FCC/S5/18/11/A FINANCE AND CONSTITUTION COMMITTEE AGENDA 11th Meeting, 2018 (Session 5) Wednesday 21 March 2018 The Committee will meet at 10.00 am in the David Livingstone Room (CR6). 1. Decision on taking business in private: The Committee will decide whether to take items 6 and 7 in private. 2. Subordinate legislation: The Committee will take evidence on the Budget (Scotland) Act 2017 Amendment Regulations 2018 [draft] from Derek Mackay, Cabinet Secretary for Finance and the Constitution, and Scott Mackay, Head of Finance Co-ordination, Scottish Government. 3. Subordinate legislation: Derek Mackay (Cabinet Secretary for Finance and the Constitution) to move S5M-10915 That the Finance and Constitution Committee recommends that the Budget (Scotland) Act 2017 Amendment Regulations 2018 [draft] be approved. 4. Subordinate legislation: The Committee will take evidence on the on the Scottish Landfill Tax (Standard Rate and Lower Rate) Order 2018 from Derek Mackay, Cabinet Secretary for Finance and the Constitution, and David Kerrouchi, Policy Adviser, Scottish Government. 5. Subordinate legislation: Derek Mackay (Cabinet Secretary for Finance and the Constitution) to move S5M 10850 That the Finance and Constitution Committee recommends that the Scottish Landfill Tax (Standard Rate and Lower Rate) Order 2018 be approved. 6. Draft Audit and Accountability Framework: The Committee will consider its response to the Public Audit and Post-Legislative Scrutiny Committee. 7. Planning (Scotland) Bill: The Committee will consider a draft letter to the Local Government and Communities Committee on the Financial Memorandum.
FCC/S5/18/11/A Jim Johnston Clerk to the Finance and Constitution Committee Room T3.60 The Scottish Parliament Edinburgh Tel: 0131 348 5215 Email: James.Johnston@parliament.scot
FCC/S5/18/11/A The papers for this meeting are as follows Item 2 Note by the Clerk FCC/S5/18/11/1 Item 4 Note by the Clerk FCC/S5/18/11/2 Item 6 PRIVATE PAPER FCC/S5/18/11/3 (P) Item 7 PRIVATE PAPER FCC/S5/18/11/4 (P)
FCC/S5/18/11/1 Introduction Finance and Constitution Committee 11th Meeting, 2018 (Session 5), Wednesday 21 March 2018 The Budget (Scotland) Act 2017 Amendment Regulations 2018 1. The purpose of this paper is to set out background and procedural information for the Committee s scrutiny of the Budget (Scotland) Act 2017 Amendment Regulations 2018 ( the Regulations ). Copies of the Regulations and the accompanying Spring Budget Revision (SBR) document are available via the following links The Budget (Scotland) Act 2017 Amendment Regulations 2018 Spring Budget Revision Supporting Document 2. Briefings on the Regulations and SBR have been prepared by the Financial Scrutiny Unit in SPICe and by the Scottish Government. These briefings are attached as Annexes A and B. Purpose of the Regulations and the scrutiny procedure 3. The Regulations were laid on 8 February and amend the Budget Scotland Act 2017 which authorised the Scottish Government s spending plans for the current financial year. The SBR provides supporting information on the revised spending plans for which the Scottish Government is seeking Parliamentary approval. 4. The Regulations are subject to the affirmative procedure under Rule 10.6 of Standing Orders. Under this procedure, the Parliament has a 40 day period in which to consider the Regulations, including consideration by a lead committee and the Delegated Powers and Law Reform Committee (DPLRC). The DPLRC considered the Regulations at its meeting on 20 February and had no issues to report. 5. As lead committee for the Regulations, the Committee will be invited to consider the following motion from the Cabinet Secretary for Finance and the Constitution Motion S5M-10915: That the Finance and Constitution Committee recommends that the Budget (Scotland) Act 2017 Amendment Regulations 2018 [draft] be approved. 6. During formal consideration of the motion, Standing Orders provide that only the Cabinet Secretary and Members may participate in the debate. In order to inform the Committee s consideration of the motion, there will therefore be an opportunity to take evidence on the Regulations from the Cabinet Secretary and his officials before moving to formal consideration of the motion. 7. The deadline by which the Finance and Constitution Committee must report on the Regulations is 28 March. Committee Clerks, March 2018 1
