Memorandum submitted to the Scottish Affairs
Committee by the Scotland Office
SCOTLAND OFFICE
ANNUAL REPORT
2005
This memorandum provides information in response
to the questions conveyed to the Scotland Office by the Committee
Clerk's letter of 26 July 2005. [1]
1. Treasury guidance supporting Department
Reports 2005, PES (2004) 19, states:
"It is very important that these tables
[expenditure tables] are structured to explain clearly what the
department is spending its money on". The same paper states
"As a matter of good practice reporting should seek to inform
the reader about how resources have been divided between the departments
differing objectives and bring out the links between financial
performance, spending allocation and service outcomes".
The Committee requests a breakdown of the
Scotland Office's resource expenditure for 2003-04 to 2007-08
by objectives. Please base the 2004-05 figures on the final outturn
if this is available.
The table at Appendix A shows the breakdown
of the Office's resource expenditure by objectives from 2003-04
to 2007-08. There have been several changes in the objectives
over the years and to assist the Committee we have endeavoured
to compare like with like, except in regard to 2003-04 where objectives
1 ("improving understanding") and 5 ("Friends of
Scotland") only applied in that year. The figures for 2004-05
are based on Offices' final outturn.
The Committee will note that the figures in
Appendix A do not reconcile with those in Annex 1 of the Annual
Report. This is because certain additions and deductions have
been made to the Scottish Block figures to identify the grant
to the Scottish Consolidated Fund; an example is set out in Annex
2 of the Annual Report.
The suggested allocation in future years assumes
that the objectives set out in paragraph 1.19 of the 2005 Annual
Report remain unaltered.
2. Who is responsible for setting and agreeing
performance targets for the Scotland Office and Office of the
Advocate General for Scotland?
The high-level objectives and performance targets
are agreed by the Secretary of State and the Advocate General
respectively at the beginning of each financial year.
3. Why does the Scotland Office and Office
of the Advocate General for Scotland not have performance targets
more related to their objectives?
The Scotland Office and the Office of the Advocate
General for Scotland have a range of additional objectives that
underpin the primary strategic objectives; these are set out in
Appendices B and C respectively. These include specific performance
targets, such as the transfer, from 1 April 2006, of Parliamentary
boundary review functions from the Boundary Commission for Scotland
to the Electoral Commission. These additional objectives are disseminated
to staff and form the core of individual personal targets in each
year.
Both Offices have quantified performance targets
as set out in the Annual Report, but it is not always possible
to quantify the high level objectives.
4. Does the Scotland Office and Office of
the Advocate General for Scotland complete any formal surveys
with key stakeholders, such as Whitehall Departments, the Scottish
Executive or private sector companies, to enable an assessment
of success in delivering objectives? If so, please provide the
Committee with evidence from recent exercises.
The role of the Scotland Office is to undertake
coordination of activities across Government against a backdrop
of devolution and ensuring efficient information sharing between
the Executive and the UK Government. This type of activity is
not readily susceptible to formal surveys, because coordination
applies at many different levels and over differing time horizons—but
the Office constantly seeks feedback from the Executive and Whitehall
Departments on an informal basis on how well coordination arrangements
with the UK Government are working.
The Office of the Advocate General for Scotland
is in frequent contact with the Whitehall Departments to which
it provides legal services and, in providing a responsive service,
regularly consults them on how those services are being provided.
SCOTTISH EXECUTIVE
5. Has the Scottish Executive finalised the
outturn for 2004-05? If so, please could the Committee have the
final figures? If not available, when will it be available?
The Scottish Executive does not—at this
stage—have final outturn audited numbers for 2004-05. However,
provisional outturn numbers for 2004-05 have been published in
the 2004-05 Public Expenditure Provisional Outturn paper (Cm 6639).
