COMMISSION ON THE POWERS AND ELECTORAL
ARRANGEMENTS OF THE NATIONAL ASSEMBLY FOR WALES
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MINUTES OF PROCEEDINGS
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of the
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EVIDENCE OF:
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PROFESSOR DAVID BELL
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held at
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The Caledonian Hilton, Edinburgh
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on
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Wednesday, 12th February 2003
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THE CHAIRMAN: Good morning.
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| PROFESSOR BELL: Good morning |
| THE CHAIRMAN: Well can I thank you very much for coming.
It is kind of you to do that. We have had the advantage
of reading your evidence to the Lord Norton Committee
and I think what we would like to concentrate on today
particularly is the Care Standards Bill. |
| PROFESSOR BELL: Yes, I mean, I wonder, would it be worth
my while just giving people some of the background to
that because (a) not everyone might be familiar with this
issue and (b) it is a complex issue. I guess the background
really starts with the Royal Commission on Care for the
Elderly which was chaired by Lord Sutherland which reported
in the late 90’s, I have forgotten exactly when,
and recommended that care for the elderly be extended
and in particular nursing care and what it’s termed,
personal care, should be provided by the State. |
| Now since care falls within a broadly defined remit
of certainly the Scottish Parliament but also the Welsh
Assembly, I guess the two devolved authorities were in
a position to take their own view about these recommendations
and that view might be a different one from the view taken
in Westminster. And what happened in Scotland was that
essentially the First Minister of the time entered into
a commitment to provide free personal care. I think that
is quite important because my experience with care followed
on his setting up of something called a Care Development
Group and the Care Development Group, just quoting from
its terms of reference, was asked to bring forward proposals
to ensure that older people in Scotland have access to
high quality and responsive long-term care in the appropriate
setting and on a fair and equitable basis, including proposals
for the implementation of free personal care. So the way
that the terms of reference for the Care Development Group
were structured was such that free personal care was already
written into that and that, it has to be said, influenced
to a certain extent the kind of work that the Care Development
Group brought forward. |
| Therefore, the Care Development Group went a little
bit broader than the Sutherland report in interpreting
how the needs of the elderly ought to be dealt with and
looked at ways of enhancing collaboration say between
the Social Services and the NHS in Scotland working together
looking at needs assessment in a holistic way, assessing
people for the form of care that was appropriate for them
and also had hoped to bring forward proposals, well I
think this was the feeling of the Group that we should
try to have proposals such which helped enable more people
to stay at home rather than to be taken into care homes. |
| Anyway, the Care Development Group reported in August
2001 and took the view that at the time the additional
costs of care were, could be met within the Scottish budget
and therefore it proposed that free personal care be implemented.
That proposal was accepted and following scrutiny by the
Health Committee which again Lord Sutherland was involved
in and I was also involved in, which scrutinised the costs
again, the Community Health and Care (Scotland) Act 2002
was brought forward and implemented on July the 1st. |
| Now running alongside, well running a little later,
you will be aware of a similar process happening in Wales
but two importance differences, one, there was no assumption
at the start of the process that free personal care would
be the outcome and then also there was no, because of
the powers of the Assembly, there was no suggestion that
this would in any way lead to legislation and I was involved
in basically the costings, I am an economist, I am not
an expert in legislation, but I was involved in the costings
in both Scotland in and Wales and there were a number
of current themes but the interpretation of these themes
it seemed to me were somewhat different, for example the
bulk of the money would be spent in a regressive way which
was something which perhaps the Executive turned a somewhat
blind eye to |
| MR ROWLANDS: The Scottish Executive? |
| PROFESSOR BELL: Yes in the sense that much of the perceived
problem was due to those whose assets exceeded a minimum
level, there is a means test and if your assets exceed
a certain level then you have to contribute towards your
own care and many older people are income poor but have
quite a lot of wealth embedded in their house so they
don’t have the wherewithal to meet on a weekly basis
from their income the cost of care and the implication
is that they may have to sell their house to meet the
cost of care. |
| The way that the costs were structured in Scotland,
the bulk of the money was going to go to that aspect of
avoiding people who are already owner/occupiers having
to sell their house in order to be able to pay for free
personal care and therefore basically it was a subsidy
to owner/occupiers rather than to poorer people whose
cost of care was always going to be met by the State.
