Examination of Witnesses (Questions 40-58)
RT HON
DES BROWNE
MP, DAVID CAIRNS
MP AND DR
JIM WILDGOOSE
17 JULY 2007
Q40 Mr Davidson: May I ask about
the planning of the dedicated Gaelic digital television service?
When is broadcasting due to commence? How much will it cost the
taxpayer? It would be helpful if you gave your answer in Gaelic.
Mr Cairns: I would of course happily
give my answer in Gaelic but I think parliamentary custom dictates
that I am not allowed to so I shall stick to English. The matter
has now really passed into the hands of the broadcasters themselves.
Ken MacQuarrie, the Controller of BBC Scotland said at a function
the other night that he is hopeful the station will be broadcasting
in this financial year. Certainly I would imagine that would be
the case. The major financial outlay of £11.5 million is
by the Scottish Executive with a small contribution from the DCMS;
also the BBC is involved as the actual broadcaster itself and
Gaelic Media Services has a funding stream as well. Part of the
reason why there has been a delay is that there was quite a complex
piecing together of the various funding strands which got delayed
by the longer time it took to settle the BBC licence fee. A lot
of projects the BBC were doing got delayed by that. As far as
I am aware, and I have no reason to doubt this, the funding is
now secured, locked in and we are going through the BBC's internal
value-for-money processes which hopefully will result in the station
being up and broadcasting in this financial year.
Q41 Mr MacNeil: Gaelic TV is a subject
close to my heart but I shall resist asking you the question in
Gaelic. The important thing is on what platforms you think this
channel is going to be available on. It is something we would
all welcome and it certainly seems to be great value for money
given the sums you have outlined there.
Mr Cairns: It is made possible
by the digital era and a dedicated channel for Gaelic using the
analogue spectrum is simply not going to happen. It is something
which has been made possible by the digital era. I know that there
are issues in terms of the way in which some radio transmitters
are able to broadcast a full sweep, but it would seem to me that
it would completely defeat the purpose if people in the Western
Isles were not able to access the Gaelic television station. I
am sure that it will be on platforms accessible in the Western
Isles; it would defeat the purpose if it were not. I am meeting
Ken MacQuarrie on Friday in Glasgow at Pacific Quay in your constituency,
Chairman. It is an issue I will happily raise with him on your
behalf. I have not heard any concerns that it will not be accessible
through the variety of methods in the Western Isles.
Mr MacNeil: It sounds like satellite
and Freeview.
Q42 Ms Clark: I have a question about
money. When you start your discussions with the Treasury under
the Comprehensive Spending Review what sort of settlement will
you be seeking for the Scotland Office? You will be aware that
some departments, in particular the Department for Constitutional
Affairs, are probably going to have real-term cuts in spending.
I just wondered whether you feel that the Scotland Office needs
the level of funding it currently has, whether you need an increase
in funding or indeed whether you would be able to run your department
with a smaller settlement.
Mr Browne: The answer to that
is that I am at the beginning of the process of assessing our
contribution to the spending review discussions and I have been
in the job for a comparatively short period. In any event I probably
would not have made public outwith those discussions what I was
saying in them. I do not yet have a settled view in relation to
that. What I do say, and if you look at annex one of the Report[4]
you will see this, is that the Scotland Office has been extraordinarily
efficient in any event over the last spending review period in
real terms and cash terms as well at living broadly within the
settlement they got in the first of the three years of that settlement.
Taking into account that we have enjoyed a period of comparatively
low inflation that shows we have been making efficiencies year
on year and living within that. I expect, given the fiscal environment
which I know and understand from my time as the Chief Secretary,
that that sort of approach is what may well be expected of us
going forward. The capability and the capacity that we will need
going forward is to a degree a response to the demands which are
made of us. If, for example, the Scottish Executive wish us to
set up a whole series of structures which we have not had to have
in the past in order to deliver devolution to the Scottish people
and to make sure it works, then that will cost resource. As we
all know, the cost of our Office is top-sliced off the block grant
and that is where the money would need to come from, so that needs
to be a consideration for all of us.
