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The medium-term financial strategy sets out that one of the Government’s key objectives is to maximise the value of current spend. Although I recognise the importance of the autonomy of universities, it is worth the Government looking at particular areas—rather than, say, set conditions for everything that you can possibly think of across the board—to ensure that the hundreds of millions of pounds that are going out the door are aligned with the Government’s wider objectives. For example, it is worth looking at the fair work conditionality, which aligns with objectives on eradicating child poverty.

It is also worth looking at how existing conditions are being enforced, because some fair work conditions are already attached. The SFC’s main mechanism for enforcement is clawback, but, in practice, we will all agree that it is very rare for a situation to be improved by clawing money back, particularly given the crisis that most institutions—both universities and colleges—are in.

Do you think that the clawback power is a useful stick to wield, or is there a need for the SFC to have other options available to ensure that universities and colleges are meeting the conditions attached to the money that is provided to them, without the prospect of taking money away and making situations worse, with people perhaps losing their jobs?

I am grateful for that, minister. I realise that I have asked quite a lot of specific questions, and you are only eight days into the job.

I apologise for not being able to join the meeting from the start. Before I move on, though, I will add my tuppence-worth on the financial memorandum.

As the convener has said, I raised the issue of £4 million for information technology during the debate as a good example of why there is so much scepticism about the memorandum. Many of us have been left with the impression that it is being used in a battle between the Government and Skills Development Scotland that we are all aware of but which we cannot really see. Costs are being reduced in some areas and increased in others, because of a tension that is not really about the finances. I cannot believe that it can cost £4 million to move responsibilities from one part of the public sector to another, given that there is no need to create new systems. The figure seemed awfully convenient when the Government had successfully managed to get SDS to reduce costs elsewhere.

That is where my scepticism comes from, minister. However, I recognise that you now have a lot of work to do to get into the detail of that, and I encourage you to do so.

My questions are on quite a different area. I want to begin by trying to get a high-level understanding of where you are coming from on the issue of public funding for colleges and universities.

It is understandable that universities, in particular, come regularly to Parliament and say that the funding that they get for the tuition of Scotland-domiciled students does not cover their costs. That is totally legitimate. They say that there is a need for far more public funding and that they are a key economic driver. We agree with all of that, but, at the same time, our public finances are under huge pressure and it is difficult to see institutions that are, in a handful of cases, very wealthy coming and asking for more public money.

Does the Government sets strict enough conditions for the funding that it provides, particularly to universities? I know that colleges are public bodies—and I might come to them in a moment—but universities often chafe against the suggestion that the money that they get should come with conditions, perhaps on fair work or net zero, and they will argue that they are independent and that Government should not be dictating how they should be run. Given that they are using hundreds of millions of pounds, do you think that the conditions that are currently attached to that funding are providing enough value for money? Is there scope to go further, or would you go in the opposite direction and reduce conditions to, as some principals would call it, unleash creativity in the sector?

Indeed, and despite other concerns that I have about it, that was one of the reasons for my group voting for it at stage 1. It is an issue that needs to be explored further.

Finally, in the same broad space, colleges are public bodies, so they are not in the same situation as universities; for a range of reasons, including not compromising their charitable status, universities cannot have everything dictated by Government. Colleges are not in that position; as I have said, they are public bodies.

However, they are not covered by public sector pay policy. Apart from Scottish Water, which is a publicly owned company and a bit different, college principals are the only leaders of public sector organisations who are not covered by the chief executive pay framework. If colleges are public bodies, should they not be more aligned with the rest of the public sector, particularly when it comes to issues such as pay policy?

What action was taken in response to it?

That is not what I was planning to ask about, but I wanted to follow up on a previous comment. I will condense this question a bit.

The Fiscal Commission did an excellent piece of work on the cost of climate mitigation and adaptation. The Climate Ready Clyde group, which includes the greater Glasgow local authorities, Strathclyde Partnership for Transport, the Scottish Environment Protection Agency and the University of Glasgow, did an excellent report a couple of years ago, which projected that the cost of climate breakdown—not the efforts that we are taking to reduce emissions but the impact that is already locked in—will be something in the region of £400 million a year by 2040 in the greater Glasgow area.

Does the Government have any figures? Have you come to any conclusion on what the cost of adaptation will be? That cost is entirely separate from the record amount of money that is going into mitigation—the £4.9 billion of climate-positive spending is excellent. Does the Government have a ballpark figure that it is planning around in relation to the locked-in damage that will already be done?

Housing and energy being ideal for that, as the returns are very stable.

Thank you.

I accept the point about certainty, but the review is now three years old. We all agree on the importance of supporting small businesses in Scotland. The overwhelming majority of businesses in Scotland are small. However, if the primary concern is that businesses require certainty, surely the Government has had the opportunity over the past couple of years to enter into a discussion with the small business community about how it thinks that a quarter of a billion pounds would be best spent to support it, and to ensure that any change is brought in over a longer period of time so that there is certainty and businesses can plan around it.

I find such a striking juxtaposition between, on the one hand, your remarks about getting best value for money and what is said in the medium-term financial strategy and, on the other, reviews being commissioned, coming back with what I think are useful but challenging conclusions, and then just being discarded. It would be one thing for the Government to say, “We will deal with this over a longer period of time because any snap changes in tax regimes can cause disruption,” but that is not what happened. It was just discarded, because politically it was hard.

Good morning, cabinet secretary. I will say something before I get on to my line of questioning.

It is hard to take seriously the Government’s claim that it is trying to get best value for money on spend when independent reviews of existing Government policies are rightly commissioned but then discarded when the conclusions are politically inconvenient. We have discussed the small business bonus scheme before. There are clearly better ways to spend a quarter of a billion pounds to support small businesses. The Government commissioned a review, and the review said that no action has been taken in response.

How do you expect us to take seriously the Government’s claim that it is trying to get best value for money when one of the most notable examples of a policy review—and it was great that the Government was willing to commission that independent review—was simply discarded because it was clearly politically inconvenient?