Select Committee on Scottish Affairs Minutes of Evidence


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?

    (a)  Training events?

    (b)  Conference?

    (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


1   1 Not published. Back

2   http://www.cipfa.org.uk/publicfinance/news details.cfm/News id = 24291 Back


 
previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2005
Prepared 28 November 2005