1. Finance Committee
5th
Report, 2013 (Session 4)
Annual Report 2013
Published by the Scottish Parliament on 11 June 2013
SP Paper 330 Session 4 (2013)

2.  Parliamentary copyright. Scottish Parliamentary Corporate Body
Information on the Scottish Parliament’s copyright policy can be found on the website -
www.scottish.parliament.uk

3. Finance Committee
Remit and membership
Remit:
1. The remit of the Finance Committee is to consider and report on-
(a) any report or other document laid before the Parliament by members of
the Scottish Executive containing proposals for, or budgets of, public
expenditure or proposals for the making of a tax-varying resolution, taking into
account any report or recommendations concerning such documents made to
them by any other committee with power to consider such documents or any
part of them;
(b) any report made by a committee setting out proposals concerning public
expenditure;
(c) Budget Bills; and
(d) any other matter relating to or affecting the expenditure of the Scottish
Administration or other expenditure payable out of the Scottish Consolidated
Fund.
2. The Committee may also consider and, where it sees fit, report to the
Parliament on the timetable for the Stages of Budget Bills and on the handling of
financial business.
3. In these Rules, "public expenditure" means expenditure of the Scottish
Administration, other expenditure payable out of the Scottish Consolidated Fund and
any other expenditure met out of taxes, charges and other public revenue.
(Standing Orders of the Scottish Parliament, Rule 6.6)

4. Membership: -
Gavin Brown
Malcolm Chisholm (member from 12 December 2012)
Bruce Crawford (member from 18 September until 24 October 2012)
Kenneth Gibson (Convener)
Jamie Hepburn (member from 25 October 2012)
John Mason (Deputy Convener)
Mark McDonald (member from 15 December 2011 until 18 September 2012)
Michael McMahon
Elaine Murray (member from 22 December 2011 until 12 December 2012)
Jean Urquhart (member from 18 September 2012)
Paul Wheelhouse (member from 1 June 2011 until 6 September 2012)
Committee Clerking Team:
Clerk to the Committee
Jim Johnston
Assistant Clerk
Alan Hunter
Committee Assistant
Parminder Kaur

5. Finance Committee
5th
Report, 2013, Session 4
Annual Report 2013
The Committee reports to the Parliament as follows—
Introduction
1. This report covers the work of the Finance Committee during the
parliamentary year 11 May 2012 to 10 May 2013. The Committee had a busy work
programme in its second year of this fourth parliamentary session. As in previous
years, the Committee’s main area of work was on the annual budget process. An
overview of the Committee’s work is set out below.
Meetings
2. During the year, the Committee met 33 times. No meetings were held entirely
in private but 27 meetings included items in private. The purpose of the private items
was to consider draft Committee reports, work programme issues or proposed
contingent liabilities. All Committee meetings were held at the Scottish Parliament
except the external meeting in Hawick (see below).
Work programme
Budget scrutiny
3. The principal role of the Finance Committee is to lead the Parliament’s
response to the Scottish Government’s spending proposals through the annual
budget process.
4. The Scottish Government published its draft budget for 2013-14 on 21
September 2012. However, the Committee’s scrutiny began in June when it agreed
to focus its scrutiny of the draft budget on whether spending decisions were aligned
with the Scottish Government's overarching Purpose of increasing sustainable
economic growth.
5. The Committee issued a call for evidence before summer recess inviting the
views of interested and affected parties on the proposals that they would like to see
in the draft budget.
SP Paper 330 Session 4 (2013)1
FI/S4/13/R5

6. 6. The Committee subsequently published the written evidence it received which
identified a number of key themes and issues on which it then focused during oral
evidence sessions.
7. As part of its scrutiny of the draft budget, the Committee heard oral evidence
from a number of organisations including from the private and third sectors before
taking oral evidence from the Cabinet Secretary for Finance, Employment and
Sustainable Growth on 5 November 2012.
8. To assist in their own scrutiny of the draft budget, the Committee issued
budget scrutiny guidance to subject committees, the Equal Opportunities Committee
and the European and External Relations Committee.
9. The Committee’s report on the draft budget was published on 10 December
2012 and the Chamber debate on the report took place on 20 December 2012. The
Scottish Government published its response to the report on 21 January.
10. The Budget (Scotland) (No.2) Bill was introduced in the Parliament on 17
January 2013 and the Chamber debate took place on 22 January. The Bill was
subsequently debated and passed by the Parliament on 6 February.
Scottish Futures Trust
11. The Committee took oral evidence from the SFT on the draft budget, Non
Profit Distributing Programme and Asset Management.
Scotland Act 2012
12. The Committee took evidence from the Office for Budget Responsibility on 17
April on the work being undertaken by it to forecast receipts from taxes to be
devolved to Scotland as a result of the Scotland Act 2012.
13. The Committee took oral evidence on 24 April on the implementation of the
Scotland Act 2012, with particular emphasis on the resulting adjustment to the block
grant. Written submissions from Professor Gerald Holtham, Professor David Bell
and the David Hume Institute were published online.
14. The Committee took oral evidence from the Cabinet Secretary for Finance,
Employment and Sustainable Growth on the implementation of the financial powers
arising from the Act on 1 May
15. The Committee took oral evidence from HM Revenue and Customs on 8 May
on its preparations to support the devolution of these taxes.
Demographic change and an ageing population
16. The Office for Budget Responsibility in its fiscal sustainability paper of
2011 stated ‘demographic change is a key source of long-term pressure on the
public finances’. Having recognised the importance of this issue and its impact on
public finances the Committee held an inquiry including a call for written evidence
and a series of round table discussions.
2

