Scottish Parliament, 1 February 2007

376 contributions from 82 members. The official report.

Official Report 1 February 2007

Green Procurement

George Reid (None, Ochil)

Good morning. The first item of business is a debate on motion S2M-5494, in the name of Patrick Harvie, on green procurement.

Patrick Harvie (Green, Glasgow)

All political parties now speak the language of sustainable development. Across the political spectrum, warm words are spoken about the links that join the social, economic and environmental aspects of our lives and the way in which we run our society. No doubt the Executive will want to tell us in glowing terms of the work that it has done to advance green procurement, but the unfortunate reality is that, well intentioned though such work might be, it is not having the desired effect. Social and environmental criteria in public contracts are not the norm and we have a long way to go to change that. Today's debate is intended to open up discussion on how those warm words can be turned into more effective action. By using the huge spending power of the public sector in Scotland, we can achieve social and environmental objectives while providing high-quality public services.

What should green procurement mean in practice? According to the European Commission document "Buying green!: A handbook on environmental public procurement", green procurement can cover huge areas of public spending, from construction materials such as timber to office supplies such as paper. It can also cover transport, electricity from renewable energy suppliers and low-energy devices. Furthermore, it can cover the food and drink that are procured for every school, office, hospital, prison and public building in Scotland.

Maureen Macmillan (Labour, Highlands and Islands)

Will the member join me in congratulating Inverness high school on the fact that its pupils grow their own vegetables on the school grounds and prepare them and eat them in special celebratory school meals?

Patrick Harvie (Green, Glasgow)

My party's Highlands and Islands representative tells me that the Inverness example is a wonderful project. I would love to learn more about it. I have seen other examples in East Ayrshire that I will mention in a few moments.

There are a few examples of good practice, but the difficulty is that they are not the norm.

One piece of legislation that could be used to push things forward is the Schools (Health Promotion and Nutrition) (Scotland) Bill, which the Communities Committee is considering. The committee has looked at projects in East Ayrshire such as the Soil Association's food for life programme, which is not only improving the quality of the meals provided but building links between food producers and local communities. When we visited the project, we saw how the links between the school or community and the farmers and producers are having an effect not just on the food that goes on to plates but on the relationship that pupils have with food. Increasing awareness of where food comes from helps to promote a healthier relationship with food for life. Thus, green procurement is not only about how such children are fed but about how we can hit other social policy objectives, from promoting health and preventing obesity to supporting locally owned businesses.

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

Does Patrick Harvie agree that many of the points that he has made could be backed up by safeguarding existing allotments and creating new ones?

Patrick Harvie (Green, Glasgow)

I would love to see every primary school have its own allotment. That would be a marvellous idea.

In scrutinising the Schools (Health Promotion and Nutrition) (Scotland) Bill, the committee asked the Minister for Education and Young People whether he would use the bill to push forward those examples by making such practice the norm. However, he told us that he would simply reissue some guidance that was issued a couple of years ago. If the guidance was issued a couple of years ago, it is clearly not having the necessary impact. In its stage 1 report, the committee agreed that something stronger was necessary in light of the new European directive. Given that the Scottish procurement policy note that the Executive issued in March 2006 after the public procurement directive came into effect states that

"there is no intention to publish separate Scottish guidance",

the current situation is that local authorities and public bodies may include social and environmental criteria but are not required to do so.

However, the Minister for Education and Young People seems to have acknowledged that that is not good enough in the amendments that he lodged yesterday, which will beef things up by giving the guidance on social and environmental aspects of food procurement a legislative basis. I hope that the Executive will agree that the same should happen for the whole of the public sector. Until we get a strong basis for such action throughout the public sector, examples such as the one in East Ayrshire will remain the exception rather than the rule. In a Sustainable Scotland Network survey, only one local authority indicated that it formally linked procurement to other policies. Across many aspects of procurement, it was found that sustainable choices were simply not being made.

The benefits of green procurement could be seen throughout society. For example, in social housing we could make a big difference by ensuring that housebuilders that are bidding for public sector work know before they start that they must demonstrate the highest level of commitment to sustainability in sourcing construction materials and in energy and heating systems. If we did that, council tenants would also enjoy the benefits that are currently enjoyed by some tenants in the housing association sector.

Christine May (Labour, Central Fife)

Will the member take an intervention?

Patrick Harvie (Green, Glasgow)

I have already taken a couple of interventions, so I am afraid that I must move on.

For example, the Abertay Housing Association in Dundee is saving tenants around a third on their annual heating bills. If we used sustainable procurement of energy systems in the public housing sector, we could roll those benefits out to everybody.

Imagination is lacking in other areas, too. In the information technology systems that are bought for the public sector, there is an almost total reliance on Dell machines and Microsoft software. Now that Mr Gates has moved on to the next leg of his world tour to promote his new operating system, large numbers of public bodies will no doubt jump unthinkingly to the conclusion that they should throw good money after bad even though better alternatives are available. It is depressing to reflect on the fact that they will have been encouraged by the glorified product launch that has just taken place. Instead, why do we not encourage competition between the various IT products by requiring public bodies to give proper consideration to the basic freedoms that Microsoft products restrict but that other software products open up?

The Sustainable Scotland Network survey made it clear that many local authorities are calling for stronger direction and leadership from the Executive. Given that the European legislation has changed, there is a need for such leadership for the whole public sector. If local authorities alone shifted to green procurement practices, we would benefit from being able to use their £2.3 billion annual spend on goods and services to help to achieve our social and environmental objectives at the same time as providing those public services. Such a change makes sense at every level. Warm words are not enough to ensure that green procurement becomes the norm. We call on the Executive to give the direction that is required by making social and environmental criteria mandatory in all public contracts and to give public bodies the guidance that they need to make that a reality throughout the public sector.

I move,

That the Parliament notes the transposition into Scots Law of the European public procurement directive (2004/18/EEC) in January 2006 and, in particular, notes the directive's clarification that public bodies may legitimately specify social and environmental criteria in their procurement contracts; welcomes the publication by the European Commission of Buying Green!: A Handbook on Environmental Public Procurement but regrets that Scottish-specific guidance on the matter is not currently available, and calls on the Scottish Executive to make social and environmental criteria mandatory in all public contracts and to issue guidance to all local authorities and public bodies to enable them to meet these requirements.

George Lyon (Liberal Democrat, Argyll and Bute)

I welcome what Patrick Harvie has said this morning. I think that all members are firmly behind the idea that we need to take steps to ensure that green procurement underpins the approach of all public agencies throughout Scotland to sourcing materials.

I should declare an interest. As a farmer for many years and as a member of NFU Scotland, I fought long and hard to try to ensure that local sourcing of food and local food networks were firmly accepted by supermarkets and those who procured on behalf of public agencies. I have a long-term interest in the matter.

Green procurement has long been recognised as important for Scotland. Indeed, the partnership agreement states:

"We want a Scotland that delivers sustainable development; that puts environmental concerns at the heart of public policy".

The motion implies that the Executive has failed to do that in its procurement activity and has not issued Scottish guidance. That is simply not the case. The Executive's procurement website already contains guidance and information on sustainable development for both purchasers and suppliers. The website also provides links to guidance from other sources, such as the Office of Government Commerce and the Department for Food, Environment and Rural Affairs. It also includes a link to the European Commission handbook "Buying green!", to which Mr Harvie referred.

Patrick Harvie (Green, Glasgow)

I acknowledge that the Executive's procurement website contains links to many guidance notes, but I ask the minister whether I am misunderstanding something. Scottish procurement policy note 4/2006 states:

"there is no intention to publish separate Scottish guidance"

on the changes that were introduced as a result of the coming into force of the European public procurement directive last year.

George Lyon (Liberal Democrat, Argyll and Bute)

I was just coming to that issue. We have a consistent and comprehensive suite of guidance documents for purchasers on the treatment of social and environmental issues in public procurement. Not all those documents are Scottish—as I said, some of them are from DEFRA and the European Commission. The key issue is whether we agree with the guidance in those documents. It is sensible to make available to purchasers that comprehensive suite of guidance.

It is important to point out that, while successfully delivering green procurement, public purchasers must still achieve two fundamental objectives, the first of which is value for money. I hope that Mr Harvie and the Green party agree that Scottish taxpayers have a right to expect their money to be spent wisely and effectively. Value for money in procurement is crucial to delivering high-quality and cost-effective public services. The second fundamental objective is to award contracts that are legal. In other words, it is important that public bodies ensure that their procurement activities are undertaken within the scope of European Union law.

Richard Lochhead (Scottish National Party, Moray)

Will the minister give way?

George Lyon (Liberal Democrat, Argyll and Bute)

I am sorry, but I do not have a lot of time.

Thankfully, we now have greater flexibility to ensure that social and environmental objectives are taken into consideration. The Executive is clear that there is scope, where relevant, as indicated in our guidance, to include environmental and social criteria in public contracts. The Executive leads by example on that and has done so for several years. I will give members a sample of the guidance that we have issued. We have a web page that is dedicated to corporate social responsibility in procurement and which contains our green procurement guidance. We have issued guidance on buying legally logged timber from sustainably managed sources and Scotland-specific guidance on how to incorporate sustainable development into the procurement of food and catering services, for example for school meals. The hungry for success programme is a good example of the Executive's success in that matter.

In line with the recommendation in John McClelland's report, "Review of Public Procurement in Scotland: Report & Recommendations on public procurement in Scotland", the Executive is working on plans to establish a single point of inquiry. We are in discussion with key stakeholders and hope to make an announcement shortly on how that will work and how it will fit in with green procurement.

There are good examples of local food procurement. Those successes were helped by the Scotland-specific guidance, which we issued as far back as 2004, on encouraging local suppliers to become more involved in public procurement, for example by supplying schools, and on supporting local suppliers of fresh produce without breaking EU procurement legislation. We realise that small and medium-sized enterprises may find the process bureaucratic, which is why we have been in dialogue with representative bodies on how to open up opportunities for such businesses to bid for public contracts. We have delivered a number of successful outcomes, which I would discuss if I had more time.

The Executive's track record demonstrates that we have led from the front on green procurement and we will continue to do so. I hope that, at decision time, colleagues will support the amendment in my name.

I move amendment S2M-5494.4, to leave out from first "notes" to end and insert:

"recognises the Scottish Executive's record on sustainable/green procurement; notes that Scottish-specific guidance on sustainable procurement for public sector buyers and sellers is available on the Executive's website; notes that the Executive has issued best practice guidance on sustainable procurement, including a contribution to the Best Value toolkits, to local authorities and public bodies, and welcomes the contribution which public procurement has made, and will continue to make, to the achievement of the partnership commitments to a successful, sustainable Scotland."

Richard Lochhead (Scottish National Party, Moray)

I find myself in the unusual situation of agreeing with the Conservative party's amendment in a debate on the environment, which makes me realise that there is a growing consensus in Scotland on the threat of climate change to our nation and the wider world—even the Conservatives are on board these days. The debate that the Green party has brought to the Parliament is an important one and will involve a consensus on many of the issues that are discussed. We all agree that Scotland can play a role in tackling climate change and that, through Scotland's £30 billion central budget and the budget of United Kingdom departments and other public authorities in Scotland, we can help to create a low-carbon society in Scotland and take the environment into account across the board.

We must realise that we can influence the debate through public procurement. As Patrick Harvie said, the issue is not only about helping the environment but about creating jobs in Scotland. If we think local, we will create more local jobs in our communities in Scotland and save cash for the public sector in the longer term, through the adoption of energy efficiency and other measures. However, we must raise awareness in every single public body in Scotland, whether local schools and hospitals or central Government departments. We must also remove legislative obstacles that prevent such bodies from using their budgets to buy environmentally friendly goods and services. We must ensure that all staff in public sector bodies are trained so that the issue is at the centre of their consciousness and that, day in, day out, they think about how they can help the environment as they go about their daily working lives in the public sector.

Patrick Harvie mentioned the food for life initiative, details of which were sent to all members prior to the debate. That is not only about helping local businesses through local procurement and helping the environment through cutting down food miles but about improving people's health. Local food is healthier than imported food, for example because it is often not as processed, which is another key reason why we should promote the food for life initiative. I hope that the initiative is expanded outwith the Highlands and the other areas where it has been put in place so far.

I sought to intervene on the minister earlier to raise an issue that a local authority worker brought to my attention a few months ago about a move to centralise contracts in local government in Scotland, I presume, to achieve economies of scale across local authority areas. However, that runs counter to any effort to encourage local procurement. I hope that that issue is being addressed.

George Lyon (Liberal Democrat, Argyll and Bute)

John McClelland's report on procurement points out the necessity of ensuring that procurement is based on value for money, but it accepts that we must ensure that small and medium-sized enterprises can access the procurement process. I am sure that, when the forward work programme on the McClelland recommendations is announced, that matter will be addressed in it.

Richard Lochhead (Scottish National Party, Moray)

I hope that that will help and provide comfort, but we must bear in mind the slight difference between putting pressure on local authorities to save money through centralised contracts and legislative measures.

One reason why public procurement is so important in greening our economy is that it stimulates the market for renewable energy technologies and other green products. If the public sector in Scotland spends tens of millions or perhaps billions of pounds on green products, that will increase demand for products such as solar panels or other renewable energy technologies. Prices will fall, which will allow the general population in Scotland to access such products more easily, as they will be more affordable. That is one reason why it is so important that we use public sector finances on green procurement. We must also ensure that appropriate information is available to authorities through eco-labelling and that there is traceability, so that they know that products that they buy are genuinely green.

My amendment refers to the Environment and Rural Development Committee's report on its inquiry into climate change. I was a member of the committee when it produced that report, in which the committee expressed frustration about the difficulty of getting information from Government ministers on what progress has been made on using the Scottish budget to promote green procurement. I hope that the minister will address that issue in his closing speech.

I move amendment S2M-594.3, to insert at end:

"and further calls on the Executive to report to the Parliament, prior to dissolution, providing details of any measures taken, and their results, in response to the call made by the Environment and Rural Development Committee in its report published in May 2005 for public procurement to be used to tackle climate change."

Murdo Fraser (Conservative, Mid Scotland and Fife)

I congratulate the Greens on devoting some of their debating time to the important issue of public procurement. I do not want to disturb Patrick Harvie too much, but there is a worrying degree of consensus in the Parliament on the importance of the issue and on the practical solutions that we want to be put in place.

The issue is one for the business sector, particularly small and medium-sized enterprises, and for environmentalists, because many of the measures that we want to take to change procurement are driven by an environmental agenda. The procurement problem has two distinct elements. The first is the difficulties that businesses, especially small businesses or social enterprises, face in tendering for contracts as a result of the volume of bureaucracy that is involved. Many small companies simply do not have sufficient time or resources to go through a different application procedure with each and every public body with which they tender. One local authority will have a different set of procedures from the next, and the health boards, the Scottish Prison Service and the Executive will all have different procedures again. That creates a huge bureaucratic burden, particularly on small businesses, as larger enterprises can afford to employ dedicated procurement staff. Therefore, many small businesses simply opt out of bidding for procurement contracts, because it is not worth their while, which is a desperate pity.

I recently spoke to somebody in business who said that the best message that he can give to government is, "Don't give us a grant; give us an order." If the huge public sector spend could be divvied up a bit more fairly so that it reached more small businesses, the benefit to the Scottish economy would be tremendous, particularly through the support for the smaller business sector.

I acknowledge that the Executive is taking steps to address the problem through, for example, the introduction last January of the Public Contracts (Scotland) Regulations 2006 and the Utilities Contracts (Scotland) Regulations 2006, and the work that John McClelland has done in his review. However, John McClelland identified problems throughout the public sector. He called the approach to procurement policy "fragmented" and said:

"Collaboration within organisations and across the sector ... has not been completely effective and must be improved."

He also said that the best examples of procurement policy had become mere "islands of excellence".

The second problem with procurement concerns the difficulties that some public agencies face. They often have the interests of small businesses at heart, but they are trying to administer contracts within the awkward straitjacket of European law and regulation.

Mark Ballard (Green, Lothians)

Murdo Fraser talks about the straitjacket of European regulations and, in particular, the European public procurement directive, which is mentioned in the Green motion. The directive does not allow discrimination on locality but allows it on environmental performance, which could include factors such as food miles and freshness, which would imply locality. Why does his amendment delete the call to make those environmental criteria mandatory, which would be the only way to ensure that local issues were part of contracts?

Murdo Fraser (Conservative, Mid Scotland and Fife)

There are different ways of approaching the issue. The problem is essentially that many public sector bodies are prepared to hide behind their interpretation of the European rules instead of trying to work their way round them. If Mark Ballard looks at our amendment, he will see that it calls for a dedicated procurement unit in the Executive, which would be tasked with finding ways round some of the European regulations. As Mr Ballard said, an examination of the detail of European regulations often reveals that there are ways to get round them, such as by raising environmental issues.