Q43 Mr Davidson: May I ask about the
unspent surpluses which have accrued at the ends of the years?
How concerned are you by this, given that underspending on budgets
obviously means faulty forecasting and also means opportunities
foregone. Would you agree that it does look rather as though the
Scottish Executive have in the past failed to get to grips adequately
with their budgets and have been failed in terms of the advice
from officials otherwise they would not have been underspending
so much at the end of the year?
Mr Browne: There could be any
number of reasons why a department might not spend up to its estimates
and quite often large projects in particular take longer to get
off the ground than people planned they would and they may well
budget in a particular financial year for something and other
things happen. I do not know enough of the detail of the way in
which these underspends were generated to be able to agree with
the comment that it means people were given bad advice or that
their processes for spending the money failed. Part of the reason
why we moved to three-year settlements and introduced end-year
flexibility or EYF as it is known was the recognition that this
is a better and more responsible way to deal with the public purse
than to paint everything in the last month of the year in order
to spend the money that people have not been able to spend. That
also has to recognise that we live in a broader fiscal environment.
One of the good things which came out of the ministerial quadrilateral
discussion which took place was that there was a recognition from
the representative of the Scottish Executive that there was a
wider fiscal environment that they had to live in. That is a matter
between the Scottish Executive and the Treasury and that is the
way in which it should continue. I do not see our role as the
Secretary of State for Scotland or the Scotland Office as commenting
on the way in which the Scottish Executive chooses to spend its
money and I will not do that. Of course as a Scottish politician
you are perfectly free to do that.
Q44 Mr Davidson: I was not inviting
you to comment on how they spend your money. What I was inviting
you to comment on was whether or not they can spend it properly.
As a Scottish Member you, like me, will be aware of a whole number
of things in both our constituencies where money could have been
spent by the Scottish Executive but where money was not spent,
presumably because it was tied up in budgets which subsequently
ended up being grossly and irresponsibly underspent. Can you clarify
for us, perhaps in the form of a note[5],
where these underspends arose and why they were not adequately
monitored and reported back? There would obviously seem to me
to be a breakdown in the system somewhere if we consistently have
underspends of this sort.
Mr Browne: I am absolutely certain
that we can point you and other members of the Committee in the
direction of the financial reports which no doubt the Scottish
Executive produced year on year that show what their actual spend
was in relation to the estimates and where on the lines of the
accounts the underspends are curved. They may indeed also give
an explanation as to why there was this discrepancy between what
they estimated they could spend and what they were not able to
spend. I also point out that there is a management of resource
over a three-year period and it sometimes misrepresents the financial
planning to look at one year in isolation.
Q45 Mr Davidson: I completely understand
that but the figures we have indicate that they have managed to
underspend substantially in each of the three years, so there
is an element of consistency there.
Mr Browne: Which is admirable
in a way. We will write and point in the direction and no doubt
there are public reports which explain these things[6].
Q46 Mr Davidson: That would be helpful.
May I follow on with the question of the Barnett formula and related
matters The briefing that we have been given indicates that the
difference in expenditure per head in Scotland and England was
expected to have grown again in 2006-07. There was a difference
of 17% in 2004-05, a difference of almost 20% in 2005-06, 21%
in 2006-07. The difference in expenditure between Scotland and
England seems to be widening and that was not my understanding
of how the Barnett system was meant to operate. It does not seem
entirely appropriate in a situation of overall growth to see Scotland
streaking ahead given that Scotland has much greater public expenditure
than many English regions which are actually poorer and the expenditure
ought to be on the basis of need rather than greed.
Mr Browne: As we all know, the
Barnett formula is not responsible for that difference. The core
settlement for Scotland is based on an historical needs assessment.