The benefits therefore of this policy it has to be said
largely accrue to the descendants of owner/occupiers so
it was their families who come off best and this is common
to Scotland and to Wales. |
| There is an issue about encouraging saving and this
is a UK wide issue. If you are going to pay for care and
not have people being forced into selling their assets
it would be good to either have some kind of insurance
approach whereby they took out a policy against cost of
long-term care or they saved in some other way and it
is clear, and here we start to impinge on reserve issues
like the tax system and the Benefits system where the
remit of the devolved authorities is limited to encouragement
and cajoling of Westminster but there are no direct powers.
Both Scotland and Wales have issues in terms of costs
of looking after the elderly but you can argue that Scotland
would, let’s assume, that Barnet is more generous
to Scotland and in that circumstance one difference that
might emerge is that Scotland has more leeway to pay for
these additional costs compared to Wales. |
| The demographic issues are largely shared in an increasingly
elderly population and an increasing population aged over
85 who are the prime group for both nursing and personal
care. |
| One of the things which actually came out and I think
was used as part of the argument that is put in the older
person’s strategy for Wales is that the structure
of assets is somewhat different between Scotland and Wales,
the structure of assets for the elderly - there is a high
proportion of home owners in Wales but the homes they
own are relatively lower value and therefore there was
actually a potential problem there associated with having
larger numbers of people in the near future running into
problems of being over the minimum asset requirement but
also having therefore to sell their homes because the
incomes of the elderly are also somewhat lower in Wales
than they are in Scotland. So I guess one theme clearly,
Scotland has had the power to legislate and what appear
to be a policy that had been directed not by the evidence
but by a decision of the First Minister and the evidence
followed, Wales seems to have taken the view to collect
the evidence first before deciding on the policy. |
| Now Scotland, by its ability to legislate on this issue,
has been able to effectively enter a long-term commitment
to the elderly. It could be rescinded but the political
cost would be higher than if the Assembly had somehow
been able to find out of its budget sufficient funds to
pay for personal care but that would be part of an expenditure
strategy. |
| However, having said, you know, Scotland had greater
powers to act in this area, nevertheless its powers were
still limited because one of the key issues which came
up and it was a very complicated issue, has to do with
attendance allowance, this is a non means tested benefit
for people who are in care or who are requiring care and
the way that Department of Work and Pensions structure
this benefit is such that if people are receiving any
other assistance from State funds towards their personal
care then this allowance is rescinded and since, I have
forgotten, it’s a matter of about £40 million in
the total budget for Scotland for free personal care,
attempts were made to get the Department of Work and Pensions
to change the regulations in such a way that attendance
allowance or the Scottish contribution could be seen as
additional to the money that was being paid in attendance. |
| MR ROWLANDS: The Care and Development Group identified
this? |
| PROFESSOR BELL: Absolutely. |
| MR ROWLANDS: It was not something that occurred suddenly
later in the day. |
| PROFESSOR BELL: Well it identified the problem but no
resolution to the problem had been achieved by the time
it had to make its report so I guess Ministers were discussing
this issue with the Department of Work and Pensions, the
report was published on the 1st August 2001 but at that
time we didn’t know whether the attendance allowance
would be payable or not and in the end the Department
of Work and Pensions said this is a UK wide welfare benefit
scheme, we are not going to change that on the basis of
your proposed policy and therefore effectively the Scottish
budget is paying and the UK welfare budget is saving some
money as a result of this refusal. |
| THE CHAIRMAN: Could you give us some figures on that?
Is it possible? |
| PROFESSOR BELL: Yes, I should have them. Can I just
have a quick look? |
| THE CHAIRMAN: And really on the whole thing, how much
would the whole thing cost? |
| PROFESSOR BELL: The attendance allowance itself is payable
at two rates, £37 a week for people who are deemed to
have low needs and £55 a week for those who are deemed
with, who are assessed with higher levels of dependence.