Final outturn data will not be available until after the 2004-05
accounts have been audited by Audit Scotland (in respect of Scottish
Executive expenditure) and this process is expected to be completed
in December 2005. Once the audited accounts are available, work
will then start to provide final outturn data to HM Treasury,
which is expected to be completed in early February 2006. The
provisional DEL outturn figure for 2004-05 is £21,703,829,000.
6. At the start of financial year 2004-05
the Scottish Executive had the second largest End Year Flexibility
on programme expenditure across government. Please could the Scotland
Office confirm;
(a) The Scottish Executives End Year
Flexibility (EYF) carried forward to 2005-06?
The 2004-05 Public Expenditure Provisional Outturn
paper (Cm 6639) states that the Scottish Executive carried forward
cumulative End Year Flexibility of £1,531,892,000 into 2005-06.
(b) Details of how any programme resource
EYF will be used in 2005-06?
This is a matter for the Scottish Executive.
(c) Why delays occurred in using the
programme resource?
This is a matter for the Scottish Executive.
7. Public Finance Magazine on the 17 June
2005[2]
reported the Scottish Executive had set itself an efficiency target
of 2.8%, as against 3.75% set by Treasury for Government Departments.
Why did the Scottish Executive set a lower target?
The efficiency targets of the Executive are
a matter for the Scottish Parliament and Executive.
Details of the efficiency targets set out for
the UK Departments were published in the 2004 Spending Review
White Paper (Cm 6237).
8. Section 3.4 of the DAR 2005 states:
"The Scottish Executive received large
increases in spending in the 2004 Spending Review, with spending
some £4.2 billion higher by 2007-08 compared to 2004-05".
What are the key priorities identified by
the Scottish Executive to benefit from the resource increases?
The spending priorities of the Executive are
a matter for the Scottish Parliament and Executive.
Their priorities and further details of the
Scottish Executive's spending plans were published in September
2004, in Building a Better Scotland: Spending Proposals 2005-08:
Enterprise Opportunity & Fairness (http://www.scotland.gov.uk/library5/enterprise/babs-00.asp).
9. Annex 4 (page 37) shows income from Non
Domestic Rates increasing by 6% in 2005-06. Additionally when
compared to the original provision in 2003-04 Non Domestic Rates
Income will have increased by 22% (£1,646 million to £2,009
million) by the end of 2005-06. Why has Non Domestic Rates income
increased so significantly in recent years?
Non domestic rate income is a devolved matter
for the Scottish Parliament and Executive.
SCOTLAND OFFICE
Administration Costs/Staff Numbers
10. Contrary to Treasury's requirement under
the Spending Review 2004 for reduced administration expenditure
and staff numbers across Government, Annex 1 indicates that the
Scotland Office is planning to increase administration expenditure
by 12% in 2005-06 and staff numbers by 7%. Can the Scotland Office
confirm:
(a) Whether the Scotland Office final
outturn for 2004-05 is now available? If so, please provide this
to the Committee.
The Scotland Office administration costs outturn
for 2004-05 was £3,703 million.
(b) Why the Scotland Office needs additional
administration and staff resource in 2005-06?
The figures for 2005-06 administration costs
reflect planned provision assuming staff complement of 60 throughout
the year ie no vacancies, even for part of the year. The figure
for 2004-05 is estimated outturn and reflects the average actual
staffing position, incorporating vacancies. There is also a technical
element in the difference; the 2005-06 figure reflects a requirement
by the Cabinet Office to revise the way in which it charges employers
for participation in the PCSPS. This element comprises about one
third of the difference.
The Office's permanent staffing numbers significantly
reduced between 2003-04 and 2004-05, from 68 to 56 with four vacancies.
The figure for 2005-06 assumes the four vacancies will be filled.
The Office regularly reviews its complement
and associated costs in the current and anticipated workload and
will be considering possible changes later this year.
PERFORMANCE ON
OBJECTIVE 1
11. Section 2.2 of the DAR 2005 states a
number of activities completed in support of objective one. However
the content of the paragraph is virtually identical to that provided
last year and fails to provide details of activity undertaken.
