By Keith Aitken in Edinburgh | 24 September 2014
The Welsh National Assembly’s Finance Committee has turned to Scotland, and to CIPFA, for specialist counsel in scrutinising the Welsh Government’s 2015/16 Budget.
Don Peebles, head of CIPFA’s Scottish operations and of Devolved Government, took on a third role from September, as special adviser to the committee over the three-month Budget process. He told Public Finance that he plans to draw on his experience as a seasoned Holyrood watcher to help focus the committee’s interrogation of ministers, officials and expert witnesses.
Among key issues likely to arise are what Peebles sees as the unsatisfactory performance in aligning policy initiatives with budget provision so as to cost them properly; financial planning problems caused by the paucity of forward figures from Westminster on the Welsh block grant; and a lack of progress towards a more preventive approach to spending.
‘We’re looking on this as being fairly prestigious for CIPFA,’ Peebles told PF. ‘What it does is allow CIPFA to bring the financial expertise of the institute to bear to influence public finance at the sharp end – not just by facilitating scrutiny of £15bn of Welsh public money but also by allowing us to help guide the finance committee through a complex and important process.’
Welsh Finance Minister Jane Hutt will present her draft Budget to the National Assembly on September 30, setting in motion a two-month examination by the finance committee, which takes evidence from the government and others, and also collates inputs from other subject committees.
Peebles’ role is to provide an initial report suggesting themes for the committee to pursue, an analysis of the draft Budget and support throughout the evidence sessions, which culminate in a final report in November. The Welsh scrutiny process is generally admired by constitutional experts, and the committee’s recommendations tend to be received positively by ministers.
Asked by PF about his likely approach, Peebles pointed to four key principles that CIPFA has been pressing on the Scottish Parliament in Edinburgh:
• affordability, meaning that ministers should only make promises they know they can afford
• prioritisation, to make sure that the governmental programme matches budget allocations
• value for money, to extract maximum public benefit from spending
• process, to ensure effective information flow and financial management.
He cited the Welsh Government’s purchase of Cardiff Airport in 2013, arguing that it would entail ongoing revenue costs for which no budgetary provision had been specified. There is, he believes, a general vagueness about costings for new measures that the committee ought to address.
Peebles said many Welsh budgetary shortcomings, such as the difficulty of shifting expenditure to a more preventive model, were proving no easier to remedy in the other British jurisdictions. He thought the Welsh regime was ahead of the game in some respects.
It is a sensitive time to make comparisons with Holyrood, for which the prospect of greater autonomy has increased demands in the Assembly for more powers to come to Wales.
In the wake of the Silk Report, the Wales Bill proposes devolving stamp duty land tax and landfill tax to Wales from April 2018, but the revenues associated with these taxes fall below £200m, barely 1% of the overall Welsh Budget, and far short of even the additional fiscal powers allocated to Scotland through the 2012 Scotland Act.
