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Meeting of the Parliament [Draft]

Meeting date: Tuesday, November 28, 2023


Topical Question Time

The Deputy Presiding Officer (Annabelle Ewing)

The next item of business is topical question time. If a member wishes to ask a supplementary question, they should press their request-to-speak button during the relevant question or enter RTS in the chat function, if they are online. Succinct questions and answers are always looked for, in order to get in as many members as possible.

Public Sector Workforce (Update)

To ask the Scottish Government whether it will provide an update on the public sector workforce reductions predicted by the finance secretary on Sunday. (S6T-01660)

The Minister for Community Wealth and Public Finance (Tom Arthur)

The United Kingdom Government’s autumn statement is one of austerity for public services. In his budget, the Chancellor of the Exchequer chose to ignore provision of much-needed funding for such services, other than the £10.8 million of consequentials for health.

We have had two years of high inflation, because of which public sector pay deals have exceeded our planned expenditure. We welcome the recent report from Audit Scotland on the Scottish Government’s workforce challenges and we recognise the issues that it has set out. Growth in the public sector workforce is due to a range of factors, and we are committed to providing high-quality public services. However, our financial position necessitates our considering reform of the way in which public bodies deliver such services.

The Deputy First Minister and Cabinet Secretary for Finance will set out a further update in the draft Scottish budget for 2024-25.

Daniel Johnson

The Deputy First Minister’s comments in the media over the weekend will have caused anxiety and nervousness among public servants across Scotland, just as winter costs start to bite. They deserve clarity and candour from the Government.

What level of detail is contained in the Scottish Government’s plans to reduce head count? Will those plans be laid before Parliament in detail? What areas of focus will there be for such reductions, given that the national health service’s head count will be protected? Will the minister guarantee that there will be no compulsory redundancies? Will he agree to meet trade union representatives, as the GMB union has called on him to do?

Tom Arthur

We are in this situation because of a range of factors. Clearly, the impact of inflation has been significant, but we are also here because of decisions that have been taken by the UK Government. As the Deputy First Minister has already stated, we are committed to protecting the health service and we want to avoid compulsory redundancies. Of course, we are committed to engaging constructively with all our partners across the public sector in order to achieve those aims and ambitions.

With regard to a further update, as I said in my original answer, the Deputy First Minister will provide more information as part of the Scottish budget process.

Daniel Johnson

The ministers’ answers were phrased to represent a range of factors doing a huge amount of work. The reality is that the announcement brings into question the Government’s competence and shows its lack of workforce planning. As the minister knows, since 2019, civil service head count in devolved areas has increased by almost 40 per cent, which represents more than 7,000 posts. That is at a time when the NHS’s head count grew by just 11 per cent and the Scottish Government’s core head count increased by 2,000—by a third.

Throughout the Covid pandemic, the Government was adamant that Covid money was being used only for non-recurring items, but was that the case? Given the coincidence, was that money being used to grow head-count numbers? More importantly, is it not grossly incompetent, if not outright cruel, to create positions only to have to remove them just months later?

Tom Arthur

What is “incompetent” is the UK Government’s handling of the UK economy, and what are “cruel” are its budget decisions. The reality is that, as was the case with every aspect of public finances, decisions on spending of public money during the Covid pandemic were set out in a transparent process through the annual budget process and, of course, in the published audited accounts.

I recognise that we are in an exceptionally challenging set of circumstances, but they are not unique to Scotland. Indeed, our colleagues in Wales are wrestling with similar challenges, which is a reflection of the broader macroeconomic factors and the decisions of the UK Government.

Liz Smith (Mid Scotland and Fife) (Con)

The minister is well aware that the Finance and Public Administration Committee has spent a great deal of its time on public sector reform and how that might happen. What principles does he believe should underpin such reform?

Tom Arthur

That is an important question. We have committed to a 10-year programme of public service reform, but underpinning that is a desire to ensure that we deliver more efficient person-centred services, and that we put prevention at the heart of them. We recognise that that is a shared ambition, and we are committed to working constructively with partners across the public sector to deliver it.

Willie Rennie (North East Fife) (LD)

That was a woeful set of explanations from the minister.

For years, the Scottish Fiscal Commission and Audit Scotland have warned the Scottish Government about the black hole in our public finances, but it has kept on recruiting people into the public services. It should be apologising to the people whose jobs are now under threat—not looking to blame Westminster. We need a proper explanation from the minister. When will we get it?