Let me just look at the costing overall. Well the free
personal care entitlement was roughly being worked out
at £145 a week per person in a care home and that was.... |
| MR ROWLANDS: Sorry, £145? |
| PROFESSOR BELL: Sorry, that’s the additional part
so care comprises three components, there is hospital,
sorry hotel costs which, and no-one has ever suggested
that the State should fund people who are unable to meet
hotel costs, that is the basic, effectively the living
costs, then above that there is personal care, then above
that there is nursing care so there are these three elements
of care and the personal care element would be £145 per
week made up, and this I am quoting directly from the
Care Development Group report, made up of £55 per week
UK entitlement plus £90 from the Scottish Executive. Well
the £55 never happened. |
| SIR MICHAEL WHEELER BOOTH: What is the asset level in
Scotland and in Wales? |
| PROFESSOR BELL: Yes, it’s about £18,000 a year. |
| SIR MICHAEL WHEELER BOOTH: A year? |
| PROFESSOR BELL: Sorry £18,000 total, a year. |
| SIR MICHAEL WHEELER BOOTH: It only costs above £18,000
in Scotland? |
| PROFESSOR BELL: Yes, it is UK wide, it is set by the
Department of Working Pensions and the regulations about
how much money is paid to care homes are effectively determined
by Benefit regulations set in London by the Department
of Work and Pensions. |
| SIR MICHAEL WHEELER BOOTH: And going back a long way
to your capital sum that would disqualify you, what are
they? |
| PROFESSOR BELL: Well if your assets exceed £18,000. |
| SIR MICHAEL WHEELER BOOTH: It’s £18,000? |
| PROFESSOR BELL: Yes, so that anyone who owns a home
effectively has to contribute. |
| MS SUGAR: So what was the total bill to the Scottish
Executive including the £40 million which was the lost
attendance allowance. |
| MR PRICE: Actual and forecast, the original forecast
and the estimate? |
| PROFESSOR BELL: There has been some debate since the
implementation of the Act about whether various areas
are receiving suitable amounts because the money is distributed
through local authorities and of course an allocation
has to be made to local authorities and there has been
a question about whether some local authorities, particularly
Highland has complained that its allocation has not been
enough and this has been used by the Press as a way of
establishing that the whole thing is imploding. My feeling
is that it is not. The estimated cost was £125 million
of changing from, sorry of making additional payments
necessary to provide personal care and that moved forward
with demography effectively to exceed on, in real terms
at 2001 prices I guess about quarter of a billion pounds
in 2020 but I mean I was involved with these costings
and I emphasised and it is emphasised in the Welsh report
as well that these are subject to considerable doubt and
in particular the further out you go the more doubt is
associated with the policy and in particular the reason
for that is that the main suppliers of care to the elderly
are not, is not the State, it is the relatives of the
elderly and we just don’t know what is going to happen.
If you make a policy where you are going to provide free
personal care then each normally it will be the children
of the elderly will make their decision, should I have
mum and dad, mum and/or dad when the State you know is
coming forward with these great new proposals to do it
itself so the evidence on that was extremely limited and
I, you know, that is a very good reason for being very
careful about long-term commitments in this area and of
course legislation is effectively a long-term commitment
in the sense that the political cost is higher that you
have to give back on this. |
| THE CHAIRMAN: On your working figure the additional
cost of introducing people initially was £125. |
| PROFESSOR BELL: Yes, that was the working figure. |
| MS McALLISTER: And the attendance allowance was £40
million? |
| PROFESSOR BELL: Yes. |
| MR JONES: So the DWP keep that figure to itself? |
| PROFESSOR BELL: Yes. |
| MR PRICE: Does that make a figure of £165, if you add
that? |
| PROFESSOR BELL: Yes, I guess it would, yes it would.
