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In some respects, you have made a similar point to the one that I would make. I totally understand what you have outlined—that is exactly what I had envisaged—but the fact that we cannot share such information is a challenge, because it means that companies that have made an application are uncertain. Even though they might present with a viable proposition that has the potential to get through the checkpoint by offering sustainability and delivering jobs at pace, which is obviously a consideration, a common theme that I hear is that although they might think that their proposition is a great idea, they are uncertain. I explain to them, “There’s a lot going on in the background—it’s a constant juggling act.”

Do you have issues with capacity, given the volume of interest? Is that part of the reason for the uncertainty that exists, as well as your having to be coy because of commercial sensitivity? How is your capacity?

Thank you.

I know that it was a massive question, but I personally am not hearing a great deal about the strategic thinking on the challenges and enablers of AI, for example, from Government, even in the face of the considerable uncertainty and complexity. I feel as though it is a juggernaut that is travelling very fast towards us and that we are tinkering round the edges.

We need to get ahead of the game in developing excellence in service provision, even with basic things such as getting small and medium-sized enterprises to actively develop agents to do some of the grunt work. It is about attitude and realising that we have only one choice, which is to seize the opportunity, because the alternative guarantees failure.

Hi, everybody. I have been listening to the session with interest. As the convener set out at the start, one of our key focuses is fiscal sustainability, but we have not really reflected on that thus far. We have touched on the UK balance sheet, which is pretty dismal—it drives everything and ultimately flows through into what we see in Scotland.

We have almost got a counterintuitive challenge here. First, we have touched on the availability of labour, which we know would be a key way of addressing some of those challenges, when we have political drivers against immigration. Secondly, I was surprised that Scottish Enterprise’s submission did not mention artificial intelligence, because it has so many links to skills and productivity, which we have touched on. Finally, I have a gentle challenge to Universities Scotland: you ended up in a position of overreliance on overseas students, but, from a business perspective, any business would be doing the risk analysis of having so many eggs in one basket—of a critical type of customer, if you like.

Are we ready and up for this challenge, given its counterintuitive nature and a backdrop of decreasing and constrained public sector funding against a demand from everybody for more money, often for a good reason, such as wanting to invest? Do we have the audacity of thinking and the leadership that we need? Do we properly understand the almost counterintuitive nature of fiscal sustainability? I appreciate that this is a pretty big question. We have had a nice chat so far. However, will that nice chat really start to shift the dial? That is my question. Elaine, you are nodding—

I want to briefly make explicit a point that has been implicit in some of the discussions about access to finance. We have heard valid commentary about SMEs: personal guarantees are hugely prohibitive, as is carrying coronavirus business interruption loan scheme loans, bounce back loans and so on. In relation to the college sector being able to access funds under the current structure and Lesley Jackson’s comment about FTs and SNIB, it might be worthwhile for us to put down a marker that access to finance in different sectors is deeply constrained when linked to the economic multipliers that have been mentioned, particularly around housing. We should think about that in a slightly different way.

That is an extremely important clarification, because that approach is different from what is happening in the rest of the UK. The difference between a case that goes through court processes where there is a finding of fraud and a case of suspicion of fraud will skew your figures, so that clarification is helpful.

I will pick up on something that the cabinet secretary said right at the start of the conversation. What did you mean when you said that there was no black hole? There are different meanings of the phrase, which we might go on to, but what is your understanding? What are you saying when you say that?

You have made my point for me. There are nearside considerations in relation to the forthcoming budget, and there are longer-term projections. The Scottish Fiscal Commission has made clear the challenges of the fiscal sustainability of continuing to make social security payments at the rate at which they are currently being made. In your discussions with senior colleagues, at what point do you say, “Oh, this looks utterly unsustainable. How on earth are we going to manage it?” What is the tipping point? How do you model that? That goes back to the questions about opportunity costs.

It would be useful to get your personal reflections on the point at which you start to worry, rather than just thinking, “How do we get through the nearside budget that is coming up thick and fast?” I have never been able to detect any sense of longer-term strategic thinking about the fact that the current level of social security payments is clearly unsustainable as it stands.

I know that it was a massive question, but I personally am not hearing a great deal about the strategic thinking on the challenges and enablers of AI, for example, from Government, even in the face of the considerable uncertainty and complexity. I feel as though it is a juggernaut that is travelling very fast towards us and that we are tinkering round the edges.

We need to get ahead of the game in developing excellence in service provision, even with basic things such as getting small and medium-sized enterprises to actively develop agents to do some of the grunt work. It is about attitude and realising that we have only one choice, which is to seize the opportunity, because the alternative guarantees failure.

I thank the witnesses for bearing with us. I will finish on one tiny point on the £36 million. You have extensively laboured the differential approach in how you deal with that in Social Security Scotland, but I did not get a strong sense of how your approach to overpayment through error—not somebody’s fault—differs from that to overpayment when there has been fraud as an intentional act of obtaining money by deception. Okay, you are going to be fair, you are going to be nice and you are going to treat people with dignity but, clearly, fraud is an entirely different matter. How do your processes differ in those circumstances?

We have laboured that point and questioned whether the recovery percentage is 10 per cent or more, but my understanding is that “black hole” is simply terminology to express a projected overspend against projected income. People will say, “Oh, the Scottish Government’s got a black hole”; equally, you could say that the UK Government has got a massive black hole.

I will briefly explore with you an important differential. In the UK Government’s situation, some economists will argue, “Well, of course it’s not a black hole, because you can squeeze people till the pips squeak”—in other words, the UK Government can raise tax, increase borrowing or create money out of thin air vis-à-vis quantitative easing. It is different for the Scottish Government, because the only available fiscal lever is to tax. Therefore, when you say that there is no black hole, do you mean that we do not need to worry about the difference between projected income and projected expenditure because we can just increase tax?