FCC/S5/18/11/1 ANNEXE A: SPICe BRIEFING: SPRING BUDGET REVISION 2017-18 Introduction The 2017-18 Spring Budget Revision (SBR) amends the Budget (Scotland) Act 2017 which authorises the Scottish Government s spending plans for the financial year 2017-18. Details of the proposed changes are set out in the 2017-18 Spring Budget Revision to the Budget (Scotland) Act for the year ending 31 March 2018 published on 8 February 2018. The Scottish Government has also produced a Brief Guide to the 2017-18 Spring Budget Revision. The proposed changes detailed in the SBR result in an increase in the approved Budget for 2017-18 of 421.4m from 39,319.2m to 39,740.6m. The SBR seeks parliamentary approval for these changes. The main changes to the Scottish Government s spending plans arise from: Funding changes allocated over a number of budget lines of 141.7m. Net Whitehall and HM Treasury transfers to/from the Scottish Government of 7.8m. Net technical adjustments of 271.9m, which include Annually Managed Expenditure (AME) budget cover from HM Treasury for provisions and impairments; adjustments to align the budget with accounting requirements Transfers of resources between Scottish Government portfolios which have no net overall effect on the budget. A summary of the proposed changes by portfolio is presented in table 1.2 of the SBR. The total effect of these revisions by type are presented in the table below. 2
Table 1: Spring Budget Revision changes by type 2017-18 Budget Approved at the Autumn Budget Revision 39,319.2 FUNDING CHANGES Miscellaneous portfolio movements 141.7 141.7 WHITEHALL TRANSFERS Transfer from the Cabinet office for Cyber Security 1.3 Transfer from Department of Health iro HIV funding 0.5 Transfer from DWP for the Fit for Work programme. 2.0 Transfer from DWP for Single Gateway Project 0.9 Transfer from the Department for Transport for the Dundee Public Service Obligation. 0.9 Transfer from the Home Office in respect of Marriage Civil Partnership Changes 0.1 Allocation of budget from HM Treasury to provide grants to women s organisations (Tampon Tax) 1.1 Allocation of budget from HM Treasury in respect of ROSA (UK Fund for women and girls) 0.2 Allocation of budget cover from HM Treasury in relation to a deficit in the fire pension scheme 0.2 Allocation of budget cover from HM Treasury in relation to LIBOR funding for Children s Hospice Association and Emergency Rider Volunteers 0.3 Allocation of budget cover from HM Treasury in relation to transfer from Comic Relief 0.3 7.8 TECHNICAL CHANGES Additional budget cover for provisions, impairments, fair value adjustment, pension liabilities and Depreciation of donated assets (AME) 71.0 Technical adjustments to align budgets with accounting requirements (ODEL) 55.2 Indexation and equalisation of NHS and Teachers Pensions (AME) 47.0 Various other DEL non-cash adjustments 98.7 271.9 Proposed Budget following Spring Revisions 39,740.6 This briefing raises some areas for discussion with the Cabinet Secretary. 3
Funding Changes Funding changes included in the SBR total 141.7m. The most significant element of these changes relates to 99.1m consequentials arising from the 2017 UK Spring Budget, which have been allocated to Health. Health also receives 8.4m from 2017 UK Autumn budget consequentials. A full breakdown of the funding changes is provided in Annex A of the Scottish Government s Brief Guide and is reproduced in table 2 below. Members may wish additional information on some of the other funding changes identified in the bottom part of table 2. For example: there is a - 64m re-profile of Scotland Act implementation funding; and underspend surrendered in a number of budget lines including a total of - 29m (p53) in Housing and just under - 4m in the Scottish Prison Service. 4
Table 2: List of Funding Changes Programme Description Amount Type m Health Spring budget consequentials 99.1 RDEL Other Transport Policy SPT - Glasgow Subway modernisation 40.0 CDEL Health staff costs - previously admin-funded 17.0 RDEL Learning SQA resource pressure 16.0 RDEL Enterprise and Energy BiFab 15.0 FT Health Autumn budget consequentials 8.4 RDEL Scottish Funding Council Low Carbon loans 6.9 FT Health Baby Boxes 5.8 RDEL Enterprise and Energy Scottish Enterprise 5.0 CDEL Social Justice & Regeneration Regeneration Capital Grant Fund 5.0 CDEL Skills & Training SDS - Transition Training Fund 4.0 RDEL Skills & Training SDS - Employability Fund 3.6 RDEL Children & Families Scottish Child Abuse Inquiry 3.4 RDEL Children & Families Disclosure Scotland capital pressure 2.8 CDEL Health GP premises scheme 2.5 FT Health Drugs Policy 2.0 RDEL Sport Sporting Opportunities 2.0 RDEL Housing staff costs - previously admin-funded 1.7 RDEL Housing Discretionary Housing Grant 1.2 RDEL Enterprise and Energy Borders Railway Blueprint 1.0 CDEL SFRS Pay award (inc. RTC) 0.8 RDEL Learning SQA capital pressure 0.8 CDEL Accountant in Bankruptcy additional allocation 0.8 CDEL Children & Families Neglect Improvement Programme 0.5 RDEL External Affairs staff costs - previously admin-funded 0.3 RDEL Miscellaneous staff costs - previously admin-funded 0.3 RDEL