 Welcome to the 10th meeting in 2017 of the Finance and Constitution Committee. As usual, I can remind members to put their mobile phones, tablets etc. into a mode that won't interfere with the proceedings. The first item on agenda today is to decide whether to take item 3 in private and any future consideration in private. Are members agreed? Yes. The second item on agenda is to take evidence on the budget process review group's interim report from three external members of the group. I welcome to the meeting Colin Gardner, the Auditor General for Scotland, Professor James Mitchell, director of academy of government at the University of Edinburgh, and Don Peebles, who is the head of chartered institute of public finance and accountancy. I very welcome our witnesses to the meeting. You have provided us with the rest of the members of the group with a very substantive and detailed interim report. I think that it is asked the right questions, and it has helped to initiate a debate that begins today in the Scottish Parliament on what a new budgetary process could look like. I am grateful for that input and the work that has already been done. I very warmly welcome you to the meeting. I wonder if you want to make an opening statement. Thank you, convener. On behalf of the members of the budget process review group, thanks for inviting us to provide evidence on the group's interim report. As the committee knows very well, the Scotland Acts of 2012 and 2016 devolved substantial new financial and social security powers to the Scottish Parliament. That means that the Scottish budget is becoming increasingly complex and subject to much greater uncertainty and volatility than in the past when the block grant from the UK government was relatively fixed. The Scottish Government and the Scottish Parliament will have more choice over tax and spending and more decisions to take about how and when to use the new powers within the agreed fiscal framework. The Scottish Parliament's budget process needs to reflect these fundamental changes in the Scottish public finances. The budget process review group was established to review the budget process and bring forward proposals for change. We have approached that in two stages. This interim report highlights what we see as some of the key issues grouped around five key themes and includes questions for consultation. Following that, we aim to publish a final report with recommendations before the end of June. We have adopted a principles-based approach to our work, aiming for a world-class financial scrutiny process that reflects the Scottish context. Membership of the group includes Scottish Parliament and Scottish Government officials, as well as eight external members, including James Mitchell, Don Peebles and myself. We have heard from a number of public finance experts who have presented their views, and the interim report reflects the breadth of contributions from members and others. It sets out the issues that need to be considered, but it does not at this stage present the agreed findings of the group overall. We are keen to gather a wide range of views from you as parliamentarians, from Civic Scotland and from the Scottish public before agreeing our recommendations later this spring. The consultation that we have launched is obviously a very important opportunity for people to have their say. Ultimately, we are very clear that it will be for the Scottish Parliament and the Scottish Government to agree a revised process. There are choices to be made on what this will look like and when and how it will be implemented. That will depend, to a great extent, on what Professor Vayner, whose backing research that we have published alongside our report, calls the agreed vision for parliamentary scrutiny. It will also require us to decide how best to balance aspirations for what the process might look like with practicality, and I think that that will need a careful blend of ambition and realism. Convener, we will do our best to answer your questions. Thank you very much. We are going to start immediately with Adam Tomkins. Adam, what do you... Thank you, convener, and thank you for coming to speak with us this morning and for your work with the review group. One option that has been canvassed in various circles and in various different contexts is that this Parliament should have an annual finance bill, which I understand that the House of Commons has. What is the difference between what we currently do and having an annual finance bill, and what in your views would be the strengths and limitations of moving to that finance bill model? A very good question to start with. I think that our starting point would be that a move to a finance bill would need to be an integral part of a wider vision, as I touched on speaking in my introduction, about the way in which the overall budget process and the scrutiny of it would work. If there is a desire to move towards greater amendment powers for this Parliament, for example, then a finance bill would give you the big picture of both revenue raising and spending in the round and allow that scrutiny consideration of whether there should be amendments proposed by committees that would then move through to the bill as it was passed in its final form. At the moment, what we are really seeing is proposals for spending within an overall financial envelope, and although there is a provision for amendment at stage 1, that has very rarely been used. Instead, we have seen behind-the-scenes negotiations leading to an amendment from the Government of the budget bill that is being introduced. So I think that there could be real benefits if the Parliament and the Government decide that amendment powers would be appropriate within the new process. From my point of view, I think that there would be a benefit in letting you have that big picture of revenue raising and spend, and all of the aggregates that come into that, things like the borrowing powers that come through the Scotland reserve, the ability to smooth expenditure taking one year with another. You would have that big picture. So a finance bill would change the balance of power between Government and Parliament in Parliament's favour. A finance bill on its own would not do that. A finance bill together with amendment powers, which is one of the other issues that we are suggesting needs to be considered at this stage of the review of the budget process. What would be the cost from a parliamentary point of view? What would be the price of this? In particular, would it have any effect on the amount of time that Parliament has to consider the Government's budget proposals? We have taken the view that even if you were to move to this model, there would be many other aspects of the budget to process. I think that it would be a mistake to focus on only one element in the year. Therefore, if that is a problem, you would need to build into the process other ways of considering scrutiny over the course of the year. The great danger would be to see this as one single event, even if it is concentrated over a period of time. We would be keen to hear your views on this, and we would be reluctant to give our own views at this stage. However, we would need to ensure that, as Garlane was saying, there is a long term over the whole course of the year process. In other words, if you were to move to a system such as this with any deficiencies, you would need to build in at other points of the year arrangements to address some of those deficiencies. That is why we have tried to look at this in a more realistic way rather than just to focus on one part. I understand that. I understand the force of that argument very much, but I am just trying to understand in a little bit more detail than I currently do exactly what the differences are, both positive and negative, from a Parliament point of view. However, when you compare what we currently do with what we would be able to do if we had an annual finance bill—let me give you one example of something that has recently been said—as a consequence of us not having a finance bill, which relates to the air-departure tax bill. The air-departure tax bill does not contain on the face of the bill all of the detail about the scope of the tax liability. Clearly, it does not have anything about bans and rates that you would expect. However, it does not even have everything on the face of the bill about the scope of tax liability, in particular with regard to exemptions. That is different from the current air-departure tax legislation at UK level. We were told recently by the Cabinet Secretary that that is because there is not a finance bill. How would you reflect on that? I am not the specifics of ADT, but is it a general or systemic problem for this Parliament in your view of not having a finance bill that we have to pass tax legislation that leaves questions of the scope and of the liability of the tax to secondary instruments? I suppose that we have to be aware that the current process and the design of the budget bill is an outline for expenditure. We are in different circumstances now and those circumstances will change going forward. Questions like that are entirely valid. It is unlikely that, through the process that we have gone through so far, we have the answer to that. That is a question that we will be seeking answers to, but the interrelationship with other elements of taxation and how the formal expression of all of that can be put forward to parliamentarians so that you have as wide and as true of you as possible. If we look at the current situation in which there is an interrelationship between the bill and the need for the Scottish rate resolution, that stage 3 cannot begin until the rate resolution has been formalised, that is the type of thing that we have to assess going forward and think about what we need to do. Is the expression of all of that right in a single finance bill? Good morning. Just to follow up on that, we have a range of tax instruments now. You mentioned the rate resolution, which has perhaps the highest profile in terms of public debate, partly because it is new and partly because the budget cannot proceed to stage 3 until, as you say, that resolution has been passed. We also have a lower level of scrutiny traditionally for other existing tax instruments. Non-domestic rates, for example, are a negative instrument. It has very rarely been debated in parliamentary committees or in the chamber. Council tax, again, albeit technically, is set by local councils. There is a degree of central policy making at the moment around rate capping previously around a council tax freeze. We have now got quite a wide range, as well as ADT is currently being legislated for. We