I will say a little bit abut how the Conservatives would address the problem. I mentioned our proposal for a new, dedicated procurement unit within the Executive. Such a unit would act as a single point of entry for the whole public sector and would process all the statutory requirements that a firm needed to fulfil before it was able to tender in a single step. The unit would also be charged with examining some of the more contentious aspects of procurement, such as aiding and encouraging social enterprises or small businesses in tendering and, of course, the promotion of local food, about which my colleague John Scott will talk more in a moment.

There is a general consensus on the issue and all parties are heading in the same direction. I am grateful to the Greens for allowing us the opportunity to debate these important subjects and I hope that the Executive will make more concrete proposals for improving the situation.

I move amendment S2M-5494.2, to leave out from "and calls on" to end and insert:

"further regrets that, whilst there are some good examples of local food procurement in Scotland, as the Environment and Rural Development Committee's 8th Report (2006) notes, 'there is no sense that the Executive has a robust strategy for rolling this out'; further regrets the bureaucratic hurdles faced, especially by small and social firms, in tendering for public contracts, and therefore calls on the Scottish Executive to establish a dedicated procurement unit to act as a single point of entry for the public sector and to be tasked with taking forward ways of procuring local produce without contravening European law."

Christine May (Labour, Central Fife)

I am pleased to open the debate for my party and I welcome the Green motion. However, we must recognise, as other members have done, that the debate cannot only be about the scented-candle thinking that might come out of sitting in a circle in the lotus position developing policy. There are elements of such thinking in what the Greens have said this morning, but procurement is extraordinarily complex and highly regulated. There is a considerable amount of legislation on it and it involves competing priorities. There is pressure from council tax payers and income tax payers to keep tax low and pressure from large corporations, which see opportunities to obtain business in large, aggregated contracts.

Procurement is about the practical application of the language of ambition, which is what we talk about when we discuss sustainable development. To date, the Executive has a commendable record on seeking to find a way through the minefield of regulation and legislation and on encouraging and helping to develop Scotland's businesses and companies.

Patrick Harvie (Green, Glasgow)

With the serenity of one who has never achieved the lotus position, I ask Christine May to acknowledge that what some have described as "islands of excellence" and others have termed single examples of good practice are not the norm. However comprehensive the Executive's suite of regulations and policy notes is, it is not having the desired impact throughout the public sector.

Christine May (Labour, Central Fife)

I will talk not about an island of excellence but about a peninsula of excellence—Fife. When I found out that I was going to speak in the debate, I phoned up the chief procurement officer in Fife Council and asked for some statistics on how the council has performed under the guidance that is available to local authorities. In the financial year to the end of March 2006, 84 per cent of the £130 million of contracts on work, services and supplies that Fife Council let went to the private sector and 16 per cent went to internal contractors, who procured externally. That meant that £28.5 million went to the private sector in Fife and £52 million to companies throughout Scotland. That includes food contracts, the majority of which went to local companies.

Fife Council's procurement website—which, I accept, is currently under review—is targeted at small and medium-sized enterprises within Fife. It contains information on current tenders, a suppliers guide and the complete contract programme with values, information on when contracts will be let and details of whom to contact. The social and environmental criteria that are referred to in the European directive and the Green motion are fundamental features of Fife Council's contracting policy.

However, there is a lack of clarity in the current regulations and everybody would welcome clarification, although not everybody wants to be the first test case. We must ask how we can influence the buying policies of wholesalers with whom contracts—particularly food contracts—are let, because that is where the greatest opportunity for local small and medium-sized enterprises lies. As a Co-operative Party member, I encourage small and medium-sized enterprises to consider the opportunities for getting together under Co-operative Development Scotland to aggregate their power and increase business locally.

I am pleased to support the Executive's amendment.

Robin Harper (Green, Lothians)

We have heard from Patrick Harvie about the opportunity that arises from the increased use of social and environmental clauses in public contracts. That opportunity is currently being wasted. We should not spend money to the detriment of social justice or environmental protection and sustainability. In other words, we should not invest in things that will not produce future sustainability. The Executive's rhetoric makes it plain how much it values—or claims to value—progress towards a sustainable Scotland. However, some of the money that is spent in our name—in fact, too much of it—remains part of the problem, not part of the solution.

Patrick Harvie spoke about his experiences with the Schools (Health Promotion and Nutrition) (Scotland) Bill, which is currently going through Parliament. The guidelines on green procurement have failed to have the desired effect and the problem clearly goes far beyond the sourcing of healthy food for school meals. I will consider a closely related issue: the provision of cooking facilities in new schools throughout Scotland. I have learned that some brand new schools are being built without proper cooking kitchen facilities. Instead, they are being designed with simple provisions to heat up pre-packaged school meals that will be imported from elsewhere, on the Edinburgh royal infirmary model, which is widely disparaged.

Two issues concern me. First, although there is no doubt that such a school will cost less to construct than one with the kind of kitchen that all schools used to have and that that will save public money now, we need to look beyond the capital cost of buildings and focus on the whole-life costs and the long-term savings. That consideration should include, for example, insulation and the kind of heating that school buildings have. What are the real costs of buying pre-cooked meals that were frozen in a factory and brought in on a truck and which contribute nothing to the local economy? Unless we take a close look at the long-term financial implications, we cannot possibly take advantage of the real, sustainable best value that sustainable procurement can offer.

Christine May (Labour, Central Fife)

What information does the Scottish Green Party have on the local and national impact that changing school building contracts to require a kitchen in every unit would have on taxation?

Robin Harper (Green, Lothians)

We do not have any; we are flagging up the problem. That is a tacit admission that there is a problem to be solved. Perhaps the Executive needs to address it.

Christine Grahame (Scottish National Party, South of Scotland)

Does Mr Harper agree that Christine May might get the answer to her question if she read the evidence that was submitted to Communities Committee? Under the contracts, people cannot even change a plug point let alone put in a new kitchen.

George Reid (None, Ochil)

You have about a minute and a half left, Mr Harper.

Robin Harper (Green, Lothians)

I must continue quickly, then.

As Christine Grahame has just pointed out, once a school has been built with such facilities, the door has essentially been closed on any opportunity to provide children with locally sourced, freshly prepared, healthy school meals.

Mark Ruskell has spent a great deal of time in the past couple of years campaigning for sustainable energy systems to be installed in high schools in north Perthshire, an area that is blessed with abundant forestry. A biomass heating scheme would lend itself admirably to a new school project but, although highly economical to run, such a system would cost more to install. However, it would be investing for the future.

We acknowledge that the Executive recently created a relatively small but nevertheless welcome biomass fund, which is a step in the right direction. However, the money is limited, and too many schools and other public buildings will continue to receive heating systems that are cheap to install but expensive and environmentally unsustainable to run.

I wish that we could be like the London borough of Merton, which four years ago challenged everybody on the issue. It was taken to court, but it won all the cases. It now insists on green energy contracts for all new buildings that are built in the borough, so that 10 per cent of the energy comes from sustainable sources. It had the courage to challenge the regulations. Realising that it is a question not so much of a way round but of a way through the regulations is important.

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

I thank the Green party for introducing the debate today. Whatever the result of the vote, we are all singing off the same sheet. The process of the debate itself is constructive and takes the Parliament a step in the right direction.

I want to speak about the potential of Scotland to promote corporate social responsibility—a subject that is close to my and other people's hearts. The Greens and others have previously said that it is regarded as something of a panacea, but that is unfair to the many businesses in Scotland that are showing leadership by implementing innovative practices and making a difference with their environmental and social practices. Some would like to beat business with a stick, but I feel that we are better to offer a carrot.

Procurement can be a great driver in corporate social responsibility. The corporate responsibility coalition—CORE—campaign to apply ethical criteria to procurement is gathering momentum in Scotland, with Oxfam and no less than 130 other charities supporting it. However, such measures should not preach virtue to business, but should demonstrate that it is of benefit to business. The most successful businesses are those that put their financial, social and environmental concerns together to make a triple bottom line. Such an approach motivates and improves the productivity of staff—an area that in Scotland we need to improve. It cuts the costs of running a business by producing less waste and using less energy. The lean manufacturing initiative run by Scottish Enterprise has helped numerous companies to improve their operations in that way. That approach can also improve links with the community, creating trust in and support for the company and the people who work for it.

As I know from personal experience, often the smallest businesses reap the biggest benefits from adopting such practices. With a procurement policy that encourages businesses with sustainable policies, we could increase the number of small innovative businesses that gain contracts in the public sector. Social enterprises would also benefit, as responsible practices are a precursor to their business model, and we should support them in every possible way and promote them more seriously as a business model. That task is being undertaken at the moment, and we are seeing steps in the right direction, but the Executive should not lose sight of it.

As individual MSPs in our constituencies, we should be mindful of green procurement. Returning to Patrick Harvie's motion, and as Christine May rightly pointed out when she mentioned Fife, measures can be taken at a local level, often with MSP input. I have no reason to believe that that is not happening, especially considering Maureen Macmillan's point about high school food.

My Green colleague from the Highlands, Eleanor Scott, may be aware of one small example. The Forestry Commission Scotland has built an innovative new office near Bettyhill in Sutherland. It is made out of trees that were felled locally, moved a minimal distance and built into an office. She has probably visited it, but if not it is worth a visit. However, the point is that it is completely renewable and green and the timber was moved the least possible distance. There is great potential for housing, which we desperately need in the Highlands, to be built using that construction method. I encourage members in the Highlands to consider that. If we take a look in our own back yards, we will see opportunities and developments that we can take forward.

I will close at that point to give you extra time, Presiding Officer.

George Reid (None, Ochil)

Thank you, Mr Stone.

Richard Baker (Labour, North East Scotland)

As someone who represents a region with many rural communities, I understand the importance of green procurement and its potential to encourage sustainable local industries.

The first issue that often comes to mind is the public procurement of food, because we have such a strong farming industry that is responsible for high-quality produce and high standards of animal welfare. In procuring local food, we make an important contribution to reducing our carbon footprint because of the smaller distances that produce has to travel to reach its point of consumption.

It is nonsensical on so many levels that we can go into supermarkets and see meat from South America or vegetables from the furthest corners of the world when there is so much high-quality local produce and such demand for local food from customers. It is right that many members encourage retailers to source more local produce, and it is important that we encourage public agencies to do the same.

I welcome the Green party giving us the chance to debate the issue, but although there is broad agreement across the chamber, I do not run with the negative aspects of the motion. It is clear that there is a genuine wish on the part of the Executive to encourage green procurement, and if the European Commission is now moving in that direction too, that is hugely welcome. However, let us not pretend that this is an easy area in which to implement policy.

Patrick Harvie (Green, Glasgow)

Does the member agree with me, and clearly with the Minister for Education and Young People, who has lodged amendments to the Schools (Health Promotion and Nutrition) (Scotland) Bill, that green procurement needs a legislative footing? Does he agree that it should be applied throughout the public sector rather than just to school food?

Richard Baker (Labour, North East Scotland)

We have to pursue the most effective delivery route. Sometimes that is legislation, but other times we have too much legislation.

My point is that, for example, the document "Buying green!" states at the beginning that it is an indicative document. Of course there has to be care that the rules are being followed, because otherwise there are consequences, but that is not to say that real progress on green procurement cannot be made and that such progress is not being encouraged.

We have already heard from Christine May about the progress that is being made in the kingdom peninsula, and we have the potential to encourage green, local procurement through the establishment of co-operatives. In addition, the Executive has set up the co-operative development agency.

Fife is not an isolated example of where green procurement is being promoted locally. We have heard about case studies in East Ayrshire, which showed that it is possible to follow local food procurement policies with benefits for producers and for the quality and freshness of produce while still meeting European procurement rules. The Executive is working with the Association for Public Service Excellence, Scottish Enterprise's food and drink team and NFU Scotland to ensure that local authorities throughout Scotland, as well as food and farming interests, are aware of the findings of the case studies. I will press the issue with Aberdeen City Council and Aberdeenshire Council, to ensure that they are aware of the case studies and are doing all that they can to engage in green procurement. There is a role for the Executive, but there is also a role for us as local members to work with our own local authorities.

In four minutes I do not have time to go through all the Executive's other activities on green procurement, but the minister has referred to them and they are many. Labour's policy states our belief that local authorities have a big role to play in addressing environmental issues, and we want to ensure that effective environmental procurement policies yield direct economic and social benefits to local authorities and communities. We are committed to the policy and are already promoting it through our work in the Executive, so let us recognise that the agenda is shared across the chamber and by the Executive. Not only is it good for Scotland's producers, it is good for Scotland as a whole and for the global environment. I commend the amendment in the name of the minister.

Jim Mather (Scottish National Party, Highlands and Islands)

I, too, congratulate the Greens on securing the debate. It is easy to be totally supportive of green procurement, as there is an environmental rationale, a local rationale and a social rationale. Furthermore, from an economic perspective, there is the prospect of fostering more indigenous supply, bringing better produce to market, boosting the nutritional quality of produce and even boosting the tourism experience in Scotland. All of that is important, as is value retention and boosting the viability of local jobs and businesses. There is also the possibility of clawing back manufacturing and reworking, and triggering development, research and new start-ups. The Greens' bête noire, Bill Gates, claimed this week that the service sector is pretty much limitless. The same could be said for green procurement. It is, as the minister said, openly and provably EC-compliant. It is important that we encourage green procurement, which has the potential to deliver real benefits in Scotland that will increase over time.

However, we should not automatically assume that we will move enough people's views just by making the case and listing the advantages. The approach has to be sold and re-sold. Cost always creeps in to any spending decisions. It is important to make the environmental, social and business cases time and again, so that people understand the total cost of ownership, the total environmental cost and the total social cost. We must also get across the fact that lowest price rarely means best value. This morning, John Lewis emerged as the top store in a survey reported by the BBC. The store wears as a badge of pride the fact that although it always competes on price, it does not set out to have the lowest price; rather, it tries to bring good produce to the marketplace. This debate shows the importance of giving green procurement a much higher profile and influencing more people.

I have recently been reading a book by Fritjof Capra, who says that there is a difference between machines and human beings: we can change a machine—we can take a spanner to it—but we can only hope to disturb or provoke people. I look to my colleagues and others to help us build the case for disturbing more people on the issue, as Al Gore has done. That means getting people disturbed enough that they want to make a change and they feel that green procurement is sensible, rewarding, business strategic, socially strategic, locally strategic, planet strategic and their own idea. That is key. They must be disturbed enough to want to change and to translate their good intentions into long-term, committed action.

People do not resent change; it is more that they resent change being imposed upon them. If we can sell green procurement in a way that makes people understand all the advantages and come to the conclusion that it is their idea, we could have a genuine bandwagon effect.

Christine May (Labour, Central Fife)

Does Jim Mather agree that people should be much more disturbed by the Scottish National Party's policy of freezing council tax, with the implications that that would have for procurement?

Jim Mather (Scottish National Party, Highlands and Islands)

I just hope that the member gets a tick in her report card for that and improves her chance of a job at some point. At least two months are left for that opportunity to arise.

Essentially, we are talking about ensuring that we present a positive case for green procurement. We must try to take a genuine partnership approach, in which green suppliers become an indispensable part of the end product that is delivered to customers. I would like suppliers to adopt good business practice to make it easier to do business over time. Green procurement is a golden opportunity for Scotland to retain wealth and business in Scotland. It is also a golden opportunity for many local suppliers to spring up, offer goods and services that compete with bigger firms, and win that business. I am happy, therefore, to support the amendment in Richard Lochhead's name.

Donald Gorrie (Liberal Democrat, Central Scotland)

All the members who have spoken have made interesting speeches, and constructive ideas have been presented. The Greens deserve credit for securing the debate.

I shall concentrate on a few points. First, we must give far more consideration to the way in which public contracts are organised, from the point of view of their size and conditions. The minister is right to say that we are doing quite a lot in that direction, but we have to do more to ensure that contracts are organised in a way that enables small social enterprises and other small companies—which are not big or complex—to compete. In addition, perhaps working through chambers of commerce, we should support the provision of, for example, bonds and insurance, which are often problems for small companies. We can help small companies and social enterprises in that way.

Robin Harper (Green, Lothians)

Would small architectural firms in particular be helped if the huge insurance indemnity that they are supposed to put up before they even bid for contracts in Scotland was removed?

Donald Gorrie (Liberal Democrat, Central Scotland)

I have not addressed that issue, but I am sure that it is important and that the minister will consider it.

Secondly, although there has been a lot of improvement in being realistic about best value, it is still seen purely in terms of money, particularly in councils and health boards. We must develop a system in which the soft aspects of contracts are taken into account, so that if, for example, someone is providing meals on wheels, support for the recipient and the friendly contact is part of the deal. That is as important as the price of the meal. We should have a more enlightened attitude. I know that the audit bodies accept that, but a lot of people who give out contracts do not.