Marine staff costs - previously admin-funded 0.3 RDEL Accountant in Bankruptcy additional allocation 0.2 RDEL EU Support & Related Services staff costs - previously admin-funded 0.2 RDEL Culture, Tourism & Major Events staff costs - previously admin-funded 0.1 RDEL Accountant in Bankruptcy additional allocation 0.1 RDEL Re-profile of Scotland Act implementation funding -64.0 RDEL Finance and Constitution Housing underspend surrendered (More Homes) -20.0 FT Housing underspend surrendered (More Homes) -9.0 CDEL Scottish Prison Service underspend surrendered -3.7 CDEL NRS underspend surrendered -2.6 RDEL Health Immigration Surcharge residual amount -2.6 RDEL Enterprise and Energy underspend surrendered -2.0 RDEL Revenue Scotland underspend surrendered -0.5 RDEL NRS underspend surrendered -0.5 CDEL Food Standards Scotland underspend swapped for non-cash -0.3 RDEL Children & Families underspend surrendered (SCRA) -0.2 CDEL Miscellaneous other changes < 50K 0.2 Total 141.7 5
Whitehall Transfers/Allocations from HM Treasury There are six Whitehall transfers in the SBR and six additional allocations from HM Treasury. These have a net positive impact on the Scottish Budget of 7.8m. The explanation for each of these provided in the document is as follows: There is a 1.3m transfer from the Cabinet Office for Cyber Security; A 0.5m transfer from the Department of Health for HIV funding; 0.9m from the Department of Transport in respect of the Dundee/London Public Service Obligation; 0.1m from the Home Office in respect of Marriage Civil Partnership Changes; 2.0m from the Department for Work and Pensions for the Fit to Work programme; and 0.9m from the Single Gateway Project. The allocations from HM Treasury are as follows: a 1.1m allocation to provide grants to women s organisations from the Tampon tax; 0.2m from costs associated from the outcome of an out of court settlement between the Department for Communities and Local Government (DCLG) and the Fires Brigade Union on the 1992 Fire-fighters Scheme; 0.3m in respect of LIBOR funding for the Children s Hospice Association and the Scottish Emergency Rider Volunteer Service; 0.2m for ROSA (UK Fund for women and girls); and a 0.3m transfer from Comic Relief Members may wish further information on some of these Whitehall transfers. Technical Transfers There are some technical adjustments in the SBR which total 271.9m. The Brief Guide provides some further background on these which it states are essentially budget neutral and do not provide additional spending power for, or detriment to, the Scottish Government. The Spring Budget Revision records increased Annually Managed Expenditure (AME) of 71.0m as agreed with HM Treasury to cover provisions, impairments, fair value adjustments and pension liabilities The Spring Budget Revision also reflects net technical adjustments of 55.2m to align the IFRS based budgets with the year-end accounting requirements for the Scottish Budget for revenue financed infrastructure projects. These are mainly in the Health budget. There has been an increase of 47m to the NHS and Teachers pension, due to an indexation and equalisation carried out by HM Treasury. 6
There are also a number of technical adjustments to the Departmental Expenditure Limit (DEL) budget, relating to non-cash budgets totalling 98m. The Health and Sport portfolio has increased its non-cash budget by 70m to cover costs of NHS Boards in respect of write downs and accelerated depreciation. It has also been allocated a further 20m of ring fenced funding from a change in the Personal Injury discount rate. The non-cash budgets of the Education and Skills portfolio has been increased by 5 million, the Rural Affairs and Connectivity portfolio non cash budget has been increased by 6.3 million, the Justice portfolio has decreased by 4 million and the non-cash budgets of Economy, Jobs and Fair Work portfolio, Food Standards Scotland and Scottish Housing Regulator have been adjusted slightly. Internal transfers Although not impacting on the overall aggregate Scottish Budget, there are a number of planned internal transfers between portfolios. The most financially significant of these transfers identified by the Scottish Government (presented on p2 of the supporting document) are as follows: Transfer of 16.0 million from Finance and the Constitution portfolio to Communities, Social Security and Equalities portfolio for Social Security Implementation and Administration (p18). Transfer of 5.2 million from Economy, Jobs and Fair Work portfolio to Rural, Economy and Connectivity portfolio re transfer of responsibility for Food and Drink Industry (p42). Transfer of 8.0 million from Economy, Jobs and Fair Work portfolio to Rural, Economy and Connectivity portfolio for Wave Energy (p42). Transfer of 5.3 million from Economy, Jobs and Fair Work portfolio to Rural, Economy and Connectivity portfolio to assist funding of Highland and Islands Enterprise capital projects (p42). Transfer of 6.0 million from Education & Skills portfolio to Local Government in relation to the Teachers Pay Deal (p20). Notable transfers and points of interest contained in the SBR are presented by portfolio below. Health and Sport There is a direct to indirect capital transfer for health research of 51m (p14). In the same schedule there is a 16.9m transfer from the administration budget to cover staff costs. Members may wish further explanation as to why this was required. Education and Skills There are a number of changes presented in the Learning budget on p20. These include a transfer to Local Government of 6.0m in relation to additional money required for 2017-18 teacher s pay deal ; and a transfer of 7.8m to the Scottish Funding Council for initial teacher training education. 7
Justice There is a transfer to the Scottish Police Authority from the Police Change Fund of 22.5m, comprising 17m Operating (or Resource) spending and 5.5m in Capital (p32). Economy, Jobs and Fair Work There are a number of proposed changes in the Enterprise and Energy budget which members may wish additional information on. For example, a transfer in to Capital of 15m from emerging underspends, and some transfers out of the Operating budget for Wave Energy Scotland ( 8m), Highlands and Islands Enterprise ( 5.3m) and the Food and Drink Industry team ( 5.2m) (p42). Communities, Social Security and Equalities There is an 8.2m transfer from Social Security to Housing Support (p54). Rural Economy and Connectivity There are some transfers in the Digital Connectivity budget, including 0.7m for giant screens at Hampden Park, and a 5m transfer to EU Support & Related Services for the FUTURES IT programme (p74). New material in Spring Budget Revision The supporting document contains two new tables (1.7a and 1.7b) in light of recommendations made by the Budget Review Group. Members may wish some further information on some of the lines contained within table 1.7a. Table 1.7a shows the Reserve balance brought forward from 2016-17 ( 74.2m). In the recent Budget Bill process for 2018-19, the Scottish Government indicated that it intended to use around 40m of this Reserve balance to fund additional spending in 2018-19. It also lists the Barnett consequentials which have arisen in the most recent UK fiscal events of March and November 2017 and from the UK Spring Supplementary Estimates (published in February). Incomings and outgoings in the Reserve from the various factors listed in table 1.7a mean that the Scottish Government is forecasting a Reserve balance at the end of the current financial year of 430.3m. Table 1.7a also presents how the 430.3m in Reserve funding is comprised. It includes the 158m in Reserve funding already allocated in the Draft Budget 2018-19. Table 1.7a doesn t include the approximately 70m that the Cabinet Secretary indicated he plans to carry over into 2018-19 as part of the budget deal with the Scottish Green Party this is expected to arise from underspends before the end of the 2017-18 financial year. The table also shows that there is 74.2m of reserve 8
balance (mentioned above), 29m of later UK Government consequentials and 11.3m of monies that came from HMT transfers/conseqentials (as yet unallocated) available to support part of the cost of the budget deal agreed with the Scottish Green Party. The Brief Guide to the SBR document notes that the Reserve forecasts are presented as at 31 December 2017, which was before the budget deal was agreed. The final picture for 2017-18 provisional outturn (and underspends) will be presented to the Scottish Parliament in June. Ross Burnside, Financial Scrutiny Unit, March 2018 9
ANNEXE B: SCOTTISH GOVERNMENT BRIEF GUIDE TO THE 2017-18 SPRING BUDGET REVISION (SBR) Background 1. The Spring Budget Revision is part of the annual Budget process. The Budget process commences with the publication of the Draft Budget and the subsequent consultation process. This is followed by the annual Budget Bill and Parliamentary approval of the Scottish Government s spending plans. 2. Once the Budget Act has been approved by the Scottish Parliament, there are usually two opportunities to amend the budget as the year progresses - the Autumn Budget Revision in October and a Spring Budget Revision in February. The Spring Budget Revision provides the final budget figures, against which outturn is reported in the Scottish Government s annual accounts. Spring Budget Revision 3. The Spring Budget Revision is routine Parliamentary business that proposes amendments to better align the Government s budget with its planned spending profile. 