have got a range of tax instruments and a different level of parliamentary process and scrutiny for each one. Is the finance bill model that you are suggesting intended to square that off and regularise, have a similar standard of parliamentary scrutiny for these different instruments, or would that not be resolved by what you are proposing? I probably should start off by saying that we are not necessarily proposing anything at this point. We are seeking people to use. The group is very clear that we are moving from a position where, for the first 16 years of its life, Parliament was deciding how to spend, in large part, a block grant that came from Westminster. We are now moving into a very different world where half of what is spent in Scotland will be raised in Scotland. There are questions that have come through our discussion this morning already about the way the revenue-raising parts of that picture come together. I think that you have highlighted another perspective on that, Mr Harvey, which is also important. I have reported, as Auditor General, previously on the fact that we do not have a single picture of Scotland's public finances that does pull in council tax income, non-domestic rates income, the borrowing powers that came in under the 2012 Scotland Act and some other aspects. Throughout the budget cycle again, we need to have that picture at the high level with the aggregates that are there as a basis for making decisions about the priorities for spending and the various revenue-raising measures that come through. A finance bill would be one way of pulling all of that together. There would be timing issues that would need to work through in terms of the Government's ability to prepare the information and the Parliament to scrutinise it. There is the question about amendment powers, but we are looking to raise the importance of that big picture and how it might work in practice in what will inevitably be conditions of greater uncertainty and constrained time. It would seem from a perspective of both efficiency and scrutiny that to have a finance bill that contained all of the various elements that we are dealing with through secondary legislation at the moment, on the face of it, would seem to be a reasonable thing to do, because it would improve scrutiny for Parliament, it would improve efficiency and government as well in order to bring different things at different times of the year, and it might reduce flexibility a bit for government in terms of change. However, if that was to be the construct that we eventually came to, how would that sit alongside another aspect that was drawn out in the report of the idea—I think that it was a good idea—about a medium-term examination of the finances of the country that would be seen as part of that holistic picture? How would they sit alongside each other? Can they sit alongside each other comfortably? I think that that is a really good and important question. That is what we are grappling with, how we fit the pieces together effectively. I think that we want to have all of these things, and often, when it comes to budgetary politics, there are trade-offs. In this case, the way to try to balance that is to ensure that these different processes occur almost separately but are linked, and it is to get that linkage, how it feeds in. To come back to the example that Pat Carvie raised, there are so many aspects of the budgetary process that you would want to look at each year, and you simply cannot—you just do not have the time to do it all at once. In tandem with the bigger picture, you need to have some things running alongside that, but they must not just be running alongside that, but they have to feed into the process. That is where one of the challenges lies. It also lies in terms of the different committees and how they operate, the relationship between the committee and other committees, if they are doing work on some of those areas. I think that that is one of the big challenges. It has been challenging enough up until now that it is going to be much more challenging in the future. That is why we have to get that right, but we do not want to make firm proposals at this stage. The danger is that, if we say X, Y or Z, we may come to regret it, and that is why we are keen to get as much feedback from you and others. One other aspect of that, and I do not quite rightly draw my attention to the fact that, obviously, we are a change in the UK budgetary cycle itself. Therefore, what consideration has the group given to that change in the autumn budget cycle that will fit alongside any medium-term examination of the Scottish finances alongside the economy, no doubt, at the same time in any finance bill? Is there a beginning to emerging a picture about how that might sit alongside each other? The medium-term financial planning itself will probably be informed by the UK budget, irrespective of the timing. I will also pick up on what has been discussed. I would not say that there is a choice between a medium-term financial plan and a finance bill. I would say that the finance bill being the parliamentary expression of all the information that has been brought before parliamentary terms of which a medium-term financial plan would be one component. The way that the UK budget would operate would again inform the financial planning of the Scottish Government. At the moment, the timing, in essence, has been March. Previously, going back further, the UK budget used to be at two times in a year. It used to announce expenditure in the autumn. What we knew generally, as the budget in March, was about the income. It is relatively recent. Probably within the last 20 years, it has brought both of them together to be the consolidated budget that we recognise now. In announcing budget in the autumn, there is reverting back expenditure terms to a position that was quite common previously. There will be an interrelationship with the Scottish Government. The reality is for parliamentarians that it could truncate the timescale that it has to examine and scrutinise in the budget. There is the possibility, depending on the timing itself, that there may be need for potential revision to the Scottish Government budget, as a result, depending on when the timing actually is. Ash Denham, I have not gone too much into the territory that you wanted to ask. I apologise. That was what I was going to cover. The idea that you either have the Scottish draft budget either before you know what is going to be in the UK budget, which means that it could be plenty of scrutiny, but it might be subject to quite substantial revisions, or you have it afterwards when you know what the content is going to be, but that does condense down the period with which you have to scrutinise it. What are your views on that? That dilemma, and it is a real dilemma, is very much behind the group's proposal suggestion that we should be considering scrutiny across the whole budget cycle, not just in that period of eight weeks or two weeks or whatever it ends up being, after the UK budget has been announced and before the budget bill or finance bill here has to be approved, but instead focusing the scrutiny over a much longer period supported by better information, fuller and more usable information than we have in some areas, so that the discussion focuses on the changes really during the period after the UK budget and the introduction of the Scottish budget in whatever form that takes. Again, it does mean pulling back and taking that look at the whole system, not just at that bit, but our thinking so far is that that can compensate for it if it is properly supported by good information and supports the Parliament's committees to do their work. I think that it is one of the big changes that is going to have to be addressed with respect to this, but other aspects, including the reconciliations, there is going to be a lot more uncertainty and there is going to be a lot more change. That has hugely influenced the way we have been working to acknowledge that that is going to be the new environment. The dilemma that you have raised is a very real one. That means that we have to present this as a moralistic way than perhaps we have. It may not be perfect, but it is probably the only way forward. One of the things that we have grappled with is uncertainty and change that is going to be introduced to a greater extent than we have had in the past. I noted with interest that you were speaking about this idea of rather than grouping and spending it into portfolios, but it was done by linking it to outcomes that the Government was trying to achieve. Would you like to say a little more about that? I will kick off and then I am sure Jim will have very strong views as well. The group has talked about this a lot and recognises that it has to be a good thing for any Government to be thinking about the outcomes that it wants to achieve in allocating its budget—that is the main way that it has got to changing society life in Scotland. The national performance framework has been seen as a real trailblazer in setting out clarity about those outcomes and embedding them in legislation. Where our debate has focused has been much more on how you link the budget to the outcomes. Professor Vayner's report was very helpful to us in demonstrating that trying to draw a direct line between what you spend and the outcomes that you get is very tricky and can dilute accountability rather than strengthen it. That is why our report is talking more about outputs, but outputs that are clearly designed to be staging points towards the outcomes that you want to achieve, linking the spending programmes to the outputs that you want to get and getting some more clarity there. One of the outcomes at the moment in the national performance framework is about living our lives safe from crime, disorder and danger. It is quite difficult at the moment to see how all the spending that goes on primarily in the justice portfolio but also more widely is linked to that. There has been some very good work done in Government about how you would go about a programme approach to reducing reoffending. We think that there is room to take the outcomes, work back to the outputs that you are seeking to achieve and then link your spending much more clearly to them. That seems to us like a very productive way of taking it forward. I have presented to the committee in the past on outcomes. I think that that is a hugely important point. If we fail to take into account outcomes, we will be making a major feeling. I think that the only thing that I would really want to add to Caroline's comments is that the work that Audit Scotland has done and continues to do has been hugely important in this