Tom Arthur

As I set out in my original answer, further information will be provided as part of the budget process. However, we cannot escape the circumstances that we have found ourselves in over the past two years, which include exceptionally high inflation that has necessitated public sector pay deals that have put unanticipated additional pressure on the public finances.

We are now having to contend with the return of the UK Government austerity agenda—one that has an excess of the austerity that was pursued by George Osborne and by Mr Rennie’s party when it was in the Government.

Can the minister say anything about last week’s Office for Budget Responsibility forecast? Could the autumn statement have done more to help Scotland’s finances and protect jobs?

Tom Arthur

John Mason is right to highlight the OBR’s grim set of forecasts, which underline the significant external factors that I mentioned, as well as the mismanagement of the UK economy by the UK Government. We want a public spending settlement that recognises the importance of investment, of protecting jobs and of supporting public service reform, which the UK Government has failed to recognise in its spending plans.

I can squeeze in another brief supplementary question.

Stephen Kerr (Central Scotland) (Con)

The minister is giving us a very bad impression of himself as someone who has sloping shoulder syndrome, blaming everybody but himself for the situation that we are in.

Does he understand and accept that if the Government does not fully fund the council tax freeze that the First Minister announced—without any consultation of anybody—there will be dire consequences for local government jobs and services?

Tom Arthur

We have committed to funding the council tax freeze fully. That is why we are engaging constructively with our partners in the Convention of Scottish Local Authorities. What is creating particular challenges in the current context, ahead of setting our own budget next month, is the fact that we have had such a paltry and pathetic settlement from the UK Government—a settlement that is not commensurate with the challenges that we face.

Vessels and Piers Project (Update)

2. Jamie Greene (West Scotland) (Con)

To ask the Scottish Government, further to the finance secretary’s letter to the Finance and Public Administration Committee on 21 November, whether it will provide an update on the delivery of vessels and piers projects, including the small vessels replacement programme and the port works at Ardrossan and Gourock harbours. (S6T-01658)

The Minister for Transport (Fiona Hyslop)

The Government remains committed to the funding of new vessels and of port infrastructure to support our lifeline ferry services. The small vessels replacement programme is progressing well and, as Caledonian Maritime Assets Ltd has confirmed, it remains on track, with the outline business case for phase 1 nearing completion, before it moves into the procurement phase. That is a crucial part of the process that will help to ensure that we deliver value for money and that vessels and shoreside works align.

Recent confirmation of in-year budgets does not impact on the overall delivery of key investments in the new ferries for our island communities, as first payments will not be due until contracts are awarded.

The business case for Ardrossan and the scope of the Gourock port projects are under review to help to inform robust investment decisions. The various partners in the Ardrossan project have further work to do in the process, following the pause in procurement in the summer, as the scope of the necessary work has been extended. I recently wrote to the Ardrossan task force members on that work.

We continue to make significant investments across our networks, working with CMAL and the operators to improve reliability and resilience of services as we progress. There has been extensive work from CMAL in the design and business case development of the small vessels replacement programme over the summer and autumn, including consultation of island communities. Through work with Transport Scotland, it is progressing well towards the next planned stage of procurement.

Jamie Greene

I thank the minister for the update.

Let me probe a little bit about what “on track” means in the real world. The Scottish Government investment plan update from two years ago made categorical commitments that seven vessels of the small vessel replacement scheme would be serving island communities within the next five years—that is, by 2026. The CMAL chief executive responded by saying that

“we are not prepared to wait and wait and wait and see small vessels getting older and older”.

However, as we heard in the chamber today, it was also confirmed this weekend that payments will be made only once the shipbuilding contract is signed. It seems that the process has been pushed back a year, because if the payment follows the contract, surely the work will start only once the contract has been signed.

The obvious question is this: in the light of the “reprofiling”—as it is being called—will our island communities see all those vessels in service by 2026, as was originally planned, and, for the sake of Scotland’s shipbuilding yards, including Ferguson Marine in Inverclyde, who on earth will build the ships?

I remind members of the need to comply with the time that has been allocated for both questions and answers.

Fiona Hyslop

CMAL’s published corporate plan for 2020-23 indicated an earlier start date, but we all understand why those plans would not have been delivered. CMAL wants progress, and so do I. We work with CMAL very closely. One of the first things that I did when I came into office was visit CMAL to understand what its plans were for the programme.

