This blog is the first in a series of publications supporting scrutiny of the Scottish Budget 2024-25.
Last year SPICe took an experimental approach to applying the use of the three principles of human rights budgeting – transparency, accountability, and participation – to the Scottish Budget. After exploring the Scottish Government’s Budget document, we took a look at the pre-budget letters and reports of 12 committees to see where the common themes lay.
This blog explains how this analysis was used, explores the common themes in pre-budget scrutiny 2024-25, what has changed, and what the implications are.
Using the cross-committee analysis
In last years’ blog, we looked at recent changes to the Scottish Budget process and the impact on oversight, and noted that there were several areas of common interest among committees. We concluded that:
“The only question remaining is where there might be appetite and scope in the committee scrutiny process to link up the common themes and concerns across all portfolios and better understand the Budget Bingo full house.”
Budget Bingo – common themes in Committee’s pre-budget scrutiny, SPICe Spotlight, January 2023
To further support the scrutiny process, SPICe carried out some further internal analysis on changes to the key themes and evidence base in committees’ budget scrutiny between 2018-19 (before changes recommended by the Budget Process Review Group were implemented) and 2023-24. This showed that there were significant overlaps in the organisations giving evidence to committees, and that this overlap had increased in recent years. We used this analysis in two ways:
- The Finance and Public Administration Committee drew on the analysis when setting out its guidance to subject committees on pre-Budget scrutiny, and
- A coordinated approach to research support for committees was used to flag overlaps, highlight good practice, and support the Scottish Parliament’s Convenor’s Group’s aim of helping “committees find ways to work together on issues of shared interest”. This led to collaboration between the Equalities, Civil Justice and Human Rights and Social Justice and Social Security Committees in this year’s pre-budget scrutiny.
The Finance and Public Administration Committee guidance to other committees on pre-budget scrutiny also included several suggestions to help committees focus their scrutiny, including:
- Using the Scottish Government’s Medium-Term Financial Strategy and forecasts by the Scottish Fiscal Commission (SFC) to set the context for pre-budget scrutiny.
- Looking at public service reform, pay sustainability and preventative measures within portfolios.
- Exploring the impact of spending on National Outcomes.
- Examining fiscal transparency, and aspirations around climate change and equalities; and,
- A focus on the reprioritisation of spend, rather than increased allocations.
One of the purposes of this blog is to support committees as they prepare to examine the Scottish Government’s responses to their letters and provide a cross-committee context for the latter stages of the Budget process.
How approaches to pre-budget scrutiny vary
Our analysis is based on the conclusions and recommendations highlighted in the letters and reports of subject committees, rather than the text as a whole. These are mostly aimed at the Scottish Government, but some conclusions are aimed at public bodies. Approaches vary – some conclusions are “we recognise”, some are “we recommend”, but the largest proportion are questions aimed at the Scottish Government – what, when, how, and why?
Each committee sets out its findings in a different format, so quantifying this information is challenging, and the detail we provide should be seen as indicative. That said, we found that the volume of output from committees this year was higher than last year, and there were considerably more conclusions and recommendations.
Some committees chose to use a “call for views” to gather written evidence from stakeholders and the wider public. The number of committees using a call for views this year was the same as last year, but the use of a public survey by one committee, and participation by two committees, diversified the evidence-base and increased the number of individual voices. Committees took less oral evidence this year than last year, but several incorporated evidence from their other scrutiny work, and/or built on previous budget scrutiny.
The number of committees taking pre-budget evidence was the same as last year, but there was a change in those committees. The Covid-19 Recovery Committee carried our budget scrutiny last year, but this committee was disbanded with the mainstreaming of Covid Recovery by the Scottish Government in Spring. And, for the first time ever, the Citizen Participation and Public Petitions Committee took budget evidence.