How many of the following events did the Scotland Office support
in 2003-04 and 2004-05?
(c) Speeches or articles?
(d) Hosted or supported events?
We do not keep detailed records of every event,
speech or article that the Office supports and it is therefore
not possible to provide comparative figures. However, the Ministers
and officials are involved in a wide range of activities as follows:
Officials speak at the National School for Government
(formerly CMPS) course on "Working with the Devolved Administrations";
this normally runs 2-4 times a year. The role of the Scotland
Office is highlighted with particular focus on the legislative
programme and UK Departments responsibilities in relation to Scotland.
There were two courses last year; one in April and another in
September.
In addition, officials speak at the National
School for Government course for new Bill teams. This runs a couple
of times a year. The focus is on devolution issues and, in particular,
the Sewel Convention. This happened twice last year in May and
then October.
The Office hosted a seminar on the Sewel Convention
in November of last year. This supplemented our involvement on
the above National School for Government course and was attended
by around 80 members of almost all the Bill teams that then existed
across Whitehall. We had Ministerial speakers from the Scottish
Executive (Scottish Minister for Parliamentary Business) and the
Scotland Office (the then PUSofS) and other speakers at official
level from OSAG, the Executive, DTI and the Cabinet Office. The
purpose was to ensure the Government continues to respect the
Sewel Convention and does not normally legislate on devolved matters
without first getting the consent of the Scottish Parliament.
The seminar highlighted the background (official, legal and political)
to the Convention and then worked through the various processes
involved in gaining the consent of the Scottish Parliament.
Ministers and senior officials take part in
numerous seminars and conferences, often as speakers and regularly
as delegates. For example, the Office was involved in several
last year including (but not limited to) Ministerial and official
speakers at a couple of conferences on Devolution in Edinburgh
organised by Holyrood Conferences and Events and Capita Events.
It should perhaps be noted that many of the speeches undertaken
by Ministers on varied topics refer to devolution and devolved/reserved
boundaries in the context of a particular policy area (eg European
Structural Funds).
The Parliamentary Under Secretary of State (Mrs
Anne McGuire) spoke at the Convention of the Highlands and Islands
at the beginning of this year. The PUSofS also hosts reasonably
frequent seminars given by Scottish organisations in Dover House
for Scottish MPs (for example, Citizens Advice Scotland and the
Network of international Development Organisations Scotland during
2004-05) and also hosts "social policy lunches" in Melville
to debate a specific current issue with interested parties. Such
discussions raise awareness and understanding of reserved/devolved
issues and so help to maintain the balance of the settlement.
The PUSofS has also met with several foreign
delegations at Ministerial level to discuss devolution including
a Thai delegation, a Moroccan delegation and the Agent General
of Quebec during 2004-05.
Officials also provide support to Ministers
of other Departments who may be talking in or about Scotland.
For example, the Office contributed heavily to a speech given
by Lord Falconer at the No. 9 Society of the Caledonian Club in
August 2004.
The Office hosts small seminars at Dover House,
including an annual event for students of the Chinese University
of Hong Kong who study at Goldsmiths University, London and for
a group of Canadian interns on an international parliamentary
intern programme. The purpose is to provide them with a broad
outline of Scottish devolution and have a Chatham House discussion
about how it operates in practice. The 2004 events took place
in July.
Ad hoc events also take place in Dover
House. For example, in April 2004, we invited all Scottish MPs
to a Chatham House event on the Scottish Social Attitudes Survey.
In addition, the Conference and Visits Group
of the Foreign Office asks officials several times a year to meet
international delegations to discuss our experience of devolution.
For example, in the summer of last year, senior officials met
with a group of Sri Lankan monks to discuss our experience of
asymmetric federalism and how this might apply in war torn Sri
Lanka.
Finally, Ministers provided articles on Devolution
to the House Magazine, Holyrood Magazine and the Sunday Times.