I am sorry but for the moment I cannot remember when it was conducted
but it was some time ago. A needs assessment was carried out and
a core settlement and then the Barnett formula is a reflection
of decisions made on public expenditure in England and Wales[7]
and reflecting in through Scotland. Sometime the Barnett formula,
for people who do not properly understand it—and I know
you do—has to bear quite a lot of blame for things for which
it has not been responsible. In my view, as a mechanism it has
delivered a degree of stability and transparency in relation to
settlements not just for Scotland but for Wales and Northern Ireland.
There is a difference in the level of public spending per head
in different parts of the United Kingdom and indeed there are
differences within England itself and concerns in parts of England
about money being spent on other parts of England. Frankly this
process has served Scotland very well for a significant period
of time. We do not have any plans to review the Barnett formula
and there is a degree of transparency about it. The fact of the
matter is that the figures in terms of investment do bring up
these differences and that is a matter more broadly for the Government.
Q47 Mr Davidson: Was it the intended
outcome that the spending per head between Scotland and England
should widen?
Mr Browne: Every single settlement
and every decision made in relation to spending in every part
of the United Kingdom is intended.
Q48 Mr Davidson: It was intended.
Mr Browne: This is the first time
I have had these figures presented to me in this way. I am happy
to go back and look at these figures but I do not think that these
figures and this consequence is the result of Barnett. It is the
result of individual decisions which are made in relation to public
spending and the consequences of them for Scotland. Part of the
problem with this discussion is that the Barnett formula is asked
to bear the blame for or the responsibility for the cumulative
effect of lots of things: the historical needs assessment; the
consequences of individual decisions in relation to discrete areas
of public spending in which there is a consequence for Scotland.
All these things tend to be looked at in relation to the individual
circumstances of the decision. If their aggregated effect is this,
then their aggregated effect is this. I would need to look at
it myself.
Q49 Mr Davidson: I am assuming the
figures must be right because the staff gave them to us but if
that is not the case then clearly we will review that situation.
I am seeking to clarify whether or not it was the intention at
any stage that the gap between Scotland and England would widen
or whether or not, as I think you are saying, like Topsy "it
just growed". I was under the impression that the financial
balance between Scotland and England was largely governed by Barnett.
If what you are saying is that it is governed by Barnett and a
host of other things as well, then perhaps there is need for the
whole system to be reviewed on the basis that this seems to be
a result which none of us, it would appear, knew was specifically
planned and none of us knew was actually happening until now.
If that is the case, then there is a concern.
Mr Browne: If you would just excuse
me in relation to this question. This is a very important question.
My answer to it could be quite significant. If you will excuse
me I would much rather go and look at all of this rather than
come to this in this situation where I was not prepared for it.
I will write to you.[8]
I will look very, very carefully at the question you have asked
and I will respond to you. I just say that to understand comparative
public spending in different parts of the United Kingdom you have
to look beyond Barnett. I know you know that but you do have to
look beyond Barnett. I just think that putting all this pressure
on the Barnett formula sometimes distorts the debate.
Q50 Mr Davidson: May I follow up a further
point in terms of the tables we have been given, which you might
not have seen, relating to total identifiable expenditure on services
by country and region per head in real terms. Can you tell me
the impact of placing orders for two aircraft carriers and whether
or not that would be disproportionately reflected in the figures
for Scotland or whether or not it would be spread evenly throughout
the United Kingdom since defence is obviously a United Kingdom
responsibility, but given that most of the building will take
place in Scotland it would seem that we would disproportionately
benefit. I am not clear how this would be reflected in these identifiable
expenditure figures.
Mr Browne: Neither am I. I will
write to you on that issue too.[9]
I commend you for the ingenious way you got to it.
Q51 Chairman: We understand these are
very complex issues and complex questions and answers and you
can write to us. If we think it appropriate to have a further
session with you, will you be happy to come back?
Mr Browne: Absolutely. I am happy
to come back to discuss these issues. It seems to me that the
complexity and detail of them is such that I would much rather
have prior notice that this sort of detail was going to be gone
into and even having the table shared with me would be of some
assistance.