4. The aim of the Brief Guide to the Spring Budget Revision is to explain the main changes to the Budget since the publication of the Autumn Budget Revision and give some further background on why the changes have been made. 5. The changes proposed in the Spring Budget Revision result in an increase in the approved budget of 421.4 million from 39,319.2 million to 39,740.6 million. The changes to the Budget are traditionally broken down in to four main areas: Funding changes which have arisen since changes to the Autumn Budget Revision ( 141.7 million). Whitehall Transfers and HM Treasury allocations ( 7.8 million). Technical Changes ( 271.9 million). Transfers between Portfolios. 6. The main changes included under each heading are summarised below. Funding Changes 7. Funding changes represent adjustments to the budget available to the Scottish Government that provide spending power within portfolios and programmes. 8. The deployment of the 141.7 million is allocated over a number of lines. As in past years, as part of the internal robust monitoring process and in line with good practice, we have also taken the opportunity at the Spring Budget Revision to ensure that we maximise the budget available in 2017-18 through the redeployment of emerging/planned underspend alongside the remaining unallocated resources held centrally. This strategy is reflected in the portfolio schedules and Annex A shows the detail of the funding changes. 10
Whitehall Transfers / Allocation from HM Treasury 9. There are six Whitehall transfers recognised at the Spring Budget Revision together with six additional allocations from HM Treasury. The net positive impact on the Scottish Budget is 7.8 million and a full breakdown is given at Annex B. 10. In respect of Whitehall transfers, there is a 1.3m transfer from the Cabinet Office for Cyber Security, a 0.5 million transfer from the Department of Health in respect of HIV funding, a 0.9 million transfer from the Department for Transport in respect of the Dundee/London Public Service Obligation, a 0.1 million transfer from the Home Office in respect of Marriage Civil Partnership Changes, a 2.0 million transfer from the Department for Work and Pension for the Fit for Work programme along with a 0.9m transfer for Single Gateway Project funding. 11. There is a 1.1 million allocation from HM Treasury to provide grants to women s organisations (Tampon Tax), an allocation of 0.2 million in relation to the costs flowing from the outcome of an out of court settlement between DCLG and the Fire Brigades Union on the 1992 Fire-fighters Scheme, a 0.3 million in respect of LIBOR funding for the Children s Hospice Association and the Scottish Emergency Rider Volunteer Service, 0.2 million in respect of ROSA (UK Fund for women and girls) and a 0.3 million transfer from Comic Relief. Technical Adjustments 12. In line with past years, the Spring Budget Revision recognises a number of technical changes which are essentially budget neutral and do not provide additional spending power for, or detriment to, the Scottish Government. The Spring Budget Revision records total net technical changes of 271.9 million described in paragraphs 13 to 16 below. 13. The Spring Budget Revision records increased Annually Managed Expenditure (AME), as agreed with HM Treasury to cover provisions, impairments, fair value adjustments and pension liabilities ( 71.0 million). 14. In addition, the Spring Budget Revision reflects net technical adjustments of 55.2 million, mainly in Health, to align the IFRS based budgets with the year-end accounting requirements for the Scottish Budget for revenue financed infrastructure projects under the Government Financial Reporting Manual (the FReM). 15. There has been an increase of 47 million to the NHS and teachers pensions budget due to indexation and equalisation carried out by HM Treasury. 16. There are also a number of technical adjustments to the Departmental Expenditure Limit (DEL) budget, relating to non-cash budgets totalling 98 million. The Health and Sport portfolio has increased its non-cash budget by 70 million to cover costs of NHS Boards in respect of write downs and accelerated depreciation. It has also been allocated a further 20 million of ring fenced funding in respect of a change in the Personal Injury discount rate. The non-cash budgets of the Education and Skills portfolio has been increased by 5 million, the Rural Affairs and Connectivity portfolio non cash budget has been increased by 6.3 million, the Justice portfolio has decreased by 4 million and the non-cash budgets of Economy, Jobs and Fair Work portfolio, Food Standards Scotland and Scottish Housing Regulator have been adjusted slightly. 17. Finally, an increase in Grant-in-Aid for the Scottish Funding Council ( 2 million) has been allocated to support working capital requirements and there were a few miscellaneous other minor technical adjustments. 11