As other members have said, there is great reluctance among small organisations—commercial or social—to get involved in contracts, because they see the whole thing as a jungle. If one is confronted by a jungle, one needs a guide. We should provide more people like Pocahontas or Minnehaha—the redskins—who actually know their way through the jungle, to help the small firms to understand the whole process.

At the moment, we build a lot of awful, seriously defective houses, schools and hospitals. We could work with bodies such as the National House-Building Council and give them more muscle to create good standards and more frequent inspections, so that builders take insulation and microgeneration, for example, more seriously. Likewise, we should build carefully designed schools, hospitals and other buildings that take account of the points that Robin Harper raised. Whatever procurement method is used, it should provide buildings that are good value over a long period and not just the cheapest at the time. We need a bit of farsightedness. That is difficult for politicians, especially when many of them are facing an election in a month or two.

Maureen Macmillan (Labour, Highlands and Islands)

On a point of order, Presiding Officer. Would Donald Gorrie care to reflect on a term he used that might prove offensive to Native Americans or First Nations people?

Murray Tosh (Conservative, West of Scotland)

That is a political matter, which is for Mr Gorrie's conscience and wisdom to address. It is not for me to rule on.

Karen Gillon (Labour, Clydesdale)

Like other members, I welcome the opportunity to participate in the debate. I thank the Greens for bringing the issue to the chamber.

For me, procurement begins at an individual level. The choices that we make as individuals in our households about the types of goods and services that we purchase set the tone as a nation. On our shopping choices, do we shop locally on our local high street? Do we use our local farmers market? Do we make those choices or do we allow the supermarkets to maintain their hold by our refusal to set the example that we should set?

In food terms, for me, locally produced food is tastier and fresher. It is the kind of food that I want to buy. That is the choice that I want to make. There is more that we can do as MSPs, as a Government and as a country to encourage people to shop locally. We need to address prices. There is still more to be done on organic farming and making organic food more affordable to local people. Those of us who can afford it are making those choices.

Alex Johnstone (Conservative, North East Scotland)

Does Karen Gillon concede that food issues highlight one of the great hypocrisies at the heart of the matter? Although the Scottish food production industry offers the highest welfare and environmental standards anywhere in the world, as her colleague Richard Baker mentioned earlier, it has to compete in an open marketplace on price, which is a handicap. That hypocrisy must be dealt with and that additional cost must be fed into the system.

Karen Gillon (Labour, Clydesdale)

The member must also reflect on the fact that Scottish farmers compete throughout Europe on price and quality. We have to be careful in whatever we do that we do not preclude them from entering those markets and competing in the same way as others. Price is an issue for local people and for public procurement My colleague Christine May spoke about the issues in Fife. There are examples of green procurement throughout Scotland. Patrick Harvie spoke about the East Ayrshire example, which is a good benchmark of what can be done through positive local decision making, sourcing products from local producers and, in turn, building on the local economy.

I welcome the changes that will be made under the Schools (Health Promotion and Nutrition) (Scotland) Bill. That is the right way to go to give our young people the best possible chance in life of accessing locally sourced food and products. People's tastebuds change as a result of the food they eat. If they eat processed food, they taste it as normal; if they eat fresh garden produce, they taste that as normal.

I take a different line to my colleague Christine May on hospitals. We could do more in hospital food procurement. People are at their lowest ebb when they are in hospital. When they are sick, we should provide them with the best and most nutritious food that we can. Call me old-fashioned, but I think that that is sometimes done by a cook in a kitchen downstairs producing food when people are looking for it—it should be fresh, warm, wholesome and locally sourced. We can do more in that area and we must continue to look at ways to do so.

I will support the amendment in the minister's name. I welcome the steps that have been taken by the Executive, but none of us in the chamber can be complacent. We all need to look to ourselves and our local authorities to find out what we can do collectively to encourage local production and ensure that we have a viable local industry, whether that is in farming, building or any other service, so that we can have local procurement. I encourage the Executive to keep pushing the boundaries as far as it can.

John Scott (Conservative, Ayr)

This has been a worthwhile debate on green procurement. Despite the rather awkward title, like Murdo Fraser, I congratulate the Scottish Green Party on raising the subject. Richard Lochhead noted the breakout of consensus.

As Murdo Fraser said, I will speak mainly about food procurement, as it is a subject close to my heart and is one on which I declare an interest—I refer members to my entry in the register of members' interests.

It is appropriate to reflect on the success or otherwise of existing Executive general procurement policies. Conservatives feel that more could and should be done, particularly for small businesses in Scotland, to reduce the red tape in the process and to give them greater ability to tender for contracts. Donald Gorrie noted that too.

The McClelland report noted the well-intentioned Executive progress in public procurement, including the e-procurement Scotland service, but concluded that collaboration within organisations and across sectors had not been completely effective and had to improve. Patrick Harvie, George Lyon, Richard Lochhead and Murdo Fraser all referred to that. Nowhere is that more true than in public food procurement.

Going back to May 2004, Andy Kerr announced the sustainable food and catering procurement guidelines at the "Delivering Change" conference. The guidelines essentially instruct public purchasers, including schools, hospitals and prisons, to buy fresh, seasonal, quality-assured produce when negotiating for catering contracts.

In Shiona Baird's debate on supporting local producers on 4 May 2005, I raised public food procurement and the minister Lewis Macdonald responded positively. He highlighted research that the Government appeared to accept would help to break down barriers to local food procurement but, sadly, nothing much has happened since then, notwithstanding George Lyon's claims and Christine May's peninsula of excellence. I say to the minister that guidance is not delivering as well as it could.

In June 2006, the Environment and Rural Development Committee emphasised in its report on the food supply chain the need for the Executive to provide more encouragement in the area. Robin Harper referred to that. However, progress has been glacial. In autumn 2006, I raised local food procurement through motion S2M-4590 at a members' business debate. The motion was supported by 35 members throughout the chamber, who acknowledged that farmers markets are just the starting point in local food procurement.

Consensus exists in the Parliament to do something, as the minister acknowledged. There is consensus that local food procurement for local people must happen as it does in the East Ayrshire project. I hope that today's debate will bring that a stage nearer, as Richard Baker reflected. A way needs to be found to bring suppliers and purchasers together for the benefit of consumers and producers alike. One way to achieve that lies in proposals that have been lodged by the Scottish Agricultural Organisation Society with the Scottish Executive Environment and Rural Affairs Department.

The minister knows that I had extensive discussions with SEERAD staff on how to enhance food networks to match up businesses of all sizes with the demands of different consumers. In addition, the cross-party group on food produced a paper on local food procurement, particularly through local food co-operatives. That model could be adopted and expanded into a national procurement network that supplies many more customers.

If we are really serious about local food procurement, centralised warehousing and distribution systems will be required in the long term with suitable transport capability. That should progress on a co-operative basis, using the SAOS as an adviser, because it has the established expertise to deliver such a national scheme. Christine May apparently supported that.

Local food procurement is an idea whose time has come—indeed, it came some time ago. We need action now to benefit consumers and producers alike, as well as to reduce our ecological footprint and provide more, healthier and fresher food for the people of Scotland. I ask members to support our amendment.

Christine Grahame (Scottish National Party, South of Scotland)

The SNP welcomes the debate, which has been, in the main, consensual, apart from a tiny hiccup from Christine May. I commend John Scott on his noted appearances at Ayr farmers market—my sister keeps me in touch with that.

We will not support the Conservative amendment; notwithstanding my colleague Richard Lochhead's comments, we will abstain on it. Although its sentiment is correct, it would delete worthy points from the Green motion—for which we thank Mark Ballard—which we will support. We will reject the Government amendment, because although there are also some good words in it, we agree with Patrick Harvie that the Executive's good-practice guidance is not being taken up throughout Scotland, notwithstanding the shining example of the kingdom of Fife.

Patrick Harvie and others mentioned the Schools (Health Promotion and Nutrition) (Scotland) Bill. Although we on the Communities Committee have received evidence from the Soil Association about good practice in East Ayrshire, issues about bulk purchasing, which have been addressed by others in the chamber, have been raised by the Scottish Consumer Council. Bulk purchasing flies in the face of purchasing locally. I will speak about value for money shortly, because I want to examine the dividends from local purchases that other members have mentioned, which include employment, quality, freshness and the carbon footprint.

Sticking with food for the moment, we must make children aware of where their food comes from. It does not simply come from the freezer and the microwave; it was something else before it got to the freezer, and we can do things other than microwave it. Some children do not even know where eggs come from. We have to educate children so that they know what they are eating. That is important for the good of our society.

From food to fabric. Patrick Harvie raised issues about buildings, which were also touched on by Robin Harper. I would like builders to access local sympathetic materials. I am weary of the ugly march of the ubiquitous Legoland houses that are a blight on the landscape. Let us see builders purchasing locally and building with materials that are sympathetic to the landscape, as they used to.

That was a short digression. I return to the mantra of value for money. I would like the minister to define value, which was also mentioned by Donald Gorrie. It is not just about money. For example, Orkney Islands Council tries to purchase as much as possible locally in the interests of the sustainability of the Orkney Islands community. To the best of my knowledge, the national health service in Wales also endeavours to purchase its food locally. I fear that, in Scotland, the Government considers the cost of everything but not the value. Local authorities and NHS boards are paranoid about being prosecuted under EU regulations. I agree that that mindset must be challenged. I am not talking about working our way around the rules; I am talking about using the rules to our advantage.

In that regard, I will give an example of bad practice, featuring Scottish Borders Council and NHS Borders, which cancelled a long-standing contract for stationery and overprinting and gave the contract to a company in France. Apparently, that represented value for money, but what was the cost? It was more than 30 local jobs—30 people who are now out of work. That is not joined-up thinking, nor is it value for money.

George Lyon (Liberal Democrat, Argyll and Bute)

This has been a good debate, with reasonable consensus around the chamber about the need to go further in green procurement. Patrick Harvie highlighted the key issue, which is the need to use the spending power of the public sector to drive forward that agenda. We must be seen to lead on this agenda.

Richard Lochhead highlighted another key issue when he said that increased demand from the public sector for sustainable products will help to lower their cost. That is key in terms of the cost of solar panels, small renewable energy generators and so on. If we can increase the demand for all those products, which currently add a lot to the basic cost of building a house, their cost will come down rapidly, which will make them more affordable and ensure that they deliver best value for money.

Richard Lochhead (Scottish National Party, Moray)

Will the member give way?

George Lyon (Liberal Democrat, Argyll and Bute)

I have not got a lot of time, so if Richard Lochhead does not mind, I will address other points that were made in the debate.

Murdo Fraser and John Scott highlighted the problems that small and medium-sized enterprises have in bidding for contracts—many enterprises opt not to bid because of the complexity and difficulty of the procedure. We have acknowledged that that is a problem and that opportunities to consolidate and co-ordinate the process exist, which is why we are currently working to set up a procurement portal that should open up opportunities for small and medium-sized enterprises. We are working with the Confederation of British Industry Scotland, the Scottish Chambers of Commerce and the Federation of Small Businesses on standardising the documentation that is used in the tendering process to try to ensure that their members get access to bidding on contracts.

We all want to ensure that we use taxpayers' money wisely to deliver high-quality and cost- effective public services. In other words, we want procurement to deliver value for money. It is important to accept, however, that that is not about what costs least; it is about delivering good value as sustainably as possible. One of the best ways in which to achieve that is by ensuring that policy and guidance reflect best practice, which should be shared among all those who need to interpret and apply it. To that end, the Executive's website is a valuable resource: advice there clearly states how and when environmental and social criteria can be included.

The motion suggests that our guidance should be mandatory and that we should instruct local authorities and public bodies accordingly. As our guidance explains, environmental criteria may be taken into account to the extent that they are relevant to the particular contract. The relevance of the criteria vary from contract to contract, which is why I remain to be convinced that a mandatory approach would be appropriate.

Karen Gillon said that we cannot be complacent. We are not, which is why the Executive is committed to producing a Scottish sustainable procurement action plan later in the year. That plan will build on our achievements and take into account the outcomes of the United Kingdom sustainable procurement task force and the recommendations in John McClelland's report. Continued work with the bodies that I mentioned earlier will help us to make further progress towards mainstreaming sustainable procurement throughout the public sector.

I believe that there are benefits to be gained from the Executive's approach—we have already delivered some successful outcomes. For example, 100 per cent of the Executive's electricity comes from renewable resources, 70 per cent of all of the stationery products that were used by the Executive in 2006 were environmentally preferred options and all our general office copier paper is manufactured from 100 per cent recycled materials. Furthermore, all Scottish school public-private partnership projects have now to follow new policy guidelines that have been issued by the Minister for Environment and Rural Development, which state that public sector building should contain a minimum of 10 per cent recyclate in its construction.

The Executive will continue to lead from the front in securing green procurement across the public sector. Our track record demonstrates the progress that we have made and the lead that we have given. Therefore, I ask members to support the amendment in our name.

Eleanor Scott (Green, Highlands and Islands)

This good debate has shown that a consensual debate can still be interesting and enjoyable. It has allowed members to air their own procurement interests; for example, it has allowed Patrick Harvie to mention IT, Robin Harper to mention school kitchens and John Scott to mention food procurement, in which he has an on-going interest. I will, therefore, spend a minute ranting about paper, which George Lyon touched on in his closing speech.

Scotland consumes about 1.5 million tonnes of paper a year and far too much of it—about half—is made from trees, all of which are grown in other people's forests. Forest degradation is a major contributor to climate change on the planet, so we have a global responsibility to reduce our footprint on other country's forests. The best way to do that is to use recycled rather than virgin paper. Only a few sorts of paper need to be made from tree fibres and those that are should be recyclable. Each fibre should have nine lives, like a cat—legal paper, then office paper, then the other side of office paper, then recycled office paper, then the other side again, then magazine paper, then newspaper paper, then newspaper paper again, then loo roll. All toilet roll and tissues should be made of 100 per cent recycled fibres. There is no excuse for flushing virgin tree fibres down the loo.

Recycling paper uses much less energy than producing paper from virgin fibre—between a sixth and a third less, depending on the type of paper. It requires less than half as much water, produces far fewer greenhouse gases, emits a tiny fraction of the toxic chemicals to air and water and is, generally, much less damaging to the environment.

Christine May (Labour, Central Fife)

Is the member familiar with the project at Smith Anderson Packaging in my constituency in Fife, in which juice cartons are recycled to produce suspension folders that are used for filing in places such as the Scottish Executive?

Eleanor Scott (Green, Highlands and Islands)

That is another example from the "peninsula"—or, possibly, kingdom—"of excellence", which Christine May spoke about earlier.

We have made a splendid effort in increasing the amount of paper that we recover instead of sending it to landfill. That is excellent, except that it is not recycled here but is increasingly sold to China for reprocessing—five times as much now as was the case four years ago—because we have fewer than 2,000 reprocessing facilities in Scotland. That makes no sense. We must encourage reprocessing in Scotland, and the best way to do that is to support the market for recycled products. Public procurement has a big part to play in that. Just think how much paper the public sector uses. It is not enough to chuck our paper into the recycling bin; we must close the loop by buying recycled paper.

George Lyon praised the Executive's record on green procurement. Actually, that record is not too bad—although it could be better—but that is not really what we are getting at. Our concern is what happens in other public bodies. In the debate, we are not arguing with Executive policy; we are agreeing with it. We are asking the Executive to put its heart and soul—and, maybe, a small amount of extra resources—into making its vision happen. The green aspects in the procurement policies in the Executive's website and the best-value toolkit are aspirational in tone but weak in detail. In contrast, the EU's guidelines on sustainable procurement give examples of writing green issues into contracts.

George Lyon (Liberal Democrat, Argyll and Bute)

I accept that we can strongly drive the agenda within public agencies, but we must acknowledge that local authorities are self-standing bodies. We need political buy-in at that level to ensure that the agenda can be delivered. The McClelland report and the discussions that McClelland is having with local authorities are important in trying to get agreement on how we implement and mainstream green procurement throughout the Executive and public agencies.

Eleanor Scott (Green, Highlands and Islands)

I agree, but local authorities look to the Executive for political leadership on the matter.

Sustainable procurement is covered in chapter 7 of the best-value guidance, so we have read six chapters before we get to it. It states:

"This means ... That 'quality of life' indicators are identified to measure performance in contributing to the achievement of sustainable development and reported to the public."

The problem is that that is very aspirational. It is not practical and not specific.

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

Does Eleanor Scott agree with my comment about corporate social responsibility? Does she agree that offering rewards to businesses is one way to encourage what she is talking about?

Eleanor Scott (Green, Highlands and Islands)

I do not disagree with that.

George Lyon talked about a suite of guidance, but it is not a matching three-piece suite. It is more like a lot of bits and pieces that have been collected over the years. Although I am in favour of recycling, it is now time to replace those things, so I welcome the idea of a procurement portal.