We are considering whether an internal system
of record keeping for all such activities should be created.
12. With regard to "hosted or supported
events", what events were held in 2004-05 and how did these
events promote Scottish interests?
The main events held in Dover House and Melville
Crescent in 2004-05 are listed in Appendix D. These events promoted
Scottish interests by bringing guests into contact with Scotland
Office Ministers and the Advocate General for Scotland and facilitating
discussion; by helping to raise the profile of public and charitable
institutions operating in Scotland; by promoting Scottish trade
and industry; and by celebrating Scottish achievements and strengths.
PERFORMANCE ON
OBJECTIVE 2
13. The DRA 2005 states that for objective
2
"a major part of the Scotland Office's
work is to ensure good working relations between Whitehall and
the Scottish Executive".
(a) could the Scotland Office provide
the Committee with evidence of how it has improved working relations
between Whitehall and the Scottish Executive in 2004-05?
The Scotland Office's responsibility for ensuring
the continuation of good working relations is anchored in the
day-to-day advice and guidance offered, predominantly at official
level, to those in other Government departments and the Scottish
Executive. The purpose of providing this advice and guidance is
to ensure each administration works consistently to the salient
principles underpinning relations (ie communication, consultation
and co-operation), which are at the heart of the Government's
devolution policy.
One specific example is the area of elections
policy. The conduct and funding of parliamentary elections (UK,
European and Scottish) in Scotland is a reserved matter. The franchise,
including for local government elections in Scotland is also reserved.
DCA has lead policy responsibility for policy on UK and European
elections while the Scotland Office lead on Scottish Parliamentary
elections. The conduct of local government elections in Scotland
is devolved. It is important that consistency of rules and procedures
in different elections is maintained. This is particularly important
in relation to the combined Scottish Parliament and local government
elections. We have worked consistently and closely with DCA and
the Scottish Executive in order to ensure that there is a sustained
flow of information between the UK and Scottish Executive interests.
This includes regular tripartite meetings, mainly at official
level, together with exchanges of Ministerial correspondence.
A further example is the significant amount
of time the Scotland Office commits to providing proactive guidance
on the distinctive Scottish aspects of the Government's legislative
programme. We do so by encouraging, on a daily basis, UK Bill
teams to engage bilaterally with the Scottish Executive where,
for example, it is agreed a UK Bill triggers the Sewel Convention.
This involves giving advice on the principles underpinning the
Convention, on the processes and mechanics required to be gone
through to successfully deliver a UK Bill and Sewel motion, and
embedding an understanding within each administration of the others
commitments and responsibilities. In 2004-05, we undertook this
outreach activity in relation, but not limited to, the Constitutional
Reform, Gambling, Energy, Civil Partnership, Railways and Serious
and Organised Crime and Police Bills.
PERFORMANCE ON
OBJECTIVE 3
Asylum
14. With reference to paragraph 2.15 please
provide the committee with details of the types of issues on which
the Scotland Office has worked with the Home Office in 2004-05
with regard to the dispersal process?
15. With reference
to paragraph 2.16
(a) how many meetings have been completed
with the National Asylum Support Service in 2004-05?
(b) what was achieved as a result of
the meetings?
(c) what priorities have been identified
for 2005-06?
Since the creation of NASS in 2000, the policy
context in relation to asylum seekers has changed significantly.
Government policy has developed with the aim of reducing the number
of asylum seekers entering the UK and the world conditions which
drive people to seek asylum continue to evolve. Officials in the
Scotland Office have considered these factors and worked with
the Home Office to help improve immigration controls and to tackle
the abuses of asylum in managed migration routes as laid out in
the Government's 5-year strategy for asylum and immigration.
We normally aim to have quarterly meetings between
Scotland Office officials and NASS together with representatives
from the Scottish Executive. The meetings provide for an exchange
of information across the full range of interests relevant to
NASS operations in Scotland.
