Finance committee slates government for lack of planning on Circular Economy Bill

Holyrood’s Finance and Public Administration Committee has issued another report criticising the Scottish Government for a lack of financial planning in the legislative process.

The report relates to the committee’s scrutiny of the Circular Economy (Scotland) Bill, which was brought forward by Green minister Lorna Slater in June and requires ministers to help develop a circular economy that reuses materials rather than send them to waste.

The committee, which heard evidence from Slater at the beginning of November, was scathing about the financial memorandum that went along with the bill, saying it “underestimates costs in relation to enforcement, education and communication campaigns and the infrastructure required to ensure that local authorities are able to adhere to the mandatory code of practice”.

While the bill states that “all parts of Scottish society” will have to “play their part” in building a more circular economy, it notes that the legislation will “primarily deliver enabling powers” and that secondary legislation will be required further down the line.

It estimates that it would cost the Scottish Government £1.6m over three years to implement the primary legislation. The cost to each local authority over the same period would be just over £200,000 while the bill the Scottish Environment Protection Agency would face was estimated at close to £900,000.

In its analysis of the numbers, the committee said it is “not convinced that the financial memorandum in its present form meets the requirements set out in the 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’”.

It was also critical of the fact that secondary legislation would be required to fully implement the bill, noting that the use of such ‘framework bills’ does not “enable the best estimates of all the costs, savings and changes in revenue to be identified [and] effectively undermines parliamentary scrutiny”.

“The committee is disappointed that the Scottish Government does not appear to have learned from the recommendations we have made in relation to our examination of previous financial memorandums and post-legislative scrutiny, where we set out our expectations around the level of financial data, clarity and transparency required,” the report states.

“In the end, it will be for parliament to decide whether, when voting on the general principles of a framework bill, the outcomes the bill seeks to deliver are such that they outweigh any financial or affordability considerations.”

A year ago the committee issued a highly critical report ahead of the Scottish Budget in which it said that affordability "does not appear to be a key factor in Scottish Government decision-making" and that there was "little evidence" that ministers have a long-term approach to public money”.

A few weeks later it raised “significant concerns” about the cost of the Scottish Government’s proposed National Care Service, noting that the legislation did not come with an “overall estimate” of costs, which it stressed had the potential to be “significant”.

Earlier this year it rebuked then social care minister Kevin Stewart for failing to provide additional information in relation to that bill.

Scottish Conservative shadow finance and local government secretary Liz Smith said the report represented a “damning verdict from the Scottish Parliament’s finance committee on key legislation being brought forward by the SNP-Green government”.

 “The complete lack of financial transparency on the Circular Economy Bill shows Lorna Slater has clearly not learned any lessons from her shambolic handling of Scotland’s deposit return scheme,” she said.

 “Lorna Slater cannot pass the buck and hide from serious questions being raised over this bill. She must ensure she responds to this report as a matter of urgency.”

LibDem economy spokesperson Willie Rennie was equally scathing, saying that Slater “has been responsible for a series of proposals which have been half-baked at best”.

"The committee are right to hold the government to account for the poor quality of its proposals,” he said.

"Even passionate supporters of this bill can recognise that simply allowing the government to press ahead with fudged numbers is a recipe for disaster.

"If the finance committee sigh every time they see her name attached to a piece of legislation, just imagine how the businesses and stakeholders who have to deal with the consequences feel?"