I haven’t been in touch recently with how the policy
has been developing so I don’t know if we have had,
well we are still into the first year, it was July 1st
when it came in. |
| THE CHAIRMAN: We have established the service is £165
million, what do the Parliament have to do in order to
find that £165 million? |
| PROFESSOR BELL: Well there is a fixed budget that comes
from Barnet, it knows what it has got so effectively it
has to shift funds around so monies were rumoured to have
come from the Transport budget and elsewhere in the Health
budget. You know, it is not costless, other things have
to be given up so it has to be seen as a priority over
other issues that the Parliament may wish to deal with,
whatever you might legislate for, the budget constraint
tells you what resources you can allocate. |
| SIR MICHAEL WHEELER BOOTH: You say rumoured. The whole
idea of the Scottish Parliament was that it was to be
open and transparent - this was an absolute fact at the
beginning, surely people know £40 million has been cut
from Transport? |
| PROFESSOR BELL: People do find the expenditure figures
from the Scottish Parliament extremely difficult to interpret
because they keep changing the basis on which they appear
to be collated so one can take a Machiaevellian view of
this and say this is the scheme, the more perhaps benign
interpretation is things are settling down in the early
years of the Parliament but it is very difficult to find
out exactly where things come from. |
| THE CHAIRMAN: That’s an annual expenditure, £165
million? |
| PROFESSOR BELL: Yes, growing with the demographic... |
| MR ROWLANDS: As a matter of interest how much would
1p standard income tax in Scotland bring in? |
| PROFESSOR BELL: The total now with the 3p variation
is £600 million, which is about £200 million per penny. |
| MR PRICE: Did you say £200 or £230? |
| PROFESSOR BELL: £230. |
| THE CHAIRMAN: Can I come back to the amount of money
they have to find? |
| PROFESSOR BELL: Yes. |
| THE CHAIRMAN: Do they go through a particular Committee,
were proceedings published or the results published? |
| PROFESSOR BELL: Not that I am aware of. The role of
the Committee, first of all the report was fully accepted
by the Executive on publication. The Health Committee
then scrutinised figures and so on, the whole basis of
the report, found the report acceptable but none of them
looked at where the money was actually going to come from. |
| THE CHAIRMAN: And we still don’t know? |
| PROFESSOR BELL: Unless I have missed something completely,
no. |
| THE CHAIRMAN: Is anybody complaining about the fact
people don’t know? |
| PROFESSOR BELL: No. |
| MR VALERIO: We were told there was a very antagonistic
Scottish Press seizing an opportunity such as this; it
seems rather surprising they haven’t discovered this. |
| PROFESSOR BELL: I think that’s true but the antagonistic
Scottish Press I think like to highlight perhaps more
issues like, will this cause a flood of, will this policy
cause a flood of elderly immigrants into Scotland and
those newspapers with red banners will pick on particular
people who are moving up to Scotland to take advantage
of free personal care and argue that is critical of the
policy rather than delving into the nuances of where the
money is actually being found from which may of course
be much more important. |
| MS SUGAR: One of the big arguments was that £165 million
could be better spent on other forms of care for the elderly? |
| PROFESSOR BELL: Absolutely. |
| MS SUGAR: Can I just be clear, when you said there was
a political commitment to doing that, was it actually
in the manifesto on which the Government had been elected
? |
| PROFESSOR BELL: No. |
| MS SUGAR: Or was it purely because the Minister thought
it was a good idea? |
| PROFESSOR BELL: I think it was a commitment of Henry
McLeish when he took over from Donald Dewar. |
| MR ROWLANDS: You are the economist, can we draw upon
your economics to look at the Barnett formula. Somewhere
in the evidence you gave to the House of Lords, that horrible
phrase, regulation and arbitrage – is the correct
interpretation of it that people will behave differently
with different models on either side of the border where
Scottish politics diverge, such as the possible mass movement
of elderly people from south of the border, is that right,
is that the correct interpretation of it? |
| PROFESSOR BELL: Yes I guess so. |
| MR ROWLANDS Have there been any examples of Scottish
policy divergence which has led to a possible movement
of people south of the border already or...? |
| PROFESSOR BELL: I guess the other main issue that required
legislation was the question of student tuition fees and
there, it is, I think it is not obvious that there has
been massive changes in behaviour as a result of Scotland
going to what is called a graduate endowment where the
UK or where England appears to be ending up now so that
payments for tuition are being made post graduation rather
than on an on-going basis. I don’t think, or I don’t
know of any plausible evidence that there has been substantial
change in behaviour in terms of the cross-boundary behaviour
as a result of that because of course English students
coming to Scotland are still having to pay their fees
and Scottish students in England are having these paid
for them and having to pay an endowment post-graduation. |
| MR ROWLANDS: What is happening with top-up fees? |
| PROFESSOR BELL: In Scotland the top UP fees does not
appear to be such a live issue as it is with some Universities,
particularly London, Cambridge, Oxford. I think that would
require legislation in Scotland and I think, the Universities
themselves are not pressing, the obvious cases would be
Edinburgh and St Andrews, that would press, but at the
moment I think they are lying low and waiting to see what
happens to see how the Executive reacts to the report
on Higher Education and funding of the Higher Education,
because the same issues apply in Scotland as indeed they
do in Wales to those that the review seeks to address. |
| MR PRICE: Can I take up something on the Barnett formula.