Internal Transfers 18. There are a number of internal transfers within the Scottish Block as part of the Spring Budget Revision process. Virement between and within portfolios are zero-sum. The significant budget internal transfers between portfolios include: Transfer of 16.0 million from Finance and the Constitution portfolio to Communities, Social Security and Equalities portfolio for Social Security Implementation and Administration. Transfer of 5.2 million from Economy, Jobs and Fair Work portfolio to Rural, Economy and Connectivity portfolio re transfer of responsibility for Food and Drink Industry. Transfer of 8.0 million from Economy, Jobs and Fair Work portfolio to Rural, Economy and Connectivity portfolio for Wave Energy. Transfer of 5.3 million from Economy, Jobs and Fair Work portfolio to Rural, Economy and Connectivity portfolio to assist funding of Highland and Islands Enterprise capital projects. Transfer of 6.0 million from Education & Skills portfolio to Local Government in relation to the Teachers Pay Deal. 19. The Spring Budget Revision records a small number of internal portfolio transfers which have no effect on the portfolio totals, but play a role in ensuring effective internal budget management. 20. Annex A provides a summary of the changes from the Autumn Budget Revision. Transparency 21. Two new tables were added to the supporting document at Autumn Budget Revision this year, to aid transparency in response to the recommendations of the Budget Scrutiny Review Group. The new tables, 7 (a) and (b) provide details of the sources of funding that support the changes applied and the movement on available resources. 22. Also in accordance with the Budget Process Review Group recommendations Annex C sets out a mid-year report on revenue and spending up to the end of December, to aid scrutiny by the Finance Committee of the Amendment Regulations. Budget figures in the December report are updated to include additional funding allocations formalised within the Spring Budget Revision. Spending figures are as at 31 December. 23. Table 1.8 on page 12 of the supporting document provides a complete picture of capital spending. As the Finance and Constitution Committee is aware, in respect of the Scottish Budget, the definition of capital applies to only spending that scores as capital in the Scottish Government s consolidated accounts or the accounts of Directly Funded Bodies. Scottish Government Finance Directorate Corporate Reporting Division February 2018 12
Annex A - Breakdown of Funding Changes Programme Description Amount Type m Health Spring budget consequentials 99.1 RDEL Other Transport Policy SPT - Glasgow Subway modernisation 40.0 CDEL Health staff costs - previously admin-funded 17.0 RDEL Learning SQA resource pressure 16.0 RDEL Enterprise and Energy BiFab 15.0 FT Health Autumn budget consequentials 8.4 RDEL Scottish Funding Council Low Carbon loans 6.9 FT Health Baby Boxes 5.8 RDEL Enterprise and Energy Scottish Enterprise 5.0 CDEL Social Justice & Regeneration Regeneration Capital Grant Fund 5.0 CDEL Skills & Training SDS - Transition Training Fund 4.0 RDEL Skills & Training SDS - Employability Fund 3.6 RDEL Children & Families Scottish Child Abuse Inquiry 3.4 RDEL Children & Families Disclosure Scotland capital pressure 2.8 CDEL Health GP premises scheme 2.5 FT Health Drugs Policy 2.0 RDEL Sport Sporting Opportunities 2.0 RDEL Housing staff costs - previously admin-funded 1.7 RDEL Housing Discretionary Housing Grant 1.2 RDEL Enterprise and Energy Borders Railway Blueprint 1.0 CDEL SFRS Pay award (inc. RTC) 0.8 RDEL Learning SQA capital pressure 0.8 CDEL Accountant in Bankruptcy additional allocation 0.8 CDEL Children & Families Neglect Improvement Programme 0.5 RDEL External Affairs staff costs - previously admin-funded 0.3 RDEL Miscellaneous staff costs - previously admin-funded 0.3 RDEL 13
Marine staff costs - previously admin-funded 0.3 RDEL Accountant in Bankruptcy additional allocation 0.2 RDEL EU Support & Related Services staff costs - previously admin-funded 0.2 RDEL Culture, Tourism & Major Events staff costs - previously admin-funded 0.1 RDEL Accountant in Bankruptcy additional allocation 0.1 RDEL Finance and Constitution Re-profile of Scotland Act implementation funding -64.0 RDEL Housing underspend surrendered (More Homes) -20.0 FT Housing underspend surrendered (More Homes) -9.0 CDEL Scottish Prison Service underspend surrendered -3.7 CDEL NRS underspend surrendered -2.6 RDEL Health Immigration Surcharge residual amount -2.6 RDEL Enterprise and Energy underspend surrendered -2.0 RDEL Revenue Scotland underspend surrendered -0.5 RDEL NRS underspend surrendered -0.5 CDEL Food Standards Scotland underspend swapped for non-cash -0.3 RDEL Children & Families underspend surrendered (SCRA) -0.2 CDEL Miscellaneous other changes < 50K 0.2 Total 141.7 14