Common themes in 2024-25 pre-budget scrutiny
Last year we structured our analysis based on the three principles of human rights budgeting. We’ve done the same again, but it’s important to note that this is a qualitative approach, and not all conclusions fit neatly into one category. By their very nature, issues are interconnected – a recommendation around understanding the data underlying a spending decision is about both transparency AND accountability, for instance.
Proportionately, the highest number of recommendations related to transparency, followed by accountability and participation.
Transparency
The number of recommendations relating to transparency, specifically fiscal transparency, and data, increased this year, and there was a slight reduction in recommendations relating to clarity of policy.
Committees focussed heavily on the need for more detail on funding commitments and allocations, and detail about where money would be drawn from and distributed. Rather than focus on a need for increased funding, committees were curious about the opportunities that reprofiling might bring. There was also a theme of trying to understand whether funding had been fully spent, and the links between spend, policy objectives and outcomes. There were regular references to the Medium-Term Financial Strategy and SFC forecasting, a likely reflection of the Finance and Public Administration Committee’s guidance.
These types of recommendation link heavily to those on policy clarity – updates on policy implementation, Scottish Government policy direction and approaches, and detail on how policies will work. There were also several queries about the Scottish Government’s stance on policies proposed by stakeholders.
There were more recommendations on data than last year, which went beyond calls for specific data and increased disaggregation. The focus has shifted towards data-sharing, streamlining, and access, as well as the evidence and modelling underlying policy. In some cases, committees were still looking for updates on data questions from past scrutiny.
Accountability
The concerns around transparency and the data underlying policy feed well into the theme of accountability. Overwhelmingly, committees wanted to understand the Scottish Government’s rationale. What evidence is there behind policy decisions, how is progress being measured, and what is driving the decision-making process?
There were specific concerns about delays to programmes and a lack of evaluation. Most strikingly, perhaps, were conclusions expressing a lack of strategic focus and leadership, gaps in legislative and strategic frameworks, and a misalignment between policy and spending.
Recommendations specifically around accountability and governance were far more prominent this year. This carried through into concerns around a lack of long-term strategic focus (heavily linked to multi-year budgets, fiscal sustainability and preventative spend) and a lack of cross-portfolio working and effective mainstreaming. Many committees referred to the National Outcomes, and how these link to spending decisions.
Finally, there were concerns raised about policy and funding decisions being announced without time being given for Parliamentary scrutiny (such as the Council Tax freeze), as well as the impact on confidence in the Government caused by reversals to funding cuts (specifically in relation to Creative Scotland).
Participation
Participation was less of a theme in recommendations this year, despite two committees building their scrutiny approach around it (the Equalities, Human Rights and Civil Justice and Citizen Participation and Public Petitions Committees).
The Scottish Government has suggested, in its response to the recommendations of the Equality and Human Rights Budget Advisory Group, and in last year’s Budget documents that participation in the budget fits within the committee scrutiny stage. It would be appropriate, then, that committees are starting to explore increasing participation in their own practice. As we noted, this had led to wider public involvement in the budget process, which may have impacted on committees’ impetus to hold the Government to account. For example, the Equalities, Human Rights and Civil Justice Committee used a deliberative approach to have citizens develop questions for the Scottish Government and expressed disappointment in its letter about the lack of clarity in the Minister’s responses.
Mainstreamed and topical issues
On top of recommendations which fit within the themes above, there are typically those which focus either on prominent, topical issues, including mainstreamed issues, and on general calls for increased funding.
Most likely in recognition of the challenging financial climate and the Finance and Public Administration Committee’s guidance, the number of recommendations around a need for more funding fell this year, replaced by a desire to understand spending prioritisation. There were also fewer recommendations related to topical issues like the cost-of-living crisis, inflation, and public sector pay. Some newer topical issues focused on the Verity House Agreement between the Scottish Government and Local Government, and the Scottish Government’s revenue raising and borrowing powers.
The Finance and Public Administration Committee’s guidance highlighted climate change and equalities as mainstreamed issues to focus on. Both were a feature of around a tenth of recommendations, with a notable increase in those relating to climate change.
