Malcolm on the importance of early years spending and "systems thinking"
Budget Strategy Phase 2011-12: The Finance Committee's Report Malcolm Chisholm (Edinburgh North and Leith) (Lab):
Like Linda Fabiani, I would like to spend a bit of time dealing with some of the interesting and relevant evidence that was given to the committee, but I must start by disagreeing with her fundamental point that Labour's amendment is not consistent with the report. The report's central theme was to ask the Government to get specific about what it proposes. Other members have quoted some of the report's recommendations. It recommended that consideration be given to the impact of keeping universal benefits; that the Government should set out the impact of protecting health and the principles that will inform its approach to developing spending proposals; and that the options should be discussed in an open and realistic way. In addition, to quote the CPPR:

"The Scottish Government needs to start to outline where it envisages making upcoming cuts across services over the summer".

The main thrust of the committee's report was to say to the Government that we cannot wait until November and that some proposals must be produced now.

Although Linda Fabiani should reflect on that aspect of the report, I agree with what she said. In the short time that is available, we do not have time to look at all the evidence that we received, but it will be worth our while considering much of it as we debate the issues over the summer.

I will pick out two examples. Alan Sinclair and others gave extremely strong evidence on the importance of investment in the early years, which is an area that might be vulnerable. He pointed out that early years support was the

"most efficient and effective use of public money".[Official Report, Finance Committee, 13 April 2010; c 2019.]

We should reflect on that evidence because, in my view, we must be extremely careful to protect that area.

For me, the most interesting aspect of the committee's report was the perhaps unlikely coalition in favour of systems thinking, which embraced Professor John Seddon - who, at one level, seemed to be quite extreme, although he was interesting - and Unison. We must take on board the idea of systems thinking, which involves looking at the interdependencies within Government expenditure. If we do not do that, savings in one area will just impact somewhere else in the budget. The other key aspect of systems thinking is ensuring that we involve the workforce at the sharp end in finding solutions. Much of the committee's evidence points to how best to deal with budget strategy.

However, we cannot forget the context in which we are operating. It would be remiss of us to look only at the situation that Scotland faces. We must never forget the wider context of why we are here. As he always does, Joe FitzPatrick waxed strongly about Labour's financial mismanagement, but I must remind him that the SNP supported all Labour's spending commitments until 2008; in fact, I seem to remember it asking for more to be spent. It also supported the action that Labour took to defend the economy against depression from 2008 onwards. For months I have been mystified about where the SNP disagrees with the spending decisions of the Labour Government.

I understand why Conservative and Liberal Democrat members do not want to deal with the wider context. Their view, as expressed by Danny Alexander on Tuesday, is that there is no choice at a UK level, but that is patent nonsense. We should remember that there is no sound economic rationale for making cuts so deeply and so fast. The action that the Tories and the Lib Dems are taking may well be counterproductive not just for growth, but from the point of view of its effect on the markets, which are already getting spooked by the impact on growth of the European deficit reduction programmes.

The distributional effect of the budget is quite calamitous, too. We must bear that in mind in the decisions that we take in Scotland. One of the key principles that we must follow is that we must mitigate the effects of the appalling budget decisions of the UK Government on the most disadvantaged people in Scotland.

The key point is that the debate must start now. We cannot wait until November. The Scottish Government must show some leadership; we cannot wait another day.
July 1st 2010, (Column 28218-20)