At present, a procurement officer who wants to improve his or her green buying practices needs extraordinary personal dedication and initiative. We heard about some examples, but the fact is that they are just examples. Everybody looks at the East Ayrshire food example with awe and wonder as well as with admiration, but that approach should be the norm. We are asking not for something new but simply for the best to be rolled out everywhere. We need a culture shift towards green thinking in procurement—in our view that can best be achieved through mandatory social and environmental goals and a proactive Government strategy of support.

George Lyon said that we must consider the relevance of environmental criteria, but it is hard to think of a case in which environmental criteria would not be relevant. I would be interested to hear an example of a case in which environmental and sustainability criteria were not relevant.

We are not asking for anything unreasonable; we ask only that the Executive's stated goal of working towards sustainable development be helped, not hindered, by public procurement. Ultimately, if we are not spending public money for the wider public good, we are missing a trick. If we are serious about getting the best value for money in the long term, if we are serious about bringing down the cost of sustainable technologies, if we are serious about tackling climate change and improving energy efficiency and—crucially—if we are serious about putting our money where our mouth is, green procurement is a must.

Scottish ministers are great at talking the talk on sustainability, but far too often the reality of public spending fails to live up to their lofty rhetoric. Let us ensure that the money that is spent in our name is part of the solution and not part of the problem.

Scottish Water

Murray Tosh (Conservative, West of Scotland)

The next item of business is a debate on motion S2M-5510, in the name of Mark Ruskell, on Scottish Water.

Mark Ruskell (Green, Mid Scotland and Fife)

This debate is an opportunity for all of us in the chamber—apart from the Tories—to restate our commitment to public ownership and control of Scottish Water and to welcome its improved performance in recent years. The number of complaints has dropped by a fifth in the past two years, whereas the number of complaints south of the border has increased by a tenth this year alone. That speaks volumes.

Dave Petrie (Conservative, Highlands and Islands)

Does the member agree with the water industry commissioner's report that, for every million gallons of expensively treated water that is produced, half a million gallons leak from our pipes? Our sewers are flooding with non-statutory surface water. Does the member accept that, under the charging system, the required improvements are not achievable within an affordable system?

Mark Ruskell (Green, Mid Scotland and Fife)

I argue that the regulatory system is at fault. We can trade figures throughout the debate, but South West Water's charges for the coming year will be 40 per cent higher than those of Scottish Water's charges. The Tories' amendment mentions the Welsh Water model, but its annual charges are 15 per cent higher than those of Scottish Water.

There is considerable room for improvement, and this morning's debate is a chance to expose where the weaknesses lie in regulation of the public utility. Those weaknesses mean that the vultures are circling, waiting for the pressure for further privatisation to mount before they move in. We must be mindful of the pressures as we enter a new programme of investment that will place new challenges on the industry.

The debate also gives us a chance to discuss the Welsh model of mutualisation, which looks and smells like public ownership but will lead to an inevitable drift towards full privatisation. Why would the Tories push such a Trojan horse into the debate, other than to tempt waverers such as Christine May?

The Greens reluctantly supported the Water Services etc (Scotland) Bill. We understood the context whereby the neo-liberal pressure of the World Trade Organization led to pressure on the European Union, which eventually led to a United Kingdom competition act. That left the Scottish Executive with no option. A limited form of privatisation of the handling of business customers was the least bad option and was better than the prospect of multinational corporations carving up the Scottish water industry in the courts to suit themselves.

However, we voiced concerns then—we voice them again now—about the remit of the water industry regulator and the methods that are used to regulate our industry economically. A public utility is being regulated as if it were a private corporation. The primary functions of Scottish Water must be sustainable development in its three strands: the delivery of an enhanced environment, a fair price to citizens for a basic need and the delivery of economic health to the country as a whole.

Although Scottish Water has a duty to deliver sustainable development, the Water Industry Commission for Scotland does not view the world through the same lens. There is a mismatch. Ministers are clear about objectives and Scottish Water plans what it has to do to meet them. The Scottish Environment Protection Agency and the drinking water quality regulator for Scotland are focused on the objectives too, but the WIC makes the final determination on the grounds of market economics and efficiency. It primary focus is the delivery of the lowest cost. The arbitration of any determination that the WIC makes goes not to ministers but to the Competition Commission—a body whose world view is also narrowly focused on issues of market efficiency rather than on the delivery of long-term public objectives.

In recent months, a new role emerged for the WIC. As a champion of privatisation, its chair, Sir Ian Byatt, talked on 5 June last year about leakage and the "dilemma" that regulators face. He said:

"should they act as agents of ministers, or should they have a role in protecting customers against policies that are cost ineffective?"

There is a thought—let us protect the voters from the crazy policies of the Government that the voters elected.

Alex Johnstone (Conservative, North East Scotland)

Hear, hear.

Mark Ruskell (Green, Mid Scotland and Fife)

A blow for democracy over there.

The view was also reported that Scottish Water should be freed from state ownership, but that was apparently a misrepresentation of the WIC's view. Perhaps that is why it felt it necessary to get its message across by employing a team of lobbyists, presumably to battle the lobbyists that are employed on the other side by Scottish Water. I know that some competition has been introduced to the water industry, but I do not think that that is the kind of competition that ministers were thinking of. The two bodies certainly do not operate within the same framework to deliver long-term public objectives.

Let us examine a particular quality issue that was raised by the chair of the WIC. Because of leakage, consumers pay for twice as much water as they receive. Leakage creates a cost not only to consumers but to the environment, but we have a regulatory mechanism that uses the regulatory capital value method, the result of which is that it is more profitable to pump water through the system than it is to repair the system as a revenue cost.

It is Scotland's water, not the WIC's. There are models of publicly accountable water delivery, such as Stockholm Vatten, that put public sustainability objectives first. We should benchmark Scottish Water against such models rather than against a private model of water delivery from England that has led to the scandal of billions of pounds being siphoned off for shareholders' profits.

The role of the WIC should be brought into line with those of ministers and Scottish Water. Economic regulation is vital, but it should not sit as the overarching framework for public service delivery. That framework should be sustainable development, which will deal with our needs and those of our children and their children to come, rather than the short-termism of the market. That is the right vision for our public services.

I move,

That the Parliament notes growing pressure for Scottish Water to be privatised; further notes the substantial improvements that have been made in Scottish Water's performance, all of this having been achieved while keeping Scottish Water in the public sector; notes the Water Industry Commission's lack of a wider social and environmental remit and its use of a regulatory model more suited to a private utility than to a public one; considers that improving the service, upgrading the water and sewerage system, reducing leakages and ensuring effective regulation should not centre on short-term efficiency measures but on the quality and safe delivery of services in the long term, and affirms its commitment to keeping Scottish Water under public ownership and control.

Sarah Boyack (Labour, Edinburgh Central)

I very much welcome the debate. We have systems of managing our water networks in Scotland that are different from those in the rest of the United Kingdom. That is a result of our policies and the ability to deliver them through this Scottish Parliament.

Mark Ruskell's motion notes the substantial improvements that Scottish Water, operating in the public sector, has delivered. I go further in my amendment by welcoming those improvements. Scottish Executive policies have transformed our water industry into a more effective and efficient organisation that delivers improved performance for less money.

Mark Ballard (Green, Lothians)

Will the minister take an intervention.

Sarah Boyack (Labour, Edinburgh Central)

No thanks. I want to get started.

We have a unique model: it is a third way that provides a public sector company that is directed by ministerial policy, that has an overarching requirement for sustainable development and which is regulated and benchmarked against the private sector. Scottish Water reinvests in water the efficiency savings that it makes.

It has been a challenging time for Scottish Water. We pulled together three separate water authorities into a single operation. We transformed the services that it has delivered to 2.2 million households and 136,000 business customers through improved operational practices and a £1.8 billion investment programme, which was supported by £600 million of borrowing from the Executive.

Other countries have been interested in the model in Scotland. South Africa was very interested and sent representatives to Parliament to meet one of my predecessors, Lewis Macdonald, and to see how the public company and regulation system worked together. Northern Ireland was also very interested in our approach. The model is unique to us in Scotland, but it has worked.

Dave Petrie (Conservative, Highlands and Islands)

Does the minister accept that in all Scottish Water's new works it is in partnership with private companies such as Miller Group, Babtie Group and so on and that, therefore, Scottish Water is already partly privatised?

Sarah Boyack (Labour, Edinburgh Central)

No. Scottish Water is using private companies to deliver our investment programme, which is set by Scottish ministers. It is using the best system of delivery. It is not a private system. Scottish Water is using companies that are directed by the public sector. We see that throughout Scottish investment, which is a good thing.

Let us consider the unprecedented levels of cost reduction that the partnership has been able to deliver in Scotland. The Water Industry Commission has calculated that savings of £946 million in operational and capital costs have been made. Those are unprecedented levels of efficiency, even for the water industry in the public sector. The savings equate to £211 in the average household bill in Scotland over the four years. Those are important savings for people who need to know that Scottish Water is spending our money properly.

Jim Mather (Scottish National Party, Highlands and Islands)

Will the minister take an intervention?

Sarah Boyack (Labour, Edinburgh Central)

No, thank you. I want to get on.

That means that Scottish Water is delivering more for less. Our constituents are benefiting from lower charges, Scotland is benefiting from improvement in the environment and drinking water quality and, crucially, our economy is benefiting from a better service being delivered more efficiently. Those achievements are good news and we should pause to congratulate Scottish Water on its successes, which have been delivered by a focused and determined management and dedicated staff. They have shown that our model for the water industry, operating in the public sector, can match the performance of the very best of the private sector.

Mark Ruskell's motion displays a fundamental misunderstanding. He is wrong to assume that such improvements can be delivered without the system of robust economic regulation that this Administration put in place, which was approved by Parliament, with the support of Mr Ruskell's party. In the stage 3 debate on the Water Services etc (Scotland) Bill, Mr Ruskell said:

"The delivery of water services in Scotland is about striking a crucial balance between the economy, the environment and social justice. Those three drivers need to be at the heart of the development of our water services. I am content that the bill offers a structure to enable that balance to be struck and controlled by the Parliament."—[Official Report, 9 February 2005; c 14378.]

That is what we have—the correct system of regulation for Scottish Water. It achieves the maximum affordable improvement in public health and standards of environmental protection by improving our drinking water quality and the quality of discharges to the water environment. It supports housing and economic growth throughout Scotland through investment in new strategic water and sewerage capacity. It delivers those outcomes with a capital programme that means that we will get delivery over the next few years and that water charges will remain affordable. That is what customers want, that is what the people of Scotland want and that is what Parliament voted for.

I move amendment S2M-5510.2, to leave out from first "notes" to end and insert:

""welcomes the substantial improvements that have been made in Scottish Water's performance, all of this having been achieved while keeping Scottish Water in the public sector; recognises that the objectives set by ministers for 2006-14, which properly recognise the social and environmental priorities of the Scottish Executive, will not only deliver further improvements in drinking water quality, environmental protection, and customer service but also

relieve development constraints, upgrade the water and sewerage system and reduce leakages; recognises that the role of the Water Industry Commission for Scotland is to assess the lowest reasonable overall costs of delivering the objectives that ministers have specified, taking account of appropriate external benchmarks, and affirms that Scottish Water operating in the current regulatory framework will go on to deliver further improvements in this vital public service."

Murdo Fraser (Conservative, Mid Scotland and Fife)

We started this morning with a consensual debate on procurement from the Greens. I am disappointed that this debate will not produce the same cross-party consensus, but I am pleased that the Greens have acknowledged in their motion the growing pressure for privatisation of the water industry—a cause that we have championed for many years. I am delighted that it has been acknowledged that the campaign on water that we have been leading is attracting support from other quarters. People such as Sir Ian Byatt, Sam Galbraith, the former Labour minister, and Jo Armstrong, the former adviser to the First Minister, are all queuing up to support our calls for the privatisation of Scottish Water. I am delighted that the Scottish Green Party has acknowledged the fact that we are winning friends.

Mark Ruskell said that Scottish Water had made some improvements, which I acknowledge. Six years after its creation, we have seen one year of improvements in Scottish Water. I pay tribute to the chairman, the board and the staff of Scottish Water for making that possible, but Scottish Water is still not doing as well as it should be doing and for the past five years it has woefully let down too many people in Scotland.

Businesses have been overcharged. In February 2005, the Executive admitted that Scottish Water had overcharged businesses in Scotland by £44 million a year. In comparison with many companies down south, businesses in Scotland are still paying far too much for their water and are being put at a competitive disadvantage.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

Is the member aware that Banff and Buchan College's Peterhead centre, which is in my constituency, has just received a bill for £39,000, which represents use of 20,000 tonnes of water? That is, of course, down to the private sector company that has been hired by Scottish Water, which read the meters so inefficiently and incorrectly. Is one of the advantages of having private sector companies engage with the public that we can see that they are capable of making errors at least as great as any in the public sector?

Murdo Fraser (Conservative, Mid Scotland and Fife)

I am sure that the private sector will make errors in many cases.

I was going to talk about the Welsh Water model, which of course has support from Mr Stevenson's colleagues. If I remember correctly, his colleague Mr Gibson, who is sitting beside him, lodged a motion in 2005 praising the performance of Welsh Water, which was and is the top-performing private water and sewerage company in England and Wales. Perhaps we need a bit of consistency from the Scottish National Party.

The problem with Scottish Water is that there are still inefficiencies in the system. Mark Ruskell did not mention development constraints, perhaps because the Greens do not really care about development. Such constraints continue to be a major problem and hold up development of the Scottish economy. We need to get more capital investment from Scottish Water.

The Office of Water Services—Ofwat—report from last March ranked Scottish Water behind every one of the 22 private water companies south of the border. Yes, its performance has improved in the past year, but it has not improved enough and it needs to do more. It is a pity that the conclusion that the Greens drew in their motion, that Scottish Water needs to remain in public ownership, is a complete non-sequitur in the situation that we face.

As members know, our proposal is to follow the Welsh Water model. It is a not-for-dividend model, where profits are reinvested. Need I remind members that Welsh Water is the best performing water company in the United Kingdom? It is efficient, it delivers high water quality and it delivers high levels of investment, because it can borrow money on the money markets. We do not mutualise Scottish Water purely because of the blinkered ideology of the other parties in this chamber. It is time to put the needs of the Scottish economy and the needs of water customers before dogma and to move ahead to mutualise Scottish Water.

I move S2M-5510.1, to leave out from "further notes" to end and insert:

"believes that Scottish Water is failing its customers because it is inefficient, misallocates resources, overcharges customers, particularly businesses which were overcharged by £44 million every year, and holds back much-needed development; further believes that Scottish Water must be removed from state control and transferred into a 'not-for-dividend' organisation in line with Welsh Water, and considers that this would enable Scottish customers to benefit from the lower costs and higher levels of service enjoyed by their counterparts south of the Border."

Rob Gibson (Scottish National Party, Highlands and Islands)

If we are to believe Murdo Fraser, privatisation is built into the model that has been delivered by the Scottish Executive. He also wants us to believe that the mutual model that he supports is a private sector model, but, in fact, mutual models such as not-for-profit trusts are not private sector models. Indeed, in the case of United Utilities, it is all the subcontractors that are doing the work and, yes, they are the ones that are making the profits. We need to mutualise the subcontractors as much as the company itself.

The SNP has a fundamental problem with the model and the way in which its accountancy system has been set up. The Finance Committee's minority report of a couple of years ago, which Jim Mather led, confirmed that accountancy method and identified

"a pattern of obfuscation and deceit on the part of the Executive and the WIC, attempting to confuse and make acceptable the unacceptable suggestion that the strategy was justified because it complied with resource accounting and budgeting; because it was in line with free cash ratios elsewhere and regulatory current value; or because the Treasury said that it was okay."—[Official Report, 2 March 2006; c 23714.]

How can a public water system, in any form, be compared with a private water system? If a water system is truly public, it cannot be compared in that way.

Let us consider the question of borrowing. Why should borrowing for a public company have to follow the private model? Publicly owned bodies such as Scottish Water might have different sources available to them, which are not available to private firms. It is up to the Government to ensure that that is possible. Given the fact that Scottish Water is passing back £162 million of borrowing requirement that it had last year for the Government to recycle into other projects, we must question the accountancy method that is being used.

On the question of improvements in performance, as I said, we must compare like with like. There is no guarantee that the model that the SNP prefers is the one that Labour wants to maintain. Labour—which may be in a minority Government, supported by the Tories, at some time in the distant future—could easily find Scottish Water to be the sort of body that it could sell off to make some quick cash to invest in a project. That is the danger that is built in, and we must change it.

Sarah Boyack (Labour, Edinburgh Central)

Would Rob Gibson like to explain specifically what model the SNP supports and how it would deliver that?

Rob Gibson (Scottish National Party, Highlands and Islands)

Certainly.

Murray Tosh (Conservative, West of Scotland)

You have one minute.

Rob Gibson (Scottish National Party, Highlands and Islands)

We need a Government that is prepared to direct the process to the WIC and Scottish Water and which sets priorities that can be achieved by the accountancy model that we want to have in place. Mr Mather will explain in detail how we should achieve that. The economists know how to do that, but the present Government does not employ them.

