Scottish Parliament, 27 September 2001

404 contributions from 77 members. The official report.

Introduction

David (None, Lothians)

Before we begin this morning's debate, I would like to draw members' attention to the fact that the staff of the Official Report were working late into the night to produce for us this morning the text of last night's debate, which included 10 different languages. We ought to record that considerable achievement with our thanks. [ Applause. ]

Care of the Elderly

David (None, Lothians)

We begin with a debate on SNP motion S1M-2248, in the name of Nicola Sturgeon, on the implications of the care development group report, and two amendments. I call Nicola Sturgeon to speak to and move the motion.

Nicola Sturgeon (Scottish National Party, Glasgow)

I begin by sending the best wishes of the SNP group to Mary Scanlon, following her accident earlier this week.

It is right and appropriate that we are having this debate this morning, because it was at the insistence of the Scottish Parliament in January that the care development group's remit was extended to include the implementation of free personal care. It is therefore right that we should now reflect on the conclusions that that group has reached.

I pay tribute to the work of the care development group. The group has produced a comprehensive report that endorses the principle of free personal care and makes a number of recommendations that are designed to expand the capacity of care services and enable more people to spend more of their later years in the comfort and familiarity of their own homes. I also welcome the Scottish Executive's acceptance of the recommendations and, in particular, the commitment to make personal care free from April next year.

Of course, that commitment was a long time coming. It is two and a half years since the Sutherland commission recommended free personal care. It is true to say that some members of the Executive took longer to convince than others, but the commitment has been made and we take some pride in the fact that it was an SNP motion that prompted the change of heart back in January.

The work of the Parliament is not complete, however. We have a duty to ensure that the package of measures to be implemented is watertight, properly funded and delivers the intentions of Parliament.

Richard Simpson (Labour, Ochil)

Will the member take an intervention?

Nicola Sturgeon (Scottish National Party, Glasgow)

Perhaps later. I ask the member to be patient.

The care development group recommended, rightly, that a significant proportion of the extra investment made available by the Executive should be directed at expanding and improving care services to meet current unmet demand and the increase in demand that will result both from demographic changes and the policy of free personal care. I welcome that, but have concerns about the robustness of the care development group's projections. When we consider the extent of existing unmet need—the reduction in care home beds, the decline in home care services, the backlog for aids and adaptations and, as a consequence of that, the problem of delayed discharge—it is hard not to fear that all the money that has been set aside could be swallowed up in meeting existing need and that little might be left for the expansion that we need.

The internal pressure on the money that has been earmarked for service expansion means that it is important that there should be no external pressure on that money. I hope, therefore, that the minister will give me two assurances this morning. The report recommends ring fencing of the new money. Ring fencing of local authority budgets is not something that the SNP would normally argue for, as we believe that it undermines local democracy. However, experience tells us that, without ring fencing, local authorities will relieve pressures elsewhere by dipping into money that is supposed to be spent on services for the elderly. The minister made no mention of ring fencing in her statement yesterday. Will she assure us that the Executive intends to ring-fence the money?

Yesterday, the First Minister and the Minister for Health and Community Care said that, if Westminster refuses to continue to pay attendance allowance, the £20 million shortfall in the sum that is needed to fund free personal care will come from the Executive's resources. Will the minister give a categorical assurance that, if that proves necessary, the money will not come from the money that is set aside for the expansion in services? Free personal care is a victory for the Parliament and the people of Scotland. We must ensure that it is properly funded and that what is implemented genuinely represents free personal care for all.

I want to deal with two points of detail.

Yesterday, Shona Robison asked a question of Susan Deacon that was not answered—given that it was asked of Susan Deacon, that is no great surprise. Perhaps the minister can answer the question today. The care development group report sets the cost of free personal care at £145 per person per week. We know that the Executive has set aside £90 of that sum and that there is an on-going debate with Westminster about the remaining £55. However, not all the people who receive attendance allowance are on the top rate of £55; some get the lower rate of £37. Even if—and it remains a big if—Westminster agrees to allow people to retain attendance allowance, that will not amount to £55 for everyone and the Executive will have to find an additional £18 for those who are on the lower rate. Has the minister calculated how many people are in that category, what the total additional bill will be and where that extra money will come from?

People who have assets of between £11,500 and £18,500 pay for some of their care. Those people do not qualify for attendance allowance. Under the Executive's proposals, they will get £90 a week. From where will they get the additional £55 to take them up to £145 a week?

Those points may seem small, but details such as those may make the difference between free personal care for all and only subsidised personal care for some.

I want to deal with the principle of the payment of attendance allowance. Yesterday, Susan Deacon confirmed that, unless Westminster agrees to continue paying attendance allowance to those in care homes who currently receive it, the Executive will have to find an additional £21.7 million to fund free personal care. The Executive has said that, if the worst comes to the worst, it will find that money from its own resources. I do not quibble with the Executive giving that commitment—it allows the Executive to remove any doubt that the policy will be delivered from next April. However, the Executive should be determined not to end up in that position, because an issue of principle is at stake.

All of us in Scotland pay our tax and national insurance to the United Kingdom Exchequer, as do those south of the border. Some of that money comes back to the Scottish Parliament to be spent on the priorities of the Scottish Parliament; the rest of the money stays with Westminster so that Westminster can provide for us services that are reserved to that Parliament. That is not an arrangement that I—or the rest of the SNP—am particularly fond of, but it is the arrangement that we work with at the moment. It would be wrong if Westminster chose to abuse that arrangement simply because it took issue with the direction of Scottish Parliament policy. The money that Westminster pays in attendance allowance to elderly people in Scotland is our money—it does not belong to Westminster; it is the money of the people of Scotland. As Susan Deacon confirmed yesterday, we are not asking for handouts or for extra money. The Executive should be demanding that we get to keep what is already ours.

The fact that the Scottish Parliament has decided to enhance the provision that Westminster makes is entirely a matter for this Parliament and for no one else. We know that Westminster does not agree with our policy of free personal care—George Foulkes was here yesterday to remind us of that fact—and Westminster is entitled to have its opinion and to set its own policy. No one in this Parliament would disagree with that. However, Westminster is absolutely not entitled to withdraw benefits from Scottish pensioners simply because it does not like the policy of the Scottish Parliament. The Scottish Executive should be demanding a guarantee that that money will stay in Scotland and benefit Scottish pensioners.

Yesterday, I listened carefully to what Susan Deacon had to say. I heard her assure us that she was in constructive dialogue with Westminster—with George Foulkes looking down on her from the VIP gallery, I am sure that she was not able to put it any more strongly than that. I am prepared to believe that the Scottish Executive is fighting our corner on this issue.

The motion, for once, is not about having a go at the Scottish Executive. It is not about trying to set the Parliament against the Executive. It is about giving the Parliament the opportunity to speak with one voice—as it has done so often before on free personal care—and to strengthen the Executive's hand.

The Parliament has been dogged in its determination that free personal care for our elderly people becomes a reality. Even the Liberal Democrats stuck to that principle, which is a rarity indeed. We are nearly at the point of delivering that commitment to Scotland. Let us ensure that, at this late stage, no one—not even Westminster—can stand in our way.

I move,

That the Parliament notes the publication of the report of the Care Development Group and welcomes the opportunity for a full parliamentary debate on the detail of the recommendations contained in the report; further welcomes the Scottish Executive's pledge to make personal care free for all elderly people from April 2002 whilst noting that aspects of the detail of this commitment require further clarification; notes in particular that the £125 million set aside by the Scottish Executive will not be sufficient to fund the recommendations of the Care Development Group unless Her Majesty's Government agrees to allow those currently eligible for Attendance Allowance to retain this benefit, notwithstanding their entitlement to free personal care; believes that, as a matter of principle, any such shortfall should not be met from within existing Scottish Executive resources, and calls on Her Majesty's Government to make the necessary amendments to the social security regulations or, alternatively, to transfer the resources that will be saved as a result of the withdrawal of Attendance Allowance to the Scottish Executive.

Malcolm Chisholm (Labour, Edinburgh North and Leith)

I too begin by sending our best wishes to Mary Scanlon. As far as I remember, today's debate is the first on health or community care in which she will not have participated. We hope that she returns soon to contribute to our debates.

The care development group report is a complex response to an even more complex subject. The Executive always intended that the Parliament should debate the report properly once the Health and Community Care Committee and other members had had a chance to digest the details.

It is a pity that the motion focuses on one aspect only—attendance allowance in care homes—especially when we are in the middle of constructive discussions with the Department for Work and Pensions on that topic. Put simply, passing the motion would hinder rather than help those discussions and risk turning an argument about resource transfer into a constitutional stand-off between Edinburgh and London. Let no one be in any doubt that we are pressing the case strongly for resource transfer. The case is set out most forcibly on page 60 of the report, and I will make three brief comments over and above that.

The fundamental point is that the DWP pays about £20 million to self-funders in Scottish care homes and that that money must not be lost to Scotland. The precise mechanism by which that is achieved is secondary, although resource transfer is probably the simplest arrangement and already happens regularly.

Secondly, the current rules do not take account of devolution, as savings to the DWP budget now result in costs to another Administration rather than to another department within the same Administration.

Thirdly, the rules about attendance allowance stopping in care homes when other publicly funded help is given were created to avoid any element of double funding. However, we in the care development group were careful: we deliberately and meticulously avoided any such double element, as outlined on page 60. Therefore, the £145 of free personal care is made up of £90 from the Scottish Executive and £55 attendance allowance, and the £210 for someone in a nursing home is made up of £155 from the Scottish Executive and £55 attendance allowance.

Nicola Sturgeon (Scottish National Party, Glasgow)

Will the minister take the opportunity to answer the question that I asked during my speech? What is the position of partial self-funders who do not qualify for attendance allowance in care homes? They will get £90 from the Scottish Executive. Who will pay them the additional £55?

Malcolm Chisholm (Labour, Edinburgh North and Leith)

Clearly, if people do not currently receive an attendance allowance, it is not an issue. I thought that Nicola Sturgeon was going to raise the point that Shona Robison raised yesterday. The vast majority of people in care homes receive the full attendance allowance. The reality is that no one—not the DWP, or the Scottish Executive, or anyone else—has the precise figures, but it is broadly accepted that most people receive the full amount.

So, £145 and £210 are the amounts that will be delivered. There will be no ifs, no buts and no maybes, as the First Minister made clear earlier this week.

That is just one half of the picture. Beyond that is free personal care in the community and the recommendation that £50 million of the new money should be allocated to the expansion and improvement of services in the community so that care is available and needs are met. That is the most distinctive of all the care development group's recommendations. I believe that it will be welcomed by everyone in Scotland, even those who have reservations about the policy as a whole.

In response to Nicola Sturgeon's point about the inadequacy of resources for services in the community, as she put it, I say that we must also remember to set the £100 million that Angus MacKay announced in June beside the £100 million that Susan Deacon announced last October, which was also for improvements in personal care and home care services more generally. That £200 million is an unprecedented investment in older people and a massive commitment to improving their lives. Through those extensive resources, we can ensure that building up services and extending the boundaries of free care go hand in hand.

To anyone in the wider community who still has doubts about the second part of that policy, I make three brief points. First, as indicated at the start of the report, free personal care is right in principle because it removes the discrimination against older people who have chronic or degenerative illnesses and need personal care.

Secondly, and contrary to what some journalists have said, our public opinion research indicated support for that approach. When questions were asked about the individual elements of personal care, as described on page 88 of the report, there were consistent majorities of two to one in favour of universal free provision.

Thirdly, free personal care will make it easier to provide integrated health and personal care services. It is extremely helpful to the joint working agenda, which is strongly endorsed by the care development group report and driven forward by the publication this week of the Community Care and Health (Scotland) Bill. That bill facilitates the pooled budgets to which the Conservatives refer in their amendment to the amendment. It also provides powers for the Scottish Executive to ensure that the new joint working arrangements take effect in every part of Scotland.

The care development group made many other recommendations, to which I will refer as far as I can in my last minute. One of the most important was that a group should be established to consider in detail the mechanics of implementing our proposals. That group will be set up soon. Another recommendation was that the £125 million of new money should be ring-fenced until local authorities agree with the Executive robust and clear outcome agreements that will allow us to ensure that the investment is being channelled appropriately. That responds to Nicola Sturgeon's point on ring fencing. A third recommendation was that all the money for older people's services should be the subject of clear outcome agreements.

Those points address the substance of Ben Wallace's amendment, although not—I fear—the shocking arithmetical skills that he displayed yesterday. I wait with interest to find out whether he will make the same simple errors today.

Now is an exciting time for the development of older people's services. There is new money, new joint working and an absolute determination to ensure delivery everywhere in Scotland. I thank members for the endorsement that they have given the report over the past few days.

I move amendment S1M-2248.1, to leave out from first "notes" to end and insert:

"welcomes the report of the Care Development Group and the Scottish Executive's commitment to implement its recommendations and further welcomes the statement made by the Minister for Health and Community Care on 26 September 2001."

Ben Wallace (Conservative, North East Scotland)

I thank members for their kind words for Mary Scanlon. I am sure that members join me in wishing her a swift recovery and hoping that we will welcome her back to the Parliament as soon as possible.

The Scottish Conservatives welcome the opportunity today to debate the implications of the care development group's report and the implementation of free personal care. We will also take the opportunity to set the record straight on how the Executive's conversion to Sir Stewart Sutherland's recommendations came about.

What a difference a year makes. In the chamber, almost exactly a year ago, the Labour party set out its reasons for not supporting the notion of free personal care. The then Deputy Minister for Community Care, Iain Gray, said:

"The remainder of the 34,000 Scots who are in residential or nursing care would see no change from that recommendation of the report".—[Official Report, 28 September 2000; Vol 8, c 743.]

Perhaps closer to home, Susan Deacon said on 5 October 2000 that implementation of free personal care "would not be right".

Those were the reasons that were set out in principle. New Labour did not support the notion of helping frugal pensioners. It saw free personal care as a means of helping only the wealthy. Most of the Labour MSPs had not the slightest idea that, to unlock and untangle the current system, the adoption of free personal care was vital. They would not even listen to Richard Simpson, who, as we all know, tried desperately behind the scenes to explain to some of his colleagues what the Sutherland report was about.

Richard Simpson (Labour, Ochil)

The record should be set straight. The Labour party was not against the principles of the Sutherland report. It was against the priority of putting the money into free personal care. Implementing the Sutherland report is costing us £125 million. That does not, in itself, benefit care of the elderly. The question is what Government must do, which is prioritise. The question is not the principles of the Sutherland report.

Ben Wallace (Conservative, North East Scotland)

I gather from the member's comments that the adoption of free personal care does not benefit care of the elderly.

Richard Simpson (Labour, Ochil)

It does not improve care of the elderly; it deals with the principle.

Ben Wallace (Conservative, North East Scotland)

That helps to unlock the system. I only have to refer the member to the comments of his colleagues.

Let us turn to the Liberal Democrats. In Bournemouth, as we speak, they are claiming that they achieved Labour's conversion—that they had the influence. However, a year ago, they all—with the exception of Margaret Smith and John Farquhar Munro, who had done their homework—voted with Labour not to adopt free personal care. Who could forget Nora Radcliffe's reason for voting against the proposals? Curiously, for a member of a federal party, she said that we would have to wait for Westminster. I wonder what her reasons are now for backing free personal care.

Today is a success for the opposition. That means giving credit where credit is due—to the Scottish National Party, Margaret Smith, Richard Simpson and the Tories, who all helped to force the Executive, kicking and screaming, to introduce proposals for the implementation of free personal care.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

How does the member react to his colleagues in the Tory party in Westminster calling his position on free personal care—the same position as ours—irresponsible? They also said that they believed that the money would be better spent elsewhere in the national health service. They do not consider it a devolved matter.

Ben Wallace (Conservative, North East Scotland)

They obviously follow the line of new Labour in feeling that it is better to target the money. The Liberal Democrats are a federal party. We decided to make that decision in Scotland. I overcame some opposition.

Jamie Stone (Liberal Democrat, Caithness, Sutherland and Easter Ross)

The Tory party is not a federal party.

Ben Wallace (Conservative, North East Scotland)

We are not a federal party, but we are a devolved party now.

Our amendment asks the Executive to put icing on the cake. The Scottish Conservatives would like the recommendation for the pooling of budgets and a joint delivery platform to be made more formal and not to be implemented on an ad hoc basis.

I notice with interest the rubbishing by the Deputy Minister for Health and Community Care of the study that illustrated how serious the leakage of community care money was becoming. No one denied that there was a problem. Before the minister sets about attacking the figures, perhaps he will tell us whether his department has done calculations and, if it has, whether it will publish them. After all, Sir Stewart Sutherland felt that the leakage was in the region of 16 per cent of the total budget—that is £150 million of the present community care budget in Scotland.

The Convention of Scottish Local Authorities, in its press release yesterday, admitted spending on children's services 42.8 per cent above the grant-aided expenditure. That 42.8 per cent came from somewhere—it seems to have come from care for the elderly.

Let us be clear. We are saying not that local authorities are being deceitful with the money, but that the budgetary pressures in some sectors must be addressed head on by the Executive and COSLA. Those pressures must not be used to justify cross-subsidising. The fact remains that relations between care providers and COSLA have almost broken down and thousands of Scots are still being held in hospital beds instead of getting the community care that they need. That shows that the money is not reaching the services that it is intended for.

The Scottish Conservatives believe that the solution is to lift those funds out of local authorities and to pool them with health board resource transfer and central Government funding into one clear budget stream that can be audited. I remember asking COSLA, when I was a member of the Health and Community Care Committee, to produce an audit trail for one such example. Two and a half years on, I have yet to receive it.

We are in favour of proposals such as those in the fine Labour and Conservative-held Perth and Kinross Council, which has been trying out shut systems with marked success.

Today is good news for all those who need long-term care. We should not be distracted by the SNP, which wants to create a constitutional crisis out of a regulation. The SNP will never understand that Labour and the Tories, as unionists, can engage in adult, pragmatic discussions at Westminster or at Holyrood with the aim of solving a problem.

I move amendment S1M-2248.1.1, to insert at end:

"but urges the Scottish Executive to implement the recommendation of the Royal Commission chaired by Sir Stewart Sutherland for the "pooling" of budgets and put in place systems to ensure that funds allocated for community care are actually spent on such services."