respect and should be informing the work of the Parliament, as it does. It is a very tricky area to link outcomes to spending. We know that there are issues around how long it takes to have an impact and so on. For those sorts of issues that we have discussed in the past, I think that what we are very keen to do and why we have a section on this is to highlight that and to bring it to attention and to ensure that we do not lose sight of outcomes. I will add to that. It might be interesting for information to the committee to know that, as Caroline rightly says, when you can trace us back to about 10 years of the focus of Parliament and government on outcomes, Scotland has seen pretty much as a bit of a trailblazer in that regard. Last year, the Northern Ireland executive introduced an outcomes-based approach in the programme for government, which was modelled on Scotland. Three years ago, when the Welsh Assembly was looking at its budget process, it looked to Scotland about how we approached not only budgeting but our approach to outcomes. We are probably in a good place notwithstanding that there is still a lot of work to do, as far as our approach is generally concerned with outcomes. We are going into outcomes quicker than I expected, but I did exactly the same. I know that Patrick MacKinnon wants it in, but let me get through the outcomes and finish first. Patrick, I will come back to you, because I know that Ivan and Murdo both had questions on outcomes. I just wanted to drill into that a wee bit more. I see that you have looked at four countries and looked at New Zealand in particular in terms of what they do. We are very keen to learn more about what is there. I totally get what you are talking about in terms of your strategy, and then you get the outcomes of them. I am reading that right, which are pretty high-level. On the other side of that, we have clearly got this focus on inputs, which in politicians are terrible at that. We talk about that all the time, and we need to change. We know that right. That is clearly all portfolio driven, and it is how you join up. I am glad to hear that you are talking about what you are calling outputs, which to my mind is a kind of lower level in the hierarchy of objectives that the portfolio departments can plug into. I want to probe a bit more in terms of what you will learn from other countries, in particular how New Zealand does that. It is good in one way that Scotland, to some extent, as you say, is at the forefront of that stuff. It is bad in another way that we do not have anyone perhaps to learn from. I do not know if you have looked outside clearly as differences between the private sector and the public sector, but I am not saying that the private sector is good at that, because a lot of large private sector companies are very rubbish at that. However, have you looked at any examples from the private sector in terms of how they would organise strategic objectives, intermediate objectives, lining up departmental spend and then tracking performance against that? What we have done so far is containing the report that Professor Vain prepared for us, which looked across four countries at their overall budget processes. I think that, in relation to outcomes and outputs, the most relevant were New Zealand and Australia, New Zealand, where they have made this very focused approach to focusing on outputs that are linked to outcomes and that seem to us to have a lot of mileage to explore further in the Scottish context. Australia, where it appears that there is still very much more weight straight to outcomes and the concern that that does dilute accountability and make it very hard to see which expenditure is effective and which is not. We can take away your suggestion that we should be looking at business in other sectors to see if there is something that we can learn from. I guess that the challenge is that most businesses are not as transparent about the way that they do that sort of planning as Governments have been for good reason, but we will certainly have a look at it. In terms of the measures themselves, the national performance framework, do you think that there is value in the committee having a look at that, just to see what is there and what measures are in there and whether they are the most effective ones in terms of what we are trying to achieve here? I think that the national performance framework always thought to be scrutinised and I think that it is an on-going process. I know that that is happening anyway, but I do think that it would be always useful to do that. I think that there is always room for improvement. I think that the broad principle is the right way forward, but we have got to constantly review that. Whether that is part of this process or any other process, I think that it is necessary. I would want to emphasise the New Zealand, because I think that we were aware of the New Zealand example before we began this work. I think that we had an extremely useful presentation on New Zealand during our deliberations, and it is certainly one. You are right, as much as we may be ahead of the game in many respects, but there are places that we have much to learn from and it is very interesting to the extent to which New Zealand has emerged very strongly in respect. I would want to emphasise the national performance framework. That is an integral part of your deliberations, and it is a part of the process rather than a part of it. That is probably one of the things that we need to consider in relation to outcomes and how that can be consolidated in the process. I think that it is right that we are learning from other countries and being very revealing. New Zealand has always been at the forefront, but one of the things that the group picked up from the assessment of other countries is that, perhaps paradoxically, the Parliament of New Zealand takes a minimal approach to scrutiny. The Parliament has a minor role in the process, and to get the budget one month before financial year end, and it is two months into the financial year before it is approved. For as much as there are many positives, there are other things to learn about the parliamentary approach. That is something that we should look at to see if that works better, or is it a negative? It seems to me that that is a negative. That is fair, and I always think that that is clear. I suppose that the last thing is round about how we build us into our on-going work, because I know that there have clearly been conversations with us asking other committees to do stuff and them going and doing stuff and stuff coming back, but that seems to be the kind of level that is at. There is not a rigorous process of saying that these are the questions that should be asked, and those are the measures that should be checked, and those are your performance measures that you should be tracking, and those are the outcomes and outputs that you should be expecting. To my mind, I look at that we have an awful lot more bales cracks on the surface on that. Is that how you see it? Yes. We are nervous and reluctant to tell committees how they ought to operate, and so on and so forth. I think that the other committees will have their own agendas and they have their own business, and they are all extremely busy, but I do think that if it was at all possible to move towards a more coherent coordinate approach, that would be good. However, there is a downside to that, and the other committees would lose some of their autonomy. However, as we move forward into this new environment, I think that it becomes ever more important that there is some degree of, perhaps greater degree, and that we are trying to work as carefully as we can of co-ordination across committees. The guidelines on how you might want to approach it might be more... Again, I think that moving towards this focus on the whole budget cycle rather than the budget season helps with that. Committees have choices about at what point in the year they do it and where they want to focus. If you are a health and support committee, whereabouts in the year and what particular issues you want to look into, that can link in to the information that the Government provides and the audit work that is available to them. You can do it much better if you are looking over a longer period rather than just in a few weeks across the order. I suppose that it is getting away from the conversation around what we are spending their money on and what the outcomes are. I think that we have covered a lot of the ground that I was going to talk about. I just wanted to go back to this comment. There is a paragraph 178 of the draft report where Auditor General York quoted the saying that enhanced financial reporting could include performance reporting, so that it is clearer what spending is aiming to achieve and how that contributes to the Government's overall purpose and specific outputs and outcomes. I think that what I am trying to understand is how, in practical terms, how realistic is it to expect Government, when it publishes its draft budget, then to specify the level of outcomes or outputs, maybe more accurately, that it would expect to get from that? I mean, I have a mickey that made a very fair point in that we are obsessed in political debate about inputs, so we will debate endlessly the number of teachers we have, the number of policemen we have, the number of—sorry, police officers—the number of nurses and doctors that we have, but we construct much less on the actual outcomes. How realistic is it? Other examples elsewhere in the world of Governments publishing budgets and at the same time putting specific outputs attached to budget spends? I guess I would say that, yes, there are examples of it and it is not just about the budget document. We have talked about the national performance framework, which is now quite a long-term view of what the priorities are for Government and the architecture is now embedded in legislation, so although future Governments may have different priorities, the approach is there until it is positively changed. I think that what we are looking for is something that across the whole budget cycle is clear about the way Government intends to allocate its money, the most important way of making things happen against those priorities. At budget time, there is probably a particular importance in focusing on changes in that, either increasing the amount that is spent in a particular area or reducing it to invest somewhere else. However, there is room for performance reporting alongside the annual financial statements about what has been achieved. Going back to Ivan McKee's question, as committees are scrutinising their particular areas of expertise and interests, it