Suppose that some additional responsibility was transferred
to the Scottish Parliament. To what extent is it easy
or otherwise to compare the Barnett formula to that shift
of responsibility from the UK to Scottish level? |
| PROFESSOR BELL: Transfers like this have been made.
One of the most important I think was Housing Benefits,
I think which are now dealt with by local authorities
is it rather than the DWP and you do get transfers on
that basis. The key to the Barnet formula is a Treasury
document which appears each year which catalogues UK policies,
spending policies that are meant to be comparable, comparable
policies in a broad sense although one might question
whether the London light railway fell into that category
but apparently it does and so spending is allocated by
Ministries in Whitehall to particular plans that they
have. Comparability percentage is presented in this Barnett
formula and then the formula itself is applies so you
might get, this is a 70% comparable programme and Scotland
gets 8.8% of that and Wales gets 4. whatever of that as
a total so if you are actually going to transfer a responsibility
somehow or other there has to be a budget and the comparability
percentage and then that has to be applied to Scotland
and/or Wales and/or Northern Ireland but the way that,
clearly, you know, a responsibility like dealing with
land issues which Scotland is currently doing, doesn’t
necessarily have a direct spending attribute associated
with it but most policies will have had some resource
associated with it and therefore if there is to be a transfer
of resource, that is the mechanism by which it must happen,
there must be an identifiable programme with a number
attached to total spend with comparability percentage
and then an application of the formula. |
| MR PRICE: On that document that you referred to, giving
comparable figures, sometimes drawn up in Whitehall, have
you any idea of the process leading up to the preparation
of that document and to what extent it is negotiated and
if so who negotiates it? |
| PROFESSOR BELL: I think I would be speculating. My feeling
is that it is largely determined by Treasury, that the
input, there may be discussion with the devolved authorities
but it is the territorial spending section, I don’t
know whether that’s the precise total but there is
a very small group of people who are concerned with this
particular issue, that is their job in the Treasury and
I am sure there are discussions but in the past certainly
it has been a very opaque procedure and it is I think
only in the last two or three years that this document
has been published even. |
| MS McALLISTER: Can I ask you to comment a little about
the latent power and the significance of the latent power
to vary income tax. How important has that been to the
mind-set of policy operations and can you envisage situations
in the future where a desire to vary tax might become
particularly significant? |
| PROFESSOR BELL: I think the current administration has
promised not to vary Income Tax and what are the issues,
why has it decided to do this? I think the key to this
statement is the fact that you have administrations of
a similar political persuasion in Westminster and in Edinburgh
and in a sense perhaps the decision to vary the rate of
Income Tax might be seen as creating perhaps a small,
perhaps a large schism between the two Labour administrations
and that might be seen as politically damaging so, you
know, it will be the case with the elections coming up
in May, will partly be determined by Scottish issues but
as with all elections other matters will cloud the decision
that the electorate makes and UK wide issues will no doubt
play a part and the absence it seems to me of a variation
in Income Tax might be seen in political terms to be a
show of coherence between Westminster and Edinburgh which
an astute politician might use in their favour. Having
said that, you know, if the Scottish Executive was much
closer to levels of comparable spending to let’s
say those in England, the issue would be a much more live
one. I think there might be another argument for not doing,
as a wish not to rock the boat, not to have the Treasury
looking into the basic level of funding for Scotland in
more detail because since the Scotland Act says that for
example if the Income Tax rate is cut in Scotland and
some advocate that the Income Tax rate should be cut to
encourage business, the Treasury would then have a careful
look at levels of its level of support for the Executive. |
| MR ROWLANDS: Can I identify that level of support. I
have been trying to work out comparative expenditure per
head in Scotland and England. We have got here a running
table from 1992 to 2001 which shows £123, would that be
right? |
| PROFESSOR BELL: That’s probably right. It varies
across the programme but its about that in Health and
Education which are of course the two biggest spending
programmes, it is much less in Justice for example but
overall it pans out about £123. |
| MR ROWLANDS: And the Scotland/Wales is, Scotland is
about £105 to our £100 is it? |
| PROFESSOR BELL: What does that make Wales relative to
England? |
| MR ROWLANDS: Wales, England is £117. |
| PROFESSOR BELL: £117, yes, that’s what I would
have said, that would be about, I guess that would be
about it. These figures have to be treated with a little
bit more care because you know when you do a per head
calculation and you have areas where there, where per
head is not the appropriate way to compare things like
farm acreage where Scotland clearly has much more its
population share of the UK’s farmland then you know
that kind of comparison isn’t completely appropriate
but in broad terms since the expenditure on agriculture
is not that high anyway we are in the right ball park
with the numbers we have quoted. |
| MR ROWLANDS: How, given the fact that Scotland’s
fee per capita is much closer to the UK average than Wales
is that in fact there is this rather large discrepancy
in expenditure per head |
| PROFESSOR BELL: Well... |
| MR ROWLANDS: You could have been relatively more prosperous
than Wales has in relation to the United Kingdom but the
levels of public expenditure have been very much higher.