On delivery of the vessels, we are clearly at the stage that CMAL thought we would be at, which is completion of the outline business case and design, and the move into procurement. We are delivering the funding for the overall vessel programme that we said we would between 2021 and 2026. The small vessel replacement programme will commence building in 2026, with delivery in the following two years, which is the current plan as set out by CMAL.

Jamie Greene

The funding is promised, but delivery of the vessels is what people are interested in. When will the vessels be sailing around their communities? It sounds as though we are talking about at least 2028, which I am sure will come as a huge disappointment to our island communities.

The harbour improvements, which are also much needed, include the Ardrossan and Gourock upgrades. We were told that the Ardrossan harbour redevelopment construction would be finished by spring or summer 2026. Will the minister update me on whether that is still on track and on plan? That would contradict comments that were made in the letter to the Finance and Public Administration Committee from Shona Robison. She said that the reprofiling will

“push out timescales of future improvements”.

What future improvements will be pushed out or, in other parlance, delayed? Will the harbour redevelopment plans also be delayed, or are they on track?

Fiona Hyslop

Vessels will be delivered from 2026, as planned. There will be important alignment between the overall vessel procurement and shoreside investments, which include harbourside investments. That includes the fact that we want to move to electric ferries, because of our desire to improve the system.

On Ardrossan—bear with me, Presiding Officer, because there was a lot of detail in those questions—the member will know that, as I have outlined in the chamber, the improvement works will need to be extended from the original investment proposal. The replacement or strengthening of the Winton pier and the Irish berth at Ardrossan, which ferries use in certain wind conditions to manoeuvre out of the harbour, has expanded that piece of work. North Ayrshire Council and Peel Ports, as the partners in that process, are delivering on-going work to make sure that we have a robust investment decision.

Minister, I need to go to the supplementary question from Stuart McMillan.

Stuart McMillan (Greenock and Inverclyde) (SNP)

The minister will be aware of my support for Ferguson Marine’s workforce and for the yard. The small vessel replacement programme is vital to Ferguson’s, particularly because of its history with the three hybrid ferries. In addition to what has been said so far, can the minister provide an assurance that the announcement of the programme will happen early in the next financial year? The minister will be aware of the correspondence that was sent from local MP Ronnie Cowan, Councillor Elizabeth Robertson and me to the Cabinet Secretary for Wellbeing Economy, Fair Work and Energy. Will the minister agree to meet the three of us to discuss the small vessel replacement programme?

Fiona Hyslop

It is clear that Stuart McMillan wants to advocate for his constituents and the Ferguson Marine yard, which he continues to do. The yard has to focus on winning future work and getting itself into a state where it can win future work.

In relation to Ferguson Marine, the lead minister is Neil Gray, who I understand has been in correspondence with Stuart McMillan. Our focus has to be for Ferguson Marine to secure the two new ferries, to ensure that the yard has a future and to serve the island communities.

It is clear that there are opportunities in relation to the procurement of the new small vessel replacements. On the needs of islanders and the local economy that Stuart McMillan represents, I understand that relationship. We are considering future vessel contracts from public agencies on a case-by-case basis.

I understand that the Cabinet Secretary for Wellbeing Economy, Fair Work and Energy had an invitation to meet Stuart McMillan, and I hear that that invitation has been extended to me. However, I would need to reflect on what stage we are at in procurement and whether that might be appropriate.

Katy Clark (West Scotland) (Lab)

Ardrossan waited six years for the Scottish Government to agree terms with Peel Ports while ministers refused to agree to calls to bring the port back into public ownership to make progress. There is now real concern that Ardrossan will lose out to Troon permanently. What is the Scottish Government doing to ensure urgent consideration of a business case for the essential works at Ardrossan harbour? Why has that work been left so late?

Fiona Hyslop

It is clear that the issue of public ownership is different from the progress of the different partners in delivering the works that are required for Ardrossan. On my responsibilities since I have been in post, I have wanted to ensure that we have the most robust business case that we can have. For example, North Ayrshire Council has been liaising with the Isle of Arran ferry committee, and has appointed consultants to provide a report. That will not be available until late November, so we could not deliver on that business case as of now. However, that is what partnership working is about. More than one partner is involved. We have been working with them and Peel Ports and looking at the extension of the need for the Winton pier and the Irish berth, which would not have not been in the original proposals that Katy Clark reflected on.

We will move on to the next item of business after a short pause to allow the front-bench teams to change positions should they wish to do so.