The WIC has been trying to achieve a lot of short-term hits and has not been investing in the long term. Why should existing customers pay 86p or more in the pound for every pound that is invested in the water infrastructure? That is a crazy model of accountancy that provides customers, whether businesses or residents, with water that is far too expensive.

I turn to a classic example of why the system has not worked, concerning leakages and smells.

Murray Tosh (Conservative, West of Scotland)

Your time is up.

Rob Gibson (Scottish National Party, Highlands and Islands)

There is a large sewage plant at Seafield that affects 30,000 people because of the unbearable smells that come from it in the summer.

Murray Tosh (Conservative, West of Scotland)

Mr Gibson, you must wind up.

Rob Gibson (Scottish National Party, Highlands and Islands)

I am winding up.

The Green party motion suggests that it is possible to have the current model and, with direction, ensure that it works.

Murray Tosh (Conservative, West of Scotland)

I am sorry, Mr Gibson, but you must stop now. You are way over time.

Andrew Arbuckle (Liberal Democrat, Mid Scotland and Fife)

On the way to Parliament today, I was, for a short time, critical of Scottish Water. There was a hold-up in the traffic, and it was only when I read the explanation as I approached the traffic lights that I discovered that Scottish Water was laying yet another new water main. If it is not laying new water mains, it is installing replacement sewers; if it is not making one improvement, it is making another. The reality is that it is far more usual to encounter roadworks caused by Scottish Water than it was back in the days when the local authorities were responsible for that public utility.

Last week, David Davidson—who, I am sorry to see, is not here today—described me, in a mean and thin comment, as not knowing whether I wanted to be an MSP or a councillor, without realising that there might be benefits to seeing government at two levels. In preparing for today's debate, I came across the former Fife Regional Council's capital plan for water and sewerage from some 20 years ago. Iain Smith—a colleague at that time—said that I was a sad person to keep such documents. As a good Liberal Democrat, he had recycled his copies of them, but I have kept mine. Those were the days when the Tories capped capital expenditure by the council and, after we had fulfilled our statutory obligations, there was little left in the local authority pot for upgrading the water supply network or carrying out work on sewage treatment plants.

Mark Ruskell (Green, Mid Scotland and Fife)

Will the member give way?

Andrew Arbuckle (Liberal Democrat, Mid Scotland and Fife)

No. I have only four minutes; otherwise, I would.

Twenty years ago, the total proposed capital spend on water services and sewage works in Fife was some £5 million, which did not go far towards replacing much of the pipework that had been laid by our Victorian predecessors. Based on using the usual multiplier of 10 to get a Scottish figure for that time, the investment in water and sewerage services for the whole of Scotland could only have been about £50 million annually. Even allowing for inflation over the following two decades, that is a tiny, insignificant sum compared with the capital programme of Scottish Water today—£1,800 million in the first four years of Scottish Water's operation and another £2.5 billion in the current four-year period. One of the brakes against more investment is the ability of our civil engineering industry to deliver more works effectively and, in financial terms, efficiently.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

Will the member take a 10-word intervention?

Andrew Arbuckle (Liberal Democrat, Mid Scotland and Fife)

I do not believe that Stewart Stevenson has ever made a 10-word intervention, so I will not take it.

Mark Ruskell (Green, Mid Scotland and Fife)

Will the member take a five-word intervention?

Andrew Arbuckle (Liberal Democrat, Mid Scotland and Fife)

No.

A comparison shows just how much the water industry has been transformed in the past two decades. In 1987, some £16,000 was allocated for water treatment in Fife. I ask members to compare that figure with the £220 million that is allocated in this year's Scottish Water budget for improving water quality.

Mark Ruskell (Green, Mid Scotland and Fife)

Will the member take a four-word intervention?

Andrew Arbuckle (Liberal Democrat, Mid Scotland and Fife)

Yes.

Mark Ruskell (Green, Mid Scotland and Fife)

Mutualisation: yes or no?

Andrew Arbuckle (Liberal Democrat, Mid Scotland and Fife)

I think that Mark Ruskell was in the chamber when Ross Finnie gave a definitive figure for the implementation of that. However, I agree with Mark Ruskell that the vast majority of Scots do not want to see water services being privatised. They do not want to see them as a profit-making vehicle for a company whose shareholders' preferences come before its ensuring good water supplies and effective treatment.

I do not deny that there is a great deal to do. Like most members, I handle complaints and requests from the public who have concerns about the delivery of water. Nevertheless, it must be remembered that we have raised the bar in terms of the quality of the water that is both going in and going out. We politicians should quietly consider whether, following two major reorganisations in the Scottish water industry in recent years, we should allow a period of consolidation. We should not spark uncertainty in the organisation and its staff over the possibility of yet another major shift, especially when Scottish Water is in the middle of delivering a major investment programme. We should allow Scottish Water to settle down and deliver its ambitious forward works.

Maureen Macmillan (Labour, Highlands and Islands)

There is no pressure to privatise Scottish Water coming from this side of the chamber. Scottish Water is a publicly owned company that is subject to tight regulation to ensure economic rigour, environmental rigour and drinking water quality. Its social remit is determined by Executive ministers under the scrutiny of the Parliament. That is why, for example, funding is being provided by Communities Scotland to support water and sewerage infrastructure for affordable housing in rural areas and why there is protection for those who are on low incomes. The economic regulator ensures that those social goods are delivered efficiently; he cannot change the policy.

Scottish Water was set up as a publicly owned company so that private water companies could not cherry pick the easy-to-deliver or affluent areas of Scotland and abandon remote rural communities, many of which exist in the area that I represent. That was a real fear at the time when the former Transport and the Environment Committee, in the first session of Parliament, was debating how the whole of Scotland should be served. We considered all the possible models for the new Scottish Water, which was formed from three existing water companies, and decided that the public sector model would deliver best.

Alex Johnstone (Conservative, North East Scotland)

Why has the argument about cherry picking and services for remote rural areas not been an issue in Wales?

Maureen Macmillan (Labour, Highlands and Islands)

The situation in Scotland is different from that in Wales. Wales might have some rural areas, but Scotland has some very remote rural areas.

Scottish Water's objectives are challenging, whether they are about improving the environmental status of rivers and coastal waters; tackling odour from sewage farms; tackling development constraints; or dealing with leakage from the existing infrastructure. Correspondence on most of those matters has filled our postbags from time to time and we have all been robust with Scottish Water when we have perceived its failings. Concern about leakages, however, has not featured in my postbag, yet loss of water that has been treated to the highest possible standard is a waste of resources. Climate change will mean that we have to address that as a matter of some urgency.

We are not taking into account properly the need to conserve water. Even here in Scotland, demand outstrips our ability to supply water because, for example, of access difficulties to more remotely located potential reservoirs or because the local water is heavily peated and difficult to bring up to the required drinking water standard. Members might have noted the proposal to use Loch Ness as a reservoir for the Inverness area. Where will we find easy access to more water in other areas? It is crucial that we minimise leakage and take water conservation seriously.

The water framework directive requires Scottish Water to deal with leakage, but what can consumers do to conserve water? First, we have to educate ourselves. The east of Scotland is becoming drier, so we need to act now to prevent future long-term water shortages such as that which happened in Dundee in 2004. We must stop the ever-increasing rise in household water consumption and the consumption of high-quality and expensively treated drinking water for washing dishes and clothes, flushing toilets, watering gardens and so on. Producing such high-quality water takes a lot of energy, and we need to be more considerate about how we use it.

Households waste most water by leaving on garden sprinklers. People should get a water butt; large house and garden stores stock them and more and more people are buying them. Some water butts can be plumbed into the toilet or washing machine. Water tanks can be set into the ground to collect run-off from a driveway. We must consider how future homes and businesses can be water efficient as well as energy efficient.

According to a survey by LogicaCMG for Waterwise, 60 per cent of Scots actively look for ways to reduce water consumption and 80 per cent believe that a Government campaign would help them to be more water aware. Perhaps the minister will consider launching a campaign.

Jim Mather (Scottish National Party, Highlands and Islands)

As we have heard, the United Kingdom water industry is privatised in England, mutually owned in Wales and publicly owned in Scotland. As a result, there is no Westminster funding for Scottish Water, and the Executive's solution has been to try to make Scottish Water largely self-funding. The problem is that the situation has arisen at the same time as a combination of 100 years of neglect of the water infrastructure coming home to roost and European Union directives landing on us.

In the process, the Executive has created a cash cow out of Scottish Water. It has deviated from the sound financial principle of net new capital investment being funded from borrowing. If that principle is breached, we are asking today's customers to subsidise tomorrow's customers; that is why John Swinburne supported the minority report in the Finance Committee. It also risks damaging high prices that erode competitiveness. As I said, the Executive has created a cash cow.

In April 2003, I took a phone call from a silversmith on Mull, who told me that his water bill of £70 was about to rise to £400. That was when we triggered the Finance Committee to act and called on Jim and Margaret Cuthbert—Jim is the former chief statistician at the Scottish Office and Margaret is a senior economist—to get involved with the committee on the project. They brought to light the errors, overcharging and planned elimination of Scottish Water debt, and they had an effect. While the Finance Committee produced a majority whitewash report, the WIC had his wings clipped by having a water commission imposed upon him. The precipitate debt reduction was slowed; it was going to be £17 million by 2016, but that was flattened out. Charges were also flattened. The privatisation risk receded, or so we thought.

In the meantime, there has been a mammoth increase in charges, mainly for business customers. Lots of money was released back to the Executive to be released into other projects. There was the absolute embarrassment of the three years' financial accounts to 31 March 2005, which showed that 86.6p of every pound of capital expenditure was paid for by current water charge payers. On top of that, we had false economies and development bottlenecks all across Scotland.

The Cuthberts are now going further and saying that, in the period 2002-10, the overcharge will be something like £940 million. That has been denied by assertion by the Executive, by a majority of the Finance Committee and by the adviser to the Finance Committee; it has never been denied by proof.

Some responses to freedom of information requests now show co-ordination between the committee's adviser and civil servants to argue away the Cuthberts' points. One of the FOI responses from a senior civil servant says of paragraph 6 of Arthur Midwinter's report:

"The final sentence must make clear that the £32bn relates to the replacement cost not the current worth of the assets. I doubt we would find a buyer for SW if the price tag was £32bn!"

Scottish Water could be a key element in the competitiveness of all Scottish business forever: an unchallengeable, valuable, permanent, legitimate state aid. But what have we had? The limited borrowing continues; Professor Alexander has resigned; there have been more false economies; communities feel that they are being ignored and that development bottlenecks have been imposed on them; and the Scottish Executive inquiry reporters unit has been brought into disrepute. The situation looks right for privatisation. Charges are high; assets are being built up and improved; there have been massive tax losses; debt has been held down; and the system is designed to maximise future profits. The crisis of confidence in Scottish Water and risk are being talked up.

We should look at the results of the English water authorities. In the first nine years, 201 per cent of the face value of the shares was paid back in dividends. That is not going to happen here; it cannot happen here.

Frances Curran (SSP, West of Scotland)

I welcome the debate that the Greens have brought on water. The key word is "vigilance". The Scottish Socialist Party voted against the Water Services etc (Scotland) Act 2005 because it was a stepping stone to privatisation. It introduced competition into Scottish Water and forced it to set up a private arm—Scottish Water Retail—which is to act entirely separately from Scottish Water as an essentially private company within a public corporation.

The elephant in the room is that the Executive is in favour of privatisation; that is the real position. I do not accept Maureen Macmillan's point—

Mark Ballard (Green, Lothians)

On that point, does it strike the member as significant that while some of the words in the Green party's motion are incorporated into the Executive's amendment, the commitment to keeping Scottish Water in public ownership and control is missing?

Frances Curran (SSP, West of Scotland)

I agree completely with Mark Ballard. It is also missing from Jack McConnell's comments on the forthcoming Labour Party manifesto.

Maureen Macmillan (Labour, Highlands and Islands)

The member has seen the manifesto, has she?

Frances Curran (SSP, West of Scotland)

I have seen Jack McConnell's comments; he was asked to rule out privatisation.

The ideology is that the Labour Party believes in the market. I remember meeting the head of Scottish Water just after I was elected and asking him to justify BP Grangemouth, which uses more water than anyone else in Scotland, getting its water for almost half the price per unit that I or any member here pays. He tried to defend the idea by saying that BP Grangemouth is a big customer that brings in many millions of pounds per year, so Scottish Water gives it a discount. He said that BP Grangemouth could go elsewhere for its water, and I asked where it would go for that amount of water in Scotland. That is a political decision. If a company is not given the opportunity to go anywhere else, it has to buy from Scottish Water. There is a political ideology at the root of the situation.

Labour, in particular, agrees with that. Given that it appointed the members of the WIC—it is no secret that those members are in favour of privatisation and believe that it would be much more effective—Labour has appointed privateers to be advisers to the minister on Scottish Water. Should that not tell the Parliament something about the direction in which we are going?

Current customers are being forced to pay for the investment programme to improve the infrastructure so that Scottish Water can be privatised and floated on the stock market. Future profits are on the agenda.

Water is a scarcity in the world; there is a world shortage and that is driving up prices. Scotland has an abundance of water, and big companies that want not just to provide it to us, but to sell it internationally, are circling. The Executive has a political problem that is at the root of the debate. It cannot move openly and publicly in the direction of privatisation and state its intention, because there is massive opposition to water privatisation in Scotland, so it is trying to achieve its objective by stealth. The WIC is in favour of privatisation. Private companies have been introduced by the Water Services etc (Scotland) Act 2005. Scottish Water and private industry are setting up public-private partnership, private finance initiative and venture organisations. It is clear that the business lobby is circling, waiting to get the guaranteed profits of Scottish Water. That is at the root of the problem, and that is why vigilance is needed.

Those of us who are opposed to water privatisation need to ensure that the public know what is happening and that the Executive does not get away with hiding it behind measures such as the 2005 act. If water is a basic human right, it should not be sold for profit. That is an ideology to which I am happy to subscribe.

Chris Ballance (Green, South of Scotland)

Today we have heard members speak in support of keeping Scottish Water public, and against privatisation or mutualisation. I would like to introduce a further theme: democratisation. Scottish Water is compared with and benchmarked against the privatised companies south of the border, but there is no need for us to measure our vital water industry solely against water companies that were established by arbitrary acts of privatisation nearly 20 years ago.

The purpose of keeping Scottish Water public is to manage a public good in the public interest. In that respect, we could learn a lot from the Swedish approach. Stockholm water—Stockholm Vatten, or SV—has as its mission statement

"to meet the needs of consumers for water services; and to contribute effectively to ... sustainable development".

Among its goals are satisfied customers, resource efficiency and a healthy environment; returning a profit to shareholders does not feature. Stockholm Vatten is owned directly by the city of Stockholm and, although not national in scale, it serves a million people. The composition of the board and consultative groups assures active participation by service users in the decisions that the organisation takes. Despite its explicitly social and environmental remit, in 2004 SV was delivering drinking water at less than half the price at which it is delivered in most European cities.

All too often the public sector is criticised as an inefficient, unproductive behemoth, as compared with a lean, efficient, responsive private sector. There has been enormous pressure at global level to create a global water industry. One third of all World Bank loans are dependent on privatisation; huge amounts of United Kingdom and other international aid have gone into developing private water supplies around the world. A frequent claim is that, under the general agreement on trade in services, Governments can be prosecuted by the World Trade Organisation for disallowing private sector attempts to take over essential public services. Critically, however, privatisation of water has proved such a political hot potato that the European Commission has announced that it will exempt water from the new GATS. Sweden is subject to the same EU regulations and directives as Scotland. The same is true of the Netherlands, where in 2004 a law was passed banning private provision of drinking water.

Another reason that we should be wary of benchmarking Scottish Water too much with English water companies is that often they are not English water companies. Thames Water was owned by the German utilities giant RWE until last October, when it was sold to Kemble Water Ltd, which is a consortium led by an investment fund that is run by the Australian Macquarie Bank. Likewise, Wessex Water is owned by YTL Power International of Malaysia. Prior to that, it was the property of Enron. Are those the models that we wish to emulate?

I say to Murdo Fraser, do we want to compare ourselves with Enron, a byword for failure and corruption, or with the best in Europe? The choice is ours. I, for one, choose to support keeping Scottish Water public and keeping control of our water in Scotland, rather than abandoning it to a boardroom in Sydney or Kuala Lumpur or to faceless shareholders. With the advent of the Scottish Parliament, we have an unprecedented extension of democracy in Scotland. Let us use our powers to retain democratic control of our water supply, to protect the environment and to protect the interests of the customer.

Mary Mulligan (Labour, Linlithgow)

I am delighted to take part in this morning's debate. I reaffirm the Labour Party's commitment to keep Scottish Water in public ownership and under public control.