7. 17. The Committee published its report on demographic change and an ageing
population before taking oral evidence from COSLA on its recommendations,
particularly those relating to the integration of health and social care.
18. The Committee then led a debate in the Chamber on 5 March 2012 on the
themes that arose during its inquiry.
Improving employability
19. One of the key themes to emerge from the fiscal sustainability roundtable
sessions that the Committee held at the beginning of 2012 was employability and
sustainable employment. The Committee agreed to hold an inquiry into the issue
including a call for written evidence and a series of oral evidence sessions which
explored the need to improve the employability of individuals experiencing high
levels of multiple deprivation as a prerequisite to increasing sustainable economic
growth.
20. A summary of written evidence was published. The Committee also held three
workshops in Ardrossan, Dumfries and Dundee with key employability stakeholders
including local businesses, employability groups, third sector organisations and
service users.
21. The Committee published its Improving Employability report on 3 December
2012. It then led a debate in the chamber on the subject.
Welfare Reform Act
22. The Committee took evidence from a number of stakeholders on the financial
implications for Scotland of the Welfare Reform Act in June 2012.
Data collection
23. Having recognised the importance of having accurate financial and statistical
data on which to base policy scrutiny, the Committee held an evidence session on
data collection and measuring outcomes in June.
UK Budget
24. In spring 2013 the Committee took oral evidence from the Institute for Fiscal
Studies and the Office for Budget Responsibility on the impact of the UK Budget on
Scotland.
Bills
25. The Committee was designated as lead committee for the consideration of the
following Bills—
 Budget (Scotland) (No.2) Bill
 Freedom of Information (Amendment) (Scotland) Bill
 Land and Buildings Transaction Tax (Scotland) Bill
 Landfill Tax (Scotland) Bill
3

8. Financial Memoranda
26. The remit of the Finance Committee includes consideration of the financial
implications of legislation through scrutiny of financial memoranda accompanying all
bills.
27. The Committee considered the following financial memoranda—
 Aquaculture and Fisheries (Scotland) Bill
 High Hedges (Scotland) Bill
 Forth Road Bridge Bill
 Local Government Finance (Unoccupied Properties etc.) (Scotland) Bill
 Post-16 Education (Scotland) Bill
 Scottish Civil Justice Council and Criminal Legal Assistance Bill
 Scottish Independence Referendum (Franchise) Bill
 Social Care (Self-directed Support) (Scotland) Bill
 Victims and Witnesses (Scotland) Bill
 Water Resources (Scotland) Bill
 Welfare Reform (Further Provision) (Scotland) Bill
28. In addition, it began its consideration of the following Financial Memoranda—
Scottish Independence Referendum Bill
Regulatory Reform (Scotland) Bill
Legislative Consent Memoranda
29. The Committee considered and reported on the following Legislative Consent
Memoranda—
 Enterprise and Regulatory Reform Bill
 Public Service Pensions Bill
Subordinate legislation
30. The Committee considered and reported on the following affirmative Scottish
Statutory Instruments—
 Official Statistics (Scotland) Amendment Order 2012
 Budget (Scotland) Act 2012 Amendment Order 2012
 Budget (Scotland) Act 2012 Amendment Order 2013
Engagement and innovation
31. The Committee played a key role in the first ever Parliament Day in Hawick.
As part of its budget scrutiny, the Committee met with local business groups and
organisations to gauge views on the budget before taking oral evidence on the Draft
Budget 2013-14 from the Cabinet Secretary for Finance, Employment and
Sustainable Growth.
Equalities
32. As in previous years, equalities considerations were integral to much of the
Committee’s work. In particular, its inquiry on improving employability focused on the
4

9. need to improve the employability of individuals experiencing high levels of multiple
deprivation as a prerequisite to increasing sustainable economic growth. Its report on
the draft budget also considered the impact on equalities of welfare reform, social
fund successor arrangements and fuel poverty.
5

10. Members who would like a printed copy of this Numbered Report to be forwarded to them should give notice
at the Document Supply Centre.
Produced and published in Scotland on behalf of the Scottish Parliamentary Corporate Body by APS Group Scotland
All documents are available on
the Scottish Parliament website at:
www.scottish.parliament.uk
For details of documents available to
order in hard copy format, please contact:
APS Scottish Parliament Publications on 0131 629 9941.
For information on the Scottish Parliament contact
Public Information on:
Telephone: 0131 348 5000
Textphone: 0800 092 7100
Email: sp.info@scottish.parliament.uk
ISBN 978-1-78351-345-1