Examination of Witnesses (Questions 100
- 119)
WEDNESDAY 21 JUNE 2000
DR J REID,
MR B WILSON
AND DR
L CLARK, QC
100. So it is their responsibility is it to
modernise that bit?
(Dr Reid) Yes; it is not my responsibility and we
have been trying today to make sure that we only spoke to our
own responsibilities rather than for Ministers in another Parliament.
The White Paper set out the five key commitments on modernising
government: on policymaking, responsive public services and quality
public services, on information age, government service to value
public service not to denigrate it. You will understand that our
range of activities precludes some of the things we are not involved
in but we are trying to carry forward, within the fifth key commitment,
the Modernising Government White Paper, our commitment to modernise
the Civil Service. Sir Richard Wilson has sent out a subsidiary
report on that. We are trying to carry that forward as far as
we can. It only has three Ministers and around a total, it is
envisaged, of 110 staff when it is up to complement. It does not
have a significant policymaking role other than in relation to
the Scottish devolution settlement. It says that at the end of
the day the decisions are made by others and we can influence
them. We have minimal programme expenditure because out of the
£16,000 million to £17,000 million, while we have been
talking today about the £6 million, the rest of that, the
£16,000 million less £6 million, goes to the Scottish
Executive and they do that. We have no responsibilities for delivering
services directly to the public. We are somewhat constrained but
within that context we have drawn up an action plan to address
the relevant elements in both the Modernising Government White
Paper to which you referred and the proposals for the Civil Service
reforms. I shall not go through them but our main focus will be
the key actions which contribute to the delivery of our functions
and make us operate efficiently, effectively and economically.
Part of that is versing myself on e-mail, laptops and thereby
getting to the stage where the Minister of State and I can correspond
with each other at all hours of the day and night on issues of
importance to people in Scotland, including the football results.
101. Is that action plan going to be published
and be accessible to everyone and indeed to this Committee so
we can measure your success against the action plan?
(Dr Reid) I am not sure. We publish so many things;
I mentioned concordats and guidelines this morning. Is there an
intention to publish some sort of plan? Yes, some of the targets
will be published in the expenditure review. On some of the larger
issues we shall have to work with the Scottish Executive and monitor
jointly with them as well.
Mr Welsh
102. Your previous answer applies. Paragraph
6 of the Departmental Report refers to Ministerial correspondence.
The Scotland Office has a target of replying to Ministerial correspondence
within 15 working day. It has only met that target in 66 per cent
of cases since October 1999. Why is the target for replies to
Ministerial correspondence achieved in only 66 per cent of cases?
(Dr Reid) I am very glad you asked me that because
the two reasons are: one, that we have such a small number of
staff that we are not even up to the levels that we are allowed
by the Treasury and have been recruiting. Two, on the basis of
partnership we have to consult much more widely and deeply with
the Scottish Executive than any other department. The small number
of staff and the requirement, the obligation, but also goodwill
to consult on so many of these replies with our colleagues in
the Scottish Parliament mean that we have a lesser figure than
others because of those particular circumstances. As we get up
to the staff which we would want there should be some mitigation
of that. While I accept that target completely, it is of crucial
importance that on areas where we have common interests with the
Scottish Executive Ministers we should give the widest consultation
before writing out. That does not mean to say of course that there
will be a writing out on each other's responsibilities. I shall,
as I have today, try not to comment on other Ministers' in other
Parliaments policy.
103. Did I understand the Minister to say he
looks to recruit more staff? I thought you said you were reducing
numbers.
(Dr Reid) No, what I said was that we were not anywhere
near the limit which was previously agreed and intimated to this
Committee, which you will recall from your previous notes was
130. You will recall from what I said today that we are at 86
at present, 19 of whom are actually for the Advocate General's
department.
104. May I ask the Secretary of State what exactly
is meant by "replying" to referred cases? Does that
mean an acknowledgement card or actual considered correspondence?
Is this a systemic problem or something which is temporary?
(Dr Reid) No, it means a reply to the correspondence.