Mark Ballard (Green, Lothians)

Will the member take an intervention?

Mary Mulligan (Labour, Linlithgow)

No—I ask the member to let me get started.

In 2003, Labour and the Liberal Democrats agreed in the partnership agreement to retain Scottish Water in the public sector. The partnership agreement committed the Scottish Executive to invest in Scottish Water. That commitment has been divided into two sections. There are five objectives in the essential category: to improve the quality of 530km of rivers and coastal waters, to improve the quality of drinking water for 1.5 million people throughout Scotland, to tackle constraints on new developments, to take action on odour from 35 waste water treatment works, and to remove more than 1,100 homes from the risk of sewage flooding. This morning, I want to concentrate on the third and fourth of those: odour nuisance and new developments.

Mark Ballard (Green, Lothians)

The member started by talking about privatisation. Can she explain why the Executive's amendment would remove the clause in the motion that commits Scotland to a public water system? Can she answer the question that was directed at Andrew Arbuckle—mutualisation, yes or no? Is she prepared to rule it out?

Mary Mulligan (Labour, Linlithgow)

The member should ask the Executive about its amendment. I am saying clearly that we are committed to retaining Scottish Water in public ownership and under public control.

Mark Ballard (Green, Lothians)

By we, do you mean the Labour Party or the Scottish Executive?

Mary Mulligan (Labour, Linlithgow)

I would like to move on. The member may not find the issues that I want to discuss quite as crucial as that which interests him, but I think that they are important, because they relate to the service that Scottish Water is delivering. Although I want to keep Scottish Water under public control, I have concerns about the way in which it is being operated.

My first concern relates to odour nuisance. I make no apologies for citing a constituency example. Mr Montgomery, a constituent of mine in Linlithgow, lives a few hundred yards from a water treatment plant. He also runs his business from his house. Since the summer of 2005 he has experienced huge problems of fly infestation and, especially at the moment, of odour. Despite repeated complaints to Scottish Water, only short-term solutions have been found. The odour problem is now worse than ever.

Rob Gibson (Scottish National Party, Highlands and Islands)

Will the member give way?

Mary Mulligan (Labour, Linlithgow)

I want to finish making my point, which relates to an issue that the member raised earlier.

Despite repeated complaints and support from the local authority, a water treatment specialist and even Scottish ministers, Scottish Water appears to think that one individual's complaint is not worth worrying about. Given that Scottish Water has not yet solved the odour problems that have been caused by the Seafield treatment plant, perhaps the issue is not that my constituent is one individual, but that Scottish Water does not see dealing with odour as a priority. It should be a priority.

I am also concerned about issues relating to development. In areas such as West Lothian, where there has been substantial house building, we need to ensure that development is not held up by problems with water supply and that the burden of providing an additional water facility is not placed on local villages. Villages are being overdeveloped because developers are required to contribute to the provision of water services.

We need to look at the strategy and work practices of Scottish Water. Unlike the Tories, who would use any excuse to privatise it, I still believe that it should remain in the public sector. The minister has reaffirmed the Executive's commitment to keep Scottish Water in the public sector, and that is to be welcomed. People in Scotland should be in no doubt that the Labour Party will invest in our water system and keep it accountable to the people, through the Parliament.

Iain Smith (Liberal Democrat, North East Fife)

I welcome the opportunity to speak in this debate and to reaffirm not only that the partnership agreement between the Liberal Democrat and Labour parties in the Parliament commits the Scottish Executive to continuing the public ownership of Scottish Water but that the Liberal Democrats are firm in their opposition to the notion of privatising our water supply.

Mark Ruskell (Green, Mid Scotland and Fife)

Will the member give way?

Iain Smith (Liberal Democrat, North East Fife)

If the Greens want to intervene in speeches, they should realise that only by ensuring that their debates are of a proper length will members' speeches be long enough to take their interventions. I will not take any interventions from the Green party in this debate.

The arguments for privatisation do not make sense. For a start, Scottish Water compares favourably with other UK providers. It is expected that, in three years' time, Scottish Water's water and sewerage bills will be the third lowest in the UK—and that is despite Scotland's rural nature, which would be badly catered for by private companies. Under the current regulatory framework, which is based on the public ownership of the water supply and affirmed in the Executive amendment, the Executive is charged with providing a leading role in setting objectives for Scottish Water.

We need look only at the figures to realise how successful the Executive's approach has been. Under the current arrangements, running costs have already fallen by 40 per cent, which has meant an average saving of £200 for every household in Scotland. Domestic charges are falling in real terms, and non-domestic charges should fall by 6 per cent before the end of the decade.

At the same time, efficiency has increased by 20 per cent as a result of targeted investment and better maintenance of pipes, sewers and treatment works. Moreover, water quality has also improved, with 99.56 per cent of samples in 2005 meeting the highest EU standards.

Of course, that is not to say that Scottish Water does not face challenges. After decades of underinvestment, there is much to be done. For a start, the organisation must continue to rebuild and replace worn-out infrastructure, and special attention must be given to water leakages. Scottish Water's delivery plan commits it to a 50 per cent reduction in leakages by 2010. It is vital that that commitment is met.

Customer service must also improve, to ensure that standards across Scotland are consistent. I acknowledge that issues have arisen over the WIC's role, and roles with regard to customers. Scottish Water must be customer focused, although it must also bear in mind that its customers are not just the individuals who turn on their taps or flush their toilets, but communities. It plays an important role in that respect and it needs to address a number of problems about how it responds to communities' concerns.

I have a long list of problems with Scottish Water in my constituency. For example, Springfield, which I used to represent on Fife Council, has suffered from a problem with sewage smells for many years. Although a solution had been agreed before I stopped being the councillor for Springfield, it seems to have disappeared. Sewage smells are still a problem in the area and, despite the fact that dealing with such problems is one of its priorities, Scottish Water has simply failed to act in this instance.

Scottish Water and Fife Council are arguing over responsibility for dealing with a leak on Largo Road in St Andrews. Surely they should just get together and sort the problem out. Moreover, there have been endless problems in the east neuk, particularly in St Monans, Cellardyke and Crail. In Kettlehill, the small matter of installing the right water pressure valve to stop leakages has still to be resolved. Scottish Water needs to take into account various issues in respect of its community role, and I hope that the minister will comment on how to ensure that Scottish Water responds more positively to local communities' concerns.

Although the Scottish Executive's public sector model for Scottish Water has led to significant improvements, that is not to say that the same model should be in place for ever. Indeed, other public sector options might emerge that ensure that Scottish Water remains publicly owned but give it more freedom in the longer term. I am not ruling anything like that out. An opportunity for mutualisation within the public sector might become available, but I certainly do not want the type of private sector mutualisation that the Conservatives are suggesting, which would only make Scottish Water ripe for private sector takeover.

Alex Johnstone (Conservative, North East Scotland)

Although I did not speak in the preceding debate, I am very glad I sat through it, because I have been very interested in the contrast between the two. There was a lot of consensus in the chamber on green procurement, but in this debate the only consensus that we have reached is that something is not right with Scottish Water.

Many parties in the chamber share the view that the way in which Scottish Water has been structured economically makes it ripe for privatisation in the long term. In that respect, I feel myself agreeing with some of the views that have been expressed in the Greens' motion and in speeches made by Scottish National Party and Scottish Socialist Party members. Even more interesting, members of the Executive parties have made a number of strong comments on the matter. They have been willing to stand up and profess their support for retaining Scottish Water in the public sector and under public ownership, but they have expressed concerns and made their own projections about what will happen in the future.

The fact is that the current governance arrangements for the water industry in Scotland were introduced to meet a perceived problem at the time and can now be seen only as a transitional measure. Everyone in the chamber agrees that a different solution must be found. Indeed, even Iain Smith seems to believe that the current arrangements are transitional.

The water industry is different things to different people. To many in the Labour Party, it is a totem of public ownership over which they will argue for ever more. To customers, it represents a redistributive taxation system that overcharges some to support others. Well, I know people in Scotland who need support to meet their water charges. The cross-subsidy system, which has resulted in business water users being charged £44 million too much, is a ball and chain for large areas of the Scottish economy and should be dealt with urgently.

The problem of development constraints and the failure to establish a structure that allows investment to take place at the necessary pace and in the necessary areas is not only preventing economic development in certain places, particularly in the east of Scotland, but restricting our ability to conform to certain environmental requirements that we struggle every year to meet.

Maureen Macmillan (Labour, Highlands and Islands)

Will the member give way?

Alex Johnstone (Conservative, North East Scotland)

No.

Something needs to be done about Scottish Water. Many hold the straightforward view that it is ripe for privatisation. However, under the option offered by the Conservatives, the Scottish water industry can be retained in the service of its customers without becoming a bundle of shares to be sold around the world. We need a sound water industry. To that end, we must take action to free it from the dead hand of government and ensure that it gets the necessary resources from the capital markets to develop as it needs to.

Scotland needs a strong water industry that is secure in the long term. That can be achieved only by moving Scottish Water out of public ownership and into the mutual model that has succeeded so well in Wales. We must get together to work towards that concept now.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

I congratulate the Greens on securing this very important debate. I can confirm that the absence of an SNP amendment means that we will support their motion at decision time.

The debate has highlighted a number of important points and illustrated a number of fundamental flaws in members' thinking. Perhaps the most fundamental is the idea, which emanates from the Conservative benches, that private ownership is good and public ownership is bad. Equally, we should not imagine that the reverse is necessarily the case. Just as the public sector is capable of success and failure, the private sector is also capable of success and—something that is less seen—very significant failure. Indeed, when there has been a crossover between the two—for example the involvement of the Capita Group and Electronic Data Systems as major contractors to the Government down south—the private sector has failed massively to deliver.

However, does such an example tell us that when the private sector conducts its private business and does not interface with the public sector it is as capable of making mistakes as the public sector? The question—it is important that we ask questions—is whether people in the public sector are capable of delivering good financial performance, meeting public objectives and supporting the people of Scotland. Of course, the answer is yes. We simply have to choose structures that make that possible.

Sarah Boyack said that the Labour manifesto has not been written yet. Oh dear. We thought that the Labour Party campaign was not going too well, but we now realise that its state of preparation is even poorer than we imagined. It is okay that Labour's manifesto has not been published yet, but the fact that it has not even been written shows the extent of the challenge that Labour faces. I hope that, in her closing remarks, the minister will nail her colours firmly to the mast, as her party's back benchers have done and as I think the Liberals have done—although Iain Smith was a little equivocal—and say that the future of Scottish Water lies in the public sector.

Iain Smith (Liberal Democrat, North East Fife)

I am happy to be unequivocal—we will ensure that Scottish Water stays in the public sector. What is the SNP's policy? It has not even lodged an amendment to the motion.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

We support the Greens' motion, which advocates keeping Scottish Water in the public sector. We are with the Liberals on that—it is an area of broad agreement, although we might differ on matters of detail.

The Tories talk about service to customers. Aye, but the whole point is that the water industry provides an infrastructure that services public policy as well as private customers. It is unlikely that we would have two infrastructures for water delivery, which would involve two sets of pipes going all over Scotland. That is why the water industry is different from some other industries that have been privatised.

I want to raise some constituency issues. I have mentioned the case of Banff and Buchan College before. A hotel in my constituency has just received a bill for £35,000. Again, that was the result of inaccurate and incomplete meter reading by the private sector company that was contracted by Scottish Water.

We warmly welcome the fact that, in Scottish Water's strategic plans, developments must be supported. That is good. My colleague John Swinney has been banging on about that for some considerable time. However, we must address how capital funding takes place and we must get from the minister a sincere assurance that Scottish Water will stay in the public sector. If she fails to make that clear, all protestations of Labour's support for Scottish Water will fall on deaf ears.

Sarah Boyack (Labour, Edinburgh Central)

Let me begin by quoting from the Scottish Executive's amendment, which

"welcomes the substantial improvements that have been made in Scottish Water's performance, all of this having been achieved while keeping Scottish Water in the public sector ... and affirms that Scottish Water operating in the current regulatory framework will go on to deliver further improvements in this vital public service."

Our position could not be clearer, as the speeches by Labour back benchers such as Maureen Macmillan and Mary Mulligan have affirmed. Iain Smith spoke for the Liberal Democrat party. It is entirely obvious what the Scottish Executive amendment means.

A number of members have disputed the success of Scottish Water over the past few years, but the company deserves to be congratulated, which is why our amendment welcomes the huge progress that has been made. Scottish Water is not a failing company or one that has not received clear directions on sustainable development. It is a public sector company that works within a regulated framework and which is delivering for Scotland. Our policies and our effective regulation mean that Scottish Water is delivering improved performance for less money.

The statistic that most people in Scotland care about is that Scottish Water's average household charge in 2006-07 is £287, which is £7 less than the equivalent charge in England and Wales. By 2009-10, the difference will be even greater.

Murdo Fraser (Conservative, Mid Scotland and Fife)

Will the minister take an intervention?

Sarah Boyack (Labour, Edinburgh Central)

No, thank you.

Andrew Arbuckle was absolutely right to highlight the contrast between investment now and the historical lack of investment, when water services languished as a low priority for cash-strapped regional councils.

I do not accept that the current system was set up deliberately to facilitate privatisation. Over the past few years, three companies have been merged into one. We have given Scottish Water a massive investment target and other, detailed targets. Maureen Macmillan was right to highlight efficiency and the importance of tackling leakage. The Water Industry Commission has set specific leakage reduction targets for Scottish Water, under which it must close 50 per cent of the gap between its current performance on leakage and the economic level of leakage by 2010 and, in the interim, reduce that gap by 16 per by 2006-07 and by 25 per cent by 2007-08. Those are tough targets. If members want us to go further, faster, we must pay more or rein back other projects for which there is support in the Parliament. The challenge for the next investment regime is to pick up the excellent points that Maureen Macmillan made about the need to ensure that we make progress on water conservation.

I think that we are delivering on sustainable development and I do not accept the Greens' argument that Scottish Water is not tackling the issue. The company is taking highly specific measures. Efficiency gains must be linked to sustainable development. Why should we not use innovative techniques to renew water mains so that minimum disruption is caused to customers? Such techniques allow 36km of pipes to be laid per week in the busiest periods. Why should we not cluster similar projects instead of wasting resources on the design of unique projects? Why should we not have rigorous project management to achieve efficient and effective solutions? Why do we not implement no-dig solutions for renovating sewers, which cause communities less disturbance and which save time and money?

Sustainable development principles and economic efficiency can be combined in numerous ways. That is why the Scottish ministers' directions require Scottish Water to deliver its aims sustainably. However, we must ensure that economic regulation—

Stewart Stevenson (Scottish National Party, Banff and Buchan)

Will the minister take a 12-word intervention?

Sarah Boyack (Labour, Edinburgh Central)

Let us count how many words the member uses.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

Given the 100-year life of water infrastructure, over how long should the funds to pay for it be paid back? I have run over by two words.

Trish Godman (Labour, West Renfrewshire)

You are in your final minute.

Sarah Boyack (Labour, Edinburgh Central)

The SNP has made its position no clearer this morning. We have had three different speeches from SNP members, none of whom has lodged an amendment to the motion. I will take no lectures from a party that has been comprehensively defeated every time it has brought forward its alternatives.

We have made clear our financial position and our investment programme is under way. During the first session of the Parliament, we set a £1.8 billion investment programme; now it is a £2.5 billion programme. The Executive has committed to ensuring that that investment takes place. Jim Mather made an extremely casual comment about the implementation of EU directives, which are in place to improve the quality of our environment. We need to meet them.

Scottish Water and the framework under which it operates—whereby public sector control by the Scottish Executive is combined with economic regulation—are unique. The system that is in place gives us the best of both worlds. Ministers are able to set policy objectives that have been approved by the Parliament, while economic regulation ensures that we can afford the necessary investment. It is important that we draw those two aspects together. Excellent environmental improvements are being delivered because Scottish Water is operating more efficiently. That is good news for the environment and for customers.

Mark Ballard (Green, Lothians)

After this debate, what is the future for Scottish Water? We already knew the Tories' position: they want to privatise Scottish Water. For this morning's debate, they have put forward the mutual model that is used by Welsh Water. The Tories' thinking was given away in Murdo Fraser's speech, in which he described Welsh Water as the top private water company in the UK. When Murdo Fraser talks about the mutualisation of Scottish Water, he is talking about it becoming a private company. That is what mutualisation means to him.

The remarks of Rob Gibson and Jim Mather about the flaws in accounting and in the operation of the economic regulator are to be welcomed. The fact that the regulator's primary focus is economic means that environmental and social issues are not taken into account.

Frances Curran's wise counsel was that we must remain vigilant to the vultures that are circling above Scottish Water, which recognise the easy pickings that they could get from a privatised Scottish Water.

Stewart Stevenson identified the crux of the debate—it offers us an opportunity to nail our colours to the mast. Will Scottish Water be a private or a public company? That is what the debate is about.