Margaret Smith (Liberal Democrat, Edinburgh West)

I echo the comments of others in wishing Mary Scanlon a speedy recovery. The community care debate this morning will be strange without her.

How we treat our older people is a benchmark of the kind of society that we form and Scotland's older people can say that devolution is working for them and making a real difference in their lives. Although the Executive's acceptance of the terms of the report means that free personal care will be a reality in Scotland, it has been a long and bumpy road with more twists and turns than an Ian Rankin novel. However, many of the people who got us to the end of that road are in the chamber.

First, the members of the Health and Community Care Committee should be congratulated. When we were elected as MSPs, the Sutherland report was gathering dust on a shelf somewhere. Members decided proactively to re-examine not only a community care system that they believed was failing the people whom it was meant to serve, but the Sutherland report itself and to ask whether we should pursue that report's recommendations.

After nine months of taking evidence, the Health and Community Care Committee decided unanimously to back the introduction of free personal care in Scotland. That decision was significant because it was the first time that there was a cross-party view that free personal care was the correct route. The Sutherland report was put back on the political agenda in Scotland and it has remained there since. I believe that the Health and Community Care Committee has much to be thanked for in that regard.

The Blair Government did not see the matter that way and—at that point—neither did the Executive. Although the joint future group continued with its good work, it failed to accept the principle of free personal care. However, last October the Executive put record funding into community care. It accepted the principle of free nursing care in January and, ultimately, the principle of free personal care. The Executive tried to find mechanisms to deliver joint working and pooled budgets and to do all that it could to keep people in their homes. The Executive should be congratulated on its record investment of more than £200 million in community care services.

The delivery of free personal care has been the policy of Liberal Democrats throughout the UK. It is clear that, without the support and actions of the Liberal Democrats in the Scottish Parliament in January, the measure would not have been introduced. Crucially, it is a triumph for the Parliament. It is a triumph for the Opposition parties and members of the Labour party who lobbied hard for the policy. It is a triumph for a First Minister who is committed to public services and social justice, for the Deputy Minister for Health and Community Care, Malcolm Chisholm, and for the members of the care development group, who have turned the Parliament's worthy aspirations into practically viable and sustainable proposals in the group's report.

At the heart of the debate is not only the issue of diagnostic fairness, but the question of how we deliver the best possible community care services. Through the Regulation of Care (Scotland) Act 2001, the Executive has built on the issues that I mentioned. The care development group has tackled problems such as the improvement of services, delayed discharge, inequality of service and charging and the need for better joint working among Scotland's councils.

We need constructive dialogue not only between the Scottish and UK Governments, but between Holyrood and local government. Scotland's councils will be central to the delivery of this agenda, so we welcome the Executive's decision to allocate £125 million a year from next April for the introduction of free personal and nursing care. The care development group, the Health and Community Care Committee and the Sutherland commission have all highlighted previous shortfalls in spending on services for older people. That is why, until outcome assessments are in place, funding for councils should be ring-fenced in the short term. The people of Scotland are looking to us to deliver on this issue, and deliver we will—not just in rhetoric, but in action on the ground.

I hope that the new unified boards with their council input will help to improve joint working and action on pooled budgets. However, we must remove the barriers to effective joint working and I am glad that the Community Care and Health (Scotland) Bill that was introduced yesterday will do just that.

Much has been made of potential shortfalls. However, I will be clear on this point: the Executive is committed to delivering the policy and that will happen with or without Westminster's support. We are not asking for new money, nor has the money been spent elsewhere on other provisions. The money is simply a resource transfer of £20 million that is already paid to Scottish pensioners for personal care.

The Executive is building on that earlier provision and it would be perverse, narrow-minded and mean of the Westminster Government to deny our elderly people their present entitlement simply because it does not agree with the decision of this democratically elected and accountable Parliament. If Westminster fails to listen to this legitimate request by our ministers, it will set up a different benefits system. I hope that common sense and partnership will prevail; however, if they do not, our pledge to deliver on the Executive's promise to the Parliament remains.

We welcome the investment of £50 million in community-based services and the definition of personal care that includes psychological counselling for dementia sufferers and which goes further than the Sutherland definition. We welcome the moves towards a single shared assessment process by April and the setting up of the implementation group that will take that forward. We also welcome the moves toward standardising charges for remaining council services, such as provision of home helps. Those measures will undoubtedly put extra pressure on our care service professionals in the social work and health services. We must support them with training and with the legal tools that are required to make joint working easier than it is. We hope that the Executive, taking into account the present situation in Scotland's care homes, will continue to work with all sectors to provide better services and to monitor the sector's work force planning needs.

The Scottish Liberal Democrats are delighted to welcome the care development group's report and the publication of the Community Care and Health (Scotland) Bill, which serve as ultimate proof that the Liberal Democrat-Labour Executive is listening to Scotland and delivering better quality of life for Scotland's older people.

Christine Grahame (Scottish National Party, South of Scotland)

Congratulations are due not to any individual members or to a committee, but to the Parliament for having come this far. I would like to bring some clarity to the matter for elderly people. I think that I am correct in saying that the measures will apply only to those over 65. Obviously, some older people will suffer and pay for personal care and will not be caught up in the package.

It is not fair to refer to "free personal care", because some people will continue to have to pay a portion of the costs of their care. I would like to know why there is some deviation from Professor Sutherland's recommendations. Page xix of his report states:

"The costs of care for those individuals who need it should be split between living costs, housing costs and personal care. Personal care should be available after an assessment, according to need and paid for from general taxation: the rest should be subject to a co-payment according to means."

In chapter 6, paragraph 6.38, the commission's recommendation is

"first to take personal care costs out of the system altogether".

The commission viewed the fixed costs as living and housing costs, which were to be a set figure. The rest would be paid "according to means". There are great variations in personal care.

I was pleased to hear the minister say that £50 million is being put aside for care in the community. Such care is what most elderly people want; they do not want to be prised out of their homes. I note that the Minister for Health and Community Care said in her statement yesterday:

"We applaud the efforts that are being made by local authorities, the NHS and the voluntary and independent sectors".—[Official Report, 26 September 2001; c 2795.]

I want to focus on the voluntary sector. I want to know whether any of the £50 million will be directed towards it. If I remember correctly from a debate in February, we have about 585 day care centres, which provide 19,000 places. Many of those centres, whose existence means that people do not need to go into hospital, are on the brink of collapse because they cannot raise funds. They do not have enough money for the transport that is needed to pick up elderly people. I would like the minister to say how he will make the necessary assessment in Scotland.

I visited the Midlothian stroke club, which caters for elderly people who have had strokes and who are suffering great psychological problems after their strokes. Through its voluntary efforts, that club helps bring those people back into their communities. Such organisations are struggling, simply because they cannot afford transport and there are not enough volunteers. They perhaps need people to be partly paid to come and help. Their work is an essential part of the cycle of supporting people in the community and I would like to hear the minister's comments on that.

Reference was made to aids and adaptations. In a debate earlier this year we heard, following a point that was originally made by Mary Scanlon,

"that 10,000 elderly people had been assessed for aid and adaptations and 10,000 were awaiting assessment."—[Official Report, 14 February 2001; Vol 10, c 1239.]

I would like to know what the position is now. If an elderly person is in his or her house and has no ramp or rail to get in, why are they still waiting for one? Such adaptations are essential for halting decline in people's physical and mental health. In the end, provision of such adaptations would reduce the bill to the state—we must always talk about pennies. In the same debate, I referred to the fact that the number of home helps fell by 9,000 between 1997 and 1999. That is the reality, despite the fact that home helps are essential to enabling elderly people to stay in their homes. How will the minister address that?

I congratulate the Parliament on coming so far, but much more detail and many more practicalities must be considered. When those are delivered simply on the ground—such as through the provision of home helps, district nurses and ramps to houses—we will have delivered for Scotland's elderly.

Richard Simpson (Labour, Ochil)

Margaret Smith was right to say that it was the Health and Community Care Committee—an all-party group—that made the strong recommendation to adopt the Sutherland principles. As I tried to indicate in my intervention on Ben Wallace, Government must decide on priorities. Christine Grahame made that point extremely well, but all her points will present more difficulty because we have made—rightly, and Christine knows that I support absolutely the Sutherland principles—a principled decision to spend £125 million on introducing free care. That money does not exist to support groups such as those that Christine Grahame mentioned. Such funding is not included in the £125 million, so we must find the necessary funding from other parts of the budget. I agree that we must fund and develop that support. I want to develop that theme in a minute.

The Executive said that it is negotiating on the possible transfer of resources to which the SNP motion refers and we will see what the outcome is. I do not intend to address that point, however; I wish instead to concentrate on the Conservatives' amendment to the Executive amendment and the matter of ring fencing.

My one comment on the SNP motion is that the interrelationship between benefits and the Scottish budget must be examined. That relationship is complex in several areas, including employment and unemployment and moving people back into work with therapeutic benefits. Many matters in that area require and will involve continuing discussions, but we need to cater for those within the current settlement and we should not try to change it.

The Executive's proposal is to ring-fence the new money. I am not in favour of ring-fencing and I believe that, in the long term, the Government is not in favour of ring-fencing. I presume that it is an interim measure. We must move towards pooled budgets and a comprehensive settlement. In doing so, however, the first step requires transparency about the situation, and I think that we have started to move towards that.

The Conservatives, in their publicity over the past few days, have confused grant-aided expenditure and resource transfer and expenditure. Expenditure is published against GAE, not the combined resource transfer and GAE. That is how we arrive at a 44 per cent shortfall. I am glad that the Conservatives did not repeat their mistake in this morning's debate.

Ben Wallace (Conservative, North East Scotland)

I will happily provide Dr Simpson with the figures that were given to us and with the background research. The definitions for the net expenditure came from the information and statistics division of the NHS in Scotland and included the resource transfers. The figures were set off against each other and I will be happy to talk Dr Simpson through them.

Richard Simpson (Labour, Ochil)

I will be happy to discuss the matter with Ben Wallace later.

I want to make a separate point on what Christine Grahame said to the effect that we need to move on. We have accepted the principles and have guaranteed the money for free personal care. We need now to consider everything that is happening and to try to reach a comprehensive settlement on this sector of care. The sector has been highly fragmented since it was, in effect, privatised under the Conservatives, through closure of long-stay beds and moving services into the private, voluntary and independent sectors.

The first step is to ensure complete transparency with the figures, and I look forward to a debate on that. We also need to deal with delayed discharges, which are an affront to old people who wait in hospital for money to be found for them to get the care that they need in the appropriate setting. There are still 3,000 patients in that position; that is an affront that needs to be dealt with. The only way in which it can be dealt with is by pooling budgets, which the Community Care and Health (Scotland) Bill will allow.

Funding for all those who have indicated that they are ready for discharge should come automatically under the pooled budget. As a first step, all long-stay beds that are to remain closed should be moved under a pooled budget, which means that expenditure for individuals whose place of residence is settled is the responsibility of local authorities.

If that is not clear—it might not be—let me give an example. Within the Forth Valley Health Board area in my constituency there are two nationalist-led councils—Clackmannanshire Council and Falkirk Council. Clackmannanshire Council has overspent its budget in the past year but, in doing so, it has reduced the number of delayed discharges to zero. There is none beyond the contract period and the few that exist do not run up to the end of the contract period.

Falkirk Council, by contrast, decided unilaterally—without discussion with its partners—that it would not take patients out of hospital to relieve its budget constraints. The results are that Falkirk and District royal infirmary is on red alert, that Stirling royal infirmary must take patients that would have been taken by Falkirk, and that Clackmannanshire Council and my constituents are suffering. That is not a party-political issue—[Laughter.] It is not. Clackmannanshire Council, which is SNP led, has done an excellent job, but Falkirk Council has not. At issue is the approach that local authorities take. This is about partnership. There must be pooled budgets and we must give responsibility to one unitary group.

I hope that the Executive will take up the issues that I have raised and deal with them.

David (None, Lothians)

I call Ian Jenkins.

Ian Jenkins (Liberal Democrat, Tweeddale, Ettrick and Lauderdale)

I thought that I was way down the list of speakers.

I welcome the report and praise the work of the care development group and of Malcolm Chisholm in particular. I am delighted that Margaret Smith highlighted an issue on which I would have focused anyway—the place of the Health and Community Care Committee in the process. The committee, on which all parties were represented, worked as a pressure group from inside the Parliament and did a job for which we all should be grateful. While I am thanking people, I should mention Sir Stewart Sutherland and Henry McLeish—who has played a great part in advancing these proposals.

The care development group's report is good and has taken a can-do approach to the problem. The report is positive in all respects where it could have been negative. It is decisive where it could have equivocated and it is generous where it could have been penny-pinching. It has accepted proposals that it could have rejected.

The new long-term care proposals will be particularly beneficial in my constituency and in the constituency of my colleague Euan Robson. The Borders has the highest proportion of elderly residents in mainland Scotland. In 1998, 13.1 per cent of the population was between the age of retirement and 74 and 8.8 per cent of the population was more than 75 years old. Those percentages are now probably even higher; we will see when the census data are published. The corresponding percentages for Scotland as a whole are 11.3 per cent and 6.7 per cent, which underlines the fact that the Borders population is heavily weighted towards the elderly. Thirty-seven per cent of households include pensioners, compared with 32.9 per cent in Scotland as a whole, while 28.8 per cent of households are made up solely of pensioners, compared with 24.1 per cent in Scotland as a whole. Any measure that offers benefits to elderly people in their homes and in residential care will be especially welcome in the Borders.

I recognise that arguments can be made both for universality of provision and for targeting of resources, and that those arguments will come up time and again. In this case, we have gone in one direction. The fact that on this important issue we have done the right thing must make ministers feel good. We have been on the side of the angels and have taken a positive approach. By doing so, we have eliminated some of the elements that Sir Stewart Sutherland identified as inequitable and wrong in the current system. Through these provisions, we will help to remove from old people and their families a potent source of anxiety, disappointment and distress. They will no longer feel the same sense of injustice, loss or humiliation. They will not face the financial worries that have sometimes wrecked people's lives even before they went into residential care.

As other members said, this is a good day for the members of the Parliament, it is a good day for the committee system and it is a good day for the Liberal Democrats, because some of our policy is being implemented. It is a good day for the partnership Executive, because together we are delivering something that Scotland wants. It is a good day for the whole Parliament, because we have all been involved in the process.

It is a good day for the Parliament in another way. In opinion polls, folk often say that the Scottish Parliament has not changed anything and that it does not make a difference to their lives. Here is the clincher, however: we can talk about central heating and the abolition of tuition fees, but the policy of providing free personal care for the elderly will lead people to say that, working together, the Scottish Parliament made a difference to their lives. Never again will they say that the Scottish Parliament does not matter.

Sandra White (Scottish National Party, Glasgow)

I apologise for being late for the debate—sometimes a car is not the best mode of transport.

I welcome the report and the fact that it has taken on board what Sir Stewart Sutherland said. However, there are anomalies that must be addressed and questions that need to be asked. It has been said that the whole Parliament—especially the Health and Community Care Committee—is to be congratulated, but we should recall that it was necessary to pull some members along kicking and screaming. I am glad that they have seen the light.

Malcolm Chisholm, who was previously convener of the cross-party group in the Scottish Parliament on older people, age and aging, will know just how vociferous that group can be. As the present convener of the group, I would like to report what has been said to me about the implementation of the proposals. To begin with, members of the group were delighted. However, when they saw the recommendation from Westminster that, although this is supposed to be a grown-up Parliament, Scottish people will not be allowed to have an attendance allowance, the phone calls started to come in. I will not repeat half the words that were said to me down the phone—this is not the appropriate place to do that. However, members will gather that the people with whom I spoke were not at all happy with the situation. We should not go to Westminster cap in hand. We should make it clear that its response is a slap in the face of this Parliament. We are being been told that this is not a grown-up Parliament and that people do not deserve an attendance allowance from a fund into which they have paid for many years.

I will quote from someone whom Labour members will all know—Jim Devine, who is Scottish organiser for the health union Unison. He said:

"Our generation owe a debt to these people.

They were the ones who campaigned for the welfare

state, created the welfare state and contributed to the welfare state all their lives."

Exactly. We should not be too complacent. We should not pat ourselves on the back when Westminster is still saying that it holds all the power and that it will tell us what to do. That is a disgrace.

I have another question for Malcolm Chisholm on the care development group's report. Page vi of the executive summary states:

"We have assumed that Attendance Allowance will continue to be paid as a contribution towards personal care costs for people in care homes."

Was the care development group given assurances that that would be the case? I am sure that all its recommendations were made in the best faith, as I know that all the members of the group are hard-working people. However, the Parliament should know whether the group was given assurances on that point.

Christine Grahame touched on the fact that attendance allowances and the costs of care for the elderly are different in different areas. The care development group suggests £145 per week for personal care. It says that that is the national average, but in seven local authorities in Scotland the average residential home charge is higher than the national average. That needs to be considered. Forty per cent of those in Scotland who fund their residential home care privately live in areas where the average weekly charge is higher than the national average. For those people, personal care would not necessarily be entirely free. We also need to consider older people who are in nursing homes.

Although we welcome the report and are prepared to give the Executive half a pat on the back, we must say to Westminster that this is a Scottish Parliament, that we will deliver free personal care for elderly people and that it cannot tell us what to do. The people who voted for a Scottish Parliament deserve better. We should tell Westminster to stop being so petty with our people and our money. We also need clarity on some of the issues that have been raised today.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

The Liberal Democrats warmly welcome the Executive's U-turn on free personal care. It was a close-run thing. On 25 January, five minutes before decision time, as the Executive faced losing a vote in the chamber, the Minister for Parliament, Tom McCabe, said:

"We have taken cognisance of the views expressed yesterday and today, especially the sincerely held views of our colleagues"—[Official Report, 25 January 2001; Vol 10, c 695.]

in the Liberal Democrat party. That commitment by the Executive to implementing a long-standing Liberal Democrat policy is now being realised.

The SNP has been generally supportive of free personal care, but it has always tried to whip up doubt about whether free personal care would be implemented. Nicola Sturgeon's motion is another sign of the SNP's attempts to muddy the water.