Annex B Summary of Changes from Autumn Budget Revision 2017-18 Budget Approved at the Autumn Budget Revision 39,319.2 FUNDING CHANGES Miscellaneous portfolio movements (See Annex A) 141.7 WHITEHALL TRANSFERS Transfer from the Cabinet office for Cyber Security 1.3 Transfer from Department of Health iro HIV funding 0.5 Transfer from DWP for the Fit for Work programme. 2.0 Transfer from DWP for Single Gateway Project 0.9 Transfer from the Department for Transport for the Dundee Public Service Obligation. 0.9 Transfer from the Home Office in respect of Marriage Civil Partnership Changes 0.1 Allocation of budget from HM Treasury to provide grants to women s organisations (Tampon Tax) 1.1 Allocation of budget from HM Treasury in respect of ROSA (UK Fund for women and girls) 0.2 Allocation of budget cover from HM Treasury in relation to a deficit in the fire pension scheme 0.2 Allocation of budget cover from HM Treasury in relation to LIBOR funding for Children s Hospice Association and Emergency Rider Volunteers 0.3 Allocation of budget cover from HM Treasury in relation to transfer from Comic Relief 0.3 TECHNICAL CHANGES Additional budget cover for provisions, impairments, fair value adjustment, pension liabilities and Depreciation of donated assets (AME) 71.0 141.7 7.8 15
Technical adjustments to align budgets with accounting requirements (ODEL) 55.2 Indexation and equalisation of NHS and Teachers Pensions (AME) 47.0 Various other DEL non-cash adjustments 98.7 271.9 Proposed Budget following Spring Revisions 39,740.6 16
2017-18 Forecast Underspend (Fiscal) as at 31 December 2017 HMT Control Total million Scottish Budget million Final Budget (31,900) (39,741) Forecast Outturn 31,753 39,638 Scottish Administration Underspend (147) (102) Additional funding (184) Total Underspend (331) Less: Non-cash 81 Total Fiscal Underspend (250) 2017-18 Scotland (Fiscal) Reserve Forecast as at 31 December 2017 million General Funding 2016-17 Brought forward (74) Earmarked Funding 2017-18 Forecast underspend committed at 2018-19 Draft Budget (158) Scotland Act 2016 (2018-19 Draft Budget) (100) Personal Injury Damages Health (58) Guarantee Fee Income (3) Additional Barnett consequentials (29) 17
Awaiting allocation (8) Total Reserve allocation at SBR (430) Notes: HMT control total does not include 100m for Scotland Act 2016 and 58m for Personal Injury Reserve Claim set aside in the Reserve. The 158m in underspend anticipated in setting out 2018-19 Draft Budget spending plans is set aside within the reserve. 198m of the 250m fiscal underspend is set aside in the Reserve total ( 158m for 2018-19 Draft Budget + 3m Guarantee Fee income + 29m in additional Barnett consequentials + 8m awaiting allocation. The position is before allowing for the additional allocations made as part of the Budget Bill process. The 2017-18 forecast figures are drawn from a wide range of income and expenditure activities, including a number of demand-led budgets where forecasts are difficult to estimate exactly, and the forecast will be updated regularly through to year-end. The Cabinet Secretary for Finance and the Constitution will provide the Scottish Parliament with a full breakdown of the 2017-18 provisional outturn figures by portfolio, in June as is normal practice. 18
FCC/S5/18/11/2 Introduction Finance and Constitution Committee 11th Meeting, 2018 (Session 4), Wednesday 21 March 2018 Subordinate Legislation: Scottish Landfill Tax 1. The purpose of this paper is to set out background and procedural information for the Committee s consideration of the following statutory instrument ( the Order ) relating to the Landfill Tax (Scotland) Act 2014 The Scottish Landfill Tax (Standard Rate and Lower Rate) Order 2018: SSI 2018/87 2. The Order is accompanied by a Policy Note which is attached at Annexe A. 3. In advance of formal consideration of the Order, the Committee will take evidence from the Cabinet Secretary for Finance and the Constitution before he moves motion S5M-10850 The Order That the Finance and Constitution Committee recommends that the Scottish Landfill Tax (Standard Rate and Lower Rate) Order 2018 be approved. 4. The current rates for the Scottish Landfill Tax are 86.10 per tonne at the standard rate; and 2.70 per tonne at the lower rate. 5. Draft Budget 2018-19 proposes that the following rates apply from 1 April 2018 88.95 per tonne at the standard rate; and 2.80 per tonne at the lower rate. 6. The Draft Budget states that the proposed increase is in line with RPI inflation and Landfill Tax charges in the rest of the UK. This follows the same approach as previous years and is intended to address the possibility of waste tourism should one part of the UK have a lower tax charge than another. 7. The Draft Budget also proposes that the credit rate for the Scottish Landfill Communities Fund for 2018-19 will remain at a maximum of 5.6 per cent of an operator s tax liability. 8. The Order seeks to implement the proposed increased rates from 1 April 2017. 1