Some of the general issues which have been under
discussion include the operation of the 2 Scottish contracts for
the provision of accommodation for dispersed asylum seekers—including
the effects on social work, policing and education services; the
provision of Section 4 support for failed asylum seekers who would
otherwise be destitute; and the operation of the induction process.
There have also been exchanges through the COSLA groupings in
relation to progress on the contract with City of Glasgow Council
for dispersed asylum seekers. Lead responsibility for all matters
related to asylum rests with the Home Office. It is not appropriate
therefore for the Scotland Office to set formal priorities in
terms of either policy or operational matters but rather to keep
open good channels of communication between Whitehall and the
Scottish Executive in this complex and sensitive area.
CIVIL CONTINGENCIES
16. With reference to paragraph 2.24, please
could the Scotland Office provide
(d) Details of improvements which have
been agreed in 2004-05 to Scotland's emergency planning process?
(e) The role played by the Scotland Office
in securing these improvements?
The Scottish Executive is responsible for managing
the consequences of any emergencies in Scotland, and it is similarly
responsible for emergency planning. The Executive performs its
emergency planning function in cooperation with Whitehall, including
the Scotland Office, and makes improvements to its planning processes
as it deems necessary. A number of improvements will be incorporated
in the Executive's forthcoming regulatory and good practice guidance
under the Civil Contingencies Act 2004.
The Scotland Office has improved its own preparedness
for emergencies by creating (in 2004-05) a Scotland Office Emergency
Cadre.
ECONOMIC AND
INDUSTRIAL POLICY
17. Paragraph 2.26 states "the Scotland
Office has facilitated at a number of events where key Cabinet
Ministers have engaged with Scottish business interests".
(a) How many events were held in 2004-05
compared to 2003-04?
(b) Which businesses were involved in
the meetings in 2004-05?
(c) What benefits were secured for the
Scottish business community as a result of the 2004-05 meetings?
(d) Whether the Secretary of State for
Scotland has undertaken any overseas visits to promote Scottish
business interests? If so, to where and what benefits resulted?
Three events were held in 2004-05 compared to
two in 2003-04. The three events in 2004-05 included a seminar
on the 2004 Pre-Budget Report (PBR), a visit and speech by the
Prime Minister and a speech by the Chancellor of the Exchequer.
The 2004 PBR Seminar was chaired by the Secretary of State and
attended by the Chief Secretary to the Treasury and the Scottish
Executive Minister for Finance and Public Service Reform.
The 2003-04 events also included a Pre-Budget
Report Seminar (following the publication of the 2003 PBR) and
a meeting of the Scottish Euro Preparations Committee. As with
the PBR Seminar, this is intended to directly engage with the
business community.
Attendees at the PBR 2004 Seminar, held in January
2005, were drawn widely from the Scottish business community,
as well as government and trade union sectors. This included board
members from the Federation of Small Businesses (FSB) in Scotland,
CBI Scotland, Scottish Financial Enterprise, Scottish Council
for Development and Industry (SCDI), the Institute of Directors,
Scottish Chambers of Commerce, Scottish Engineering, Scottish
Retail Consortium (SRC), Royal Bank of Scotland, Clydesdale Bank
and Lloyds TSB.
The speeches by the Prime Minister and the Chancellor
of the Exchequer were delivered to audiences of around 200 people
respectively, around half of whom were drawn from the business
community and representative bodies. The Prime Minister and First
Minister also had a separate meeting with the "Big 8"
Scottish companies during this visit.
It is difficult to quantify the effects of these
events. However, clear benefits do accrue. For example, the Pre-Budget
Report Seminar held in January 2005 brought HM Treasury's economic
policy into closer contact with some of those with a keen interest
in Scotland's economic future. It provided a platform for a group
of key stakeholders from the Scottish business community to provide
feedback on the main issues in the PBR directly to the Chief Secretary
to the Treasury on the understanding that any regional dimension
would be considered in the formulation of policy.