is about linking not just what the policy is and what performance looks like, but how much is spent and how that has changed over time. It is about linking the finances and the performance in terms of inputs, outputs and outcomes over a longer period and doing it right across the budget cycle. That would need a more structured approach to the way all of the committees do their work, and it would also need better, more joined-up information from Government to make it possible and from other sources, like audit reports. So, just to give you an example, one of the Government's stated aims is to eliminate the attainment gap in education. Would it be reasonable, therefore, to expect in terms of the budget? There was an indication in terms of different budget lines, not just on education in terms of, for example, local government allocation. How those funding allocations might impact on that stated objective? Absolutely, and in response to Ms Denham's question earlier, I talked about programmes linking your budget to programmes of activity, which are linked to outputs and to outcomes. I think that that is a much clearer way of letting Parliament and anybody else with an interest see how the Government intends to improve outcomes, to be clear about the way money is moving over time to do that, and then to be able to do the look back and say, how is it going? Is this working or should we be investing in something else or reducing the amount that we spend on that? I think that you are touching on something hugely difficult, as we all appreciate. I think that what is required for Government in terms of transparency is a very clear statement of what it would expect certain spending to have. It is a theory of change alongside the evidence. If we focus only on numbers and evidence, we can run into real difficulties. You have got to link the two. That will always be open to challenge, to be questioned, to be scrutinised. That is where the Parliamentary committees come in, but one would expect Government to explain the thinking behind spending and then to have it challenged. That is the healthy way forward. That is what good scrutiny should be about. Of course, we are bound to find situations, so I can be quite blunt about it, in which decisions are made, which may not be, frankly, made for reasons for improving outcomes but may be made because it gets a good headline or whatever else and comes back to the point that a number of members have made about input measures. That is where the role of the Parliamentary committees come in, to question and to challenge some of those. That is a highly political process that is open to challenge and such like, but that is where the role of the Parliament is. Given that we have moved into performance areas generally and that Willie had a question in that area, I am going to look at that first and I will come back to your supplementary, then we will get on to James and Marie's area. Thank you, Willie. Do you think that the balance of scrutiny is too much weighted at the front end of a process and during a process? I see some examples in your report where even the Finance Committee or predecessor committee and the Education Committee could not see a linkage between spending and outcomes. In any system where you are trying to assess performance and to hopefully improve anything, you need to close that loop and to make sure that some kind of future planning process can be carried out from an examination at the end of a piece of work that is done. Those are recurring themes that I well remember during my time at the Audit Committee. I suppose that it is worrying that we are still looking at that, but I think that it is really important that we think about where the balance of scrutiny should lie. Sometimes I feel that the committees let go of a process once the budget is agreed and we never see the figures again unless we look at the performance framework. Are you saying to us that the balance of scrutiny should be more of a shift in terms of the scrutiny towards the end of a process and the outcomes and performance so that we hopefully get it right next time around? I suppose that we will look at the process at the moment in relation to the budget. All that activity is focused on the point after publication of the budget up until just before the final approval of the bill. Thereafter, you can identify elements of scrutiny through subject committees, but there is not a golden thread of scrutiny all the way through from the budget proposal to the actual performance and then the reconsideration of the actual performance and what corrective action should be taken. That is why one of the areas that we are interested in looking at when some international examples was the extent to which the undertakes scrutiny throughout the full year, rather than just in a truncated period, seemed to have some merit. At the moment, we are asking the question, what should that all-year-round scrutiny look like? Should it be preferable? Is it something that would be beneficial? Of course, we would have to consider, as James Touch taught, the extent to which there is capacity. There are going to be trade-offs associated with that and there will be some behavioural change necessary along with the committees to accommodate that, as well as the stakeholders, which now include the Fiscal Commission and the Government. Is there an issue of consistency in different departments that behave and perform in different ways? When you are looking at your comments in paragraph 186 in terms of the framework, sometimes when you are looking at performance, it is difficult to see and sometimes departments find it difficult to assess themselves against performance or targets or whatever we want to call it. Do we need more of a consistent theme across the board to give us all a chance and other committees an effective chance of doing some real quality scrutiny? I suppose that we have to reflect on a process that has been developed incrementally, the stage 3 budget process, which is well known, but stage 1 itself has gone through several iterations. When that process was designed back in 1999, that was some eight years in advance of the national performance framework and then behaviour has been modified in some way to accommodate that. What we are able to do at this stage is to draw a line and reflect on the past 18 years or so and say that this is where we are and that this is what we actually have. Is there a better way that this should all be joined up and is there a better way that this should link together? What we have identified is notwithstanding that we can actually undertake a different form of scrutiny, but we have identified where there are maybe different options for elected politicians to consider different forms of information on a medium-term basis as well as the budget at the moment. It is probably a quantum leap from budget to national performance framework or vice-versa for that. There are a couple of other dimensions to consistency in addition to what Don said. If you read the budget, it is clear that some parts of the Scottish Government are more used to programmes and outputs and the way spend follows it than others, and that is reflected in the committee's comments around it. It can also be quite hard to compare what was spent in the budget with readily available figures. Your very often see budget compared with budget for previous years, even where outturn was quite markedly different from that. We have seen that around students financing in the past. Unless you know what was actually spent, it is hard to make sense of what is being forecast for the future. A third dimension that we touch on in our interim report is the importance of separating out technical information from political presentation. It is important that that information is understood, it is clear what is included and that people can agree on the basis for that, regardless of the political interpretation that every party is going to put on it from their own perspective thereafter. I think that there is room for more consistency in those dimensions, too. Patrick, I do not know too far away from your supplementary now if you want to come in. It was to pick up on one of the earlier comments on timing and then just to pick up on something from the draft from the interim report. We talked about the timing of an autumn budget at UK level and what impact that has. I am still not aware of any clarity that has been given by the UK Government about what autumn means. It seems to me that there is a big difference between September, before the party conference season, for example, that giving additional time for the Scottish Parliament to conduct scrutiny and discussion of a draft budget and then a budget bill. If we were talking about November, for example, even late November, which apparently still qualifies as autumn in some people's eyes, have you been aware of any clarity that has started to form up about what the UK Government means when it says autumn? I have seen nothing of the clarity that you are actually seeking. The most recent example that I think of was the autumn statement, which came in November, as you rightly indicate. The only fixed date that I think in the whole process, fixed to use advisedly, is the date of the written agreement, the 20 September publication date, which would seem to me likely to be in advance without any prior knowledge of when the UK Government expected to publish its own budget. I would be surprised, although I would stress that I do not have any specific information on this, if the UK budget was published in advance of the 20 September, and if you were to press me to guess, I would think that their publication date would be as late as possible, probably into something like November. I speculate on that, and I speculate personally, rather than as a group member. It seems to me that that leads us in the position of, if we want any substantive parliamentary scrutiny, it has to be on a draft budget that is published before the UK budget. I do not think that we have reached that position as a group yet, and we have done some quite detailed, scary timelines around the way all of this works and what it means for Revenue Scotland and HMRC in terms of implementing tax rates and so on, so we are considering it carefully. However, the other point that I would make is that it is now inevitable that there will be greater uncertainty in the budget process than there ever was before. That is just a fact of life. Forecasts are never right. They will change. There will be things that will come in from left field, more than ever, I guess, in the current global political context. The process needs to be resilient enough to cope with that, while