It does not mean a card, it means a reply. I have told you the
two reasons for it: one is our political requirement to share
responses. No other department has to share in the way that we
do because that is the nature of devolution. Rather than me just
write off the top of my head or purely from the Scotland Office
point of view, in many of these case we want to alert other Ministers
that this issue has been raised, we want to share with them how
we think we should answer it, we want to listen to the Scottish
Office Ministers and officials as to any problems that might cause
them and that would be expected of us. The second problem is systemic
in the sense that we only set the system up last year. The department
was only formed last year and we have only gradually been recruiting
up to the figures previously agreed.
105. Why are you spending £3 million more
each year on office costs when you have fewer staff?
(Dr Reid) I do not know where you get your figures
from. Three million pounds more than what?
106. More than your predecessors spent.
(Dr Reid) You seem to be implying that my predecessor
ran 4,200 civil servants on a budget of £3 million which
would suggest an annual income for each civil servant of £600.
I am not aware they were all working for £12 a week.
107. I was referring to office costs.
(Dr Reid) The total cost of the previous Scotland
Office was in the region of £240 million. I think that means
we've had a reduction of £234 million rather than an addition
of £3 million.
108. The figure given is that it cost £2.85
million for office costs as opposed to £5.5 million.
(Dr Reid) Ah, you are reading from an article in the
Sunday Mail which was briefed by your colleague Mr Wilson and
was so wildly inaccurate that even a child who could do simple
arithmetic could have worked it out.
109. Here is your opportunity.
(Dr Reid) I am answering your question. You are actually
quoting from the article. Anyone who thought that you could run
an office of 4,200 civil servants, which is what is asserted in
the article, on the basis of a £2.8 million annual budget
just cannot do simple arithmetic. We did explain that and it is
why the Sunday Mail decided to give me a column the following
week, they were so embarrassed by the figures they had unwittingly
published. I hope that fully answers your question.
110. I doubt if it does but I am interested
in your answer.
(Mr Wilson) I am puzzled. What does this figure of
£3 million relate to?
(Dr Reid) It actually relates to the provisional estimates
for the eight-month period for the early plans for the new Scotland
Office. Mr Wilson apparently thought it applied to the total annual
cost of running the whole Scottish Office under Donald Dewar.
(Mr Wilson) Another Mr Wilson!
Mr Brown
111. Can we turn to the Scotland Office grants
to support expenditure by the Scottish Parliament in expenditure
outside departmental expenditure limits. A couple of questions.
First of all, can you explain what the reason was for the increase
from £93 million last financial year to £271 million
this current financial year in Scotland Office grants to support
expenditure by the Scottish Parliament in this other expenditure
outside departmental expenditure limits? They increased from £93
million to £271 million.
(Dr Reid) Yes. This was not expenditure by the Scotland
Office, this was expenditure by the Scottish Executive. I think
from memory that will probably include the extra money which was
allocated as a result of the budget. Is that what we are talking
about on that one? Sorry, it is a reclassification process as
a result of the student loans issue[4].
112. The shadow resource-based Estimate for
the Scotland Office for the current year indicates that all the
grants from the Scotland Office to the Scottish Executive will
be treated outside the Resource Budget. Can you explain why that
should be the case?
(Dr Reid) On the previous one, the increase in grant,
may I just clarify that? The apparently large increase in grants
to support expenditure by the Scottish Parliament, the £93
million and the £271 million, mainly reflects a change in
the classification of expenditure and refers to expenditure on
higher education and student loans and student awards. If you
want further details on that we can of course send them to you.
I am sorry we are getting into the detail of some of the budgeting
and accounting measures rather than the substantial elements so
I may occasionally have to take advice. We shall certainly write
again[5].
113. That would be helpful. The other part I
was asking about was the shadow resource-based Estimate for the
current year which indicates that all the grants from the Scotland
Office to the Scottish Executive are treated outside the Resource
Budget. Why should that be the case?
(Dr Reid) That will essentially be paid as cash as
soon as that comes through but at the moment it is not allocated
on that basis.