Nicola Sturgeon (Scottish National Party, Glasgow)

Surely it is the duty of an Opposition to scrutinise and harry a Government to the last minute, to ensure that what that Government promises—however welcome—is delivered? That is the job of Opposition and I think the SNP does it rather well.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Nicola Sturgeon is quite right: that is the job of Opposition. However, it is also the job of a responsible Opposition not to worry elderly people in Scotland, yet that is exactly what the SNP has been up to.

The SNP was poised for the care development group not to deliver free personal care for all. As usual, the SNP has to be negative. The Liberal Democrats cannot and will not support the SNP's motion. [Interruption.] SNP members should listen while I examine their logic. Why should we allow the UK Government to veto the policy of the Scottish Government? That is exactly what the SNP motion asks us to agree to do.

The motion says:

"unless Her Majesty's Government agrees to allow those currently eligible for Attendance Allowance to retain this benefit, notwithstanding their entitlement to free personal care"—

the Parliament

"believes that, as a matter of principle, any such shortfall should not be met from within existing Scottish Executive resources".

What an untenable position. [MEMBERS: "Shame."] I am glad that Tory members shouted, "Shame", as I now turn to their position.

Ben Wallace (Conservative, North East Scotland)

Will the member give way?

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

I shall give way in a minute.

In my view, the Tories' position has always seemed opportunistic. The Conservatives oppose the introduction of free personal care in England, but we are told that they support its introduction in Scotland.

I quote from a Westminster debate on the Sutherland report, during which the Conservative spokesperson said:

"'We believe that the money would be better spent elsewhere in the national health service.'"—[Official Report, House of Commons, 5 February 2001; Vol 362, c 737.]

The Tories derided the provision of free personal care as an irresponsible policy. I wonder whether the Tories north and south of the border talk to one another, as their position is unsustainable.

At least the Labour party is consistent. It opposed free personal care for the elderly, both north and south of the border, preferring targeted benefits. That is a perfectly honourable position, although the Liberal Democrats disagreed with it.

There is no doubt that, had the Liberal Democrats given way to Labour in January, we would not be debating today the implementation of free personal care for the elderly in Scotland. The partnership Government is successful—it delivers Scottish solutions to Scottish problems.

Ben Wallace (Conservative, North East Scotland)

Will the member give way?

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Have I time, Presiding Officer?

Patricia Ferguson (Labour, Glasgow Maryhill)

No. You should be winding up, Mr Rumbles.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

In conclusion, the Liberal Democrats welcome the debate and congratulate Malcolm Chisholm and the care development group on presenting sensible proposals on the implementation of the policy on free personal care. We congratulate the Executive on eventually coming round to the Liberal Democrats' view that the provision of free personal care is the right policy for Scotland. We believe that it is the right policy for the entire United Kingdom.

Keith Harding (Conservative, Mid Scotland and Fife)

Mr Rumbles did not allow Ben Wallace to respond to his comments, so I note now that Mr Rumbles accused the SNP of taking an approach that was the one advocated by Nora Radcliffe.

This should all be so simple. The Executive has endorsed the provision of free personal and nursing care for the elderly. What else could we possibly have to discuss? I presume that, as we have signed up to the recommendations made by Sir Stewart Sutherland and the care development group, we are all agreed.

It appears to me that, now that we have signed up to the implementation of free nursing and personal care, it would be sensible to provide that care in the most efficient way possible. It is obvious that that has yet to become clear to the Executive because neither yesterday's statement from Susan Deacon nor last week's Executive response mentioned the single budget for which Sir Stewart Sutherland, the Health and Community Care Committee and my party have been arguing.

I believe that all personal care should be provided free at the point of delivery under a unified budget. Without a unified budget, not only will there be widespread waste within the system but the major problem of bedblocking will not be addressed. The care development group's report recommends that the money for elderly care should be ring-fenced, that joint assessment should be implemented, that joint resources should be allocated and that joint measures should be put in place to tackle bedblocking. The obvious conclusion to all that joint action is a single budget, but the report states that, because there is no single budget at present, the money will still have to be channelled through local authorities—the very organisations through which leakage occurs.

Joint measures will do nothing to tackle the conflicts between purchaser and provider, which cause many of the problems that we are trying to overcome. In fact, they simply reinforce the inherent weaknesses in the system. Thus, by implementing them we will be unable to make significant improvements.

On the problem of the attendance allowance, we do not know whether Westminster or Holyrood will cover the payments. The minister told us yesterday that talks with Westminster were continuing and no doubt those talks will resolve the issue. In an attempt to move the debate on to constitutional grounds, the SNP would have us believe that Henry McLeish and Alistair Darling are engaged in some kind of turf war, but the real issue is why the attendance allowance question was not sorted out earlier. To be honest, does that matter anyway? The Executive is endorsing a mechanism for care delivery that is so unsuitable that a large part of the benefit may never reach the intended recipients; it will disappear in the local authority black hole. How can so much of the money that is allocated to community care go missing along the way? Yet the Executive still refuses to formalise the single budget.

Margaret Smith (Liberal Democrat, Edinburgh West)

Will the member take an intervention?

Keith Harding (Conservative, Mid Scotland and Fife)

No.

Although we support the Executive's amendment and its endeavours to deliver free personal and nursing care, I remain unconvinced that its approach provides the right mechanism through which to deliver that care. What is the point of making promises that inevitably will be undermined by a defective delivery system? We must ensure that the money the Executive is so busy telling us about is spent properly and reaches those people for whom it was intended.

This is just the start of the debate. The Conservatives have always made it clear that free care for all was the solution for the short to medium term only. The Executive's approach will still leave individuals having to pay the bulk of their accommodation costs. The next step must be to search for the best long-term solution—encouraging people to provide for themselves and their families without returning to the errors of the present system, which pays the profligate and penalises the prudent. If we do not take that step, we will have changed nothing other than the amount of moneys that people receive. We will not have changed the inherent injustices in the system.

Yesterday, Susan Deacon spoke about her sadness that some people had reduced the debate to "simple slogans", yet she is also a culprit. Providing free nursing and personal care will mean nothing if that care is not delivered effectively.

I support the amendment in the name of Ben Wallace.

Malcolm Chisholm (Labour, Edinburgh North and Leith)

Several interesting points have been made during the debate. In the time available to me, I shall try to respond to them, party by party.

I thank the Liberal Democrats for their positive response to the care development group's report. Margaret Smith made a point about diagnostic fairness—her point is repeated on page 69 of the report. She welcomed the publication of the Community Care and Health (Scotland) Bill this week—some members seemed to be unaware of its publication—and the fact that the bill will remove barriers to joint working. She reminded us that some of the bill's provisions will standardise charges for non-personal care services. We should remember that that is part of the picture.

Mike Rumbles made an interesting point about the SNP motion's support for a UK veto on our policy. I had not thought of that, but when members consider it, they will agree that he made an interesting and valid point.

Mike Rumbles also said that the Labour party preferred targeted benefits. I will make a general response to that point: the Labour party supports a combination of universal and targeted benefits. Since its first day, the welfare state has been based on that combination. It is clear that other Executive policies on health, social inclusion and many other areas are targeted.

Brian Adam (Scottish National Party, North East Scotland)

Is it fair to say that personally the minister favours universal benefits much more than he favours the targeted benefits with which the Westminster Government appears to be obsessed?

Malcolm Chisholm (Labour, Edinburgh North and Leith)

I genuinely believe that that is a false dichotomy. Our policy has changed the boundaries of universal benefits in Scotland, but the fact remains that one cannot have only universal benefits or only targeted benefits.

I turn now to the Conservatives. It is unfortunate that Keith Harding and Ben Wallace were unaware of the developments on joint and pooled budgets that are laid out in the bill that was introduced to Parliament this week. As I indicated in my opening speech, Ben Wallace's figures were wildly out. We are aware that not all the grant-aided expenditure for a particular service is spent on that service and, on page 29 of the report, we refer in particular to the spending gap on older people's services. Our recommendations take that on board. They talk about the need for outcome agreements.

On resource transfer, our recommendation is that

"the full amount of NHS long stay resources freed up by bed closures should also be part of the aligned or pooled budget."

Ben Wallace (Conservative, North East Scotland)

Will the minister say whether his department has done a study into leakage—the difference between GAE and what is spent—and, if it has, will he publish the details?

Malcolm Chisholm (Labour, Edinburgh North and Leith)

The details on older people's services are in our report, as I indicated. Local authorities generally spend 98 per cent of GAE, which is slightly different from the 44 per cent that Ben Wallace mentioned yesterday.

I will now turn to the SNP. Christine Grahame asked several questions. I assure her that the £50 million will be available for aids and adaptations. I agree with what she said about the decline in home care hours. The report refers to that point, but also welcomes the fact that, because of increased Executive funding, home care hours increased by 9.8 per cent in 2000. We strongly support the continued development of that trend.

Christine Grahame (Scottish National Party, South of Scotland)

Will the minister give way?

Malcolm Chisholm (Labour, Edinburgh North and Leith)

I am sorry, but I must move on because I have only five minutes.

Christine Grahame was incorrect when she said that Stewart Sutherland favoured a fixed amount for housing and living costs. It is true that he considered that as an option, but he favoured a fixed rate for personal care. In that and in almost every other regard, we have followed Sir Stewart Sutherland's methodology. We have also adopted an average charge, which Sandra White asked about, which again, is what Sir Stewart Sutherland recommended. We used the same method for future projections as Sir Stewart, but we also built in an allowance for the response to the new policy, which he did not build in. That is why we allow a great deal of money for the expansion of services in the community.

Finally, let me respond to the one speaker in my party who was allowed to speak in the debate. Richard Simpson seems not to have given due weight to the £50 million for the development of new services, because he said in his intervention that that would not benefit the care of the elderly. I confirm that the ring fencing is an interim measure, which is what he wished for. Let me also repeat that resource transfer will be transparent, which he supported. Richard Simpson also called for long-stay beds to go into the pooled budget. That will happen. He made one final point in which he seemed to suggest that funding people in hospitals should become a local authority responsibility. That seems to contradict his earlier point about pooled budgets and joint responsibilities.

That is a detail in the context of today's debate. I welcome the positive responses that have been given and the constructive comments that have been made. I hope that we can all go forward together into the exciting new world that begins for older people next April.

Shona Robison (Scottish National Party, North East Scotland)

I thank all, or certainly most, of the members who contributed to the debate. At the end of the day, the debate took place only because the SNP afforded Parliament the opportunity. In fact, yesterday's ministerial statement was also due to my party's determination to secure a statement sooner rather than later. Although Susan Deacon's statement yesterday was welcome, today's debate has been an opportunity to try to get answers to some serious outstanding questions. Perhaps it is unfortunate that some members have not taken that opportunity and that some questions remain unanswered.

When Mike Rumbles made his comments, he did not look over to the benches of his Executive partners. If looks could kill, Mike would look rather unwell. "How to Win Friends and Influence People" was perhaps lost on Mike Rumbles. The point about the whole resources issue is that it would be quite wrong if this Parliament had to find the shortfall from existing resources and raid other budgets simply because—I quote Mike Rumbles's colleague Margaret Smith—Westminster was being "perverse, narrow-minded and mean". Why on earth should that be?

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Has Shona Robison thought through the logic of the SNP motion, which would give a veto to the Westminster Parliament over the policies of the Scottish Government? Shona Robison seems to imply that free personal care for the elderly should not be implemented.

Shona Robison (Scottish National Party, North East Scotland)

That is nonsense. The principle at stake is that when this Parliament decides a course of action, as it is quite entitled to do and as it has done with free personal care, it should not be thwarted by another body that does not agree with its policy. That is the problem with what Westminster is doing. Mike Rumbles knows that very well.

Resourcing has featured heavily in the debate. It is crucial that the community care sector expands to meet the inevitable increase in demand. The sector cannot even meet current demand, before the care development group's recommendations are implemented next April. We have heard examples of the reduction in the number of local authority homes, in care home beds and in community care services on the ground. We need to move swiftly to build capacity. I am pleased that the minister has clarified that £50 million has been set aside to do that and I welcome that.

Any shortfall in the funding package will be a serious problem. The resources that are required from Westminster will be an essential component of making the package work. It is all very well for Henry McLeish to say that if Westminster does not agree to the transfer, the £21.7 million will be found, but we have a right to know about the contingency plans. Would the money come from the £50 million that has been set aside to build capacity? If it would, that is a serious concern. For the policy to work, every penny of that £50 million will be required to build capacity. It is right that the Parliament has the opportunity to ask such questions.

Margaret Smith (Liberal Democrat, Edinburgh West)

I agree that if we lose £20 million of that £50 million, it will have an impact on community care services. The £30 million that would be left would be the same as the total amount for community care that the SNP offered in its manifesto at the elections to the Scottish Parliament. Will Shona Robison comment on that?

Shona Robison (Scottish National Party, North East Scotland)

At the end of the day, Margaret Smith must recognise that we want to go forward together on the issue. That comment was not worthy of her. The point is that a threat is undermining the very principle on which the package is based, which is that we must build up capacity. Otherwise, the whole package could be undermined. Among the many people I have spoken to outside the chamber, there has been agreement on that point, which is why it is frustrating that members, for whatever reason, feel that that they cannot support a very reasonable SNP motion. Perhaps people should reflect on why that is.

The way in which we do business and the way in which negotiations are conducted are also issues. I would rather the Parliament gave its view on Westminster's actions than that it went on with what are in essence back-door negotiations. I do not know what stage things are at, or whether Westminster is giving a nod in the right direction. We are not told. The fundamental point of principle is that the Parliament should be the place in which debates are held on what we think should happen on this or any other issue, rather than that being done behind closed doors.

Let me turn to points that were raised during the debate. The Tory amendment, although—as others have pointed out—perhaps based on some spurious figures, makes an important point. The GAE spend by local authorities has been of concern for some time. Budgets for the care of the elderly are often the first to be plundered, so I am pleased that we are to have a far more rigorous assessment of how such budgets are spent. The way in which that has been done has been fundamentally wrong for quite some time.

In an intervention, Richard Simpson spoke about how the Executive's package would improve care for the elderly. What he said suggested that his conversion has been something less than that on the road to Damascus. I am not convinced that he has fully converted to the principles underlying free personal care.

Richard Simpson (Labour, Ochil)

Will the member give way?

Shona Robison (Scottish National Party, North East Scotland)

I do not have much time, but if Richard Simpson wants an answer to the question of how free personal care will fundamentally improve the care of elderly people, it is this: it will remove the fear that thousands of elderly people have had about what will happen to them in their golden years. That principle is very important.

Christine Grahame raised important points about what is happening on the ground to community care services. Those points have to be addressed.

I should also deal with another point that Richard Simpson raised. I want to correct his point about Falkirk Council. It was the previous Labour administration that embarked on the policy that was referred to—although to be fair, that administration was in a difficult position because of the discharges from the Royal Scottish national hospital, which the SNP administration has inherited. Richard Simpson was perhaps a little economical with the truth.

Free personal care is an issue that unites the Parliament. I do not think that anyone was singly responsible for making it happen; I would like to think that it was a collective effort from all sides of the chamber.

We want to see joined-up government. In future, when we want to make radical changes that affect the lives of our people, would it not be much easier if we had control over social security benefits?

I support the motion in the name of Nicola Sturgeon.

Public Resources

Patricia Ferguson (Labour, Glasgow Maryhill)

The next item of business is an SNP debate on motion S1M-2249, in the name of Alasdair Morgan, on Government stewardship of the public's resources. Members who wish to speak in the debate should press their request-to-speak buttons.

Alasdair Morgan (Scottish National Party, Galloway and Upper Nithsdale)

The motion simply invites the Parliament to take note of the press release that was issued last week on behalf of the Executive by the Minister for Finance and Local Government to announce the end-year flexibility—or, for normal mortals, underspend—in last year's budget. The reason why I lodged the motion and why it is important for Parliament to debate it is that, otherwise, Parliament—apart perhaps from some of its committees—will have no chance to discuss why last year's budget has been underspent by £718 million or what financial management steps the minister intends to take as a result of the underspend.

It is perhaps indicative of the way in which the Executive chooses to conduct its business that it is only in Opposition time that the Parliament has the opportunity to discuss this important matter. The minister would prefer simply to issue his press release, presenting the underspend and underachievement as a good-news story; he would prefer Parliament not to have its say. That cannot be right. The budget is the property of Parliament. It is the result of the budget process, in which all committees are involved, and of the subsequent Budget Bill. Deviations in the budget should be debated here. The SNP is happy to use its time to rectify that omission.

The debate contrasts significantly with the statement on the Executive's finances that the minister made to Parliament on 28 June, just before the beginning of the summer recess. Then, he was eager to announce to the chamber that, as a result of a "realignment" of the budget, he was able to put £289 million into different programmes. Clearly, £289 million is considered worthy of a statement in Parliament, because the minister thinks that it will generate positive publicity for the Executive, but £718 million does not merit any explanation to the chamber if there is a danger of negative coverage.

It is worth considering what the minister said in his June statement on readjustment. He said:

"we can both deliver a balanced budget and meet the ambitious policy objectives of the Scottish Executive."

Later, he said that he looked ahead

"to better management of Scottish public spending, with new focus, flexibility and effectiveness."—[Official Report, 28 June 2001; c 2096.]

Applying those yardsticks to the contents of the minister's press release on 19 September, we come to the conclusion that, for the past financial year, the Executive did not meet its self-proclaimed "ambitious policy objectives", nor was its management of public spending—if we use the minister's own criteria—focused or effective.

The budget for the past financial year, as far as departmental expenditure limits are concerned, which constitute the budget to which end-year flexibility applies, was £14,705 million. Therefore, the underspend that the minister announced amounts to about 5 per cent of budgeted expenditure. Not only is that a very substantial figure—which, if it had occurred in a local authority, would have caused the Executive to ask some hard questions—it is some 2 per cent higher than the figure for the previous year. The increase is even greater if we compare it with the first year of the current Labour Government in Scotland.

I can accept—because I am a very generous person—[MEMBERS: "You are."] It is a major failing of mine.

I can accept that, in the first year of the new devolved Administration in Scotland, the Executive might have had the beginnings of an argument to explain why it had some difficulty in making the financial outturn match the initial budget with a greater degree of accuracy. However, we have to remember that we are talking about budgets that Labour has been in charge of since 1997.

