Chamber and committees

Good morning, cabinet secretary. Thank you for joining us. I note, just as an observation, that the language in the general report did not feel as though it absolutely cut to the heart of the urgency that the committee feels about the need for really good financial planning in the future. I will highlight one sentence in the Government’s response:

“As part of the planning process, my officials will consider the potential to pilot a ‘zero-based budgeting approach’”.

I would say that

“consider the potential to pilot”

was probably the most egregious phrase. That wording does not exactly set the heather on fire.

I have a few general questions. We have been clear in expressing our concerns about the publication of strategic financial documents, and there is a sentence in the Government’s response that says:

“I am also aware that setting out multi-year spending plans ahead of a Scottish election could restrict the options of a new administration.”

Is that just an excuse for not doing anything? Surely any new Administration would just tear up any plans if it was so minded.

I have another wee point to make. I just want to check the 60 per cent figure for employer NICs, although I appreciate that the numbers are still fluid, as was picked up by the convener earlier. A couple of weeks ago, COSLA was claiming that it had a shortfall of £265 million, with the Scottish Government giving it £144 million. Those figures were quoted a couple of weeks ago, before the recess. Of course, that is only 54 per cent of the costs. I appreciate that there are other factors at play in how the 60 per cent figure is derived.

For the record, I look forward to hearing more about the specific data, because that underpins everything.

I have a couple of quick questions. In our report, we expressed a view about having a wider review of the fiscal framework, but the Government’s response said simply “Noted”, which is brief in the extreme.

I understand all of that, but there is something that jumped out at me. Given the sense of urgency that the committee feels, in caring so much that setting out multiyear spending plans could restrict the options of a new Administration, it worries me that the wording provides an excuse not to do enough. We appreciate that there is an election coming up, but surely any Administration, regardless of its colour, should share a sense of urgency and concern equally. The need for some initiatives—public service reform, for example—has certainly been expressed on a cross-party basis, so I thought that that statement in the response was very odd.

Thank you. That clears that up.

On a point that Craig Hoy made earlier, I was heartened to see data on back-office costs emerging. To my knowledge, it is the first time that we have had a hard figure for those, so that is good. On the comment that we will implement reporting on internal recruitment and monthly head counts in public bodies, I am surprised that that does not happen already, with monthly reports and management information showing the numbers that we have and the variance. I would have expected to see that as standard. Given that we now have a figure for back-office costs, which is heartening, I wonder how many of these data items we do not have.

I thought that it would be useful to have some colour on that, because, as I have been fond of reminding people, the Scottish Fiscal Commission’s report about getting to net zero makes it clear that the UK Government cannot do that without Scotland and that Scotland cannot do it without the UK Government. Fundamentally, the fiscal framework as it stands is completely inadequate to get us to where we need to be. Therefore, I thought that the response was somewhat perfunctory—you missed the opportunity to set out why you agree with us. Also, if you agree with us, why did you say “Noted” and not “Agreed”?

Thank you very much for that comment.

I have one tiny question about small and medium-sized enterprises and women-led businesses. Obviously, all the deals are entirely different, but it is not unfair to say that the argument about the need for a seat at the table for SMEs and a focus on women-led businesses—as you will know, that is an interest of mine—is not always heard. We recently took evidence from the Federation of Small Businesses and Women’s Enterprise Scotland, and the evidence on that was fairly mixed. Are you giving any guidance across the entirety of the city and regional growth deals on the need to keep a relentless focus on making sure that SMEs and women-led businesses get a fair share of the pie?

I have one more point on that. We talked earlier about Rachel Reeves’s announcement on Wednesday about the AI corridor. It struck me as somewhat ironic that she made an announcement that the green book would be looked at with a view to ensuring that there is not a dominant focus on projects in London and the south-east, while at the same time she announced that the UK Government wants to create an AI corridor and that she has centred Oxford at the heart of that, rather than Edinburgh, as we talked about earlier.

Have you had any further indication of what the implications of the green book changes might be for city region deals in Scotland?

Good morning. I want to pick up on the point that Gordon MacDonald raised and ask about something that has come up in the committee before and which, from a legal perspective, I explored with the Secretary of State for Scotland.

Both the Scottish Government and the UK Government might have a seat at the table; however, when I asked the secretary of state who the ultimate legal liability rested with, once commitments had been made, he confirmed that it rested with the Scottish Government. You might have a view on that, but what follows logically is that, if funding is withdrawn or paused by the UK Government vis-à-vis the spending review, if the Scottish Government, having made commitments, is on the rack from a legal liability perspective, that represents quite a significant risk. What risk assessment has been made of that by the Scottish Government?

So it is a risk to monitor, rather than a risk of significant concern.