What did members of the Executive parties tell us? Andrew Arbuckle gave us a history lesson, in which he went back to the situation in Fife in the 1960s.

Labour members—and Iain Smith—talked about the history of the past four or eight years and the content of the partnership agreement. Why was that? Alex Johnstone made a good point when he said that the current arrangements seem to be transitional. The Executive is still not making clear what the future holds.

Sarah Boyack said that she had nailed her colours to the mast in the Executive amendment. The amendment acknowledges the past achievements of Scottish Water while in the public sector. It is right that we celebrate those achievements. However, it is crucial that although the amendment acknowledges Scottish Water's history of success, as does our motion, it does not include a commitment to keep Scottish Water in public ownership and under public control. Instead, it suggests that the Parliament

"affirms that Scottish Water operating in the current regulatory framework will go on to deliver further improvements in this vital public service."

We all know that Scottish Water will do that—it has a plan to do so until 2010. However, what will happen after that? What is the future for Scottish Water? What is the Executive's long-term vision? That is the issue.

Mark Ruskell put it well in his four-word intervention during Andrew Arbuckle's speech—he must hold the record for the shortest intervention—when he asked, "Mutualisation: yes or no?" Andrew Arbuckle referred to comments made by Ross Finnie, who I think was reported in The Scotsman as saying that it would be an unwise politician who ruled out options for the future. The crux of the matter is that the Executive refuses to rule out mutualisation.

Andrew Arbuckle (Liberal Democrat, Mid Scotland and Fife)

Will the member give way?

Mark Ballard (Green, Lothians)

I am sorry, I do not have enough time.

In practice, mutualisation means that money is borrowed not at the cheaper rates that the Government can get through the public sector borrowing requirement but at the more expensive rates of the finance markets. In all mutualisation models that have been proposed, money is borrowed privately and not through the PSBR. That is the division between public and private. We must ask whether we want a company that is accountable to the people of Scotland, which borrows money through the PSBR, or a mutual or private company that is ultimately accountable to shareholders or to the bankers who lent it money.

Murdo Fraser (Conservative, Mid Scotland and Fife)

Will the member give way?

Mark Ballard (Green, Lothians)

I am sorry. I do not have enough time.

Welsh Water, which was held up as an example by Murdo Fraser and other members, employs 152 people. The rest, who work effectively to provide a water system for Wales, are employed by various consortiums in the private sector. An industry that employs 3,000 people in the private sector is not a model of public service delivery by the public. The mutual model in Welsh Water is a Trojan horse—we should be clear about that.

As Mark Ruskell, Rob Gibson and others said, there are problems with the regulatory system and how it accounts for social and environmental factors. Many members talked about problems to do with housing, and Maureen Macmillan mentioned smell—

Maureen Macmillan (Labour, Highlands and Islands)

I did not.

Mark Ballard (Green, Lothians)

Sorry. That must have been another Labour back bencher.

The fact that the WIC is, ultimately, an economic regulator is a serious problem. Whether there are tensions with SEPA about drinking water or with the Scottish ministers, the WIC is ultimately accountable to the Competition Commission for economic regulation and does not have the wider social and environmental remit that it should have.

Water is not just a commodity like any other commodity. Our water industry is a vital resource, not just for new building developments but for human health. That is why, when the Victorians installed the water infrastructure that we now seek to replace, they did so as a public enterprise. The civic fathers in Glasgow responded to the concerns of medical officers such as James Burn Russell. We need to match the Victorian civic infrastructure with a new public infrastructure.

Water is the classic sustainable development issue because it concerns the economic, social and environmental health of our nation. It is too important to be run for the benefit of shareholders and bankers. As a result of massive public opposition to a sell-off, the industry in Scotland remained in public ownership when the industry south of the border was sold off. Water must remain public for the future. Parties and the Executive must nail their colours to the mast. I urge members to do so by supporting the motion.

Question Time — Scottish Executive — General Questions

Derek Brownlee (Conservative, South of Scotland)

To ask the Scottish Executive what impact its policies have had on economic growth since 1999. (S2O-11820)

Nicol Stephen (Liberal Democrat, Aberdeen South)

Since devolution, the policies of this Executive have laid the foundations for continued economic growth and job creation in Scotland. The latest figures show that since 1999 the economy has grown by 11.9 per cent. The economy has grown above our long-run annual average in each of the past nine consecutive quarters.

Derek Brownlee (Conservative, South of Scotland)

That is interesting, because Professor Brian Ashcroft told the Finance Committee on 16 January that there has been

"a relative decline in the Scottish economy since 1996."—[Official Report, Finance Committee, 16 January 2007; c 4298.]

Is that down to the Executive, too?

Nicol Stephen (Liberal Democrat, Aberdeen South)

That is inaccurate. We need to treat quite a lot of what the Conservatives say on the issue with a great deal of caution, too. As members know, earlier this week I heard Annabel Goldie announce that she is tearing up most of the Conservatives' key policies—although she did not seem to have an exhaustive list. The Conservatives have U-turned on the economy and education. Perhaps I should issue a challenge to the Conservatives. Will they now support the Edinburgh airport rail link, which will help Scottish financial services? Will they support Scottish Enterprise's work on skills training, business support and economic regeneration, which is helping to create jobs and growth in Scotland? If the Conservatives cannot answer those questions, I assure members that the Executive will continue to build economic growth in Scotland and to exceed our average long-term growth rate in Scotland, as we have done for the past nine quarters.

Jim Mather (Scottish National Party, Highlands and Islands)

I wanted to thank the minister for his answer, but his reference to inaccuracy was just too good. Gross domestic product is a poor and inaccurate measure of a branch economy and the reindexing of GDP on a rolling basis makes it more inaccurate.

How much additional economic growth would have been generated by Scottish business if business rates and water charges in Scotland had been no higher than charges in the rest of the United Kingdom?

Nicol Stephen (Liberal Democrat, Aberdeen South)

As Jim Mather knows, business rates in Scotland are coming down. I hope he welcomes that.

I have been talking about the chaos at the centre of Conservative policy, but it is important and only right that we should hear from the Scottish National Party. I discovered an old SNP policy document, which says:

"Sterling is a highly volatile currency, the value of which has consistently failed to reflect the prevailing conditions in the Scottish economy.

Sterling interest rates ... consistently fail to reflect the prevailing conditions in the Scottish economy."

Why has the SNP now decided that its economic plans involve interest rates and exchange rates being determined by the central bank of another country and the policy of a foreign Government? The currency will be sterling and the foreign interest-rate-setting body will be the Bank of England. I set a target for Jim Mather: he should try to reduce the number of SNP policies on the pound and the euro from two to one.

Murdo Fraser (Conservative, Mid Scotland and Fife)

On a point of order, Presiding Officer. This is all very entertaining, but there is a serious point. The minister has made no attempt whatever to answer the substantive points that were put to him in two questions. He has responded by making party-political points. Under the standing orders of the Parliament, can you do anything to compel ministers at least to attempt to address the questions that are put to them?

George Reid (None, Ochil)

I can look encouragingly, but under our standing orders I am responsible for the questions, not the answers. The answers are a matter for the Executive.

Patrick Harvie (Green, Glasgow)

There will now be only the slightest change of tone, Presiding Officer.

To ask the Scottish Executive what the role of mediation will be in the reformed planning system (S2O-11893), even if this Parliament might be a more appropriate place for mediation.

Des McNulty (Labour, Clydebank and Milngavie)

Mediation is one of a number of measures for engaging communities that we would see planning authorities adopting under the new planning system.

Patrick Harvie (Green, Glasgow)

I am pleased to hear that answer because there is general agreement on the value that mediation can have in the planning system. However, a proposal for a pilot project on mediation in planning has been under discussion for more than two years now, and the Executive has had detailed proposals for more than a year and a half. When will progress be made? When will the minister be able to come to Parliament to report that the pilot project is going ahead?

Des McNulty (Labour, Clydebank and Milngavie)

We are currently scoping taking the mediation pilot ahead, focusing on the development planning process. The intention is to commission it in 2007. We are working with the different parties involved to ensure that that is done properly.

To help develop the range and scope of issues for the pilot project, a literature review was commissioned to see how mediation had been used in planning in the past. As I say, the intention is to take this forward. It will be done before the end of 2007.

Christine Grahame (Scottish National Party, South of Scotland)

Has the minister considered how mediation is used in planning in the state of Maryland, where it is used extensively? If not, will he do so?

Des McNulty (Labour, Clydebank and Milngavie)

I have not considered mediation in the state of Maryland, but if Christine Grahame is suggesting that it is interesting, I will certainly ask officials to have a look at it.

Dave Petrie (Conservative, Highlands and Islands)

I thank the minister for at last answering questions.

We accept the obvious benefits of mediation to the planning process, but does the minister agree that the practice must not be employed in such a way as to be an overly expensive delaying tactic that could conflict with the aims and objectives of a fast-track and inclusive modernised planning system?

Des McNulty (Labour, Clydebank and Milngavie)

Dave Petrie is correct to suggest that the whole purpose of the planning system is to speed up and streamline the mechanism. We really would not want to bring in any process that took away from the clear benefits of streamlining.

We have to identify the purposes of mediation and the circumstances in which it will be helpful. If we are going to introduce a system, we will have to ensure that it is fit for purpose and is applied properly. That is why it will be necessary to do a decent study, taking all the relevant information into account.

David Davidson (Conservative, North East Scotland)

To ask the Scottish Executive whether it plans to give local authorities more powers to move unauthorised Gypsy or Traveller encampments quickly to official sites and to recover the costs of relocation, provision of toilet and waste facilities and clean-up after the unauthorised sites have closed. (S2O-11837)

Rhona Brankin (Labour, Midlothian)

There are no plans to give more powers to local authorities to move unauthorised Gypsy/Traveller encampments on to official sites. A range of powers are already in place, under both civil and criminal law, which local authorities and local police can use to manage the incidence of unauthorised encampments and the impact on the local environment and community. In addition, the Scottish Executive published guidance in December 2004 to assist local authorities with this. The Executive is providing £3 million in Gypsy/Traveller site grant between 2005-06 and 2007-08 to local authorities.

David Davidson (Conservative, North East Scotland)

I thank the minister for her partial answer and for the copy of the guide on unauthorised camping that she very kindly sent me the other week.

At the moment, Aberdeen City Council is desperately trying to close an unauthorised site, but it does not have the powers to do so. It has tried informal methods, it has tried discussion and it has tried mediation—which we talked about a moment ago. The police will not get involved and the council is now having to incur huge costs in going to the courts in order to get the police to take action eventually. The council has spent tens of thousands of pounds clearing the site.

I wonder how many other councils are in a similar situation. Is the Executive not prepared to take action? Unauthorised sites disrupt the lives of regular citizens.

Rhona Brankin (Labour, Midlothian)

Opportunities are available to local authorities. Various provisions in civil and criminal law can be used to deal with unauthorised camping—provisions relating to vandalism; the dumping of rubbish; unwanted property; planning; and obstructing the highway. There are also common law offences such as breach of the peace and malicious mischief. Sections 61 and 62 of the Criminal Justice and Public Order Act 1994 could also be used—they deal with criminal trespass and the removal of vehicles.

Mr Davidson referred to the guidance on unauthorised encampments. That guidance is there to help local authorities and the police to manage situations.

Therefore, there are provisions in relation to unauthorised encampments. The provision of £3 million should assist local authorities as well.

Linda Fabiani (Scottish National Party, Central Scotland)

I listened to what the minister said about guidance. Will the minister tell me how, in the absence of a specific provision in the recently approved Planning etc (Scotland) Act 2006, the Executive will ensure that the needs of Gypsy Travellers—who are also citizens of this country—will be met?

Rhona Brankin (Labour, Midlothian)

Our guidance to local authorities makes it clear that local authorities should provide strategies in their area in collaboration and consultation with Gypsy/Traveller communities.

George Reid (None, Ochil)

Question 4 is not lodged.

Kenneth Macintosh (Labour, Eastwood)

To ask the Scottish Executive what action is being taken to upgrade junction 4 on the M77 to improve access to Barrhead. (S2O-11875)

George Lyon (Liberal Democrat, Argyll and Bute)

Transport Scotland has been in discussion with East Renfrewshire Council about the possibility of upgrading this junction to provide south-facing slip roads.

Transport Scotland has asked East Renfrewshire Council to undertake an appraisal and will continue to work with the council to determine whether the need for the improvement is justified.

Kenneth Macintosh (Labour, Eastwood)

As well as the benefits to the wider area offered by a new park-and-ride at junction 4, is the minister aware of the advantages that a new junction would give to the regeneration of the town of Barrhead? Direct access to the motorway network would attract jobs and businesses and would bring prosperity to the wider area. Will the minister ensure that improvements to the junction will be considered in the strategic transport projects review?

George Lyon (Liberal Democrat, Argyll and Bute)

I am well aware of the arguments that Mr Macintosh has made in favour of this improvement. As I said, East Renfrewshire Council has been asked to prepare an appropriate appraisal. I understand that once an appraisal under Scottish transport appraisal guidance has been carried out, I would of course be able to assure the member that the project would be considered as part of the strategic transport projects review.

Andrew Welsh (Scottish National Party, Angus)

To ask the Scottish Executive what further steps it is taking to improve the marketing of tourism in Scotland. (S2O-11812)

Patricia Ferguson (Labour, Glasgow Maryhill)

VisitScotland's imaginative techniques and use of new technology ensure that its award-winning marketing is constantly improving.

Andrew Welsh (Scottish National Party, Angus)

Although VisitScotland deserves praise for much of its work, a gap in perception exists. There is a sense of frustration and condemnation among providers. They feel that VisitScotland charges are added to fees charged by hubs; that a percentage charge is put on business that is sent to them; and that, on top of all that, a charge is made to the tourist. Providers feel that VisitScotland simply does not meet their needs.

Is the minister aware of dissatisfaction with the operation of the national website and its booking system—a feeling that it is a commercial venture to earn profits for a private firm, rather than a service to meet the direct needs of small businesses throughout Scotland? What is the minister doing to heal the division and to link Scotland's small businesses with the national and international system?

Patricia Ferguson (Labour, Glasgow Maryhill)

Tourists coming to our country wish to book their accommodation and experiences through a variety of methods, one of which is the national website visitscotland.com—which I would emphasise has a slightly different structure from VisitScotland, which is the core agency for tourism in Scotland.

I would be the first to acknowledge that visitscotland.com has not been without its difficulties, but since its inception the website has encouraged thousands—millions—of visitors to come to our country. The website is not the only way in which visitors can book their accommodation; many people use the website as an information portal and then book directly with the individual business providers.

However, visitscotland.com is taking all opportunities to improve its relations with individual providers and with different geographical areas of the country—for example, by inviting tourist information centre staff to work in the call centre and by allowing call-centre staff to pick up more information about what is available in local areas. It is fair to say that visitscotland.com is taking all the steps that it can.

Alasdair Morrison (Labour, Western Isles)

To ask the Scottish Executive whether it will provide an update on the air discount scheme. (S2O-11879)

George Lyon (Liberal Democrat, Argyll and Bute)

As at 1 January 2007, there were 90,293 members of the air discount scheme in eligible areas of the Highlands and Islands, including 26,653 in the Western Isles, Mr Morrison's constituency.

In total, 14,326 residents have accessed discounts under the scheme, including 5,202 in the Western Isles. A total of 74,133 flights were booked with discounts between May and December 2006.

Alasdair Morrison (Labour, Western Isles)

As the minister's answer proves, the air discount scheme has been remarkably successful and has benefited many islanders and island businesses. Now that the Scottish Executive has established the principle of, and implemented in practice, a discount scheme that discriminates in favour of island residents, will the minister—as a fellow islander, in common with the First Minister—agree with me that this valuable and eminently sensible principle can and should be applied to ferry travel?

George Lyon (Liberal Democrat, Argyll and Bute)

I concur with the member's views on the warm welcome that the air discount scheme has received on the islands. In Islay, which I represent, the scheme has been well received and much used. As I stated at the Islay conference on the future of the islands, we need to go further in looking at improving the affordability of ferry services. Islanders need a greater direct benefit from the £30 million annual subsidy for ferries. The air discount scheme is a model that needs to be examined further in the context of ferry fares.

Jamie McGrigor (Conservative, Highlands and Islands)

Chancellor Gordon Brown's latest tax increase came into force today, with another £10 being levied on every passenger who takes a domestic flight. I am concerned that, as well as being an extra burden on those who live in the Highlands and Islands, the extra tax will be a real disincentive to those who might be considering visiting some of the remoter parts of Scotland, many of which are very reliant on tourism. What representations has the Scottish Executive made to the United Kingdom Government on the tax increase? Will the minister assure me that, if it has not already done so, the Executive will fight to oppose the increase and any further increases that raise money for Gordon Brown at the expense of the north of Scotland's tourism sector?