Brian Fitzpatrick (Labour, Strathkelvin and Bearsden)

Thank God.

Alasdair Morgan (Scottish National Party, Galloway and Upper Nithsdale)

However, we need a considered explanation from the minister on why the situation has become significantly worse, rather than better, in the fourth year.

Does Mr Fitzpatrick wish to intervene? No? It seems that Labour members would prefer to snipe from a sedentary position.

In his evidence to the Finance Committee on 8 June, the Deputy Minister for Finance and Local Government said that he and his boss would take a hard look at end-year flexibility and that they were

"working on better management of budgets, to ensure that over time we squeeze down the amounts of EYF."—[Official Report, Finance Committee, 8 June 2001; c 1336.]

We need to hear an explanation from the minister of the measures that he is putting in place to ensure that in future years the outturn more closely approximates to the original plans. We need to hear what targets he is setting for end-year flexibility to be squeezed down to. Clearly, even the minister agrees that the current figure is unacceptable—so what would he like it to be?

The minister's press release of 19 September said:

"we nevertheless could improve our financial planning and management."

As one might expect of the minister, the press release is a model of modesty and understatement. The minister also said:

"I have therefore put in place new procedures to monitor the Executive's spending at regular intervals and to spot where there are possible delays or lags in funding."

Given that the introduction of such procedures is clearly not before time, why were they not put in place last year? I repeat my plea that we should have an explanation—if not just now, at least in a document later—of precisely what the procedures are. Will those procedures strengthen the pre-approval scrutiny that is given to projects to ensure that they have a realistic prospect of being undertaken within the planned time scale and will the relevant committees of the Parliament be involved in that process?

The minister should also tell us why we are not being alerted to underspends earlier, rather than five and a half months after the end of the financial year. Why was no mechanism available to warn the minister during the financial year that such an underspend was likely and when did he find out its size, which is clearly of some embarrassment to him? How long has it taken him to relay the information to Parliament and what indications of the size of the underspend had he received at the time of his June statement to Parliament? Finally—in this series of questions, at least—can the minister tell us whether all departments were equally efficient at revealing the extent of their potential end-year flexibility? Did some report it later than others? If so, can he tell us who the ministers are who need to, as the Daily Record so helpfully advised them last week, "GET A GRIP!"?

Although we are disappointed at the overall level of underspend across the Government's entire budget, the position becomes far more worrying when we consider how that total underspend has been made up, which departments contribute to it and by how much. My colleagues will concentrate on the detail of the underspend and will highlight some of the opportunities that have been lost and—more important—the needs that have gone unsatisfied while the underspend has been built up. In education, the underspend was 31 per cent; in social justice, it was 18 per cent. Of interest to me and my constituency is the environment and rural affairs department's underspend, which amounted to £67 million—about 6 per cent of that department's budget.

Along with many other members who represent rural areas, in the months since the outbreak in Scotland of foot-and-mouth disease on 1 March, I have spent much time arguing with the Government about the level of support for all industries in rural areas, especially in the south-west. Many of my constituents thought that the size of the recovery packages that were offered was in no way proportionate to the degree of devastation that had been caused. Their reaction would have been much more critical had they known the size of the underspend in the department that was meant to be helping them at that time. They simply would not have understood it.

Hugh Henry (Labour, Paisley South)

Alasdair Morgan has listed his concerns about underspends and alleges that the Executive failed to react. If SNP members have been so concerned, can he explain why the SNP has never lodged any amendments to the budget over the past two and a half years?

Alasdair Morgan (Scottish National Party, Galloway and Upper Nithsdale)

This is not about the budget; it is about the way in which the budget is implemented. The Executive clearly cannot implement its own budget; there would be a fat chance of its implementing a budget that had been amended by us.

My constituents would not have accepted the constraints that were being put on the assistance that was given to them in their time of need. They will also wonder why Dumfries and Galloway Council is being forced to consider a public-private partnership in education, which will involve the closure of more than 40 schools because the council believes that it cannot otherwise deal with the backlog of school building repairs, although the underspend in the central education budget is £86 million.

I have referred to the urgent necessity to put in place better procedures to discover at an earlier stage when underspends are going to occur. I shall now say why some of the underspend is occurring and why no number of reporting procedures will cure it. Underspending is endemic in the new Labour project because that project depends much more on spin than on delivery—underspends are an inevitable consequence of that fact. Ministers are eager to rush to the press with announcements of programmes to come. Heaven knows that the same programmes have been announced time after time in recycled statements about recycled cash.

It is clear from the evidence that we have in front of us that announcements of expenditure programmes are often made before ministers have any idea whether the Executive is able to put into practice the projects that are the subject of those press releases. That is why the outturn does not match the budget. The budget is, in part, a wish list that has been cobbled together from ministers' press releases, driven by the need to spread yet another good-news story. The reality on the ground is that new Labour often cannot deliver on its programmes, not because there is not enough cash—there clearly is—but simply because they have not been thought through and the mechanisms do not exist to deliver them.

Cathie Craigie (Labour, Cumbernauld and Kilsyth)

Alasdair Morgan says that the budget is a wish list. He also said, in response to a previous intervention from a back-bench Labour member, that the Executive could not manage its own budget, let alone the SNP's. If the budget is a wish list, why do we never see the SNP's wishes on paper, so that we could cost them?

Alasdair Morgan (Scottish National Party, Galloway and Upper Nithsdale)

Labour members obviously do not understand what this debate is about. It is about the outcome of the budget and whether the Administration can implement it. It would not matter whose budget was being implemented; the Administration is clearly unable to implement any budget.

Brian Monteith (Conservative, Mid Scotland and Fife)

Is the ability to implement budgets the same as that which was required of the SNP, which could not handle its finances well enough to avoid having to sell its headquarters? At the weekend, the SNP could not count the pregnant chads well enough to save Mike Russell the embarrassment of losing his post temporarily—the same Mike Russell who called for the Scottish Qualifications Authority to be abolished. Should not the SNP be abolished?

Alasdair Morgan (Scottish National Party, Galloway and Upper Nithsdale)

I thought that the Tory party was in favour of selling off property to release the capital for use. When it was in power, it insisted that many bodies under its control should do that. If Brian Monteith is worried about our ability to add up, compared with the Executive's, I suggest that he look at the draft Scottish budget that was published last week, at the same time as the minister's statement. I invite him to try adding up the numbers in the first column of the second table in that budget—the total is £54 million adrift. I would rather trust a party that gets an addition sum £80 wrong than one that gets such a sum £54 million wrong.

One of the ironies of end-year flexibility is that it allows money that has been the subject of at least one—it is likely to have been more than one—announcement in the previous financial year to be transferred into the next financial year on other programmes and to become the subject of yet more announcements. I suspect that that is why it is so popular with the Executive.

The Parliament's committees will have to be much more rigorous in examining the detail of the spending proposals of the various departments, in trying to worm out of them the extent to which proposed programmes can be delivered and in establishing how programmes that have been announced are measuring up to the rhetoric of the budget. It is also up to ministers to take to heart the extent to which they have not delivered on the task of administering the public finances of Scotland and it is for them to put in place the necessary measures to ensure that the people and the Parliament can have confidence in the administration of their money. I hope that everyone within and outwith the chamber will note the gap between rhetoric and delivery that lies at the heart of the coalition Administration.

I move,

That the Parliament notes the Scottish Executive's news release of 19 September 2001 on end-year flexibility.

Angus MacKay (Labour, Edinburgh South)

The sensible approach to end-year flexibility was introduced by the Labour Government for a clear purpose: to improve effectiveness in public spending and to stop the absurd end-of-year spending spree that was once common throughout the public sector, in which walls were painted, carpets were replaced, furniture was bought and everything else was done to get the money out the door. EYF is money that is transferred forward for use, not lost to services or sent back to the Treasury as it was under the Tories. An underspend represents a real opportunity to shape our services in accordance with our priorities.

Let us look at last year's underspend. Around £250 million was slippage in capital projects; £90 million was carried forward to finance the Glasgow stock transfer, which was perhaps Scotland's biggest-ever anti-poverty measure; £65 million was planned carry-forward before the McCrone settlement, which was a massive investment in teachers and education; and £55 million was retained by health boards, which retain 1 per cent flexibility from year to year, allowing them useful discretion to improve their services. Together, those four areas account for more than £450 million of the underspend.

Andrew Wilson (Scottish National Party, Central Scotland)

Will the minister give way?

Angus MacKay (Labour, Edinburgh South)

Not this early in my speech.

The remainder, from various budgets, amounts to the equivalent of just five days' spending. We have taken steps to ensure that underspending is reduced in future and that, where it occurs, it is legitimate and sensible. Departmental spending will be closely monitored and there will be quarterly briefings to Peter Peacock and me. If departments are not spending according to plan, we will want to know why. Where underspending is forecast, ministers will consider re-allocating spend and presenting proposals to the Finance Committee.

Brian Adam (Scottish National Party, North East Scotland)

The minister said that he will receive quarterly reports on the budget outturns. Will he confirm that he did not receive such reports in the past and will he assure us that not only will they appear on his desk, they will come before the Finance Committee, as they concern the Parliament's budget?

Angus MacKay (Labour, Edinburgh South)

The Finance Committee will receive whatever documentation and information is appropriate under parliamentary procedures and expectations. One reason why the monitoring procedure—

David Davidson (Conservative, North East Scotland)

Will the minister give way?

Angus MacKay (Labour, Edinburgh South)

No, I will continue with my point. Monitoring procedures had to change because we moved to resource account budgeting, which means that we have an entirely new system in place to deal with our budgets. Brian Adam will know about that from the detailed financial convolutions that we went through with various finance spokespersons and the Finance Committee. We now have a more rigorous method of costing what we are spending and reporting back in good time to ministers and departments how the spend is going out the door.

We know that underspend can happen for good reasons and that we have to plan ahead for it. That is why we have established a clear process to ensure that it is re-invested in ways that support our highest priorities. Departments automatically retain 75 per cent of their underspends, but they are required to make clear how it will be invested and in what time scale. The rest is pooled centrally and is bid for competitively. That process is rigorous, but it is fair, and it prioritises our key objectives. That is why health and education have gained about £15 million more than they underspent in the year.

There is an underspend, but it is dealt with fairly, according to our priorities and in a way that produces results.

Alasdair Morgan (Scottish National Party, Galloway and Upper Nithsdale)

Will the minister say whether the same process that is in place to scrutinise initial bids for expenditure is in place to scrutinise bids for EYF? If so, is there any guarantee that the departments will spend the EYF funding better than they spent their initial funding?

Angus MacKay (Labour, Edinburgh South)

No, the same process is not in place, but, yes, there is a guarantee that there will be better scrutiny.

Last week, we used EYF money to wipe out historic national health service trust deficits. That was welcomed by Tayside Health Board, as The Press and Journal reports, with spontaneous applause from staff at the announcement. In Alasdair Morgan's area, Dumfries and Galloway Health Board, which has a good record of managing its finances, has an extra £2 million from EYF for further improvements to its services. As its chief executive said:

"the investment has come at exactly the right time".

A total of £79 million went to NHS Scotland to deal with deficits, as well as £11 million, also from EYF, to meet winter pressures. Over the next few weeks, there will be further announcements about the use of EYF for our other main priority, education. The investments will be welcomed in schools all over Scotland.

I have set out the facts, the process applied to EYF and the benefits of EYF. I will now address some of the fictions that the Opposition has been promoting about it. Last week, in The Press and Journal, Alasdair Morgan claimed that EYF was

"a startling example of mismanagement and financial incompetence on a grand scale".

I have already dealt with that assertion in setting out how £450 million of the money emerged. He also claimed that we had underspent our education budget by 31 per cent. I will take him through a fairly simple calculation: 31 per cent of £3.2 billion, which is what we spend in total on education centrally and through local government, is almost £1 billion, but the education underspend, as a matter of record, was £86.5 million. The percentage underspend—if he is still following me—is 2.7 per cent, not 31 per cent. I hope that he is still with me.

Alasdair Morgan (Scottish National Party, Galloway and Upper Nithsdale)

rose—

Kenneth Gibson (Scottish National Party, Glasgow)

rose—

Angus MacKay (Labour, Edinburgh South)

Sit down and listen.

If we have doubts about the SNP's numeracy, we also are entitled to have pretty grave doubts about whether Alasdair Morgan or anyone else in his party is paying attention. He claimed, again in The Press and Journal, that SNP members have not been told anything. The fact is they have not been paying attention. In early June, Peter Peacock told the Finance Committee that the amount of new money reaching departments inevitably was leading to underspends. He told the committee what was going on and what we were doing about it. He is on record stating that there would be additional and significant EYF and he gave the timetable and process for dealing with it that I have just described. Did any SNP member of the Finance Committee ask any questions about EYF? No. In fact, the then SNP finance spokesman did not even turn up to the committee.

One month later, in July, by which time Mr Morgan was assiduously minding his brief as chief Opposition finance spokesman, he, all his MSP colleagues, all five of the SNP's Westminster MPs and the entire party appeared to have overlooked a major public statement by a reasonably high-profile politician—the Chancellor of the Exchequer—that spells out our total underspend. The details are set out in Gordon Brown's white paper "Public Expenditure 2000-01 Provisional Outturn", the accompanying press release and the subsequent quarter-page of coverage in The Guardian, all of which I have here and would be happy to give to Mr Morgan.

Alasdair Morgan (Scottish National Party, Galloway and Upper Nithsdale)

rose—

Angus MacKay (Labour, Edinburgh South)

Sit down.

If only the SNP would pay attention. By then there were, as I said, five SNP MPs at Westminster, including, apparently, an economist—their leader in exile—but still there was no interest or comment and there were no questions. That says much about the synthetic sincerity of the SNP.

Alasdair Morgan (Scottish National Party, Galloway and Upper Nithsdale)

Will the minister give way?

Angus MacKay (Labour, Edinburgh South)

Sit down and listen.

It is a feature of the Scottish Parliament that parliamentary questions can be asked throughout the summer recess. So, did the SNP finance spokesman or any other SNP MSP take advantage of that? No—except, to be fair, for Andrew Wilson, who recently asked when we would be making an announcement.

But perhaps we should not expect too much. The SNP, as we know, is not good with numbers. "Free by 93" certainly did not add up. Is it not sad that to determine the scale of the deficit in their party's finances, SNP members were forced, in the middle of a press conference, to borrow a calculator from a journalist to work out the numbers? Just last week at its conference, the SNP had trouble with the votes for its executive elections. It was forced to introduce to British politics the new concept of end-conference voting flexibility. As the Daily Record said:

"the best brains in the SNP can't count up to 182."

Margo MacDonald (Independent, Lothians)

Will the minister give way?

Angus MacKay (Labour, Edinburgh South)

It is no surprise that even one of its own senior figures describes the SNP's policies as financially illiterate. In the Evening Times this week, Duncan Hamilton, who somewhat ridiculously is still described as

"The fresh new voice of Scottish politics",

said of his own party's tax policies:

"this looks a ridiculously risky strategy".

He reminded the SNP that it needs to

"learn from the mistakes of the past".

Should the SNP decide to learn from the mistakes of the past, its learning opportunities must surely be many and various. It campaigned for a penny for Scotland and its leader said at its conference that he wanted to raise tax, but here in the Scottish Parliament, there has been not a single tax-varying proposal, budget amendment or coherent policy.

Andrew Wilson (Scottish National Party, Central Scotland)

Will the minister give way?

Angus MacKay (Labour, Edinburgh South)

Let us get away from the SNP and back to reality. We have taken hold of Scotland's public finances, we have taken hard decisions to achieve our priorities and we have been rigorous in finding the money to pay for them. Free personal care, the abolition of tuition fees and the reform of teachers' pay are all fully funded and have been funded within our budget. EYF is part of that process. What about members of the Opposition? We know all that we need to know about their financial capabilities: they cannot count, they will not count and that is why they do not count.

David Davidson (Conservative, North East Scotland)

First, it is remarkably good fun sitting here watching the Minister for Finance and Local Government for once laying into somebody; it is fairly obvious that in the budget process he has not laid into any of his ministers. Secondly, I thank the SNP for having this debate and fetching the Minister for Finance and Local Government to come before us. I hope that some light will be shed on the tangled web of illusion and spin that is the Executive's handling of the spending of the Scottish budget.

Much has been made of the role of the Finance Committee. I remind Alasdair Morgan—a new member of that committee—and the minister that, over the past two years, I have repeatedly asked for either quarterly or half-yearly statements of the roll-out of programmes. I cannot believe that those statements do not exist. I know that the accounting officers must have them. Perhaps the truth is that the minister and his team do not bother to ask for them because they are so busy writing up their next press release.

I find it incredible that hospital trusts, police forces, fire brigades, schools, universities and colleges of further education could have been denied the support that they required while money has been sloshing around within the Executive's departmental coffers. Did the minister know that the money was there? If not, why not? I remember the First Minister announcing a grand new department that was going to supervise all of that. I do not recall there being much of an outcome from that department.

Nevertheless, I feel quite sorry for the minister. It is obvious that his colleagues are incapable of managing their allocations and keeping him informed of the progress of the delivery of the services for which they are responsible. Perhaps the problem now lies not in spending but in the formulation of budgets and their inability to cost anything that they wish to deliver.

The figures mentioned today do not include the £430 million underspend from the year 2000-01 that was highlighted in the draft budget that came out the other week. Our adviser on the Finance Committee assures us that he could not see any link between the £430 million underspend and the £718 million that we are dealing with today. If one considers the total figure, we are talking about £1 billion out of an annual budget of £20 billion. Even in SNP terms—if Andrew Wilson remembers how to do his sums—that is a significant sum of money. It cannot be glossed over with a few idle statements here and there.

I have another question for the minister. How is it that, even under new Labour, the Scottish Office managed to deal with an annual approximate roll-over of only £300 million? I know that it did not paint every wall every year.

Andrew Wilson (Scottish National Party, Central Scotland)

In order to make the debate interesting at this stage, would Mr Davidson care to comment on how much of the underspend went back to the Treasury over the period of Conservative government? How much did we lose from underspend under the Conservatives?

David Davidson (Conservative, North East Scotland)

It is not a case of losing. Perhaps we were a bit more prudent about how we raised taxes. The money belonged to the taxpayer and was reallocated centrally to the needs of the taxpayer.

