Finance Committee questions financial credibility of Circular Economy Bill

The Finance and Public Administration Committee (FPAC) doubts that the Bill complies with the Parliament’s rules on setting out “best estimates” of costs likely to arise.

FPAC Convener Kenneth Gibson MSP said:

“Scrutiny of this Bill reinforces our concern that affordability does not appear to be a key factor in Scottish Government decision-making. The Minister, Lorna Slater MSP, has committed to consult on the cost of secondary legislation, but that should not replace an assessment of affordability at the point of a Bill’s introduction.

“Our committee is not convinced that this Bill’s financial memorandum meets the requirements set out in Parliament’s Standing Orders to provide: “best estimates of the costs, savings, and changes to revenues to which the provisions of the Bill would give rise”.

“We’ve seen an increasing use of ‘framework’ bills that provide government with future enabling powers. These do not, however, provide best estimates of all likely costs, and undermine parliamentary scrutiny.  It also risks the Parliament passing legislation which may in the end - once outcomes are fully understood – lead to significant cost increases.

“The increased use of framework bills with no clear implementation costs, poses a long-term risk to the Scottish Budget, both now and for successive governments.

“The FPAC is disappointed that Scottish Ministers have still to meet our previous recommendations or expectations around the level of financial data, clarity and transparency required.

“In the end, it will be for Parliament to decide when voting on the general principles of this framework bill, whether the outcomes it seeks to deliver outweigh any financial or affordability considerations.”

On income from fly-tipping and litter fines, the report said:

• The assumption in this financial memorandum (FM) of a 100% payment rate for fixed penalty notices is entirely unrealistic. Therefore, given that the level of income from fines assumed in the FM is not attainable, it should not be used to ‘off set’ some of the costs of enforcement, such as in relation to fly tipping. We consider this approach to identifying potential savings to be unsatisfactory.

Updates every six months:

• We request that the updates, committed to by the Minister in her letter of 20 November be provided to the Committee every six months. These updates should include updated information on the expenditure incurred to date, any changes in forecast costs and any savings arising from the Bill and the subsequent Act (subject to the Bill being passed) and relevant secondary legislation, until all provisions are operational.

Read the full report