still having direction and clarity about what Government wants to achieve and the chance for Parliament to scrutinise it. That is really what we are grappling with, how we make that work. It certainly affects the wider public sector, not just the devolved Administrations. My understanding is that the block grant adjustment will not be published until after the UK autumn budget. The block grant adjustment mechanism has a significant potential impact on the spending power of any Scottish Government, any Scottish Parliament. How we could come to having solid numbers before knowing what the UK budget position is, and what the block grant adjustment mechanism has turned out would be a bit like putting a finger on there and seeing which way the wind was blown. I would not quite put it that way. I think that that is a bit extreme. It is certainly difficult, but we would need to identify the uncertainties and risk. It is about risk. Therefore, measure that risk and work out the extent to which it is likely to change. That is going to be part of the process that has to be built into the process. The block grant adjustment will be very important. Although we do not know the precise adjustments, what we would always strive to do is to get some sense and build it into the process. That will have to be part of the whole process of scrutiny as well. Are assumptions fair and valid? Have we assessed the risk adequately? It comes back to the point that we have been stressing. The new system is now replete with uncertainty to an extent that we have never had before. It is relating to your discussion of alternative tax and spending proposals from paragraph 54 onwards. Is that about timing? Otherwise, I do not disservice to other members. Okay, I will have to come back in later on that. I will come back to that. James, you want to discuss issues around multi-year budgeting. Some of this has already been covered, but I suppose, in a sense, looking at the discussion so far, what we are trying to achieve is a better budget process through more quality information, which ensures that we make better decisions in terms of how the money is allocated to individual budget lines. We have spoken about multi-year budgets and are separate to that financial planning. One of the issues around both multi-year budgets and financial planning in terms of the Parliament getting more involved is the resource that is involved in that around committees and the challenge in terms of committees. In terms of being able to strip it down to various areas, what are the fixed and variable areas of the budget that can be separated for the parliamentary committees to look at in terms of both of financial planning and multi-year budgets? As you were talking, Mr Kelly, I am not sure that there will be many things that are fixed in future. In a sense, there have not been in the past. The block grant has always depended on decisions made by the UK Government, and we have seen both changes year on year and in-year consequentials coming through from decisions taken in Westminster. What we are doing now is taking that and multiplying it several times with different revenue streams in Scotland, block grant adjustments for the different taxes and new borrowing and reserve powers to smooth things year on year, so all of that is moving. One of the things that we are toying with turning over in the group is the importance of this committee, particularly having the chance to scrutinise the Government's long-term financial planning. It is thinking about financial priorities, about the fiscal context that they are working in, the fiscal and economic forecasts that come through and the high-level choices within that about investment in particular areas and disinvestment in others. Subject committees taking their area of interest, the programmes and organisations and budgets associated with it, and looking at those alongside the priorities but also the performance and the activity that is going on. I think that there is uncertainty in all of it, but the process that I think is forming in the group's thinking is about a much deeper and broader understanding of how that works at the broad level here for this committee and the depth coming through the subject committees. You threw me because I thought your question was heading in one direction, and then it kind of came to the question you asked. Can I maybe address the question that I thought was coming? Certainly it was implicit in the early part, and that was about capacity, because I thought you were going to be asking a question there about do we have the capacity in the Parliament to deal with some of these things? I think that that is a hugely important issue that we haven't really touched on in the discussion so far, and I think that there is something that we are grappling with. If we are moving to this more complex, more uncertain system with more data, more uncertainty around that data, I think that there is a big question as to whether we have the capacity in the Parliament to deal with it, and if not, then what do we do? That has been an issue that we have discussed. It really informs much of the broader discussion. We are interested in views on the Parliament itself and other bodies about ensuring that other extra parliamentary institutions, including academic institutions, can be brought into the process. That is where my head was heading when you were asking a question. If you don't mind, I'll curve. It wasn't actually the question that you asked, but I thought it was implicit in the first part, and I think that it is a hugely important matter that we are really interested in thoughts on that. I will give you an answer on that one. I will talk about what you were talking about in the fixed and variable. It was making me think of I suppose the closest that we get to multi-year budgets at the moment is through the spending review, which has been with us for around 30 years or so. The intention behind the spending review was that it would add some form of certainty to departmental expenditure limits for a period of about three years, although it was reviewed every two, with the exception of AIME, which was going to be on an annual basis. The terms that we have used, if we think about AIME as being the variable, and to a large extent we can fix the departmental limits for around about three years, that tends to be, however, for the resource budgets and for a short period of time, and it tends to be spending review-based investments that are followed by spending review at a point in time, but in the Scottish Government, what is missing from that is the longer-term look and to see how that short-term consideration fits into what is the longer-term view and the longer-term approach that needs to be taken by Government. I think that what you'll actually find that if it is accepted and introduction of a medium to longer-term approach to financial planning, is that the gaps that you have rightly highlighted have actually started to fall into place and you have a wider picture to undertake objective scrutiny on Government finances. Okay, thanks for that. Just to round off with a comment convener, I thank Professor Mitchell for the answer that he gave as opposed to the question that answered that. I think that he does highlight some really important issues. We've spoke at length in this committee in recent months, particularly when we've been looking at the recent budget, about the importance of the decisions that have been taken, about all the changes and the scale of it, and, as I said in my original summary, it's about being able to provide more information so that parliamentarians can take appropriate decisions that make a difference, because that isn't just about getting all the numbers in and making sure that they add up. Ultimately, there are hundreds of budget lines that impact on people's lives out there, and if we want to make sure that we get it right, we need a process that supports that. It's not just a case of people coming to the committees looking at the papers agreeing with their recommendations. We want people to be informed. You're right that needs expertise and it needs resource to do that. I'll just add to that very briefly. In the interests of fairness, I think that that is equally true for Scottish Government. I think that we see that Scottish Government is facing similar capacity challenges and being able to manage all of this. It's why I referred in my opening remarks to needing to get right that balance between the aspiration of where we get to and the practicality of the steps along the way. We're not going to have all of this in place for 17, 18 or 18, 19, but where do we want to get to and what's reasonable to do to get there? Marie, you're in the same area. Thank you. I wanted to ask about the different options in terms of medium term planning. You can, every year, look maybe three or five years ahead, or alternatively you can each parliamentary term, so the term of the government, can plan for that term. I can see that there are advantages and disadvantages of both systems and I just wondered if you wanted to give some comment on that for me. We've come to a view on it yet. We are clear that there's a need for a more transparent set of a medium term financial plan that contains a whole range of things, like the assumptions that underlie different scenarios, the priorities in broad terms that are required, and that will need to be refreshed by governments anyway to keep it useful and to make it a reasonable underpinning for the annual cycle that needs to happen. The extent to which it's a good use of parliamentary time to be digging into that every year, as opposed to doing it once in a Parliament or two or three times in a Parliament, I think that we really haven't explored yet, but there absolutely is, again, another trade-off that takes us back to those questions about capacity in Parliament and in government. I think that we'd be very keen to hear your views as James keeps saying. The other thing that I wondered about this year in the Health and Sport Committee, which I'm also a member of, we looked particularly, we drilled down particularly into the health and social integration budgeting, rather than looking at the whole budget. One of the things that we heard loud and clear was that they would like to have the ability to plan further ahead medium term and to have perhaps multi-year budgets. Are there other areas that are very keen for that, or are there other areas where it would be particularly relevant that you're hearing about? I haven't detected any resistance generally throughout the public sector ever about a move towards medium-term financial planning. I think that some of the barriers that are