Features: February 13th, 2004

Devolution in Scotland – A Progress Report

By Ian Doig

Reproduced by permission of the Public Management and Policy Association.

Prior to the constitutional changes introduced by the Labour Government, the UK had long been criticised as having an over-centralised government system. Within this, Scotland had previously had a high degree of administrative decentralisation, but not political self-government.

The Scottish model of devolution, which came into operation as the result of the Scotland Act 1998, represents a large degree of home rule (and one that is greater than exists in either Wales or Northern Ireland) and could be considered a move towards independence from the other parts of the UK. In practice, the reverse has happened and support for independence, which peaked in the era of the Thatcher Conservative Government, has declined since devolution.

In Scotland, all matters of government, apart from specific UK-wide powers retained to Westminster and Whitehall (such as constitutional matters, UK economic and monetary policy, defence, foreign affairs and social security), are now the responsibility of the Scottish Parliament and the Scottish Executive. Westminster has no role in Scotland in health, local government, police, fire, higher and further education, the environment and water.

Parliament and the Executive

The Scottish Parliament came into operation in 1999. Its fundamental values reflect a modern democratic system of governance, which is open, accessible and accountable.

It has primary legislative and limited tax-raising powers. Legislation is normally proposed by the Executive but there is provision for private bills to be introduced by individual Members of the Scottish Parliament (MSPs). Whatever the source of a bill, they are progressed and scrutinised by Subject Committees ; there is no upper chamber. Consultation in scrutinising legislation is available to the public and to organisations which would be affected.

The Scottish Executive is the government of Scotland. Power is currently held by a coalition of the Labour and Liberal Democratic parties.

Holding to account is a central concept. The Parliament has real power to hold the Executive to account. It is much easier for an MSP or a Parliamentary Committee to initiate or challenge legislation than it is for their Westminster counterparts.

Financial resources and control

The Executive is responsible for a budget of ?n per annum, which will rise to ?n by 2005. It is funded by a share from the UK Treasury funds but the Scottish Parliament has powers to vary the rate of income tax by 3p . This ‘tartan tax’ would represent ?m, which is a marginal amount and a politically unattractive option. It would also be problematical to collect. The Executive also has powers over local taxation in the form of non-domestic rates and council tax.

The scope for financing new initiatives is constrained by the tight income base and expenditure has to be tightly controlled. Parliament maintains tight scrutiny over all public spending. Its Finance Committee has a central role in co-ordinating the Parliament’s response to both the Executive’s budget programmes and specific spending proposals. The Committee also carries out cross-cutting reviews into subjects such as PFI.

Each Bill contains a Financial Memorandum, which sets out the Executive’s financial appraisal of the proposals. The Finance Committee scrutinises the Financial Memorandum and assesses how much the proposed Bill would cost to implement. The Committee probes for assumptions made, implications of potential error, degree of realism and risk.

The Finance Committee reports its findings to the Subject Committee, including any amendments to reflect more realistically the financial aspects. The Finance Committee’s scrutiny has had a profound effect in reshaping some Bills and provides a very powerful control by the Parliament over the Executive.

Checks and balances

The Auditor General is the Parliament’s watchdog for ensuring propriety and value for money in the spending of public funds. He is independent and not subject to the control of the Executive or the Parliament. He holds the Executive and other public bodies (except local government, which is scrutinised by the Accounts Commission) to account for the proper, efficient and effective use of public funds. Audit Scotland is the single public audit body for Scotland and provides services to both the Auditor General and the Accounts Commission.

Room for improvement

Devolved government has quickly become part and parcel of everyday life. The general view is that the Scottish Parliament is here to stay, but that further refinements are needed. The Procedures Committee of the Parliament has itself suggested improvements in parliamentary business procedures and transparency.