Q52 Chairman: I ask you a plain question
which will probably not be difficult to answer. You accept that
the Barnett formula has served the people of Scotland well. Do
you think the people who are advocating more powers for the Scottish
Parliament, including revenue raising powers, are demanding this
in the interests of Scotland and that with the disappearance of
Barnett we shall be better or worse off?
Mr Browne: I understand that there
are politicians in Scotland who, for perfectly understandable
reasons, want to keep us in debates on process but a number of
those politicians are going to have to turn their attention to
the delivery of services shortly; sooner rather than later I suspect.
When they find that they have to do that and the challenges of
those services, when, for example, an issue which we were discussing
earlier, the Scottish Executive has to formulate its policy position
and explain its policy position in relation to the transfer of
prisoners between Scottish prisons and other prisons, then that
is a challenge for Government and they cannot complain about process
any longer. The sooner we get into that relationship, delivery
of service, the better. We should move off these constant debates
about process and powers and start doing what the Scottish people
elected us all to do and that is concentrate on services.
Q53 Mr Davidson: Notwithstanding
that point, could you also provide us with figures which indicate
how much the finance allocated to the Scottish Parliament has
grown since the period of the establishment of the Scottish Parliament
in order that we can have these figures in context. If you do
not have them at the moment, it would be helpful if you could
let us have those.
Mr Browne: For a number of the
years from 2001 to present day, although the last two columns
are estimated outturn and provision so they are not the actual
outturns, the figures are provided in the Scotland Office Report
in annex one but we can complement that with others for you.[10]
Q54 Mr Davidson: That would be helpful.
Mr Browne: I am sure, given that
we have been publishing them in this fashion, if we have been
publishing them for some time there will be an earlier Report.
Q55 Mr Davidson: It would be helpful
if it came with the papers we are already getting from you to
put that in context.
Mr Browne: Yes, that should not
be a problem.
Q56 Mr Davidson: Following on from
our discussion about Barnett and allocation of money, given that
the Government have allocated additional monies for education
and health budgets in England then there will be a consequence
for Scotland. Has consideration been given to any of that money
being ring-fenced for those particular topics and subjects in
Scotland?
Mr Browne: No. It is a fundamental
principle of devolution that it is entirely for the Scottish Parliament
and its Executive to determine how it spends the monies which
are allocated to it for devolved matters. It is entirely a matter
for them, they are accountable; that is what devolution is about
and they are accountable to the Scottish electorate for what they
do with that money.
Q57 Mr Davidson: Could you just clarify
something for us? If a percentage of the budget which comes from
Westminster to the Scottish Parliament is nil tied budget, can
you clarify just for comparison the equivalent percentage of the
budget the Scottish Executive gives to local authorities which
is tied budget?
Mr Browne: Yes, we probably can.
11
Mr Davidson: That would be helpful in
the context of allowing the democracy full control over its financial
assets.
Q58 Chairman: Thank you all for your
attendance today. We will follow up this session by sending you
some written questions on some of the things we have not had the
time to cover in detail today. We will publish your response alongside
the transcript of this session. Before I declare the meeting closed,
would you like to say anything in conclusion—perhaps on
areas we have not covered during our questioning?
Mr Browne: No, just thank you
very much. I am sorry if we did not get to all of the subjects
you had hoped to interrogate us on but we shall be perfectly happy
to provide written answers to any questions which are sent to
us because we have a fair idea what those subjects are and we
are ready and willing to provide any information the Committee
wants.
Chairman: Before I close the meeting
may I express, on behalf of my Committee, our special thanks and
appreciation to Diane for working very hard for this Committee
for a number of years. You have done excellent work and we shall
definitely miss you in the Committee. We wish you all the very
best.
11 See Ev 21
4 Correction to Annex 1 printed by TSO July 2007,
Cm 7109, ISBN 978 010171092 3. Back
5
See Supplementary memorandum submitted by the Scotland Office,
Ev 18 Back
6
See Ev 18 Back
7
Note by Witness: "England and Wales" should read "England" Back
8
See Ev 19-20 Back
9
Not yet received Back
10
See Ev 21 Back
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