The Secretary of State has undertaken no foreign
visits on behalf of the Scotland Office in 2004-05.
ENERGY
18. What role did the Scotland Office play
in the "decision of British Energy to relocate their HQ from
East Kilbride to Livingston?" What benefit resulted from
this activity for Scotland?
Relocation of British Energy's Headquarters
is mentioned at 2.29 and 2.30 of the 2005 Report. Inclusion of
paragraph 2.30 is a typographical error for which we have to apologise.
The paragraph was included as 2.23 in the 2004 Scotland Office
Report and has unfortunately been repeated here.
In 2003-04 and earlier years Scotland Office
Ministers and officials will have taken part in exchanges with
DTI, British Energy management and others in considering the new
management structures for the company as it downsized in the face
of financial restructuring and its withdrawal form overseas operations.
The new structures required release of savings by moving staff
from the company's previous HQ in East Kilbride but the case was
accepted that a smaller corporate HQ should be maintained in Scotland.
This was given effect in summer 2004 with acquisition of the new
site at Livingstone which now functions as British Energy's corporate
HQ.
As also noted in 2.29 during 2004-05 there was
involvement in further corporate restructuring of the British
Energy Group of companies, recognising the special share interests
which continue to be held by the Secretary of State for Scotland.
TRANSPORT
19. With regard to paragraph 3.21 please
could the Scotland Office provide:
(a) Details of the areas of reserved
policy discussed with the Department of Transport in 2004-05?
(b) Details of how the outcomes from
these discussions have facilitated improvements to Scotland's
transport network?
Exchanges involving Scotland Office officials
spanned the range of reserved policy areas within Transport listed
at paragraph 2.31. Many would take place ad hoc as specific issues
arose on reserved transport legislation or in EU dealings on reserved
topics which raised specific issues in legislation, policy and
practice for Scotland. In addition, Scotland Office officials
participated in the regular pattern of liaison meetings between
officials in the Executive's Transport Group and the Department
for Transport.
As in other policy fields, Scotland Office officials
can bring to exchanges on legislation, policy and practice a view
of the UK Government interest from a specifically Scottish perspective;
and a greater familiarity with aspects of devolution than those
with responsibilities for specific aspects of transport in the
Executive and in Whitehall. This can help produce a better appreciation
of Scottish concerns within Whitehall and easier working with
the Executive to deliver outcomes on reserved policy better tailored
to Scottish circumstances. As described in paragraph 2.31 of the
Annual Report, the Scotland Office had considerable involvement
in work leading up to the Railways Act 2004.
OFFICE OF
THE ADVOCATE
GENERAL FOR
SCOTLAND
Administration Costs/Staff Numbers
20. Contrary to Treasury's requirement under
Spending Review 2004 for reduced administration expenditure and
reduced staff numbers in Government Departments, Annex 1 indicates
the Advocate General for Scotland has increase administration
expenditure by 10% in 2004-05 and is planning to increased staff
resource by 10% in 2005-06. Can the Advocate General for Scotland
confirm:
(a) Whether the final outturn for 2004-05
has now been agreed? If so, please provide the final figures to
the Committee.
The OAG outturn for 2004-05 was £1,484
million.
(b) Why the additional administration
expenditure was required in 2004-05?
The estimated outturn for OAG in 2004-05 in
the Annual Report included an allowance for potential expenditure
on legal outlays in cases to which the Advocate General was party
but, in the event, these costs did not arise. However, we cannot
predict when (and if) any cases will arise and consequently, financial
provision is needed to cover such an eventuality.
(c) Why the additional staff resource
is required in 2005-06?
The number of staff in post reduced between
2003-04 and 2004-05 from 33 to 28 with three vacancies. The figure
stated for 2005-06 (32) assumes all vacancies are filled and one
new part-time post is created to deal with an increased workload
in relation to orders made under the Scotland Act.
Scotland Office
September 2005
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