seen usually focusses on funding, which sometimes comes back to multi-year budgeting or the ability to budget multi-year at a government level, in effect. My sense is that if we focus on funding and see that as a barrier, if we think about the expenditure side, services, organisations and departments are actually taking decisions, which will in fact have a long-term effect, whether it be a care package, whether it be investing in infrastructure. There are decisions that are actually being taken on the expenditure side, which necessarily are long-term. It seems to be natural that if you can actually take those decisions as an elected politician, whether nationally or locally, then that would actually translate naturally into the desire to actually have information, which would give you an additional suite of information to assist those longer-term pieces of information. You're right to focus on integration of health and social care in a new area or a new governance area, in effect, with the reformulation of the IJBs. The issue that they have is the interrelationship between themselves, the health board and local government. Both sectors have their own issues associated with their ability to do multi-year budget. I think that what you're actually touching on there is a combined pressure in effect, which in itself won't necessarily be resolved by the introduction of multi-year budgets or medium-term financial planning, but they have the ability to actually do so from government all the way to individual health and local government bodies. You were asking for comments, so I've been thinking through this area as we've been talking. There's an issue here that even though we had the capacity in Parliament and we had the capacity in government, is it the right thing to do? Why I asked that question is, do we want to be careful not to crowd out too much that we leave the politics to the side? Actually, Parliament is a political place and there's a space for politics and all of this as well. I think that the financial issues advisory group and designing what they designed in the setup of the Parliament left enough room for Parliament to be able to breathe, but for still whatever shape of government where it was coalition majority or minority government, they would still be able to have some stability through a process. I think that they did a good job there. When I read in bits of the report, for instance in paragraph 26, where people like the IMF and OECD are talking about potentially having recommended seven different budget reports at different points in the budget and site, the budget cycle, that does begin to make me worry a bit about whether we do crowd out the politicians, whether we don't have enough room for space for the political discourse to take place and then designing a world-class process that is technically very efficient. We have not got that room that we all require as politicians to have the discussions that we all know go on between parties, between individuals. It's a worry that it's just beginning to develop on my head as we go through this process. I want to ask you, as part of your process, are you bearing that political space in mind as we try to design this world-class process? I am trying to identify the correct suite of information to enable parliamentarians to undertake that political debate in as enriched a way as possible. You are right to focus on the OECD suite of reports, which has been expressed in number 7, but rather in volume, if you think of the information that is in there, that is the formulation of what they think for any Government that is necessary to undertake that discussion. The ability or capacity to consume seven reports, you are right to focus on that. We do not have the answer to that at the moment, but we are trying to focus on the extent to which additional information beyond what we have at the moment is necessary to enable us to have that discussion. I think that that is the right focus. What is it that we need to enable us to undertake those political discussions rather than to be overwhelmed by the potential volume of reports that could come your way? It is at the heart of what we are trying to reconcile here. First of all, I think that Professor Vayner pointed out to us that although FIAG said that it wanted to design a process that entailed much more parliamentary scrutiny than at Westminster, in practice that has not actually come through either in terms of the amount of scrutiny within the process as it stands or in the lack of any amendment powers that the Parliament has got. We are thinking about what that means and whether those principles are still fit for purpose in a Parliament that is raising half of what it spends for the first time. A second observation, personally, is that we talked a lot this morning about New Zealand and we have been looking at it in Audit Scotland because of the way that it does lots of that in-year scrutiny of what is happening with the budget. The thing that I am most struck by about that process is how apolitical it is. Things that would be front page of the Scotsman every month here just seem to pass without very much comment at all in New Zealand. Clearly, there is a cultural dimension to that. There is an institutional dimension, but I think that very much where our thinking is going now is what is the right balance for Scotland to get those principles, to get transparency, scrutiny and accountability in, but to make it something that works as well. I think that there is a big question that is based on the role of Parliament more broadly than just the budgetary process. That is the relationship between the executive and the Parliament. The literature on comparative legislatures would suggest that there is a continuum. On one end, you have got what we are often referred to as transformative institutions that are able to truly transform recommendations coming from the executive or, indeed, initiate right through to what we are often referred to as arenas, where, essentially, they rubber-stamp. The classic example of a transformative institution is Congress in the United States. However, one looks at the budgetary processes there, we certainly do not want to go down that route whereby you basically have port bar politics, with members just adding lines and adding lines, and it is a deeply ffiscally irresponsible form of budgetary politics. I think that as Professor Venner has pointed out in his work, the Westminster model, which essentially this Parliament has copied, lies towards the other end of the spectrum. In fact, in many respects, it is a liberal democracy. We are a bit of an outlier. There is a big question to be raised, which we cannot really address for Parliament, as to whether you want to move the Parliament further along towards a more—without moving to the congressional end of the spectrum—a more transformative type of institution and where on that spectrum you would wish to go. We do not tend to see, as is often observed, the kind of amendments to finance bills here on Westminster that you would get and see in Germany, as Professor Venner has pointed out. What we would like to think is that the processes that we are considering and that we will recommend will, at the very least, permit that kind of move, but, ultimately, it will be up to others to make decisions as to whether they take advantage of that. I hear your point about the danger of, in a sense, overwhelming members with too much information. My tendency is to think that you can almost never get too much information as long as it is quality information, but I do think that there is a filtering process. That comes back to the point that I was trying to make earlier about capacity. I think that those are all interlinked, but, in terms of that spectrum—I would say that it is a spectrum rather as a binary divide—a more transformative, the initial intention, if you go back to the CSG, that idea was that this Parliament would be a more transformative institution. I do not think that that has happened. More on amendments, Neil, so you are interested in that area in particular. Yes, I think that that is very interesting what we have just been discussing there. I note from your report on Professor Vayner's contribution about lodging amendments that you have not reached to define on the issue of lodging amendments during the budget process. I know that you will want to explore that further with the committee and with others about what, if any, mechanism should be used in that regard. I am keen to find out more about your hesitation to come to a view on that and to see in general that we should have a mechanism or the Parliament and the Parliament committee should have a right to lodge amendments during the budget process. I suppose that that is feedback, isn't it? I guess that our starting point is that we are very conscious that we will make recommendations and Parliament and Government will have to agree them. One of the reasons for going through this interim phase is to get feedback, to get soundings on where our political system is in thinking about how far the five principles are fit for purpose and have worked in practice and how far we need to change that and how far things are changed, whatever we think, by the introduction of significant revenue-raising powers. James talked about the risk of amendment powers leading to pork barrel politics. We have seen that in other countries as well as the US, and Professor Vayner makes the point again that you need to think in terms of institutional checks and balances. It is possible to have amendment powers where you are working within a fixed ceiling of revenue to be spent. If you are looking to increase something, you have to reduce something else. Equally, it is possible to make your amendment powers wide open, so that, if more is being spent, the money needs to be found somewhere. Again, there is a spectrum of choices to be made, but the vision for what the political system looks like in relation to the budget needs to be a decision between Parliament and Government and needs to be one that works in the Scottish context. We are really testing out views and perspectives on that right now. Can I add one other dimension to this? That is one that members will be aware of. While there may not be formal amendments moved in the Parliament, there are negotiations that will take place, particularly under minority government, but not just under minority government. There is a really interesting question here about transparency. On the other hand, one of the problems in any negotiation is that negotiations taking place in public are very difficult to be conducted. You need some degree of privacy, but I think that there lies a real