The Scottish Government has been accused of peddling “unrealistic” numbers to justify proposed legislation to improve recycling and tackle waste crime.
Holyrood’s finance and public administration committee has taken issue with projections contained in a financial memorandum for the Circular Economy Bill that is being brought forward by the SNP-Green coalition.
MSPs said estimates of projected savings provided by Lorna Slater, the circular economy minister, were “unsatisfactory” because they assumed a wildly optimistic 100 per cent payment rate for fixed penalty notices for car littering. The committee said this could not be used to offset the Bill’s enforcement costs.
Kenneth Gibson, the committee convener, added that scrutiny of the Bill had reinforced concerns that affordability “did not appear to be a key factor in Scottish Government decision-making”. He said the committee was “disappointed” that ministers had not met previous recommendations around financial transparency.
“The minister, Lorna Slater, 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,” said Mr Gibson.
“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’.”
Opposition politicians said the committee’s criticism was a “damning verdict” 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,” said Liz Smith, the Scottish Conservative finance and local government secretary.
“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.”
The Circular Economy (Scotland) Bill was introduced on June13 2023 and requires Scottish ministers to adopt measures to help develop a circular economy.
The legislation, if passed, would give councils additional powers to tackle fly-tipping and other waste crime and strengthen enforcement on household recycling, establishing a new civil penalty regime and fixed-penalty notice.
A financial memorandum underpinning the Bill predicts that fines will yield income to local authorities of £40,000 per year during the second and third year. The committee was told that the income assumptions were based on a 100 per cent payment rate when a 10-15 per cent rate was more realistic.
In evidence to the committee, Holyrood officials admitted that when deliberating on the financial memorandum, “it did not feel appropriate, in a sense, to assume that the penalty would not be paid”.
They said further research on the non-payment of fines had been commissioned.
According to the Scottish Government, the cost to each local authority of implementing and enforcing the new legislation is estimated at £227,000 over the first three years with total savings ranging from £430,366 to £990,952 over the second and third year.
However, the committee points out that each of the councils that submitted written evidence suggested that enforcement costs had been underestimated.
Mr Gibson pointed out that financial scrutiny was “incredibly challenging, if not impossible” because the primary legislation was introduced before the co-design process had begun, preventing complete cost estimates. The committee has requested that ministers provide six-monthly updates on expenditure, any changes in forecast costs and any savings arising from the Bill and the subsequent act, if passed.
Mr Gibson also took issue with the increasing use of “framework” Bills that provide government with future enabling powers but fail to provide reliable estimates of all likely costs. He warned that this undermines parliamentary scrutiny.
“It also risks Parliament passing legislation which may in the end – once outcomes are fully understood – lead to significant cost increases,” he added.