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Finance Committee

11th Report 2001

Annual Report of the Finance Committee for the Parliamentary Year 12 May 2000 to 11 May 2001

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SP Paper 414

Session 1 (2001)


Remit and Membership


1. The remit of the Finance Committee is to consider and report on-

(a) any report or other document laid before the Parliament by members of the Scottish Executive containing proposals for, or budgets of, public expenditure or proposals for the making of a tax-varying resolution, taking into account any report or recommendations concerning such documents made to them by any other committee with power to consider such documents or any part of them;

(b) any report made by a committee setting out proposals concerning public expenditure;

(c) Budget Bills; and

(d) any other matter relating to or affecting the expenditure of the Scottish Administration or other expenditure payable out of the Scottish Consolidated Fund.

2. The Committee may also consider and, where it sees fit, report to the Parliament on the timetable for the Stages of Budget Bills and on the handling of financial business.

3. In these Rules, "public expenditure" means expenditure of the Scottish Administration, other expenditure payable out of the Scottish Consolidated Fund and any other expenditure met out of taxes, charges and other public revenue.


Mike Watson (Convener)

Elaine Thomson (Deputy Convener)

David Davidson

Donald Gorrie (from 8 January 2001)

Adam Ingram

Dr Richard Simpson

Andrew Wilson

Past Members

Rhoda Grant (until 8 January 2001)

George Lyon (until 8 January 2001)

Kenneth Macintosh (until 8 January 2001)

Alex Neil (from 2 November 2000 to 8 January 2001)

Keith Raffan (until 8 January 2001)

John Swinney (until 1 November 2000)

Committee Clerks

Callum Thomson

Anne Peat

Gerry McInally

Contact Telephone and Email

Gerry McInally

Assistant Clerk



The Committee reports to the Parliament as follows-


1. The membership of the Committee changed on 1 November 2000 with Alex Neil replacing John Swinney. Subsequent changes in the membership of the Committee were due to a decision by the Parliament to reduce the membership from 11 members to 7. These changes were effective from 8 January 2001.

Priorities and Inquiries

Budget Process

2. The principal task of the Finance Committee will always be to co-ordinate the Parliament's response to the Scottish Executive's budget proposals. Over the course of the 2001/02 budget process, (including the passage of the Budget Act 2001) the vast majority of Members were involved (whether as members of the ten committees scrutinising spending plans or as Ministers being held to account). Indeed the Finance Committee alone took evidence from the Minister for Finance and Local Government (or his deputy) six times in connection with budgetary matters.

3. Such scrutiny has thrown the budget process open to participation by a wide range or interest groups and organisations. The Finance Committee is committed to engaging with the people of Scotland on these matters. Accordingly the Committee took evidence in Aberdeen from local councils, business organisations, educational establishments and voluntary sector groups to see how the proposed budget would impact on the services available to Aberdeenshire people.

4. The budget process is certainly not without its flaws and the Finance Committee is committed to making sure that truly informed scrutiny can take place. The key issue to be tackled now is to ensure that the budgetary data provided by the Executive is relevant and robust. Despite the shortcomings in the current process, specific expenditure re-allocations were made in the Budget Act as a result of the budget process, notably increases in the budget of Victim Support Scotland and the size of the mental illness specific grant.

Related work

5. In this period, the Committee has undertaken other major pieces of work which underpin its budgetary work.

· Inquiry into resource accounting and budgeting.

6. RAB has added around £1.2 billion to the size of the Scottish Budget and the Committee inquired into how it was being implemented and, specifically, to ascertain whether lessons could be learned to ensure that this major change in government practice was more than just an accountancy exercise. Furthermore, the Committee made sure it was aware of best practice by taking evidence, via video conference, from a highly respected Professor in New Zealand. Appropriately for the Finance Committee, a valuable insight was obtained at a fraction of the cost of travelling to meet her in person.

· External research

7. The Finance Committee was the first committee to commission independent research to aid its work. Professor Arthur Midwinter produced research on the real level of inflation in public spending together with an analysis of the extent to which discretion exists in determining the allocation of resources across the public services. This will have a direct and positive effect on the Parliament's input into the budget process.


8. In addition to its involvement in the Budget Bill, the Finance Committee reported on the financial memorandums of 11 Scottish Executive Bills, as well as 1 Member's Bill.

Subordinate Legislation

9. In the last parliamentary year the Finance Committee has considered 4 Scottish Statutory Instruments, three of which involved amending Budget Acts, thereby implementing changes to the make-up of the Scottish Budget..


10. From 11 May 2000 to 10 May 2001, the Committee met 29 times. 1 of these meetings was held entirely in private; 25 were held partly in private. Of these 29 meetings, 28 were held in Edinburgh, 1 was held in Aberdeen.

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