The minister has mentioned the McCrone settlement. I want to know about the way it was rolled out. The problem is not with the global sum of money; it is that there is not enough money to deal with the number of schools.

In the area of health, we have had the sticking-plaster of millions from Susan Deacon to bail out the Arbuthnott formula. Next year, will the minister again have to bail out that iniquitous formula from EYF? It is another failed Labour policy and the minister has been sent out as the first-aid paramedic to try and patch up the holes.

Last year, I asked the First Minister about how many universities were going into deficit. Although he had only just left the department of enterprise and lifelong learning, he did not have a clue. Does Angus MacKay have a clue?

I will go further and talk about our developing economic woes. Alasdair Morgan touched on the problems in Dumfries and Galloway. However, a lot of Scotland has been affected in many ways. Apart from the service sector, we are almost at a standstill. The rural economy is on its knees, yet in the minister's recent statement, there is a reduction in spending and the enterprise budget. That does not stack up. If we consider the spending of the unspent millions, competitiveness might have been to the fore of the minister's mind, or perhaps he did not listen to pleas that Wendy Alexander perhaps did not make. I do not know.

We have to look at helping our businesses recover. All the difficulties were there before the terrible disaster in New York. The problems are not new. All through last year the signals were there. The reports that came out talked about the state of our economy. The minister has a tool in his hand to use, properly and effectively, to help the economy, but there is no mention of that, possibly because that is a sector that he is not bothered about.

The problem is what we are going to do with the small, innovative Scottish companies that are doing lots of good research, but cannot access venture capital that would drive forward connections into the oil and gas industry in particular. We also see struggling biotechnology parks that might even move abroad for foreign investment. What about creative use of budgets?

One could accept the minister not getting his sums right at the initial predictive stage, if he had the common courtesy to come to the committees and say "Come on, give us a hand here. What do you think?" However, the subject committees of the Parliament are denied the sort of information that they need to make commonsense decisions on the outcomes of what the Executive is trying to deliver.

Michael Russell (Scottish National Party, South of Scotland)

Will the member give way?

David Davidson (Conservative, North East Scotland)

Yes.

Michael Russell (Scottish National Party, South of Scotland)

With regard to information being provided to parliamentary committees, would Mr Davidson support my and many other people's calls to the minister to publish detailed information about which budgets were underspent, along with some explanation of that, so that the committees can see the impact of the Administration's incompetence?

David Davidson (Conservative, North East Scotland)

Mr Russell has obviously read my speech before. I will just clip on quickly The truth is that Executive ministers tell us in speech after speech that we must get our infrastructure upgraded. You name it and those who sit on the Executive front bench have mentioned it. However, there is nothing for the future. Scotland cannot continue to tolerate an attitude that is concerned with the short term only. Where did the £718 million come from? We did not get an answer to Alasdair Morgan's question about that. What were those moneys supposed to have been spent on? We do not know.

It would have been helpful for the next stage of the budget discussions that we are entering into if the minister had been able to tell us where the £430 million that is in the new budget documents came from. We do not know that. The minister wonders why committees do not make comments. I am getting a little bit tired of having to repeat this. Some of us have been on the Finance Committee for a fair time now and members of all parties in the committee are asking the same question time in, time out.

Angus MacKay (Labour, Edinburgh South)

rose—

David Davidson (Conservative, North East Scotland)

Minister, will you just sit for a second?

George Reid (Scottish National Party, Mid Scotland and Fife)

You are on your last minute.

David Davidson (Conservative, North East Scotland)

Thank you, Presiding Officer.

If one looks at Scotland's business communities, council tax payers and rural dwellers, one sees that they are disadvantaged, but the minister does nothing. Perhaps he should ask his colleague the First Minister why he keeps looking south for additional funding when there is money in the bank. That is going to get Scotland a bad name. We see Helen Liddell and other ministers coming up here and beginning to interfere, because they have patently lost faith in what the Executive is trying to deliver.

I do not have much time left, but I have a short comment for the SNP. It is the wish-list party of Scotland—from which the minister is trying to take lessons. I would love to hear Mr Adam tell us in his wind-up speech what he would have spent the money on. We have not had that information today.

I turn fleetingly to the Liberals—this is my last comment, Presiding Officer—whose numbers are sadly depleted today. I do not doubt that they will whinge and cringe on every subject under the sun, but I guarantee that at the end of today they will still vote with their Labour masters.

Jamie Stone (Liberal Democrat, Caithness, Sutherland and Easter Ross)

It might be wise to remind ourselves what the situation was like before we had devolution. The mandarins conducted government in Scotland. With the stroke of a pen in the Scottish Office they could throw money this way or take it back and fire it down to the Treasury. We are here today because those actions were not accountable or open to public scrutiny.

Remember the bad old days. When ministers point out the splurge of spending that used to happen at all levels, those of us who were in local government or other public sector areas remember. Paint was literally put on walls and vehicles were bought. I can remember rows of street lamps going up in the middle of nowhere just to get money out of the budget before that dreaded date was reached. Remember, colleagues, that the general public hated that kind of thing. They knew that that was a waste of money and that it was money wrongly spent. Now we have EYF that allows funding to carry into other years. That is welcome flexibility in public finances. It means that we can get away from the non-essential spending on painting walls and vehicles and move the money to the priorities of the Scottish Parliament, where it should be spent.

Last year's underspend is a significant amount of money, but we should consider for a couple of minutes why such underspends are created. Public spending is growing at such a rate that it is almost inevitable that underspends will occur. Those of us who have worked in the public sector will know that that is true. When Peter Peacock and I were members of Highland Council, we had to tackle that issue every year.

The direct funding of nurses is affected by recruitment problems. The required number of nurses—or doctors or staff of whatever professions are needed—may not be obtained as soon as we would like. Capital slippage is another factor. Those who have worked in local authorities will know that that is true. As the minister said, that has played a major part in the underspend.

I will pose a question to the SNP, prompted by what Alasdair Morgan said. Will Mr Adam say in his summing-up whether the SNP is against the proposals? We have an acceptance of reality. Surely the system allows prudent management of public funds. I need a clear answer. Is the SNP saying that it would like to return to the bad old system of spending quickly to get rid of all the money?

The SNP must also tackle the question that the Conservatives asked: what are the SNP's priorities? Are SNP members saying that they would not give money to some NHS trusts? If so, which? Is the SNP against our giving money to health and education—the Government's priorities?

Michael Russell (Scottish National Party, South of Scotland)

I will explain what the SNP is saying and use an analogy from Mr Stone's background—I remember that he is a distinguished cheese maker. Our argument is that if the budget for his cheese-making enterprise was 30 per cent underspent, it would be obvious that some of his customers had not had some cheese delivered to them, because the cheese would not have been made. I hope that Mr Stone understands the argument now.

Jamie Stone (Liberal Democrat, Caithness, Sutherland and Easter Ross)

When the debate started, the SNP went off on a great charge—it was as if an R101 were flying in the chamber. Now Mr Russell is going on about cheese. The Scottish Government is not involved in cheese making, for goodness' sake.

David Davidson (Conservative, North East Scotland)

Perhaps the member has not yet realised that the Executive's purpose is to support the public relations industry.

Jamie Stone (Liberal Democrat, Caithness, Sutherland and Easter Ross)

Ah, dear me.

We have a straightforward good-news story. It is right and proper that Angus MacKay and Peter Peacock are putting the required procedure in place, which will manage our moneys prudently.

I welcomed Angus MacKay's comments on 19 September, when he said:

"I am however concerned that the Executive is not making use of the considerable growth in the Scottish budget as quickly as it could. I have therefore taken a much more rigorous approach to examining Departmental underspends and their entitlement to carry forward money this year."

My party welcomes that and the minister's comment that he will develop early reviews. I am sure that that will improve matters.

However, we must remember that in comparison with the previous system, we have open scrutiny in this democratic chamber. Those who carp and criticise from the committee point of view should use the committees to obtain the information. My goodness, the Education, Culture and Sport Committee did that during the Scottish Qualifications Authority inquiry. It is the members' Parliament. I say to David Davidson that there is a wealth of difference from the previous system. I warmly support the Scottish Executive and I will vote not for my masters, but for my partners, who happen to be doing a very good job.

George Reid (Scottish National Party, Mid Scotland and Fife)

We proceed to the open debate. If members keep their speeches to four minutes, we shall be able to include everyone.

Kenneth Gibson (Scottish National Party, Glasgow)

Jamie Stone spoke like a man with some ambition.

Jamie Stone (Liberal Democrat, Caithness, Sutherland and Easter Ross)

rose—

Kenneth Gibson (Scottish National Party, Glasgow)

That is likely to be unfulfilled.

The first thought that springs to mind is: come back, Jack McConnell, all is forgiven. At least he kept the underspend down to a relatively modest £430 million. It is sad that the Minister for Finance and Local Government gave us not only arrogance and a whiff of complacency, but the stench of incompetence. Last year, Henry McLeish's crown prince was Deputy Minister for Justice and did not realise that sex offender legislation fell within his remit. Now he does not appear to realise that good financial husbandry falls within his remit. I would like the minister to tell me which local authorities he would allow to have a 31 per cent underspend.

I was astonished that Peter Peacock did not leap in and correct the Minister for Finance and Local Government when he made something of a faux pas and said that the education budget was £3 billion. That is correct for local authorities, but according to the written answer that the minister gave Mike Watson on 19 September, the Executive's education budget is £280 million and the underspend is £86.5 million. Before the minister signs off the answers that his civil servants write for him, he might want to read them.

Angus MacKay (Labour, Edinburgh South)

The point that I made in my speech was that it is wrong for Mr Morgan or any other SNP spokesman to suggest that the total education budget was underspent by 31 per cent. The core education spend through the Executive is a small part of the total education spend that the Executive promotes, particularly through local government. That is why it is dangerous and overblown to throw around figures as Mr Morgan did in the press.

Kenny Gibson asked what we would tolerate in underspend by local authorities. SNP-controlled Falkirk Council is carrying forward an underspend of £1.6 million for a park-and-ride scheme—

Kenneth Gibson (Scottish National Party, Glasgow)

The minister has used 45 seconds of my four-minute speech. He can sit down now.

George Reid (Scottish National Party, Mid Scotland and Fife)

Order. Let the minister finish his point.

Angus MacKay (Labour, Edinburgh South)

Will Mr Gibson respond to my point?

Hugh Henry (Labour, Paisley South)

On a point of order, Presiding Officer.

Kenneth Gibson (Scottish National Party, Glasgow)

The SNP in Falkirk was in control for less than six weeks before the end of the financial year—

George Reid (Scottish National Party, Mid Scotland and Fife)

I have a point of order.

Hugh Henry (Labour, Paisley South)

On a point of order, Presiding Officer. When you allow a member to intervene, subject to the agreement of the member who is speaking, is it for the member who was speaking to determine when the member intervening should finish speaking, or is it for you?

George Reid (Scottish National Party, Mid Scotland and Fife)

It is for me to determine, as I did there.

Kenneth Gibson (Scottish National Party, Glasgow)

Throughout the course of the Parliament, we have had spin, spin and more spin from the Executive. One example is KickStart—a wonderful innovation, which the SNP supported and which was launched on 4 November 2000 to help disadvantaged community organisations to access community fund moneys. The money was announced in November and reannounced in February. No money had been spent 10 months after the launch. Further, by the end of the financial year, nothing had been spent on the central heating initiative that was announced on 15 September 2000.

As for new housing partnerships, I am sure that we all recall the balls-up that Wendy Alexander made when she went to Glasgow in May 2000 and announced £12 million of new money that had been announced 15 months earlier and of which not a penny had been spent. The underspend in the social justice budget has more than doubled from £57 million in 1999-2000 to £122 million in 2000-01. The culprit in both instances was the new housing partnerships fund. Because of the massive slippage to which the minister alluded in the housing stock transfer programme, that fund cannot meet its targets.

That problem is compounded by the fact that the wholesale debt relief that the new housing partnerships budget was designed to facilitate has been available in England from the Treasury as a matter of course. We have been informed only now that our Executive intends to take the same route, which will mean that money that was allocated to be spent on NHPs has probably never been needed. How long has the Executive known that Treasury money was available? If it did not know, what was it playing at? If it did know, why did not it spend that money on Scotland's crumbling housing stock?

Vast sums of money have not been spent. Today, Glasgow City Council was reported to be at odds with the Executive on stock transfer. Why is money not being spent in that city, which is desperate for investment? On the day when the Executive's own press release says that homelessness applications have risen again, we are considering a £122 million—18 per cent—underspend in the social justice budget. The number of households in temporary accommodation, including those with children, has also risen. The Executive trips over itself to provide good news but is not so desperate to spend where money is needed. Jack McConnell sounded a fanfare when a measly £12 million was allocated for additional repairs to school buildings, yet £86.5 million is sloshing around, much of which could have been put into that programme.

As for the complacent statements of "Oh yeah, a wee bit of end-year flexibility, blah, blah, blah," why are there underspends of 0.2 per cent in the audit budget and of 31 per cent in education and an overspend of 1.7 per cent in forestry? The minister may laugh, but several organisations and departments are desperate for resources and are not receiving the money that they need. It is about time that the Executive did what it said in its press release. It must improve its financial planning and management. That should have been done already for this financial year. The Executive should get its act together.

Brian Fitzpatrick (Labour, Strathkelvin and Bearsden)

On a point of order, Presiding Officer. I wondered about the language being used in the chamber. I appreciate that Mr Gibson was engaged in his usual rant—perhaps he has taken his lead from Mr Davidson's speechwriter—but he used an especially ugly phrase, which I am sure on reflection Mr Gibson would care to withdraw.

Kenneth Gibson (Scottish National Party, Glasgow)

On a point of order, Presiding Officer. When Mr Fitzpatrick was a member of Pollok SNP, he often heard that phraseology being used.

George Reid (Scottish National Party, Mid Scotland and Fife)

That is not a point of order.

From time to time, inappropriate language is used in the chamber. I do not want to dramatise it, but I ask members to remember that this is a Parliament.

Mike Watson (Labour, Glasgow Cathcart)

A lot of moral indignation is emerging from the SNP, not for the first time. It is not well-founded on this occasion. I was especially taken by Kenny Gibson's comment that we should bring back the previous finance minister; I am not sure if he said that all is forgiven, but that was the thrust of his argument.

Let us take that literally and consider the figures under the previous finance minister. I think that I am right in saying that end-year flexibility in June of last year was about £430 million. Is Mr Gibson saying that that is a satisfactory level for EYF?

Kenneth Gibson (Scottish National Party, Glasgow)

It is not, but it is better than £718 million.

Mike Watson (Labour, Glasgow Cathcart)

If he was not saying that, I am not sure what he was saying.

What is the SNP saying is an acceptable percentage? Is it an overall percentage of the budget? Is it a specific figure? Does the SNP approve of the concept of end-year flexibility? It has not given EYF a warm welcome, despite the fact that when Mr Swinney was a member of the Finance Committee, before he became leader of the party, he welcomed the 75:25 per cent split and seemed to be in favour of it.

Alasdair Morgan (Scottish National Party, Galloway and Upper Nithsdale)

Does Mr Watson acknowledge that one of the questions that I asked in my opening speech was what would be the acceptable level of end-year flexibility? I expect the Deputy Minister for Finance and Local Government to answer that when he sums up.

Mike Watson (Labour, Glasgow Cathcart)

My point is, what is the SNP's position on an acceptable figure? I cannot speak for the minister.

Does the SNP have a figure in mind? I do not think it has. It is all very well asking questions, but we get this time and time again with the SNP. It always asks questions; it never gives any answers about its own spending priorities.

Alasdair Morgan (Scottish National Party, Galloway and Upper Nithsdale)

Give us a figure.

Mike Watson (Labour, Glasgow Cathcart)

I do not have a figure for the acceptable percentage of EYF. I do not know whether Alasdair Morgan does.

The Minister for Finance and Local Government has made this point at least twice this morning, but I will make it clear again as Mr Gibson went on to repeat the nonsense about £86 million, as he put it, "sloshing around" in the education budget. I say to Mr Gibson that that is not the budget that can be spent on building schools or providing new books. It is the central education budget, which is not the same thing. If Mr Gibson is suggesting a change from one budget head to another, that is the sort of suggestion that we would be delighted to hear in the Finance Committee, because we have not heard anything like that from the SNP before. Perhaps the SNP will produce suggestions such as that next year.

How many times do we have to make this point? Mr Russell made it himself a week ago at First Minister's question time. He also asked another question, which showed how ill-prepared he was for his first appearance at First Minister's questions. He asked about the modernising government budget. He was apparently unaware that the initial budget of £13 million had been supplemented by an additional £10 million as a budget consequential from the UK budget. That is why it looks as if the underspend is more than the additional figure. Why did Mike Russell not know that?

Michael Russell (Scottish National Party, South of Scotland)

The point that I made, which Mike Watson has not clarified in any sense, is how can an official set of figures—in the minister's press release—show a budget of £13 million and an underspend of £22 million? It is ludicrous. If the convener of the Finance Committee cannot see how ludicrous that is, I suggest that he should take a refresher course in simple English.

Mike Watson (Labour, Glasgow Cathcart)

I was aware when Mike Russell asked the question last week that that was not the actual figure. He should have been aware of that as well when he prepared for First Minister's questions. That is the point that I am making.

Andrew Wilson (Scottish National Party, Central Scotland)

rose—

Mike Watson (Labour, Glasgow Cathcart)

I am sorry. My time is restricted.

I have a serious point to make about my role as convener of the Finance Committee. This week the committee discussed the draft budget, which was published on the same day as the end-year flexibility figures were put out. It was not easy for the committee. We had an informal meeting with finance division officials and made that point to them. We will make the point to the minister and his deputy. Last year the announcement was made in June; this year it was made in September. It would be helpful to have the figures earlier.

From what the Minister for Finance and Local Government said, I took it that the quarterly reviews that he was producing would make it easier to track and easier for the committee to follow the EYF figures and put them into the context of the draft budget. When we try to evaluate the draft budget, we are considering a moving feast, as there are supplementaries, yearly revisions every second year and a comprehensive spending review.

Brian Adam (Scottish National Party, North East Scotland)

rose—

Mike Watson (Labour, Glasgow Cathcart)

I am sorry. I do not have time to take an intervention.