Why? |
| PROFESSOR BELL: Yes, well that’s the way the Barnett
formula works. The Barnett formula doesn’t depend
on how prosperous or lacking in prosperity you happen
to be, the Barnett formula depends on history, it depends
on where it was when it started and one can argue back
in the early 80’s, maybe those levels were appropriate,
it’s difficult to tell, the only needs assessment
that was actually carried out was done in ‘79 I think
and actually gave Scotland about 17% per head justifiable
on needs above expenditure in England at that time but
that’s history, you know, the Barnett formula basically
rolls over last year’s spending plus some small addition
depending on where the UK Government has decided to put
its extra money. |
| The way it works, it should have converged and it has
not, in other words that number, that sum of £120 should
have slid down over time and eventually the mathematics
say it should reach £100, this is the so-called Barnett
squeeze but it has not, it hasn’t happened because
for example the Scots did not point out to the Treasury
that Scotland’s population was falling relative to
that in England and calculations were based on different
populations than were actually relevant for the time,
that was until 1992 when population started to be updated
on an annual basis but even then the narrowing of any
gaps between Scotland and Wales has been, I am sure from
the Welsh point of view painfully slow. |
| SIR MICHAEL WHEELER BOOTH: Do you think Professor that
rationally it would be possible and academically respectable
to do a needs based assessment to take over from Barnett.
Is it do’able? |
| PROFESSOR BELL: There are a number of issues, I have
attended the meetings of the equivalent resource allocation
mechanism for local authorities in England and they effectively
have needs assessment and one gets involved in bizarre
arguments about how the statistics ought to be put together
that are showing that need in Birkenhead is 5% more than
in Woking, that’s the kind of process issue. There
is a principal issue, or let me highlight two principal
issues, one is you need to asses the need on a common
analysis of the policy issues that are relevant, okay.
Now, let me take a very extreme example. Suppose that
Government of Westminster decided that in England they
would privatise health and therefore health would become
entirely a matter for the individual. Scotland and Wales
might take a completely different view but how would one
assess need then. Scotland wants to, and Wales want to
follow quite different policies from the policy that is
being followed in England and so you cannot use thinks
like mortality rates in England because that’s an
issue, as an indicator of needs sorry, because that’s
no longer relevant for State spending so there has to
be, for a needs assessment to work it seems to me there
has to be broadly common agreement about the range of
policies on which you are going to base your assessment
of need. Now that again is an issue in relation to devolution
because you would have hoped that policies might diverge
a little so I am not saying that can’t be overcome
but that’s an issue and then another issue is who
does the assessment, who do you trust to do the assessment
and I suspect that the feeling in the devolved administrations
is that the Treasury could not be trusted to do the assessment. |
| SIR MICHAEL WHEELER BOOTH: Even though they did not
notice that the population of Scotland had gone down? |
| PROFESSOR BELL: Yes, even so. In Australia you have
effectively got a body that stands outside which is doing
this assessment on an annual basis, the Commonwealth Grants
Commission and I think there has to be an argument in
favour of that but then again the primary, you are starting
to deal with, it would be dealing with very large sums
of money and these sums of money might affect UK macro
economic policy and the Treasury would want to have some
control over the activities of such a body. |
| THE CHAIRMAN: Professor, can I come back to the education
issue you were talking about a few minutes ago. I mean
we know in relation to personal care for the elderly that
the cost is £165 million, we are not quite sure where
it is coming from. Are there any similar figures regarding
the proposed changes in educational needs provision. Do
you think it would cost more and if so how much and where
is it going to come from? |
| PROFESSOR BELL: Well the... could I just preface all
of this by saying something, that I have highlighted,
I have highlighted professional care and tuition fees.