challenge, given that transparency is another of the key objectives in any good parliamentary process. In a sense, it is not that amendments are not entirely being forward, although I am notwithstanding your point—take your point, mate—it is very well made. However, in a sense, there are opportunities for parties to have an input, and we are really struggling with this, to be honest. How do we take that into account? It does happen, as I see someone nodding the head vigorously, as it suggests. We might have been part of that process, but I do think that there is a real issue here. On the issue of amendments and transparency, the past budget—you have obviously got to show where money is coming from, if you are going to put forward amendments—we saw a substantial amount of money come from underspend, brought forward from what is normally declared in June. I raised with the finance secretary previously that there should be a great transparency about underspends, because that is a potentially significant sum of money that could be used for potential amendments. The cabinet secretary to be fair to him has said that he is willing, if we ask for it, to provide more information on an on-going basis about where underspends are in various stages of the budget process. I just want to get your thoughts on whether that should be formalised more in terms of the committee and Parliament knowing what are the underspends on what basis, but certainly during the budget process, to allow us to make more informed decisions, and that relates to transparency, and that relates to the budget process. That goes to the heart of what we are discussing here, but the new process should look like and what is the information complement that is required. You have probably had a good example of that. The public is a time for that to be provided to committees and to parliamentarians. I would not want to focus necessarily only on underspends, but it is important to say that that is one part of an additional sphere of information that should be placed in front of you to make an informed discussion or have an informed choice about what amendment, if any, is necessary or what alternative spending proposals could be made, which is based on best information possible. That probably comes back also to the reluctance to be overwhelmed by an additional suite of information. That is going to add to the information because there will have to be this trade-off between your capacity to consume that information and then to channel that into discussions with Government, with other parties about what potential amendments could be made. Patrick, you and I have been involved in the transparent discussions in the past. Sometimes well and sometimes badly. That is part of the problem here. I was fascinated by the comparison between the earlier section on alternative proposals from paragraph 54 and the later discussion on informal negotiations from paragraph 106. The first section is suggesting that the FIAG argued for early opportunities for Parliament to consider alternative proposals to subject them to scrutiny. That clearly requires more transparency than we have seen to date on things such as how much flexibility the Government really has available to it and on year-to-year comparisons so that people can see what the changes actually amount to, as well as being able to assess things such as the socioeconomic impact of budget changes, now that tax is part of the mix, as well as spending. Inevitably, as you say, there are also these processes of informal negotiations. They happen differently under different forms of Government in a coalition. During the last period of coalition in the Scottish Parliament, there were already concerns that the informal discussions that happen in the formation of a coalition Government are also in private, but they can risk leading to a lack of coherence about the financial impact throughout an entire term of Parliament, because those negotiations happened at the beginning and they do not necessarily give the flexibility. They can lock in priorities based on the political value that each party in the coalition attaches to them, so they end up with less coherence about the budget overall. They happen differently with a majority administration that can choose to listen if it wishes, but it does not have to, and differently again with informal negotiations, which, occasionally—not always, but occasionally—have been at the level of games of brightmanship at, literally, the last minutes and hours of the process. It seems to me that if we want a process that works for all of these different scenarios, alternative proposals wherever they come from, whether from one individual member, of a Government-backed venture or of an opposition party, or from opposition groups or from outside Parliament, all need to be subject to parliamentary scrutiny and that, if there is that requirement that anyone proposing a particular budget change comes and gives evidence to this committee or its successor prior to that last-minute process, it creates an absolute requirement on those involved in informal discussions to do them early to result in proposals that can then be subject to scrutiny and that members or others who are seeking to persuade colleagues of change have to persuade Parliament rather than just be seen to be in a one-to-one arrangement with Government, the implication being that this is all about the power of Government to grant its goodness on whoever it chooses. That was very useful. I think that you summarised some of the challenges that we face and some of the questions. What we would want to have, I think that you said a system that would work under any of these scenarios and I think that that is exactly what we want and I think that that may mean that we end up having a number of ways, a multitude of ways, assessing it the outset of a Parliament and right the way through. The danger is that, if we were to draw up a list of all the different ways that we could scrutinise, we would spend all your time in this Parliament scrutinising budget and that may be a problem. I think that it's a way before— I'm suggesting that it boils down to one principle that whoever is looking to influence change at some point in the process has to come and do it publicly in front of parliamentary committees and answer questions. I was just looking for it in the report. I think that we make that point about the outset of a Parliament, the importance of scrutinising the policies and of course the budgetary implications that are important. We are very conscious of that in our deliberations. I'm not pretending that it's easy and I'm not pretending that particularly—I think that there has always been and always will be and it doesn't just apply to budgetary politics. I hesitate to give some other examples but there are always occasions when negotiations will have to take place in private but, after a negotiation, there needs to be public scrutiny. If you like, it's the old Woodrow Wilson, a great political scientist and student of Government as well as an American president. He used to talk about open covenants, openly arrived at that. That's a totally discredited notion. You cannot arrive at a decision through negotiation with public. What you do need, however, is that once a decision has been made, that needs to be open to scrutiny. I think that's where—I'm speaking very personal here, I'm not speaking about colleagues—that may be where we need to ensure that we get to. I don't know if that helps. Focusing on the report itself, the two sections of the report that you highlight, Mr Harvey, really reflect the fact that we haven't yet reached a position on whether we should be recommending amendment powers. If not, then they will continue to be in formal negotiations and there's a question, as James has been saying, about how you get some transparency around that process. Okay, I've really got two observations rather than questions, but I'm happy to get any comments. I just follow on from Mr Bibby's lines of questioning. First, in relation to the size of the budget, when the draft budget was presented in December, we went through a process between that point and January—sorry, February when we had the stage 1 debate—where £185 million extra appeared, some of that was from underspend, some of that was from the business rates pool, £185 million. The finance secretary then found another £42 million three weeks later in relation to addressing an issue with business rates, and then we had Barnett consequentials from the UK Government's spring budget of, I think, £145 million. The final budget for the coming year is, according to my rough calculations, more than £370 million higher than the draft budget that was presented to Parliament in December, which this committee and other committees of Parliament sought to scrutinise. I think that there's an issue there in terms of how do we properly scrutinise a budget when, in fact, there's a lot more money that subsequently appeared. My second point is the point about amendments. I remember that I raised this privately when this committee looked at our budget report, because when we considered our budget report, it was very clear in the rules that any member proposing an amendment to the budget report that would increase spending and would have to specify where spending would reduce and vice versa. It seems to me that this is actually rather out of date as a rule, because it would apply when we had a fixed budget, but our budget is no longer fixed. Our budget is, to a large extent, dependent upon the growth or decline of the Scottish economy. For example, the Scottish Government will argue that, by seeking to reduce air departure tax, to pick up any current example, it doesn't need to replace every penny that would be lost because there would be growth in the tax revenue elsewhere. Therefore, if I was going to propose a tax cut, for example, in terms of the budget, I would be arguing that we could replace at least some of that money by economic growth and get that back. I am just wondering if that rule that we are currently bound by is out of date and needs to be revised. Can I comment on your first observation, Mr Fraser? I absolutely recognise what you are describing about this budget round and it has applied to others. For me, it comes back to this importance of the big picture that the block grant from Westminster and the forecasts of the revenues from the devolved and assigned taxes is not any longer the big picture. We have got increasing powers for revenue borrowing, the Scotland reserve, other pockets of revenue light and non-domestic rates, which are all accounted for outside the core of the budget document. Having that big