Chairman
114. We could do with some clarification on
that point as well.
(Dr Reid) All right.
Mr Sarwar
115. Could you explain to us in what ways the
introduction of resource accounting and budgeting will improve
the accountability of the Scotland Office to Parliament?
(Dr Reid) At this time of day to do a quick synopsis
of what resource-based accountancy is! Essentially, just to give
you a 30 second explanation as I understand it, previously all
accountancy has been done on the basis of income and outgoings.
Now departments are going to be judged on the share of the national
wealth that they actually hold and that includes capital assets.
Instead of just what the grant is, what proportion of the national
wealth you are taking up. So it takes in the resources as well
as the actual income. We shall obviously implement the Government's
commitment to introduce resource accounting again. As in the other
case, it has again required a little bit of effort for us to catch
up in the department on the timetable set for introducing resource
accounting because the department was so young and had to build
basically from a staff of 20 or 30 in the first instance. I understand
that the Principal Finance Office wrote to the Clerk recently
confirming that the Scotland Office was on track to produce resource
estimates and accounts in line with the Government's plans.
Mr Tynan
116. Are there any issues which would allow
the National Audit Office to argue against implementation of resource
accounting and budgeting in the year 2001-2002?
(Dr Reid) I hope there are not. I have been given
an assurance that we are on track and I should like to think that
as in other areas we conduct ourselves in a way where the National
Audit Office would not be given grounds for objecting to anything
that we are going to do.
117. What are the implications for the operation
of the Barnett Formula of the implementation of resource accounting
and budgeting, if any?
(Dr Reid) Good God. How long do you have?
Chairman
118. We are not going back over the first hour
again. Are there any implications?
(Dr Reid) As far as I am aware it does not have implications
because, just because you go to resource-based accountancy does
not mean to say that you have to get rid of departmental spending
limits or for that matter that you somehow stop putting limits.
The Barnett Formula is actually calculated to do the limit in
income. In other words, because you are taking capital and resources
into account does not mean to say you are abandoning income. I
do not see immediately that it has any great effect on that. That
was an excellent question to throw in at exactly one minute to
one.
Chairman: We might return to that at a future
session. Finally we have some interesting questions on the Scottish
economy.
Mr Brown
119. How would you actually describe the performance
of the Scottish economy over the last years? Do you believe there
have been any perceptible changes since devolution in the way
in which the economy has performed?
(Dr Reid) The economy in Scotland has performed very
robustly. You will know, as I do, the basic facts and figures.
We have the highest employment we have had for 25 to 30 years.
We have the lowest unemployment that we have had for a generation.
We have the lowest sustainable inflation that we have had for
over 30 years. We are creating far more jobs than we are losing.
We have slashed youth unemployment by 71 per cent since the Government
came in. We have taken 21 per cent off the long-term unemployed.
I am very pleased with the way it is going, not only in absolute
terms but also in relative terms within the United Kingdom; we
have become relatively more prosperous in terms of GDP. What are
the problems of this that we have to face? The weakness of the
euro has obviously created a problem for some manufacturing producers
and exporters, though I would have to say that manufacturing output
went up last year by something like 1.9 per cent and manufacturing
exports went up by six per cent. It is not a completely bleak
picture, even in that area. By and large we are doing very well.
The second part: what about devolution, how does that assist us?
If it is done in partnership and with goodwill it helps us because
the Parliament in Scotland can supplement what is being done at
the UK level. Our job is to create the economic stability and
framework but through Henry McLeish, through Jack McConnell, through
others who are deeply now involved in implementing aspects of
the New Deal, which Brian Wilson is dealing with in particular,
aspects of the industrial policy, aspects of employment policy,
in other words a partnership where we are setting the framework,
they are closer to the ground in actually implementing and assisting
small- and medium-sized enterprises and so on and I think will
be an added bonus. Doing very well. I have avoided sound-bites
all day of course but: a lot done but a lot still to do.
4 See Evidence, p 28. Back
5
Ibid. Back
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