In terms of actual increase in spend, these are small
fry by comparison with another major initiative which
the Scottish Executive took but which didn’t require
any legislative powers and that’s the so called McCrone
Committee which revised conditions of work for teachers
and in addition gave them a 21% pay rise, sorry in compensation
gave them a 21% pay rise over a period of three years.
Now if you are actually talking about magnitudes that
affected the overall budget that is by far the biggest. |
| THE CHAIRMAN: Have you any idea how much that was? |
| PROFESSOR BELL: We are into about 1.2 billion I think
for that. |
| MR PRICE: Net or gross? |
| PROFESSOR BELL: Gross. Effectively it was a commitment
to, with teachers committed to additional training, to
clarify their hours of work and holidays and other measures
of improving educational, school based education experience
and the overall cost was in terms of additional training
and higher pay to teachers and all of that you see, another,
sorry, to take this on a slight divergence again, but
another issue that I think is important that actually
I am doing some research with a colleague from Aberdeen
on is public sector pay because effectively 60, 65% of
the Scottish Executive’s 15 billion budget is on
individuals pay and some pay is determined at UK level,
some pay is determined at Scottish level, some is negotiated
locally so that is of over-arching importance to the way
that the Executive in Scotland is able to deploy its resources
and a lot of it is outside its control, you know, a settlement
for the Firemen I suspect, even although that’s supposedly
the local authorities are determining that is essentially
going to be determined by UK wide negotiations. However,
sorry, teachers pay has always for some reason been negotiated
within Scotland. |
| THE CHAIRMAN: Can I just finish this off, 1.2 billion
on the McCrone, where is it coming from, do we know that
or is that sort of shrouded in mystery? |
| PROFESSOR BELL: Well I think that that has just been
built into plans, the McCrone Committee was set up almost
immediately after the Executive was, sorry the Scottish
Parliament was set up and the expenditure for that obviously
goes into the Education budget but it didn’t require
a volte face, it just required an adjustment to
the Education budget and coming right back to your tuition
fees issue, by comparison the amounts of money there are
relatively small, I guess about £50 million a year, that
order of magnitude and then there is a question of whether,
you know, at what rate this endowment is to be repaid
so although students are receiving tuition free in Scotland,
it is not free in the long term since in fact they are
meant to contribute and they will be starting to contribute
as soon as they have graduated and that is just starting
now so there is an offsetting revenue there. |
| MR ROWLANDS: Can I just clarify the public sector pay
budget, 65% of the total, what proportion of that is non-devolved
in the sense it is UK determined as opposed to Scotland
itself internally determined? |
| PROFESSOR BELL: I mean there is effectively, you know,
the Executive could take control of all of the pay budgets
that it is responsible for, it is ultimately, well it
is the last but one spending authority that has responsibility
here, ultimately the Treasury is I guess but the Executive,
the Scottish Executive has tended to play a back role
on issues other than the teachers pay and let UK wide
negotiations determine.... |
| MR ROWLANDS: Police for example? |
| PROFESSOR BELL: For Police, it’s a UK wide... |
| MR ROWLANDS: Farming, UK? |
| PROFESSOR BELL: Farming, farming UK wide health workers,
yes, its largely the first kind of crack that appeared
with the Consultants contract where a Scots Consultative
voted for it. |
| MR ROWLANDS: And do you think Scotland will implement
the agreement? |
| PROFESSOR BELL: As far as I know they are going to implement
so that’s a crack in otherwise UK-wide health related
wage determination. |
| MR ROWLANDS: Do public sector unions in Scotland want
to sustain the UK system as opposed to finding themselves
being devolved in by terms of negotiations? |
| PROFESSOR BELL: I suspect that they would and I suspect
that, you see, there is a Treasury push for more locally
determined pay rates so that they reflect conditions in
the local labour market. Well, some parts of Scotland
around Edinburgh, that might mean an increase in some
public sector workers pay but in most of Scotland I am
sure it would mean a holding back of their pay to increase
levels of pay say round the south east of England so my
general feeling is that certainly the public sector unions
will want to hang on to UK wide rates of pay. |
| THE CHAIRMAN: Well Professor Bell, thank you very much
indeed. I think you have illuminated some matters and
lifted a few veils and that is very helpful to us, thank
you very much indeed. |
|
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