picture, whatever the legislative vehicle looks like in future, is very important to understand the choices that you are making and the fiscal risks that may be involved as well along with sustainability questions that come through. I have reported separately that we do not have that in out-turn terms. We have the Scottish Consolidated Fund, but there is a lot of activity around that that is not captured there and the same is equally true in budgetary terms. It is increasingly important to have that picture to understand what the scale of room for manoeuvre is and to be thinking about the long-term fiscal sustainability of choices that are being made as well. The second point is to comment. I am happy that Ben has got the new bed. It is a challenging one to comment upon. I guess that the only comment that I think at this stage that I could give—again, I do not want to align myself with others who may not want to be aligned with this view, but I think that the only point that I would make is that it is the role of the Parliament to challenge assumptions that the Government may be making about changes in terms of taxation and to look at the evidence if there are assumptions that by increasing or decreasing a particular tax, therefore you will have a growth in the economy and therefore you will have a bigger tax stake. If that could be backed up with evidence, that would be fine. I think that if you feel, as a member, that that cannot be your role to challenge it. That is where the politics comes into it. I do not think that there is any kind of process that can address that. That is a highly political process. The rules that we currently operate under do not allow us to have that debate. Moving on to an important area, which I have not covered yet, because this has all been about Government and Parliament, but how do we involve the public? Liam has issues around that. Yes, thank you, convener. Good morning. That is exactly the issue. The discussion has been very technical. Professor Mitchell, you talked about a move to a more complex, more uncertain system. James Kelly was talking about hundreds of budget lines. The interim report talks about public engagement. First of all, what does the group see civic Scotland adding to this process, which arguably has little interest to civic Scotland and perhaps even less understanding? I would probably challenge the implicit assumption that it is of little interest to civic Scotland. I would have thought that I would have been at the heart of what civic Scotland should be interested in. Where I would agree is that the overall premise of public engagement has been difficult over a long period of time. If you look at the practical elements of the budget, it is in numbers and it is in a scale that a few people can comprehend and understand. The budget documentation is not presented in a way that would be, if I can use the phrase, ordinary citizen being meaningful to him or her. If you look at the developments that have taken place over the past few years, as far as the Committee Empowerment Act is concerned, and the ability of individuals to become involved in budgeting at a participative level, a local level that poses more meaningful to them, that is where you can find public engagement of the pure type that we probably understand. If you think of the scrutiny process that the committee goes through, you probably do not see many members of the public. You will see representatives from civic Scotland, you will see groups, you will see organisations that we represent as well. The question that we are asking openly is what we seek to achieve from public engagement. I know that, in the past, the committee has gone to the public and gone to separate towns to speak to individuals who have used them in social media. It is a question that we are genuinely asking, what should public engagement look like? How do we get the public to engage with us? It is not uncommon, in matters of public finance, to be talking to someone who actually puts information into the public domain to find it difficult to get individuals to engage with what can be complex documents. Sometimes the barrier is that they are not presented in a way that is understandable and easily readable to individuals. Because public bodies have a complex story to tell, it is sometimes difficult to translate that into something that is easily readable. It is an open question about public engagement and what that should look like. Instinctively, there should be a direct line to the public, and the public should have a direct line to the process. Can I add to that? In many ways, it absolutely is difficult, you are right, and it has never been more important. Going back to the premise of Murdo Fraser's question, we are moving into a new world where Scotland has, to some extent, a choice between the sort of society it wants to be. Does it want to be relatively high-tax, high-public services like Scandinavian countries? Does it want to be lower-tax, lower-public services like the US? That is a discussion that only the public can have. At the moment, it happens indirectly through people's support for political parties. The budget process is a chance to open up that conversation. There are some really interesting things under way. My predecessor took part in a citizen's jury back in 2010, where people got very engaged in understanding public finances and the choices that were there. James's colleagues at the Academy of Government have done some very interesting work on citizen's budgets and budgeting, where people are being very much involved in the choices and trade-offs that happen. In the report, we are not saying that it is an easy thing to do, but increasingly it is a very important thing to do. We do not want to lose sight of that dimension to the changes that the Parliament is currently considering. Absolutely. Some of my colleagues are very much unparticipated by budgeting, for example, but that would not be so real, particularly in terms of citizen engagement. We are going to distinguish between civic Scotland's engagement, by which I would refer to institutions and organised interests, and the public. It is much more challenging with the public than it is with civic Scotland. The challenge here is one that I know that the Parliament is well aware of. That is how do you avoid going to the usual suspects? How do you broaden it out? One of the lessons that we have learned from the work of this Parliament is to get out there and not to expect people to come here. It is conscious of the language that is used. There is also the level of discussion. I do not think that there is much point in getting members of the public together and starting to talk about some of the technical detail, but those issues all affect the public. In that respect, they are of interest, they affect people's lives, and I think that it is a challenge for Parliament to find a way of articulating itself and listening to the public. I have to say that you are better at it than we are in that respect. It is part of your daily job, and it is what you do. You engage with constituents and the public. We need to try to harness that and not just have it, as I was saying. You know that elections come around quite often, but in terms of engaging with some of those issues. Some of the discussions that we have been having in this document are about the different approaches, the different opportunities of scrutiny, and there may be some that are more appropriate for public engagement and civic Scotland engagement, but I stress that civic Scotland is one of the things that I think the biggest challenge here is one that I know the Parliament has been grappling with, and that is to avoid the usual suspects. That certainly addresses the how. Mr Peebles posed a question in your answer about the why. He said, what do we seek to achieve with the public engagement? I appreciate Caroline Gardner gave some answer to that, but I might pose the question again, because I am not sure that it was asked what the how I concede is complex. Given the points that you make, Professor Mitchell, about what we are here to do as representatives and the expertise on the group that is putting the process together, what are we seeking to achieve by going to the public? They experience the public services, and I think that you can learn a great deal from engaging with the public. I think that public policy, as a failure to do so, has been one of the historic errors, and I am talking about over a long period of time that we have had in Scotland. We have done things to people, for people rather than with people. I speak now as a former member of the Christie Commission that I think that one of the key things that we have got to continue to strive to do is to engage. I think that the Parliament does a reasonably good job, does a much better job than many other institutions, but that is why. You can have technical expertise, but there is no greater expert in terms of public policy provision than those people who are experiencing on the ground. We can learn an enormous amount from people. It is remarkable the amount of change that you can bring about, and it may seem small-scale. It is about the prioritisation, it is about the big, big questions that Carling has talked about, but it is often about quite minute detail. I do not have the experience of some of the welfare reforms, for example, that many members of the public in that respect have an expertise that I could not have. I think that there are different levels of ways of looking at this. I do not have that answer. It emphasises the point that you made earlier on that it is about making sure that the usual suspects are not the ones with the loudest voices. That has been a very helpful session. From our perspective, I hope that too, from your perspective, the number of issues that you have to tackle is how do we get a system where there is an appropriate level of scrutiny and challenge for Parliament at the same time to allow a Government to make sure that it gets through a safe budget to support the economic wellbeing in the public services? When you are finishing that process and coming to a conclusion in Parliament, you are getting an all-party agreement around that to make sure that the public themselves see that there is confidence in the Parliament and the system. That is the only way that they are going to have confidence. It is quite a challenge that you have been set, and we have been set. Thank you very much for coming along and helping us to initiate that challenge today and begin to unpick about a lot of the work that you have been going through. I look forward to the final report when it comes out. Thank you very much. We suspend just for five minutes.