It is difficult for us to grasp the figures and make something meaningful of them. When figures for end-year flexibility come along on the same day as the draft budget is announced, we are considering the draft budget and do not have the ability to put the two in context. I make that point on behalf of the committee and ask the minister to bear it in mind.

In general, surely the SNP can see that the system of end-year flexibility that we now have is much less wasteful. It provides for more focused spending, which must be a good thing for spending within this Parliament.

David McLetchie (Conservative, Lothians)

I must say that the Executive's failure to spend more than £700 million of its budget last year demonstrates what a brass neck it has to keep going to the Labour Government in Westminster to plead for more money.

It is odd, to say the least, that in a week in which the First Minister has been embroiled in a dispute with the Treasury and Alistair Darling over £20 million in attendance allowances for people in need of care, we find that he has enough in the kitty to fund the apparent shortfall for 35 years. I expect that he will get a dusty response from his former friend the Chancellor of the Exchequer when he next pleads poverty. There is a limit to how many times even this First Minister can cry wolf.

It is not for me to become involved in the internal Labour party wrangles over money, although I must say that it would help if the Minister for Finance and Local Government knew the difference between a white paper and a red book.

The most interesting aspect of the debate is what it tells us about the SNP and its recent lurch to the left. Judging by some of the pronouncements at its recent conference it will merge with the Scottish Socialist Party in the not-too-distant future. The frightening thing is that many SNP members of this Parliament would not regard that as a shocking prospect. They have abandoned all pretensions to be a national movement and wear their left-wing credentials as a badge of pride.

In the debate on how to improve our health service, the SNP has shown that it has nothing to offer. SNP members are more concerned about clinging to the outdated ideology that puts ideological purity before the interests of patients. They will not countenance any partnership with the independent sector, even if it can be demonstrated to reduce waiting lists and waiting times.

Alasdair Morgan (Scottish National Party, Galloway and Upper Nithsdale)

Can Mr McLetchie tell us what his speech has to do with the motion or anything that has been said in the debate?

David McLetchie (Conservative, Lothians)

A great deal. The debate is about the spending of public finances and the relationship between that and taxes. If Alasdair Morgan gives me a few minutes, I will get to the main points.

The SNP's attitude to public spending betrays its belief that the answer to all of Scotland's problems can be found in ever higher public expenditure and, as an inevitable consequence of that, ever higher taxation of our people and businesses.

Remember the previous Scottish Parliament elections when the SNP promised us a penny for Scotland or, more accurately, a penny for being Scots. Sadly, the SNP seem to be like the Bourbons after the French revolution. They have learnt nothing and forgotten nothing.

Andrew Wilson (Scottish National Party, Central Scotland)

Will Mr McLetchie take an intervention?

David McLetchie (Conservative, Lothians)

No. The Bourbons are not a biscuit, Mr Wilson.

Instead of denouncing the Executive as incompetent because it failed to spend enough money, it would be far better for us all if the nationalists considered the other side of the coin. Why do we not do something truly revolutionary and consider ways of reducing the burden of tax on people living in Scotland, who already pay far too much?

Last year's underspend was £435 million, £400 million of which was carried forward. We now have a £700 million underspend. That demonstrates that the first year's underspend was not a one-off. This suggests to me that the Government is taking far too much in tax. If it cannot spend the money sensibly and efficiently on our public services, it should give the money back to the people to whom it belongs—the taxpayers of Scotland—so that they can spend it on themselves and their families, something that I am sure they would do to far better effect than this Scottish Executive.

Andrew Wilson (Scottish National Party, Central Scotland)

I am grateful to the Conservative leader for giving way. His speech on financial prudence comes a few years after the Conservatives were in office. Will he recognise that during their long and painful time in office the average deficit for the nation's finances—in other words, when they were in the red—was more than £30,000 million? The Conservatives beggared Britain. Why are they now giving speeches in Scotland?

David McLetchie (Conservative, Lothians)

The Conservative Government set this country on a path of prosperity over a period of 18 years. It reduced tax levels across the board and reduced the proportion of our national product taken in taxes. Unfortunately, that proportion has been on the rise for the past five years in a row.

Let us consider the underspend, for example. The average yearly underspend of £350 million would be more than enough to restore a uniform business rate poundage throughout the United Kingdom and re-establish a level rates playing field for all our businesses, large and small, to help them cope with the looming recession. Why should our businesses pay a rates poundage in Scotland that is 9 per cent higher than businesses down south?

The underspend could also be used to abolish the £2,000 graduate tax that the Executive has imposed on our students. It could be used to consider reductions in the level of council tax, about which I frequently receive complaints from council tax payers the length and breadth of Scotland. Any of those options could and should be considered as a way to utilise the underspend. It is a sad reflection of the tunnel vision of our opponents that those options are not even on the table.

Labour and the Liberal Democrats, along with the SNP, believe that politicians are better at spending people's money than people themselves are. The SNP seems to think that raising the tartan tax is some sort of political virility symbol, the Liberal Democrats confuse high taxation with compassion and, when he tears himself away from his fixation with foxes, our Finance Committee convener, Mike Watson, spends his time urging his Labour colleagues to levy the full 3p of tartan tax on Scots.

The record shows that only the Scottish Conservatives stand against that unholy tax alliance of Labour, Liberals and the SNP and the tax-and-spend policies that they pursue, which will be the ruination of this country.

Michael Russell (Scottish National Party, South of Scotland)

We have just seen a graphic example of the Scottish Tory party's rush to the right. Its conversion is not so much Damascene as Gadarene. Unfortunately, it is rushing to destruction yet again. It is clear that the party wants to slash public spending and Scottish public services. Whatever else divides the chamber, the vast majority of members know that that would be a recipe for disaster in Scotland. It has been a recipe for disaster for the Scottish Tories—clearly that will continue.

Before I talk about the education underspend—because, no matter what the Minister for Finance and Local Government says, there is an education underspend—I must say that I am intrigued by a report from the Finance Committee on stage 1 of the 2002-03 budget process. At the committee meeting on 22 May, the convener was involved in a long discussion with committee advisers and members about exactly what the modernising government fund is. One of the advisers said:

"Entering the £13 million in that table—

the table of finance—

seems to have been a mistake."—[Official Report, Finance Committee, 22 May 2001; c 1268.]

The convener later admitted that he had no idea who was responsible for the programme. He said that the clerks had checked the introduction to the report and that there was no specific mention of it. If we pin that down, we should be able to identify where the cost falls. Mr Watson is an expert on the matter now, but he did not seem to know anything about it then.

The reality of the situation is that, in the past 12 months, schools, hospitals and public services in Scotland did not get the money that they needed. That is irrefutable. I talk regularly to teachers and ask them what they need; they know that their services are underfunded. They were horrified to discover, at a time of cuts in education when it was impossible to get books in classrooms and some schools were closing, that the Executive had underspent its budget by £85 million.

The minister and the Finance Committee convener may shake their heads, but people cannot be fooled. They know whether a Government is doing its job. When they cannot get hospital services and their children cannot get books in schools, they know that the Government is to blame. When they discover that, although the Government spins and blusters about every programme and announces and re-announces, it is not spending the money and the programmes are not taking place, people know that the blame lies in only one place: on the front bench, with a Minister for Finance and Local Government who cannot run finances efficiently and a Minister for Education, Europe and External Affairs who is not performing and not delivering. There is no way round that.

Angus MacKay (Labour, Edinburgh South)

The member quotes a figure of £86 million, but fails to acknowledge that approximately £70 million of that was planned underspend, to ensure the successful implementation of the McCrone package, which is precisely to ensure that we have excellence in the education system. That leaves about £16 million. If the member's synthetic concern about that really amounts to something, perhaps he will address a point I raised earlier. Why has it taken three or four months for the member to ask a single question about this, despite the fact that his colleagues at Westminster knew about it and it was in The Guardian ? It was not exactly a secret. What do we pay SNP MSPs for?

Michael Russell (Scottish National Party, South of Scotland)

A much better question today would be, "What do we pay the Minister for Finance and Local Government for?" If he is saying that all this has been done by his friend Gordon Brown and told to people at Westminster, and that he is only just following it up, we should not be paying him a penny. [ Interruption. ] I am coming to the McCrone issue.

The reality of the situation is that the Minister for Education, Europe and External Affairs told the chamber that there will be no transfer of resources away from key priorities into teachers' pay. If he is saying that, at the very beginning of the McCrone process, there was a plan to transfer money from things like school repairs into teachers' pay, he should have told us. We supported—and continue to support—the McCrone settlement. What we do not support is economy with the truth in the chamber or in answer to the people of Scotland. That is clearly what is happening.

I have a letter here from Comann nam Pàrant (Nàiseanta)—the Gaelic education parents group—to the minister. It suggests what the minister could spend a small amount of the money on—if he is so incompetent that money is available. Matters such as Gaelic education, which was bitterly opposed by Mr Peacock when he was the Deputy Minister for Children and Education, are still not being funded. People are looking at the Executive and saying, "It can talk, put out press releases and bluster, but it cannot help the people of Scotland."

Hugh Henry (Labour, Paisley South)

During his speech, David Davidson said that Mike Russell had obviously read his speech. It might have been helpful if David Davidson had read his own speech before he contributed, because some of the content was not only contradictory and confusing, but downright mischievous. There were times when I did not know what he was talking about—I do not know whether he did either. Mr Davidson told the minister that he has a tool in his hand. I think I know what Mr Davidson was talking about, but I do not know whether he knew what he meant by that.

The SNP's contribution today has been pitiful. We have here another example of a party bereft of leadership, ideas and relevance to the political debate in Scotland. There are contradictions and splits in the SNP. Mike Russell says that the blame lies with the Minister for Education, Europe and External Affairs, but Kenny Gibson said earlier, "Come back, Jack McConnell, all is forgiven." Kenny and Mike need to get their act sorted out about whether and where they want Jack McConnell.

This is an example of the SNP's ability to talk up a crisis where none exists, to identify problems where none exist and to clutch at straws in its attempt to advance a weak form of opportunism. It would have been too much to expect the SNP to say that we should praise the Executive for introducing the mechanism of end-year flexibility.

Andrew Wilson (Scottish National Party, Central Scotland)

I praise the Executive for introducing that mechanism, whereby it moves money forward at the end of the year if it is underspent. I criticise the Executive because the underspend is getting bigger and the Executive seems to be totally out of control.

Hugh Henry (Labour, Paisley South)

If the member praises the Executive for introducing a mechanism for underspend he must recognise that, for specific reasons, there will be underspends from time to time. The minister and others have indicated some of those reasons.

It would have been too much to expect the SNP to recognise that we have moved significantly beyond what was available before devolution. It would have been too much to expect the SNP to recognise the progress that has been made in two short years. Never the ones to miss an opportunity to whine for Scotland, SNP members have yet again risen to the occasion.

Mike Russell talked about McCrone and gave a very convoluted argument that, quite frankly, led him nowhere. If the minister and the Executive had not properly prepared or accounted for the McCrone money and had simply disbursed it for expenditure and then revealed that they had not budgeted for that money, SNP members would have been the first to criticise the lack of forward planning and forward thinking. We are hearing pathetic arguments from a pathetic party.

When I reflect on my experience as an employee in local government and as leader of a local council, I remember attempts by officials in departments to spend money for the sake of spending money at the year end, with no thought for next year or the year after. The flexibility that is being introduced will be of tremendous benefit, not just in three-year programmes for local government, but also in Executive expenditure on behalf of the Parliament. We have moved forward and are making progress, and it is about time that the SNP started to face up to that.

Brian Monteith (Conservative, Mid Scotland and Fife)

I found myself agreeing with much of what Hugh Henry said, which is unusual. In debating the Executive's press release on underspending, the Scottish National Party has tried to present itself as the guardian of financial prudence and the custodian of fiscal probity, but we all know that that will not wash. It will not wash, because the SNP's central financial policy is itself a dishonest charade that will fool no one, will lead to division in the SNP and to the party's eventual humiliation in future elections.

Why is it dishonest? The SNP is always quick to attack Labour politicians for adopting Tory ideas. How is it, then, that the SNP can so easily adopt a modern Tory idea? I am speaking, of course, of fiscal freedom. Just as Labour rechristened PFI as PPP, so SNP members have rebranded fiscal freedom as financial independence. They can call it what they want, but that will not remove the Tory origins of the policy.

Let me give Andrew Wilson some education in that respect. Back in 1988, Brian Meek, Struan Stevenson and Michael Fry published a Tory reform group paper that explained how devolution could be made to work. A Scottish Parliament, they argued, should be able to collect all the taxes due in Scotland and pay a precept to the UK Treasury for the common services, such as defence and welfare benefits, that we enjoy as part of the United Kingdom of Great Britain and Northern Ireland. I enjoy that bit, so I shall say it again: the United Kingdom of Great Britain and Northern Ireland.

Fiscal freedom has been, is now and always will be a unionist policy. It is designed to reduce tensions within Britain, not to raise them. Of course, it carries some risk and it will be for the unionist politicians to decide at some time in the future, if at all, whether that model should eventually be adopted and what effect it will have on overspending or underspending.

Andrew Wilson (Scottish National Party, Central Scotland)

Will Brian Monteith clarify whether what he is describing as fiscal freedom is Conservative policy, because the leader of his party looks a wee bit glum as he listens to his speech? What is the Conservative policy on the constitution now? Is he now arguing that the Conservative party is in favour of full financial independence?

Brian Monteith (Conservative, Mid Scotland and Fife)

Conservative policy is entirely clear and I support it. We do not support fiscal freedom. What we do support is having a debate about the way in which the Parliament should run its finances. That is what we are doing today and I am examining the alternative vision that the SNP offers. In case Andrew Wilson missed my point, I shall make it again. It will be for unionist politicians to introduce any form of change.

It is impossible for the SNP to deliver fiscal freedom. That is why it is doubly dishonest of SNP members to tout fiscal freedom as their solution to Scotland's ills. To introduce fiscal freedom will require the consent of Westminster—something that the SNP cannot deliver. If the SNP were to become, let us say, the largest party in the Parliament, it might want to hold a referendum, but on what question—fiscal freedom or independence? Surely there is no prospect of the SNP brokering any deal on fiscal freedom, if it had the opportunity to deliver independence. Therein lie the seeds of conflict in the SNP and therein lies the dishonesty of its policy. Why would its politicians settle for not going the whole way?

Over the years, the Scottish Conservatives will weigh up whether or not the funding of Scotland's Government requires change. We will make our decision on what we see as best for Scotland, believing, as we do, that Scotland's interests are best served by remaining in the union. It is a policy that is not without risks, but there are those in the Parliament who sincerely fear that, without such powers, the Parliament can be used by the nationalists to undermine the union enough to let the SNP deliver independence. However, the SNP does not take such a pragmatic view. The SNP ideologues would have fiscal freedom, whether it was good or bad for Scotland.

The truth is simple. If we are to have better control of our finances, whether to prevent overspending or to control underspending, we must tread carefully, cautiously weighing up what is good for Scotland, and not delivering what is good in the eyes of the SNP.

Andrew Wilson (Scottish National Party, Central Scotland)

It has been a surprisingly lively and enjoyable debate, and I thank all members who have taken part in that spirit.

I begin by questioning the criticism of Mike Russell, a man who is obviously never wrong. The criticism was that he was wrong, at last week's question time, to use the figure of £13 million for the capital modernisation fund. It is fair to say that he made the mistake of using as his source an Executive press release from the day before, which said that the capital modernisation fund is £13 million. The Scottish Parliament must therefore be dubious about Executive sources of information, because the Executive admits that it can be wrong.

As Alasdair Morgan said, we should look at the budget released by the—very hard-working, I am sure, despite the criticisms of his colleagues—Angus MacKay. In the very first column of only the second table of that document, we find that £54 million has gone a-begging. Will that perhaps be next year's underspend? If the Executive cannot add up official Government tables, with a bank of advisers, twice as many ministers as Jack McConnell had to back him up, and a whole host of special advisers under the purse, how can we trust anything that the Government has to say? As an effective Opposition, we have the job of doing our best to scrutinise the Executive's plans but, if even its own plans are all over the shop, what hope do we have?

As I mentioned, it is true—and it is a troubling trend—that there is a whispering campaign across the Executive and the Labour party saying that the Minister for Finance and Local Government is perhaps not the hardest grafter on the Government benches. It is said that he springs out of bed at the crack of noon and is home in time for "Neighbours". I think that that is wrong and is a slight on the hard-working finance team, which I know does a rigorous job at the heart of the Executive.

However, let us look at Angus MacKay's press release on the underspend, which has a very Romanesque picture of Angus himself, with a nice profile, and the very nice headline:

"Health and education win extra cash".

That is the equivalent of a father going into his child's bedroom, taking money out of his piggybank and saying, "Look, son, there's some extra cash for your pocket money." That is an effective metaphor for what is actually going on.

All that has happened is that Angus MacKay, rather than going for a 75:25 split, has allowed the departments to retain their money. We do not even have Jack McConnell's star chamber. There was no negotiation. The only areas that lost out in this round of negotiations were the capital modernisation fund and local government borrowing consents. Which schools are not being built as a result of the cancellation of local government borrowing consents?

Jamie Stone (Liberal Democrat, Caithness, Sutherland and Easter Ross)

Will Andrew Wilson give way?

Andrew Wilson (Scottish National Party, Central Scotland)

I will take an intervention in a moment.

That is the reality of what has actually gone on. It would not be too hard to understand, if it were not for the fact that Labour finance ministers do not have that much to do. Angus MacKay mentioned a balanced budget. He cannot not have a balanced budget in Scotland, because there are no borrowing consents. If Jamie Stone would like to argue for borrowing powers, as the Liberal Democrat treasury spokesman in London did this week, that would be a good thing. Let us hear from Jamie. Does he agree that the Parliament should have borrowing powers?

Jamie Stone (Liberal Democrat, Caithness, Sutherland and Easter Ross)

I think that Andrew Wilson seriously misunderstands the section 94 element of the budget document that is in front of him. That sum of money was historically always kept back by the Scottish Office—now the Scottish Executive. In the old days, it might have been punted out here and there around councils. Does he acknowledge that, despite what he said about money going in and out of the piggybank, the fund in question is, in fact, up by £15.4 million? That is the point, and that is why the press release says that there is extra money for education.