George Lyon (Liberal Democrat, Argyll and Bute)

I understand that the tax does not apply to outward flights, but I think that it is rather disappointing that the increase applies to inward flights. That seems to run contrary to the Executive's attempts to improve air transport for islanders. I can assure the member that the Executive makes representation to the Chancellor of the Exchequer on a wide range of matters, including this one, and will continue to do so.

Margaret Jamieson (Labour, Kilmarnock and Loudoun)

To ask the Scottish Executive what discussion it is having with the United Kingdom Government regarding the possibility of implementing a ban on personal use of fireworks. (S2O-11869)

George Reid (None, Ochil)

I call George Lyon to respond. Mr Lyon?

George Lyon (Liberal Democrat, Argyll and Bute)

The Scottish Executive is in regular contact with the UK Government on a wide range of issues, including fireworks. We continue to monitor the effectiveness of regulations that have been made under the Fireworks Act 2003 but we do not believe that a case has been made for further controls at present.

Margaret Jamieson (Labour, Kilmarnock and Loudoun)

I thank the minister for his somewhat belated response.

The minister's answer gives me cause for concern. A number of my constituents have written to him in the last month, but letters that were addressed to him have been passed to the Department of Trade and Industry by his officials. Is he aware of the curt response that my constituents have received from the DTI correspondence official? Will he undertake to investigate the matter and to provide an appropriate response to my constituents on what is a very important issue?

George Lyon (Liberal Democrat, Argyll and Bute)

I am aware that close to 100 representations on the problems of fireworks have been made by the member's constituents and have been passed to the DTI. I will undertake to examine the response that her constituents received. I reassure her that the Executive is always willing to examine the issue in the light of such representations to see whether a case could be made for further representations to the UK Government for a further change in the law.

Charlie Gordon (Labour, Glasgow Cathcart)

Is the minister aware that I, too, am disappointed by his response to Margaret Jamieson's questions? When I raised a similar question with him on 30 November 2006, he undertook to monitor complaints to the police and to local authorities. According to the Official Report , he also undertook to discuss the representations that I have had on the issue. Kicking it for a shy to the DTI hardly fits the bill.

George Lyon (Liberal Democrat, Argyll and Bute)

As I said in my previous answer, we have examined the letters that have been sent to us. We are aware of the representations that Charlie Gordon and other members have made. As I said in my answer to Margaret Jamieson, we are always willing, in the light of representations, to consider whether a case can be made for going further on the matter.

First Minister's Question Time

Nicola Sturgeon (Scottish National Party, Glasgow)

I welcome to the public gallery pupils from Eastern primary school.

To ask the First Minister when he will next meet the Prime Minister and what issues they will discuss. (S2F-2683)

Jack McConnell (Labour, Motherwell and Wishaw)

I have no immediate plans to meet the Prime Minister.

Nicola Sturgeon (Scottish National Party, Glasgow)

Perhaps that is wise, given the breaking news that Tony Blair has been interviewed by the police for a second time in relation to the cash for peerages investigation.

Why has the First Minister failed to deliver on his promise to improve school discipline?

Jack McConnell (Labour, Motherwell and Wishaw)

That is not the case at all. The reality throughout Scotland is that there are improved teacher numbers, improved school buildings—which the nationalists oppose—and improvements in facilities for dealing with troublesome pupils, and we have evidence this week that head teachers are using the direction that they have been given and are excluding more pupils than they were six or seven years ago. All those indicators point to the fact that schools today are dealing with discipline more effectively than they have done in the past. Schools cannot be solely responsible for dealing with the problems in wider society with today's younger generation, but they can, as institutions and services, function more effectively than they were doing. I believe that the vast majority of schools throughout Scotland are doing that.

Nicola Sturgeon (Scottish National Party, Glasgow)

Not for the first time, the facts tell a completely different story. I remind the First Minister that figures that were released this week show that, since the start of this session of Parliament, the number of pupils who are excluded from schools has gone up by 18 per cent. Is the he aware that, in primary schools, the situation is even worse? Since 2003, the number of primary-age children who are excluded from school has gone up by 40 per cent. Should that not be a cause for the most serious concern?

I remind the First Minister that his policy in the first session of Parliament to try artificially to reduce exclusions by setting targets was a complete and utter failure. Do not the recent figures prove that his policy in this session of Parliament to deliver "a downward trend" in school exclusions by "addressing bad behaviour" has also failed? Will he explain why?

Jack McConnell (Labour, Motherwell and Wishaw)

I do not want to comment specifically on the policies of predecessors, as it can be unfair to do so. However, I want to be clear that the policy on school exclusions was changed following my election as First Minister, precisely because I believed that it was wrong to set a cap on or a target for school exclusions. The figures that the Tories produced this week are inaccurate and misleading. The reality is that it is essential that head teachers and teachers can remove from classrooms and schools youngsters who cause trouble. The reaction of the nationalists and the Conservatives this week to the misleading figures that the Conservatives published indicates yet again that they are prepared to say one thing at one point and a completely different thing at another. Before the policy was changed, the nationalists and the Conservatives called—correctly, in my view—for the target on reducing school exclusions to be put to one side and for teachers and head teachers to have a clearer instruction to use the exclusion powers that are available to them. Then, when head teachers and teachers actually use the power, the nationalists and the Conservatives use that to make a case against the very point that they raised in the first place.

That is another example of the fact that the nationalists and, occasionally, the Conservatives are prepared to say anything to try to win votes and curry favour with the public. It does not work to be that inconsistent. School discipline requires consistent, determined work by schools and back-up by politicians on everything, from issues that might appear minor, such as school uniforms, right through to exclusions and tougher action against those who cause the most serious trouble. Our duty as politicians is to back up those who have the hard job of making the measures work.

Nicola Sturgeon (Scottish National Party, Glasgow)

The figures to which I referred were Government figures, and the predecessor to whom the First Minister referred was education minister Jack McConnell. Back in 2001, he said that rising exclusions were a sign that other policies were not working. No one wants an artificial reduction in exclusions, but people want an actual reduction that is brought about by better behaviour.

I draw the First Minister's attention to the reality in our schools last year. There was a 40 per cent increase in persistent disobedience, a 40 per cent increase in the verbal abuse of staff, an 88 per cent increase in offensive behaviour and more than 10,000 violent incidents, nearly 1,000 of which involved the use of a weapon.

I remind the First Minister that, in Labour's manifesto for the previous Scottish election, he said, "We will ... improve discipline" in schools. Will he accept that he has completely failed to deliver on that promise?

Jack McConnell (Labour, Motherwell and Wishaw)

Not at all. The nationalists and the Conservatives distort the figures in an extremely misleading way. For example, the figures that were being distorted this week include, for the first time, a proper, comprehensive addition of the day-to-day experience of teachers in special schools. In the past, teachers in such schools did not record verbal or physical reactions in the classroom as part of national or even local statistics, for the good reason that youngsters could be involved in such incidents because of their disabilities—they do not necessarily understand that they are being violent or abusive. However, those statistics are now properly recorded, because it is important that, year on year, we are able to monitor improvements in all our schools, including our special schools.

I admire teachers for being willing to make the change and ensure that the figures are included in the statistics. It is wrong for politicians to use their position to distort the statistics and mislead the public and parents in the way that Nicola Sturgeon does. The truth is that Scotland's schools are safer places because of the actions that we have taken, and they are better places because of additional teachers, improved school buildings, an improved curriculum, additional resources and better behaviour from pupils.

I taught in Scotland's schools when the kids in them were demotivated and felt that they had no hope and no future outside school because of a Conservative Government's economic actions. When I go round schools today, I find senior pupils helping younger ones in primary and secondary schools. I find eco-committees in which the schools and the kids work with parents and local communities to deliver a better future and understand the society in which they live. I find better results in primaries and secondaries. In classroom after classroom, I also find improvements in school discipline because of hard work by teachers and better behaviour from pupils. It is time that the nationalists and the Tories backed up Scotland's schools and teachers instead of attacking them all the time.

Nicola Sturgeon (Scottish National Party, Glasgow)

To be frank, it is disingenuous for the First Minister to argue that the situation in special schools explains his failure. I admire teachers too; it is the Government that is failing to deliver.

The First Minister says that education is his top priority, but he said that at the previous election and the election before that, and has failed to deliver. I remind him what has happened since 2003: indiscipline has got worse; the number of primary teachers has fallen; and class sizes are still far too big. I suggest to him that education is vital and that Scotland has huge potential but, to fulfil that potential, we need less rhetoric from a failing First Minister and real action from a new Government with fresh ideas and the will to deliver.

Jack McConnell (Labour, Motherwell and Wishaw)

Members from across the parties will notice that, in four statements from Ms Sturgeon, which partially included questions, there was not one policy, initiative, idea or grain that might inspire Scottish youngsters, teachers and parents or improve their lot. The truth is that, in education in Scotland today, we have more teachers, better school buildings, improvements in the curriculum and better results for the youngsters, who are themselves helping to improve discipline. Those youngsters make me proud because they are helping to build the better Scotland that we want. Ms Sturgeon and the Scottish National Party have a completely different priority for Scotland, which puts separation before education, but that will never happen. As long as I am First Minister, education will always come first.

Annabel Goldie (Conservative, West of Scotland)

To ask the First Minister what issues will be discussed at the next meeting of the Scottish Executive's Cabinet. (S2F-2684)

Jack McConnell (Labour, Motherwell and Wishaw)

The Cabinet will discuss a number of issues that are important to Scotland.

Annabel Goldie (Conservative, West of Scotland)

The First Minister is well aware of the horrific problems that Midlothian Council has with its social work department. Unlike some, I do not seek to blame him directly for the situation. It is right that local authorities deal with such issues, and they should be judged by the electorate.

That said, it is important to establish the Lib-Lab pact's role in and knowledge of this deeply worrying affair. We know that Midlothian Council has been aware of the problem since 2004 and has apparently been sitting on a report since September 2006. Therefore, will the First Minister tell me when he knew about the problem, in which other councils it is replicated and how many Scottish children are in similar danger?

Jack McConnell (Labour, Motherwell and Wishaw)

I will start at the end of Annabel Goldie's question, which deserves to be treated seriously because this is a desperately serious issue for youngsters in Midlothian and elsewhere in Scotland.

I do not have figures for the numbers of inspections that are currently taking place, but I am happy to provide them to Annabel Goldie afterwards. What I know is that the report was drawn to my attention last week, and I am aware that the Minister for Education and Young People and his officials were involved in preparing in advance for its publication. There have been discussions with Midlothian Council, in particular to ensure that it has an effective action plan in place to deal with the deficiencies that have been identified. I also note that this morning Midlothian Council seems to have taken action, and I welcome that.

For far too long in Scotland, public and, sometimes, voluntary bodies have not accepted the responsibility for failings in the child protection system that they should accept. Although all of us today would rightly criticise what has been happening in Midlothian Council services in recent years and praise the inspectors for how they have raised the issue properly under the new system of joint inspections, we would also welcome the fact that, on this occasion, someone has taken responsibility and resigned. I believe that others have perhaps done the same in recent weeks.

I hope now to see early action by Midlothian Council to put in place and then execute an action plan that ensures that youngsters across Midlothian are better protected and which enables the community, parents and friends of those youngsters to know that, when they are identified as requiring protection, they are properly looked after.

Annabel Goldie (Conservative, West of Scotland)

I thank the First Minister for that helpful response. As I said, I realise that he is not directly implicated in the affair. However, when it comes to the care, welfare and development of children, the record of the Labour Party and the Lib-Lab pact is abysmal. As has already been said, we were informed this week that there were 1,000 more exclusions from schools than in the previous year, which is apparently contributing to a rise of almost 20 per cent in the past three years alone. Added to that, in the past school year almost 1 million pupil days were lost to truancy, and nearly one in five pupils plays truant.

Faced with that stark information, why does this former teacher have so little faith in his former colleagues? Is it not about time that he gave more power to head teachers to provide effective school management—something that the Lib-Lab pact and their local government colleagues have shown themselves utterly unable to do?

Jack McConnell (Labour, Motherwell and Wishaw)

Unfortunately for the tone of debate, a number of issues are mixed up in that question in connection with the Midlothian Council report this morning, which I will come back to in a second.

First, on the issues that Annabel Goldie raised at the end of her question, the point that I made earlier still stands. I believe that, when the Parliament was first created, her party had a better policy on school exclusions than my party. It was right to call for us to remove the target. I was determined to do that when I became First Minister, and I did so. However, that being the case, it is wrong to criticise schools or the system—which is in effect what happens the Conservatives make these comments—for ensuring that the new policy is properly implemented and head teachers execute their responsibilities.

It is precisely because politicians exploit the issue of school exclusions that head teachers and teachers hesitate to make exclusions in the first place. We need to support them. When they make that judgment, we should encourage them to do so and to take effective action, while at the same time giving them every support to improve discipline in schools so that they do not need to make exclusions in future.

On the management of schools, the Executive has ensured that schools throughout Scotland have more devolved school management. We have done so not only by increasing such devolution in the first session of the Parliament, but by increasing it even further in this session, and by identifying those authorities that have not pursued devolved school management as effectively and energetically as they should and insisting that they do so. In addition, we have ensured that there is a system of inspection reports on local authorities so that we can check that they are carrying out their duties and responsibilities in relation to devolved school budgets and school management. Annabel Goldie is wrong about both those areas.

Annabel Goldie is also wrong in relation to the Midlothian Council report. In 2003, we instituted the new system of joint inspections precisely because youngsters were being mistreated in some areas of Scotland—some had actually died because of the inability of local departments to look after them properly. Following my election as First Minister, we introduced a new system of joint inspections. We have stood by that policy. We gave authorities three years to get their house in order, and we will now go through every authority with a joint inspection to check that they have done so. Where they have not, we expect action to be taken. Such youngsters, probably more than any others, deserve to be protected properly by the state at a local and a national level. We should leave no stone unturned in ensuring that the adults who are responsible for them—whether in their homes, in local authorities or in other agencies—work together to ensure that we get it right for every child. That is an absolute duty on and responsibility of 21st century government. As long as I am standing here, we will ensure that it happens.

Annabel Goldie (Conservative, West of Scotland)

Let us return to the environment of our schools. The clear message I am getting is that good, competent head teachers are hamstrung by state diktat from getting on with the jobs that their professional qualifications and experience equip them to do. The First Minister said that the Lib-Lab pact has improved devolved school management. How does the abolition of school boards do that?

On school discipline, my party previously revealed that there is an attack on a member of staff in a school every 12 minutes. What did the Lib-Lab pact do to rectify that problem? Did it give heads more power over exclusions? No—nothing as sensible as that; it stopped publishing the figures, and no wonder. The response to a recent Conservative freedom of information request—not a Conservative propaganda initiative—showed that physical violence in schools was up by 25 per cent in the past year alone. Will the First Minister start publishing those statistics again and stop hiding from Scotland's parents the true scale of violence in Scotland's schools?

Jack McConnell (Labour, Motherwell and Wishaw)

I repeat some of the points that I made earlier. In this instance, the Conservative research department has done Lord James Douglas-Hamilton a great disservice by putting out those figures in his name. The figures are a gross distortion of the position. They have been taken from local authorities throughout Scotland on the basis of inaccurate and, at times, very different interpretations of information. They include, as I said earlier, figures on special schools, which have not been included in the past. It is brave of teachers to identify those incidents, but we all know that some youngsters, for all kinds of reasons—sometimes reasons that are purely physical due to the nature of their bodies—gesture and act in ways that have an impact on the adult standing or sitting next to them. There is no intention whatever on the part of a severely disabled youngster to be in that situation. Those figures are a gross distortion of the truth.

The head teacher whom I met on Monday at Stirling high school did not talk about the school board that the school used to have years ago. He was looking forward to the new building that his school will have next year. He was inspired by the school's committee of youngsters, which is helping to ensure that the school is a cleaner, better place for the pupils who come next. I was inspired by the head boy and the head girl, who showed a real dedication to duty and the sort of leadership that youngsters are now showing in our schools that helps to deal with school discipline and makes it sustainable. The Conservatives and the nationalists should occasionally praise such practices and improvements in our schools, rather than running down the teachers and the pupils who are doing so much to make Scotland a better place.

George Reid (None, Ochil)

There are two brief supplementaries.

Irene Oldfather (Labour, Cunninghame South)

The First Minister will be aware of the 420 job losses in my constituency announced by Simclar (Ayrshire) Ltd on Monday. Will he join me in condemning the shoddy way in which the workforce was informed of the job losses? Some of them received texts. Will he undertake to investigate whether the company's actions breach the European worker information and consultation directive? Is he further aware that the company has indicated that it will look to the Department for Trade and Industry to make minimum statutory redundancy payments, although suggestions of asset stripping need to be investigated? Finally, will he agree to meet me urgently to discuss the resources that could be levered into the area to help us meet the substantial challenge that we will face in North Ayrshire to absorb those job losses?