The top questions for the Scottish Government
One of the aims of this work is to identify overlaps between committees. In some cases, this might be duplicated work, and in others, it may be that the same issue is prominent across several portfolios or is persistently unaddressed.
If we were to summarise the main conclusions from committees, that appeared over and over, they would be:
- There is a need for longer-term financial planning and multi-year funding, both in the Scottish Government’s spending plans overall, and in several portfolios, including a need to balance short-term pressures and preventative spend (culture, criminal justice, skills development, third sector, capital investment, health and social care, local government and housing).
- The Scottish Government needs to make its strategic focus and priorities clear in several areas, and link this clearly to spending decisions (culture, skills development, education, human rights, taxation and fiscal framework, third sector funding, local government, public service reform, prevention, commissioners, transport, care in the community, science and innovation, islands, cost of living, child poverty, and housing rights).
- The Scottish Government needs to better demonstrate the link between policy and spending decisions and National Outcomes and do so in a holistic and cross-portfolio way. This includes evidencing decisions, explaining reasoning, and reprioritising of spend where needed.
Conclusions
As well as showing the themes emerging from committee budget scrutiny this year, this analysis has shown a slight shift in the approach taken by committees, with an increasing focus on transparency, accountability, and participation. This compliments the Scottish Government’s stated aspiration of progressing towards a human rights budget.
The use of the guidance provided by the Finance and Public Administration Committee is clear, and this, combined with committees working together to coordinate budget scrutiny, has led to a more cohesive set of conclusions and recommendations. Rather than overlapping directly, the work of the committees has demonstrated common concerns and challenges. There is also a greater emphasis on understanding the Government’s processes and rationale, and a shared understanding of budget pressures.
Put simply, committees acknowledge the difficult decisions the Scottish Government must make, so are focusing on making sure those decisions are made in a rigorous and evidenced way and linked to strategic priorities. They are taking a more outcomes-based approach to scrutiny, which leans towards OECD-recommended best practice. This is demonstrated well by the following recommendation by the Finance and Public Administration Committee:
“We recommend that the Scottish Government explicitly sets out in the Scottish Budget 2024-25 if there are any areas of spending it has assessed as not meeting its three missions test and where funding will, as a result, be reduced or ceased entirely.”
Pre-Budget Scrutiny 2024-25: the sustainability of Scotland’s finances, Finance and Public Administration Committee (Paragraph 108)
What next?
The Scottish Budget for 2024-25 will be published on Tuesday 19th December. As per the Budget Process Review Group recommendations, individual ministers are required to respond to committee pre-budget letters within five sitting days of the Budget being published. The Finance and Public Administration Committee will take evidence from the Scottish Fiscal Commission the following day, and several committees will take post-budget evidence in January, before holding a debate in the Chamber in early-February. The Budget Bill will then progress through Stage 2, with the Finance and Public Administration Committee, and then to Stage 3, in the Chamber.
SPICe will, as always, publish additional analysis on the release of the Budget, including a repeat of our look at how transparency, accountability and participation are reflected.
The next step in committees’ scrutiny journey may be to examine more closely the impact their work has in improving accountability. In its letter to the Minister for Equalities, Migration and Refugees, the Equalities, Human Rights and Civil Justice Committee said:
“Will the Scottish Government commit to clearly setting out within budget documents the decisions made as a result of Committees’ recommendations?”
Understanding how much the Scottish Government is taking on board from committee scrutiny will be a true test of accountability, and there may be some merit in exploring how the style and language of recommendations influences their impact.
In the meantime, SPICe will continue to curiously explore the themes, impacts and cross-cutting scrutiny implications within budget work and to support the Finance and Public Administration Committee’s leadership role within scrutiny of both the Scottish Budget and the upcoming update to National Outcomes that underpin the National Performance Framework.
Ailsa Burn-Murdoch, Financial Scrutiny Unit, SPICe