Andrew Wilson (Scottish National Party, Central Scotland)

The question that Jamie Stone fails to answer is whether the Liberal party agrees that we should have the ability to have properly rounded budgets, with borrowing consents and greater taxation powers.

It is bizarre that, over the past year and a half to three years, the Labour party has gone around the country managing expectations by telling people that we cannot have better public services and that things will have to get worse because money is too tight to mention. How can the Labour party now go around community groups throughout Scotland and tell them that the Government has had up its jouk more than £700 million? There is an £86 million underspend on education. How is there such money to spare on education? Why is there £143 million to spare on health? With not one council house built, how is there £121 million to spare on social justice? Incidentally, education and social justice have the highest underspends of any UK department.

That cuts to the nub of what we are talking about. We are not criticising the fact that there is underspend. We understand that underspend happens—Mike Watson was right to allude to that. However, we are concerned about—and are right to bring up—the fact that Labour is presiding over an increasing mess, despite there being four times as many ministers in the Scottish Parliament as there were when the Conservatives left office. When the Conservatives left office, the underspend was 1 per cent—it is now going on for 5 per cent. Why is the underspend getting worse, despite the fact that more people are employed by Parliament to look after and scrutinise budgets? Finance ministers must get a grip. Perhaps the Minister for Finance and Local Government needs to silence the critics on his back benches who say that he is not working as hard as he might. Colleagues might say that he does not work, but it is clear to the people of Scotland that his policies are not working.

Hugh Henry (Labour, Paisley South)

On a point of order. A serious accusation of indolence has been levelled against the minister. It would be helpful to those of us who must consider the veracity of those accusations if the Deputy Presiding Officer could obtain information on how many Scotland away matches Andrew Wilson attended while Parliament was sitting.

Mike Watson (Labour, Glasgow Cathcart)

On a point of order.

George Reid (Scottish National Party, Mid Scotland and Fife)

I hope that it is a genuine point of order.

Mike Watson (Labour, Glasgow Cathcart)

It is not just the allegation that is important—where the allegation came from is important, too. The allegation is refuted on the Labour benches and Andrew Wilson should justify such statements.

George Reid (Scottish National Party, Mid Scotland and Fife)

I will reflect on that.

Elaine Thomson (Labour, Aberdeen North)

I am surprised that the SNP feels the need to bring this debate to the chamber and I am particularly surprised at what Alasdair Morgan said about inadequate discussion of Scotland's finances. Over the past two years—since Parliament came into existence—there has been a quantum leap in the level of scrutiny of Scotland's budget.

Alasdair Morgan (Scottish National Party, Galloway and Upper Nithsdale)

Will the member give way?

Elaine Thomson (Labour, Aberdeen North)

No, thank you.

There is constant discussion of Scotland's finances in the Finance Committee, of which I am a member, in Parliament, with the minister and with Scottish Executive finance officials. There is considerable movement in how we look after the current financial systems and how we report on the Scottish budget. As we were told by Scottish Executive finance officials, we have moved considerably from the days when one solitary academic in Scotland asked regular questions about the Scottish budget.

End-year flexibility is part of the improving process in looking after Scottish money. There has been substantial improvement in being able to carry money over from one financial year to the next. I am pleased that Andrew Wilson got as far as recognising that EYF is a good thing—that was about the only sensible thing that he said.

Other improvements include three-year budgeting, which puts paid to the stop-start spending of previous years whereby money had to be spent in the financial year or be lost. We now have sound financial planning.

The amount available for EYF this year is large, but that is due in part to the sustained increase in the Scottish budget. As Peter Peacock said to the Finance Committee in June:

"Currently, so much new money is coming into the system that departments are taking a while to be able to spend it. It is taking longer than one would wish to get the programmes geared up."—[Official Report, Finance Committee, 8 June 2001; c 1335.]

Thank goodness we are in a position where increased money is coming in. More money is now being invested in public services than has been for a generation. It is essential that that money is spent wisely and effectively. It is totally counterproductive for departments to rush out and spend money simply because it is there.

Labour is using money effectively and is continuing to invest in the priorities of health and education. The new health boards that are being formed are being given a very good start by having their historic deficits wiped out. Aberdeen has a trust with a deficit and I welcome the opportunity for that deficit to be eliminated so that Grampian Health Board can start with a clean slate.

I welcome the fact that there is increased and substantial growth in the Scottish budget, which will increase by about £1 billion a year within this three-year cycle. When the Deputy Minister for Finance and Local Government came before the Finance Committee in June, he said that there is a commitment to continuing to improve the Scottish Executive's planning and management. That is good. The increased money in the Scottish budget should be translated into better services as soon as possible. That will mean, for example, more teachers and classroom assistants. Training and recruiting takes time. As has been said this morning, some of the underspend is planned to allow the smooth implementation of the McCrone settlement—that is sensible financial management.

The Scottish Executive should be congratulated for improvements in its financial planning. Practice in Scotland is ahead of that at Westminster. End-year flexibility is a sensible and prudent way to manage the Scottish budget to Scotland's best advantage.

George Reid (Scottish National Party, Mid Scotland and Fife)

We move to winding-up speeches. Robert Brown has four minutes and David Davidson has five minutes.

Robert Brown (Liberal Democrat, Glasgow)

The debate has been interesting and there have been many good contributions to it, as Andrew Wilson said. There have been many interesting cross-currents.

It was sensible of the SNP to lodge a neutral motion that enables the chamber to perform without being too diverted by party political issues—although there have been many such issues in the debate. Parliament's proper purpose is to scrutinise the Executive's spending and the efficiency of its spend. Back benchers and front benchers are entitled to have their views and to put forward their points to test ministers. That is what scrutiny is all about. End-year flexibility procedures have been a considerable advance in allowing open, transparent and proper scrutiny.

Different party visions have been clear. It was, for example, reasonably clear where David McLetchie was coming from in his remarks on the Conservative view. Whether members agree with that view is another matter.

The Liberal Democrats unreservedly welcome the additional money for our spending priorities of health and education. We welcome the write-off of the historic trust deficits, although we must be careful that the message does not go out to NHS trusts that that is a precedent for the future. We are still looking for efficiency of spend and for them to meet their objectives within the budgets that they have been set. We should not give mixed messages about that.

We should also give credit for the fact that matters are more transparent than they used to be and for the fact that a good part of the Executive's spending is not directly spent by the Executive. Trust spending, for example, is spent at second remove, in a sense. The Executive does not therefore have immediate control. The comparison with local authorities is not entirely good in that respect.

We have to be clear that the underspend is not lost money in any sense: it is money that carries forward, that we can use further. We no longer have the need for last-minute, senseless decisions on spending on desks, headed notepaper or painting store rooms.

A number of items in the budget—such as Holyrood capital—are clearly one-offs and have explanations that the Parliament accepts, whatever political use members may make of them. The same considerations apply to the new housing partnership money. There is nothing new about such items—they were known about and required to be dealt with in due course.

Fiona Hyslop (Scottish National Party, Lothians)

Robert Brown may recall a meeting of the Social Justice Committee about 18 months ago—I think—when Wendy Alexander gave evidence. Members of the committee questioned whether it would be possible to deliver the new housing partnership. We thought that money could be released and put into immediate and desperately needed investment in housing. Does he agree that it is worrying that the stewardship highlighted 18 months ago is still being perpetuated by the Government?

Robert Brown (Liberal Democrat, Glasgow)

With regard to the housing budget and the situation relating to the Housing (Scotland) Act 2001, the stock transfer mechanisms and so on, the important point is the framework for delivering effective and accountable spending on housing, which is what we all want. The underspend will be spent on the area in due course. The question is to do with the time scale in which the money is spent.

The Executive must deal with several critical issues. We have talked about the effects of an underspend on end-year spending. There is political pressure to reduce the underspend—the Executive must deal with the £700 million somehow. We must ensure that, when putting in place the mechanisms for the spending of public funds, the Executive continues to seek efficient and effective ways of doing so. I know that the Executive will do that.

It should be within the bounds of Executive competence to make adjustments at the mid-year point that will head towards a more effective spending of the budget in the year, as problems arise when a budget is not spent in the allotted time. We must deal with issues around the acceptable percentage of end-year flexibility. Is there an optimum level that the Executive should be heading towards? Such questions must be asked and it is right that the Parliament has done so this morning. I hope that we will get some answers as the process develops.

This has been a good and transparent debate. It has shown the Scottish Parliament at its best and allowed it to play its proper role of scrutinising the performance of the Executive.

David Davidson (Conservative, North East Scotland)

I thank the SNP for securing this debate and agree wholeheartedly with Robert Brown that the fact that there are no outlandish amendments has allowed us to discuss a topic that is of vital importance. The people of Scotland will have watched this debate and the press corps will report it in one way or another. That shows that we are moving forward in terms of transparency.

I agree with Mike Watson: all the parties who are represented on the Finance Committee are agreed on end-year flexibility. What was not agreed was a finite definition of end-year flexibility. That is the basis of today's debate. All members of the Parliament and of the Finance Committee are engaged in a learning process. If we do not have a clear handle on how moneys flow in the Executive, the democratic process of Scottish Parliament committee scrutiny of the Executive will fail. We have to understand the rules and play by them. First, however, we have to agree what the rules should be. During today's debate, it has become clear that there is a need for the conveners of the committees and the party leaders to discuss how we should handle the budget system. Frankly, there is not enough information to allow the subject committees to work efficiently. It would be nice if we were able to move towards outcome budgeting to allow people in the street to understand what we are trying to deliver. Each of us will approach that issue differently, but it is important that we quantify the discussion and ensure that it does not appear to be a numbers game. It is hard to explain to people who live in poor accommodation or who have children in a school that seems to be failing why those things are not the priorities of the Government.

Robert Brown (Liberal Democrat, Glasgow)

Will the member give way?

David Davidson (Conservative, North East Scotland)

I will make another point first.

We must debate the future role of bodies that receive funding from the Scottish Executive. We must decide on the function of those bodies, how they report, what they are responsible for and how they are accountable. We have not yet got into that grown-up debate. If one thing has come out of today's debate it is that it is essential that we deal with those issues in the Parliament. That will no doubt require a long consultation process, but the matter cannot be put off for much longer.

A huge amount of money goes out through local government, but there appears to be overlap and differences in delivery and focus. The people of Scotland look to the Parliament to deal with that.

I hope that the minister will agree in his reply to the debate that we need an early view of what is in the new draft budget. How does the £430 million in the draft budget break down? The figures are unknown. We just have a total. We have no idea where that total came from and what might be done with it. If the minister can assure us that the Finance Committee will get details of the figures in the very near future, that would be helpful.

I would also like from the minister an assurance that the Executive is not developing a war chest for the next election. We will hold the Executive to three-year budgeting, not just the short-termism that happens every fourth year and which must be a temptation to it.

Interestingly, we have not really touched on public-private partnership and the private finance initiative, but I know that the Finance Committee will consider them in the near future. They will affect how additional moneys appear in the budget. We have to question the Executive on what will happen with the released capital that comes from PPP and PFI. Will there be an improvement in services? Will there be a refocusing? Perhaps the minister can reply to those questions in future.

Some good comments have been made. I agree wholeheartedly with David McLetchie that the uniform business rate, council tax, the graduate tax and the tartan tax are still to be dealt with. All budgets are based on where the money comes from. I will be interested to hear what the Scottish National Party has to say about that. It will have to get an awful lot of money to follow its promises.

Mike Watson was correct. Elaine Thomson mentioned the defence of the budget process. No control mechanisms are in place. I am sorry that Elaine Thomson is not in the chamber. I know that she believes in transparency—she works that way in the Finance Committee—but I cannot believe that she accepts that the partial transparency that we have is adequate to do justice to the subject.

I thank all those who have contributed to the debate. Although it has been partisan in part, at least it has lifted the lid on some of what is happening.

George Reid (Scottish National Party, Mid Scotland and Fife)

Before we continue with the last two closing speeches, I have two points of business to make. First, I apologise to Cathie Craigie, who sat through the debate without being called.

Secondly, I have a response to the points of order made by Mike Watson and Hugh Henry. Until now, the position of the presiding officers has always been that the content of speeches is a matter for members and that we intervene only if the language is disorderly or disrespectful. I did not pick up anything that merited my intervention, and neither did the clerks. We will read the Official Report and, if the two members concerned wish to write to me, we will give the matter consideration.

Peter Peacock (Labour, Highlands and Islands)

The debate has been one of great contrasts. The Liberal Democrats and Labour members have made constructive, positive comments on the procedures that are now in place. In contrast, the SNP has failed in another attempt to manufacture bad news from good. Creating smoke where there is no fire is a modern form of alchemy.

Angus MacKay set out the clear procedures that the Executive has followed in dealing with EYF and its benefits. The position that he set out continues the firm theme of a rigorous and prudent approach to Scotland's finances. That approach brings rewards and ensures priority for our key objectives of improving education and health—Robert Brown drew attention to that.

The approach also ensures minimum wastage in the use of public finances. Jamie Stone, Mike Watson and Hugh Henry drew attention to that. Hugh Henry also correctly pointed out that, had we not made sensible provision for the McCrone settlement, the SNP would have been the first to criticise us. That is why we made sensible provision and why we have the best teachers' settlement for many generations.

Our approach is in stark contrast to that of the SNP, which is a party with no sense of priority. The SNP has nothing to say on the value that we get from our current and significant resources. It seeks to tax Scots more heavily, apparently as a matter of fundamental principle.

The SNP complains that we took months to announce our position on EYF, but as Angus MacKay set out clearly, our position was open and entirely transparent. The big question is why the SNP did not see that. That may have something to do with the fact that Andrew Wilson, the SNP's then finance spokesman, did not show up at the meeting of the Finance Committee at which all those matters were dealt with and in which I set out in some detail the position on EYF. Why did Andrew Wilson not turn up on that day? I will tell members why. It was a famous day. It was the day the Finance Committee met in Perth. Not only that, it was 8 June 2001—the day of the general election results when Labour was returned for a second term of office and our Liberal Democrat colleagues made a national advance.

It was also the day on which the full extent of the humiliating collapse of the SNP vote became apparent and on which it was confirmed that the SNP had failed to capture its No 1 priority seat and had been forced, in its second priority seat, into a humiliating fourth place. It was the day the SNP just scraped home in Perth—against the Tories, of all parties—and lost one in six of its representatives at Westminster. It was the day of the lowest SNP vote for decades and the day the seat of its new finance spokesman was lost to the Tories. The party of financial irresponsibility had been defeated by the party of financial incompetence. It was the day Labour won seat after seat because the people know that the Labour party is the party of financial competence and responsibility, as we are demonstrating in Scotland with our partnership colleagues.

Alasdair Morgan (Scottish National Party, Galloway and Upper Nithsdale)

The SNP vote at the election changed by a much smaller percentage than the percentage by which the Government's underspend has changed.

Is it true that the sum—presumably just the total, not the detail—of the Government's underspend was announced in a parliamentary answer at Westminster? Does the member think it satisfactory that the Parliament and its finances should be treated as if they were simply a Westminster department and that, regardless of what has been given to members at Westminster, no indication should be given to members of the Scottish Parliament?

Peter Peacock (Labour, Highlands and Islands)

My point is that I was giving evidence on 8 June, just five weeks after the end of the financial year—[ Interruption. ] If SNP members give me a moment, I will explain. I set out very clearly why we expected an increase in EYF and explained that there would be an addition to the sums. I know that the SNP finds it difficult to add up figures, but if SNP members had turned up to that committee meeting and listened, they would have received all the information that was openly given and they would have been able to question ministers if they had so wished. They simply did not turn up to do so.

While we are demonstrating competent and prudent stewardship of Scotland's finances and showing that we can make rapid progress in developing public services while still being prudent, the SNP is rushing to raise taxes. An increase in tax is not needed. In contrast to our position, the SNP has not mentioned prudence or rigour and, as others have mentioned, the party that cannot add up to 182 questions our competence with figures.

Andrew Welsh (Scottish National Party, Angus)

Surely budgets should be about the accurate forecasting of desired outcomes. Massive underspends simply should not happen unless the initial budget is inaccurate or misleading. The problem is when the budget process becomes a case of smoke and mirrors instead of accurate, responsible forecasting.

Peter Peacock (Labour, Highlands and Islands)

The point that Angus MacKay, I and others have tried to make this morning is that the flexibility that we now have at the end of a financial year gives us the opportunity to manage public finances more effectively than happened in the past. Because of the one-year accounting conventions that were followed in the public sector at that time, money was very often spent on lesser priorities to ensure that the cash was not lost the following year. Now we are able to hold money over a financial year and target it on the Executive's priorities.

Instead of managing finances prudently, the SNP wants to raise Scotland's taxes as an alternative to the rigour that brings such big rewards. It is no wonder that the SNP finance spokesman was hiding from public view while the Executive was talking openly about the level and management of EYF and our processes for dealing with it.

Although the Tories' finance spokesman attended the Finance Committee meeting on 8 June, he was also so shell-shocked by the result of the general election that he was unable to lecture us on anything. Did he follow up that discussion with a parliamentary question on EYF? No, he did not; however, he soon indicated his own priorities by asking a parliamentary question on the Montrose vehicle extravaganza.

David Davidson (Conservative, North East Scotland)

It is infinitely superb to go from zero to one. As our south-west of Scotland SNP colleagues will acknowledge, our magnificent victory was almost technically incalculable.

Peter Peacock (Labour, Highlands and Islands)

I hope that Brian Adam—whom I genuinely welcome to the front bench—will take this opportunity, so soon after the SNP conference at which his party leader pledged to raise taxes, to tell the Parliament by how much the SNP plans to raise them. The penny for Scotland was clearly not enough; tuppence for Scotland is also clearly not enough for the SNP, nor is thruppence. The SNP wants to go higher. That is the only reason why it is arguing for so-called financial independence, which gives more scope for raising taxes even more. I urge Brian Adam to say how much and when. In this Parliament, the opportunity exists to bring forward detailed proposals, but I am perplexed as to why the SNP will not do so and will not reveal its cards fully. When he is winding up, perhaps Brian Adam could also explain why on earth, given that the SNP claims—fallaciously, in our view—that there is a £7 billion Scottish surplus, it proposes to raise Scotland's taxes. There is a clear intellectual contradiction in that, which I hope Brian Adam will take the opportunity to explain.