FCC/S5/18/11/2 Scrutiny Procedure 9. The Order was laid on 28 February and is subject to the provisional affirmative procedure. Section 41(3)b of the Landfill Tax (Scotland) Act 2014 states that such an order ceases to have effect at the expiry of the period of 28 days beginning with the date on which it was made unless, before the expiry of that period, the order has been approved by resolution of the Parliament. 10. The Delegated Powers and Law Reform Committee considered the Order on 6 March and determined that it did not need to draw the attention of the Parliament to the instrument. 11. During formal consideration of the Cabinet Secretary s motion, Standing Orders provide that only the Cabinet Secretary and members may participate in the debate. In order to inform the Committee s consideration of the motion, there will therefore be an opportunity to take evidence on the Order from the Cabinet Secretary and his officials before moving to formal consideration of the motion. 12. The date on which the 28 day period expires is 27 March. Once the Committee has considered and reported on the Order the Parliament will be invited to consider a further Scottish Government motion seeking its approval of the Order. Committee Clerks, March 2018 2
FCC/S5/18/11/2 POLICY NOTE THE SCOTTISH LANDFILL TAX (STANDARD RATE AND LOWER RATE) ORDER 2018 SSI No: 2018/87 The instrument above was made in exercise of the powers conferred by section 13(2) and (5) of the Landfill Tax (Scotland) Act 2014 (LT(S)A 2014). The making of this order is subject to the provisional affirmative procedure. Policy Objectives The LT(S)A 2014 provides for a Scottish Landfill Tax (SLfT) which will took effect on 1 April 2015. Sections 13(2) and (5) of the LT(S)A 2014 provide a power allowing the rates of tax to be set. Scottish landfill tax is chargeable by weight and the two rates will be uprated from 1 April 2018: the standard rate is 88.95 per tonne; and the lower rate is per 2.80 tonne. A list of material qualifying for the lower rate and conditions that have to be met are provided for in the Scottish Landfill Tax (Qualifying Materials) Order 2016. The Scottish Government considers that these rates will provide appropriate financial incentives to support delivery of its waste policies, namely reducing the amount of material being sent to landfill, especially non-qualifying material which is particularly harmful from an environmental point of view. Consultation There is no statutory requirement to consult on this Order. The Scottish Government s proposed SLfT rates from 1 April 2018 were published in the Draft Budget 2017-18 in December 2017 1. Impact Assessments A Business and Regulatory Impact Assessment ( BRIA ) 2 was published looking at different rates and bands associated with the LT(S)A 2014. An Equality Impact Assessment ( EQIA ) on landfill tax was also published 3 previously in December 2014 and landfill tax rates and bands orders will have no negative impact on equality issues. 1 https://beta.gov.scot/publications/scottish-budget-draft-budget-2018-19/pages/3/ 2 Scottish Landfill Tax Final Business and Regulatory Impact Assessment, published 14 December 2014, available at: http://www.scotland.gov.uk/publications/2014/12/6274 3 Scottish Landfill Tax Equality Impact Assessment Results, published 17 December 2014, available at: http://www.scotland.gov.uk/publications/2014/12/7976 3
FCC/S5/18/11/2 A strategic environmental screening exercise was also conducted and LT(S)A 2014 statutory secondary instruments raising landfill tax rates will have no negative impact on the environment 4. Financial Implications The Scottish Government estimates that Scottish Landfill Tax will generate revenue of around 106 million in 2018-19. This is a full-year estimate. This forecast has been independently produced by the Scottish Fiscal Commission 5. Scottish Government Financial Strategy Directorate Fiscal Responsibility Division 4 Scottish Environmental Screening Exercise results available at: http://www.scotland.gov.uk/topics/environment/environmental-assessment/sea/seag 5 Report on The on Draft Budget 2018/19, published December 2017, available at: http://www.fiscalcommission.scot/publications/scotlands-economic-and-fiscal-forecasts/ 4