Other areas where improvements have been suggested include

  • Fiscal autonomy, through responsibility for raising its own taxes. It is argued that it would increase accountability if the Parliament were answerable for raising, as well as spending, public money.
  • A revising mechanism to review newly-passed legislation where its introduction has been particularly controversial.
  • A review of the balance between constituency and non constituency MSPs and how they are elected
  • More time for all MSPs to question Ministers and for backbench speeches.

Four years is a very short time to bed down the most fundamental constitutional change in Scotland for 300 years. Overall, Scotland has found a more satisfactory system of governance – it may not be perfect yet but there is general acknowledgment that the Scottish Parliament and the Executive are far more accessible and responsive than Westminster ever was, although Parliament has not yet gained the popular support it seeks. It must do this by improving its reputation for real improvements in quality of life. As its next term begins, the Scottish Parliament is showing signs of maturing, becoming wiser in ensuring issues will deliver real benefits and in avoiding ‘elephant traps’ and scandals.

Divergence offers opportunity and challenge

Divergence in government policy and levels of service provision will inevitably arise between different parts of the UK, as a practical consequence of devolution. Divergence will also come about because the structures and functions of the Westminster and Edinburgh Parliaments are radically different. At the heart of this is a different balance of power between the Executive and MSPs – backbenchers are in a strong position to influence the Executive, without regard for policies at Westminster. This gives a real opportunity to reflect Scottish concerns and priorities where these differ from the agenda at Westminster.

So we have seen, for example, that free personal care for the elderly is a policy being implemented in Scotland but not in England and Wales. The different approach in Scotland to university tuition fees has also been much vaunted. The approach to Best Value (BV) differs, too. The Scottish Executive has decided to apply it across all parts of the public sector, using the same model and ‘Joined Up Working’. Authorities are encouraged to integrate BV with Community Planning and Partnership Agreements. CPAs, league tables and overall labels which categorise authorities have been rejected.

More is to come, For example, Foundation Hospitals will not be adopted in Scotland. Instead, a new structure of Unitary Health Authorities will replace the existing Boards and Trusts.

The Prudential Framework is another area where divergence is likely. Governments on both sides of the border wish to allow greater freedom to authorities to borrow for capital investment in schools, housing and roads but the approach on Scotland, which will be embodied in legislation, is likely to differ from that In England and Wales.

As well as a potential cause of tension between the national governments, divergent policies can also cause tension between a government and its electorate as they perceive that their neighbours across the border are getting a better deal. These tensions are likely to increase when, as at some stage will be inevitable, different parties head up the different national executives.

The challenge for professional bodies

Multi-centred government has increased the challenges for professional bodies and associations such as CIPFA and the PMPA’s associate organisations.

Many, like CIPFA, have a key role to play in upholding the highest professional and ethical standards in their sector, service or profession. This can include giving professional advice on proposed legislation and other consultations and providing professional support and training to equip practitioners and organisations to deal with new developments. In adapting to the radical increase in tempo and complexity which devolution has brought professional bodies need to be more innovative, creative and flexible to ensure that they are influential with all centres of government across the UK, and beyond. They, like we, have a key role to play in helping ensure that reform improves public services and solves problems, rather than creates new problems.


Devolution is one of the most significant constitutional and political developments in the UK for centuries. A new system of greater self-governance in different parts of the UK is evolving, driven by democratic processes. This mature evolution could not be achieved in many parts of the world without conflict and violence. Devolution has great potential to deliver ‘better’ and more responsive government. It remains to be seen how much further devolved government will progress and, in particular, whether England will follow suit. Devolution might eventually lead to a new looser ‘federal’ system of four devolved nations operating under the umbrella of the UK Government.

When the new Scottish Parliament opened in 1999 a far-sighted leader in the Financial Times said:

The Scottish people have caught a glimpse of freedom and are making a run for it. They should be congratulated on escaping from some of Westminster’s power. The Welsh should follow. So, in time, should the English.

We live in interesting times.

Ian Doig is Director CIPFA in Scotland.

He can be contacted at: ian.doig@cipfascotland.org.uk