Only SNP members greet good news by girning. We write off health board debts and they moan; we give more to education and they girn; we give more to health and they greet. Moanin, girnin, greetin—the hallmarks of the SNP. That is why the Scottish people reject the SNP and trust this coalition with the sound stewardship of their finances.

Brian Adam (Scottish National Party, North East Scotland)

It is unfortunate that Angus MacKay, the Minister for Finance and Local Government, has decided that he needs an early lunch today. It is also unfortunate that he failed to make a statement and take questions on the massive underspends in the past financial year. We gave him that opportunity today and he has been found wanting. We have had—[ Interruption. ] Ah, welcome back, Mr MacKay.

We have had a series of interesting contributions from Labour members, none of which appear to address the motion before us. The minister has provided no good evidence of financial control over the Scottish budget. The minister and his departmental colleagues may not receive regular updates—although I think we heard a confession earlier that they will now start to receive them. We heard no commitment that they will be shared with the rest of us. I hope that that will be rectified and that the Finance Committee convener will press the minister to ensure that that is done. We have no evidence to suggest that the minister and his colleagues are capable and competent in managing our resources.

I want to put it on record that we support end-year flexibility. There seems to have been an attempt to confuse on that point. We also support the 75:25 split in how it is used. We were asked why we had not discussed that before. Members who remember the Public Finance and Accountability (Scotland) Bill—I am sure that the convener of the Finance Committee remembers it—will recall that I lodged an amendment that dealt with adding a fixed percentage. I admit that my motivation for doing so was concern that an Administration—even a future Administration—might wish to hoard some money to spend in an election year. I suggested a figure in my amendment, but I was generous: I set the figure a little higher than the underspend that existed under a previous arrangement.

I readily admit that we needed a little more flexibility to have planned expenditure. I accept that we do not want people to be tarring roads on 31 March just to get rid of money. I did not get a lot of comfort on that matter from the previous Minister for Finance. We do not appear to have heard any willingness on the part of the Government in today's debate, from either the Minister for Finance and Local Government or his deputy, to recognise that there should be some guidance. The Finance Committee may well return to that matter and offer some firm advice to ministers on it. Given that underspends were previously of the order of 1 to 1.5 per cent, my suggestion of 2 per cent, plus my willingness to discuss it, would offer a way forward. I am not going to suggest, on behalf of the SNP, what the final figure should be, as that is a matter on which we could reach consensus.

Cathie Craigie (Labour, Cumbernauld and Kilsyth)

I join other members in welcoming Brian Adam to his new position. Does he agree that even if his proposal were adopted, there would still be the risk of roads being tarred at 12 o'clock at night on 31 July—or whenever it is—if the figure were set at 2 per cent or 1.5 per cent? Does he agree that even if such a figure were set, organisations or departments would still have to run around spending money to reach the target?

Brian Adam (Scottish National Party, North East Scotland)

The limit that I proposed might have encouraged the Executive to be more rigorous in drawing up budgets and monitoring them during the financial year. There is always a danger that people will do things that are inappropriate, but surely it is inappropriate that the underspend should have been 1 per cent three years ago but should be 5 per cent now. That is indefensible.

The minister and his deputy have been at pains to describe how they informed the Parliament of the underspend—or, rather, how they did not. I hope that the minister will not have Gordon Brown make all his financial announcements for him. That would be a very unusual approach and it would be a telling admission on the minister's part. Gordon Brown was the first person to reveal the total figure. All the smoke and mirrors of what may or may not have happened on 8 June are not relevant to this debate. The same applies to much that has been said by Labour members today.

Not only did I ask for a figure to be set for end-year flexibility and to have that debated during consideration of the Public Finance and Accountability (Scotland) Bill, I asked for regular reports to be made. I may not have asked for those reports to be made with the same frequency that David Davidson requested—although I cannot find David Davidson's contribution in the Official Reports for the meetings concerned—but I have asked for them to be made on a regular basis.

Irrespective of who has asked for such reports, the Parliament deserves to have them. Those who are charged with scrutinising the Executive's budget—the Finance Committee and, in particular, the Opposition—should have access to the information. There is doubt in my mind as to whether ministers have the information. Indeed, I have doubts as to whether they have pursued the information. They are trying to dress up a £718 million underspend as financial prudence. To my mind, it is clearly the result of mismanagement. There is a problem at the input end of the process.

Helen Eadie (Labour, Dunfermline East)

The member mentioned Gordon Brown's favourite woman: prudence. By his prudent management of the economy, Gordon Brown has been able constantly to stream money through the country. He has been able to supply us with new money throughout the year. How can Brian Adam say to the chamber that spending can be targeted when we do not know when new money will come in? For the past three years we have received nothing but new money.

Brian Adam (Scottish National Party, North East Scotland)

We are talking about the management of that money. Ministers have not shown that they are capable of managing the money in their budgets. By ministers I mean ministers in general, as there is a string of underspends. There is no control over how money is being spent. Recycling money and reannouncing it for different programmes because of failure to deliver the programmes that were initially announced is no proof of prudence or rigour on the part of this Administration.

Mike Watson asked whether the money could have been spent on school buildings. I refer him to page 54 of the Scottish budget document, which states:

"We are initiating a strategic approach to the improvement of the school estate".

Money could have been used for that purpose, but there is a 31 per cent underspend on the central education budget. Lumping in all the other money to make things look better does not show the minister in a good light.

In his statement of 28 June, the minister was at pains to tell us that

"The real significance of this statement is that it goes beyond the traditional inter-departmental numbers game of who is up and who is down and instead looks ahead to better management of Scottish public spending".—[Official Report, 28 June 2001; c 2096.]

To be frank, the minister did all he could to hide who was up, who was down, who was managing their budget well and who was not. We had to ask a series of questions over a number of weeks to find out about the background. Those who regularly lecture us on open government would be much better placed to do so if they practised open government. The purpose of today's debate was to facilitate open government, yet the minister, his deputy and the Administration have not participated in that exercise.

The object of today's exercise was to allow members the opportunity to ask questions and get answers on what we are to do in future. I hope that the Administration will not continue to try to disguise things or to slip information out through placed questions—[Interruption.] I cannot remember whether that is the correct term. [MEMBERS: "Planted questions."] A minister in another Government in—dare I say it—another country makes the announcement and the Minister for Finance and Local Government has the temerity to suggest that that is a good procedure.

I found what the Conservatives offered today most interesting. Not only do they want to continue to slash public services, but there seems to be a great divide in the Conservative party on whether we ought to control our own finances in Scotland. I welcome Brian Monteith's conversion to the idea of financial independence for Scotland. I hope that that does not put Mr McLetchie under too much of a threat. I do not know whether Brian Monteith was making a leadership bid or whether Iain Duncan Smith allowed or encouraged Brian Monteith to make such comments. I know that Brian Monteith believes firmly in financial independence for Scotland, as he published documents on the subject prior to the Scottish Parliament elections. I am delighted that he is a convert to the idea that we ought to be running our own affairs, both financial and otherwise.

George Reid (Scottish National Party, Mid Scotland and Fife)

You must come to a close, Mr Adam

Brian Adam (Scottish National Party, North East Scotland)

The Government cannot deal with problems in Scotland because it is not aware of the detail. Its planning is weak, but its opportunities to respin are legion.

In the past few days, I visited a hospital—

George Reid (Scottish National Party, Mid Scotland and Fife)

You must close now, Mr Adam. You are a minute and a half over your limit.

Brian Adam (Scottish National Party, North East Scotland)

For me, that visit highlighted the problem. We are trying to invest money in cancer care but cannot make progress because the lead times for the programmes are far too short. We cannot spend the capital, install the equipment or train the staff because it takes too long to do so. That is where the failures arise and why there is an underspend. I commend the SNP's motion to the Parliament.

Business Motion

George Reid (Scottish National Party, Mid Scotland and Fife)

The next item of business is consideration of business motion S1M-2256, in the name of Tom McCabe, on behalf of the Parliamentary Bureau, which sets out the business programme. Any member who wishes to speak against the motion should press their request-to-speak button now.

Motion moved,

That the Parliament agrees—

(a) the following programme of business— Wednesday 3 October 2001

2.30 pm Time for Reflection followed by Parliamentary Bureau Motions followed by Executive Debate on a Forward Strategy for Agriculture followed by Parliamentary Bureau Motions

5.00 pm Decision Time followed by Members' Business - debate on the subject of S1M-2118 Mrs Mary Mulligan: Oxfam Thursday 4 October 2001

9.30 am Stage 3 Debate on the Protection from Abuse (Scotland) Bill followed by Business Motion

2.30 pm Question Time

3.10 pm First Minister's Question Time

3.30 pm Executive Debate on Sports Promotion in Scotland's Schools followed by Parliamentary Bureau Motions

5.00 pm Decision Time followed by Members' Business - debate on the subject of S1M-2098 Christine Grahame: Borders' Children with Special Education Needs

(b) that the Justice 2 Committee reports to the Local Government Committee by 7 October 2001 on the Firemen's Pension Scheme (Pension Sharing on Divorce) (Scotland) Order 2001 (SSI 2001/310), and to the Justice 1 Committee by 22 October 2001 on the Parole Board (Scotland) Rules 2001 (SSI 2001/315), the Criminal Legal Aid (Scotland) Amendment Regulations 2001 (SSI 2001/306) and the Criminal Legal Aid (Fixed Payments) (Scotland) Amendment Regulations 2001 (SSI 2001/307); and

(c) that Stage 1 of the Public Appointments (Parliamentary Approval) (Scotland) Bill be completed by 8 February 2002.—[Euan Robson.]

Motion agreed to.

David (None, Lothians)

Before we begin, I have two announcements to make. First, I am sure that members will want to welcome 17 members of the Scottish Peers Association, headed by their chairman, Lord Wilson of Tillyorn, who are sitting in the gallery. Members will understand that Lord James Douglas-Hamilton, Mike Watson and I welcome them warmly as members of that particular trade union.

Secondly, I draw members' attention to the fact that the business bulletin has been reprinted because I have accepted an emergency question, which will be taken as an ordinary question at the end of question time. It is not a statement; it is simply an additional question.

Henry McLeish (Labour, Central Fife)

We have just heard news that a gunman has killed 14 people in a Swiss assembly—I think one of the regional parliaments. We obviously condemn utterly what has happened and express our solidarity with those involved and the families that have been affected. I am sure that the whole chamber will join me in expressing those sentiments to those people.

I hope that you, Sir David, and I can write to the Assembly expressing those sentiments. That is partly David McLetchie's suggestion—we spoke before I stood up to speak. I thank David McLetchie for that; it is important that we register our sentiments in the Parliament today.

David (None, Lothians)

I thank the First Minister for that. I was going to say something, but as the news is still coming in, I think that we will want to wait until later in the afternoon and then act together on the matter.

Question Time — Scottish Executive

Dennis Canavan (Independent, Falkirk West)

I add my support to what the First Minister said.

Sarah Boyack (Labour, Edinburgh Central)

Following the Finance Committee's approval of the granting of indemnities to the trustees of the pension schemes, the wind-up of the fund is now proceeding. The Scottish Executive is finalising the detail on the basis of a fair and equitable distribution to eligible STG pension scheme members. We will provide details of our proposals when the Executive brings forward the STG dissolution order for consideration by the Scottish Parliament.

Dennis Canavan (Independent, Falkirk West)

Does the minister recall that, during the Falkirk West by-election, Henry McLeish and Gordon Brown announced ex gratia payments that totalled £100 million? Since then, it has been revealed that the total gross surplus is about £250 million. An overwhelming majority of members of the Scottish Parliament supported my motion that called for the STG pension scheme surplus to be used for the maximum benefit of the members of that scheme. Will the Executive implement the will of the Parliament by handing over to the pension scheme members every penny of the £250 million, instead of allowing HM Treasury to pillage 60 per cent of it?

Sarah Boyack (Labour, Edinburgh Central)

I understand the sentiment that Mr Canavan brings to the chamber and I know that the pension scheme is unfinished pre-devolution business. We inherited the situation from the previous Westminster Government. The Scottish Transport Group (Pension Schemes) Order 1996, which was passed in Westminster, provided for the surplus money to go back to Westminster.

Through the good offices of Henry McLeish and Gordon Brown, we have successfully persuaded HM Treasury that the Scottish pensioners should get a fair deal from the money. That is why we have managed to retain £100 million that will go directly to Scottish pensioners. My concern is that we get on with the matter. We need to ensure that the money goes to the correct pensioners and that there is fair distribution. We will come back to Parliament after the recess to ensure that we get on with the unfinished business.

Sylvia Jackson (Labour, Stirling)

As the minister knows, the majority of members of the STG pension scheme were members of the Transport and General Workers Union. Like its members, the union is concerned about a number of issues. It is concerned about the amount of money that is to be paid out; the amount of tax being paid on the surplus fund, including the ex gratia payment; how individual payments will be calculated; when the ex gratia payments will be paid and the possibility of interim payments; and how the claims are to be processed.

In the light of those concerns, will the minister give details of her meetings with the Transport and General Workers Union and assure us that she will meet the union in the near future to take up the pressing issues to which I referred?

Sarah Boyack (Labour, Edinburgh Central)

I have been in touch with the TGWU. We are keen that the TGWU and other relevant trade unions be involved in discussions with my officials to ensure that their members' concerns are put to us. However, ensuring that we get a fair scheme in which individual pensioners receive the right sums of money is a complex procedure. I have asked the TGWU and other relevant unions to meet my officials to ensure that we have those discussions soon. When they are concluded and the scheme has been set up, we will introduce the dissolution order to Parliament.

Once that has been processed, we will pass across to the Scottish Public Pensions Agency all the forms which, I know, members have been working with their constituents to fill in. At that stage, the agency will ensure that everybody gets their money as expeditiously as possible. Members throughout the chamber agree that we should get on with that unfinished business. We want to ensure that our Scottish Bus Group pensioners get a fair deal out of the system.

Fergus Ewing (Scottish National Party, Inverness East, Nairn and Lochaber)

I appreciate that the minister has been candid enough to admit that there has been an inordinate delay in dealing with the matter. Of the 12,000 workers who have been waiting for their pensions, how many have died without receiving a penny piece? Will the surviving spouse—or dependant—in each case receive the full amount or less? If they will receive less, how much less will they receive than they would have received had their partners survived to receive the payments to which we all believe they were entitled?

Sarah Boyack (Labour, Edinburgh Central)

I understand the point that Fergus Ewing makes. We must get on and consider the detail of the scheme to ensure that people get fair payments. I know that pensioners are extremely anxious that we get on with it. We need to talk to 14,000 potential pensioners. We have already sent forms out to ensure that people send us up-to-date details. As soon as Parliament has passed the dissolution order, all those forms will automatically go to the Scottish Public Pensions Agency. At that point, we will issue the widest possible publicity to ensure that every eligible pensioner knows about the scheme and to ensure that they get their details to us so that they are included in the pay-out.

Bruce Crawford (Scottish National Party, Mid Scotland and Fife)

To ask the Scottish Executive what progress it is currently making in the establishment of the new single water authority. (S1O-3863)

Sarah Boyack (Labour, Edinburgh Central)

I answer on behalf of the Minister for Environment and Rural Development.

A transitional planning team is in place. The prospective chair and chief executive have been identified and we have advertised for prospective board members to ensure that Scottish water can be established quickly if Parliament approves the Water Industry (Scotland) Bill, which was made available today to members of the Parliament.

Bruce Crawford (Scottish National Party, Mid Scotland and Fife)

I understand that Ross Finnie is in Austria today—the day on which his bill is published.

The minister might or might not be aware that I wrote to Ross Finnie in early August about the problems that employees of the water industry face because of restructuring. In that letter I recommended the appointment of an employment guardian, to ensure that job losses are kept to a minimum. Why have I not received a substantive reply to that letter? Is it because the Executive is afraid to face up to the truth about the scale of the job losses, or is it simply because the Executive puts the dogma of competition ahead of jobs and wants to hide that simple truth?

Perhaps the minister—or Ross Finnie, when he returns from Austria—might be able to tell us soon what the scale of the job losses will be.

Sarah Boyack (Labour, Edinburgh Central)

Ross Finnie is focused on the fact that we need to ensure that the needs of the employees and customers of our water companies are taken into account throughout the process. I will mention the response to Bruce Crawford's letter to Ross Finnie and ensure that that is expedited.

Ross Finnie is in Austria with other environment ministers from throughout Europe. I am sure that the Parliament welcomes the fact that he is engaging in those European discussions. I will ensure that, as soon as he returns, he is made aware of the concerns that Mr Crawford has raised so forcefully.

Elaine Murray (Labour, Dumfries)

Does the minister agree with the water commissioner, Alan Sutherland, that the establishment of a new single water authority should not necessarily mean the centralisation of services in Edinburgh and Glasgow and that centralisation does not necessarily equate with efficiency?

Sarah Boyack (Labour, Edinburgh Central)

I agree that the creation of a single water authority does not automatically mean the centralisation of the delivery of the water authority's services. I know that Ross Finnie is keen to ensure that we have the highest quality water standards throughout Scotland. That is why we have already appointed the water industry commissioner, who is also examining issues such as efficiency and value for money for customers. Ross Finnie's driving desires in creating a single water authority are to ensure that customers' needs throughout Scotland are recognised, that our massive £1.8 billion investment programme progresses efficiently and effectively and that people throughout Scotland benefit from the higher water quality standards that the new investment and new water board will provide.

John Scott (Conservative, Ayr)

Will the minister assure members that the prices that Scottish consumers will have to pay over the next four years after the introduction of the new authority will not be higher than those paid by consumers in England and Wales?

Sarah Boyack (Labour, Edinburgh Central)

I will certainly not go beyond my brief and answer questions that Ross Finnie has not enabled me to answer. As the minister has said, the driving force behind the creation of the single water authority is the creation of an efficient water industry that deals effectively with competition to ensure efficient prices throughout Scotland. One of the core objectives behind the appointment of the water industry commissioner is the provision of an independent and objective system that will ensure that the current water boards and the delivery of the investment programme are managed in the best possible way, and that they are managed in the interests of individual domestic customers and the business community.