator Fiscal Service budget increases by £5 million, and the Scottish Courts and Tribunal Service by £1.8 million. The significant increase in funding to support third and voluntary sector organisations in the justice sector in the 2018-19 Budget is maintained in 2019-20. 

Local Government and Communities Committee

The Local Government and Communities Committee focused on two issues as part of its pre-budget scrutiny: local authority workforce planning and the housing needs of older people and disabled people (including veterans).

On local authority workforce planning, the scrutiny provided by the Committee has provided useful insight into the challenges faced by local authorities as a result of the austerity imposed by the UK Government. In spite of this, we have delivered the best deal possible for local government in this budget. It is councils rather than the Scottish Government that have the responsibility for taking decisions on workforce allocation to ensure delivery of services.

We are committed to our vision that everyone should be able to live in a home that meets their needs and supports them to live independently. The Committee’s scrutiny has provided useful information that will help continue the work we have started to provide strategic and practical support to health and social care partnerships to improve delivery and funding arrangements for adaptations.

Rural Economy and Connectivity Committee

The Rural Economy and Connectivity Committee pre-budget scrutiny letter covers a range of recommendations on matters relating to ferry services, many of which will require consideration in the context of medium- to long-term strategies. 

In respect of 2019-20, we will continue to invest in two new vessels currently being built by Ferguson Marine Engineering Ltd on the Clyde and further invest in our piers and harbours infrastructure. We recognise that the growth in tourism and economic benefit for our islands, through the success of Road Equivalent Tariff-based fares, has brought challenges for the vessel fleet and infrastructure which we are committed to addressing. 

We have invested significantly in vessels and infrastructure since 2007: £215 million on vessels and £104 million on piers and harbours. We are working with Caledonian Maritime Assets Limited (CMAL) to better understand and estimate the future funding requirements and continue to work with CMAL and other stakeholders to shape the Vessel Replacement Deployment Plan and the next Ferries Plan. 

In response to the 2017 Audit Scotland report, Transport Scotland is committed to a long-term strategy which builds on the Ferries Plan and the recommendations from the Committee will help inform this strategy.

Social Security Committee

We welcomed the Social Security Committee inquiry into the Scottish Welfare Fund (SWF), and are working to take forward the points raised during the evidence sessions. We continue to work closely with third sector organisations, local authorities and the Scottish Public Services Ombudsman (SPSO), as well as seeking views directly from users of the SWF. We are looking at the accessibility of the fund in keeping with the Social Security Committee recommendation and, along with the SPSO, are delivering workshops to local authorities to embed good practice and a cohesive approach in decision making to ensure that the fund is used to maximise the number of vulnerable people who can receive help. 

Information gathered throughout the year will help to inform the review of the SWF statutory guidance and we will include the Committee when it is sent out for comment in the early part of next year. We are committed to actively promoting and encouraging people to access the SWF, which, as everyone agrees, is an extremely important safety net for anyone facing severe hardship. We have maintained the SWF budget at £38 million despite the pressure of welfare reform measures passed by the UK Government which we expect to reduce annual spending in Scotland by £3.7 billion by 2020-21.

Formal Pre-Budget Report Responses

Individual Cabinet Secretaries will provide written responses to committee pre-budget scrutiny reports within five parliamentary sitting days of the publication of this Budget.


Contact

Email: Finance.co-ordination@gov.scot